Finding Text
2002-04 ? Policy for indirect costs and monitoring of that policy Criteria: Non-federal entities should either obtain a negotiated indirect cost rate or elect to use a de minimis rate of 10% of modified total direct costs. Either method must be charged consistently for all federal awards. Controls over indirect policies should be monitored for compliance. Condition: The Organization does not have a formal method of identifying its base rate for an indirect cost rate, nor do they have a formal policy for charging either a negotiated indirect cost rate or the de minimis rate of 10%. Cause: There was no team member assigned to this task during the year. Effect: Potentially, unallowable costs could be charged to the federal programs. However, we did not note instances of this in our testing. Recommendation: Since the Organization does not charge over the 10% de minimis rate on any federal program, we recommend creating a formal policy to use the 10% de minimis rate on all federal programs. As part of this policy the organization should document its base rate for modified total direct costs and establish procedures for monitoring compliance of the policy. Response: The Organization has hired a part time consultant to maintain this grant schedule