Finding Text
Finding # 2024-001 – Indirect Costs Allocation Process Needs Improvement
Federal program titles:
• Volunteer Income Tax Assistance ALN: 21.009
• Coronavirus State and Local Recovery Funds ALN: 21.019
• Senior Care Service Employment Program ALN 17.235
• Twenty First Century Community Learning ALN 84.287C
• Connected Literacy Program ALN 84.425B
Criteria or specific requirements:
2 CFR § 200.412 Classification of costs “…cost incurred for the same purpose in like circumstances must be treated consistently either as a direct or an indirect cost to avoid possible double charging of Federal awards.
Condition and Context:
The Urban League of Greater Chattanooga process for allocating indirect costs to programs where indirect costs are reimbursable needs improvement. The is no process to prevent or detect if the indirect cost pool costs support the amounts charged to federal and state programs.
Cause:
The Urban League of Greater Chattanooga records indirect costs to a cost allocation pool but does not record a journal entry in the general ledger to allocate those costs to the programs. Effect:
Duplication of cost charged to programs could result in receiving overpayments. Based on analysis of the total indirect cost pool, the indirect cost pool included supported indirect costs charged to the programs. Known and Likely Questioned Costs: None
Recommendation:
Implement a monthly process to record and allocate indirect costs to programs where an indirect rate is allowed. The allocation should be prepared by someone knowledgeable of the indirect allocation and reviewed by another individual at least one level above.