Finding Text
2024-004: Use of Expired Federally Negotiated Rate
Grantor: Department of Health and Human Services, National Institute of Health (NIH)/ National Institute on
Drug Abuse
Cluster: Research & Development
Award Name: Clinical Support Services for the Research Efforts of the Stroke Branch, Section on Stroke
Diagnostics and Therapeutics, NINDS, NIH
Award Number: 75N95019C00074
Assistance Listing Title: National Institute of Neurological Disorders & Stroke Direct Award
Assistance Listing Number: 93.RD
Award Year: September 28, 2019 – September 27, 2024
Passthrough Entity: None
Criteria
In accordance with Section 2(c) of OMB Uniform Guidance Appendix IV to Part 200—Indirect (F&A) Costs
Identification and Assignment, and Rate Determination for Nonprofit Organizations, organizations that have
previously established indirect cost rates must submit a new indirect cost proposal to the cognizant agency for
indirect costs within six months after the close of each fiscal year.
Condition
JHHS had a federally negotiated indirect cost rate agreement for the period 7/1/2015- 6/30/2019, which had an
approved rate of 39.5%. An extension of the rate was granted through 6/30/2021, but the new indirect cost rate
proposal has not been accepted. In FY24, JHHS continued to charge indirect costs to the National Institute of
Neurological Disorders & Stroke Direct Award using this rate, despite the fact that this rate had expired.
Cause
As a result of JHHS staff turnover, management failed to finalize the new federally negotiated indirect cost rate
in a timely manner. Rate negotiations are currently in progress.
Effect
JHHS has charged $145,295 of indirect costs to this award, which has been approved for reimbursement by the
granting agency, but is using an expired rate agreement.
Questioned Costs
There are no questioned costs associated with this finding. JHHS has continued to use the historically accepted
rate during the ongoing negotiations.
Recommendation
JHHS should establish control procedures to ensure that the indirect cost rates used are related to approved
and effective rate agreements. Management should also ensure submitted rate proposals are approved in a
timely manner such that there is no lapse in rate agreements or a provisional rate is established during periods
of rate negotiations.
Management’s Views and Corrective Action Plan
Refer to Management’s View’s and Corrective Action Plan at the end of the report.