Finding Text
2024-002 Indirect Costs
Federal Agency: Department of Labor
Federal Programs: 17.258/17.259/17.278 Workforce Innovation Opportunity Act (WIOA) Cluster
(Passed through MassHire Department of Career Services (MDCS))
Condition:
The Organization over billed grant awards under the WIOA Cluster $37,790 for indirect costs.
Criteria:
2 CFR 200.414(f) of the Uniform Guidance allows entities that do not have a current negotiated indirect cost rate to charge federal awards a de minimus rate of 10% of modified total direct costs. The Uniform Guidance defines modified total direct costs as all direct salaries and wages, applicable fringe benefits, materials and supplies, services, travel, and up to the first $25,000 of each subaward.
Cause:
The Organization did not properly calculate its modified total direct costs for each federal award under the WIOA cluster resulting in the calculated indirect costs being overstated.
Effect:
The Organization has over billed grant awards under the WIOA cluster.
Context:
Modified total direct costs under the WIOA Cluster grant awards were $781,730 for the year ended June 30, 2024. The WIOA Cluster grants were billed for $115,963 in indirect costs for the year ended June 30, 2024.
Questioned Costs:
$37,790
Recommendation:
We recommend that management return the over billed costs to the grantor and review its policies and procedures to ensure indirect costs are properly calculated and billed under the Uniform Guidance.
Management Response:
Management agrees with the finding. See management’s attached corrective action plan.