Finding Text
Federal program
93.958 – Block Grants for Community Mental Health Services
Compliance requirements
Activities Allowed or Unallowed and Allowable Costs/Cost Principles
Criteria or specific requirement
Internal controls should be in place to ensure that indirect cost rates are applied to the modified total direct cost base.
Condition
During the year under audit, the indirect cost rate applied to the modified total direct cost base was more than the de minimis indirect cost rate elected.
Context
An additional $677.40 in indirect costs were applied to the IPS MHBG ARPA Grant for the year ended December 31, 2023.
Effect
Indirect costs rates were incorrectly charged to the IPS MHBG ARPA Grant for the period under audit.
Cause
Since the total indirect costs as a percentage of total grant expenses was under the 10% de minimis indirect cost rate elected, grant management thought indirect costs charged were in compliance with indirect cost rate rules. Management was not aware that the percentage must be 10% or less of the modified total direct cost base rather than total grant expenses.
Recommendation
The elected 10% de minimis indirect cost rate should be applied consistently across all federal grant awards to the modified total direct cost base for each federal grant award.
Views of responsible officials and planned corrective actions
See corrective action plan.