Finding Text
2024-002: Allocation of Costs Other Than Payroll
Criteria or specific requirement: In accordance with Title 2 U.S. Code of Federal Regulations (CFR) Part 200.414, the Alliance must allocate indirect costs appropriately.
Condition and context: The Alliance allocates certain shared costs, other than payroll, using an approach that details the full-time equivalents performing work on each grant. During the year ended June 30, 2024, costs were allocation using a schedule that did not agree to actual underlying payroll data. Additionally, the schedule that was used was not reviewed by the Executive Director.
Cause: The Alliance does not have adequate staffing in place to ensure that the proper allocations were used.
Effect or potential effect: Without adequate controls over this process, the Alliance could charge unallowable costs to the HIV Formula Grants.
Questioned costs: None.
Identification as a repeat finding, if applicable: Not applicable.
Recommendation: The Alliance should ensure that internal control processes for the allocation of cost are consistently followed. A review process should be in place to ensure that accurate allocations are used. The Alliance could also consider the use of the de minimis cost rate, which would alleviate the need to create an allocation approach for shared costs. Effective October 1, 2024, the de minimis cost rate increased to 15%. Views of responsible officials: Refer to the Corrective Action Plan prepared by the Alliance in regard to this matter.