Finding Text
2021-004 – ALLOWABLE COSTS-INDIRECT COST ALLOCATION PLAN
Federal Program Information:
Federal Agency
Federal Program Name Assistance Listing Number Grant Award(s) Unique Identifier(s)
Department of Defense Basic Scientific Research 12.431 W15QKN-14-1-0001
W15QKN-20-1-1000
Criteria:
2 CFR 200.303 requires that a non-federal entity must “(a) establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations and the terms and conditions of the Federal award.” These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the comptroller General of the United States and the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).
Non-profit organizations that charge indirect cost to federal awards based on federally negotiated rates should charge the award in accordance with any negotiated rate agreements and specific award conditions/limitations.
Condition:
The entity was subject to a 13% provisional rate utilizing a simplified allocation method that provided for certain adjustments to the distribution base. It was determined that the entity charged $703,925 for indirect costs during the year. However, the maximum amount of indirect costs pursuant to the provisional rate agreement was approximately $488,427.
Questioned Costs:
Approximately $215,498 (subject to final negotiated rate adjustments).
Context:
Total federal expenditures listed on the Schedule of Federal Awards was $6,267,848, of which $703,925 was charged to indirect costs.
Cause:
Management failed to ensure that indirect costs charged to the award were in accordance with the provisional rate in effect. Furthermore, internal controls and procedures related to the indirect cost allocation were not effectively designed or performed.
Effect:
National Center for the Advancement of STEM Education, Inc. is not in compliance with the indirect cost allocation plan requirements.
SECTION III – FEDERAL AWARD FINDINGS AND QUESTIONED COSTS (Continued)
2021-004 – ALLOWABLE COSTS-INDIRECT COST ALLOCATION PLAN (Continued)
Federal Program Information:
Federal Agency
Federal Program Name Assistance Listing Number Grant Award(s) Unique Identifier(s)
Department of Defense Basic Scientific Research 12.431 W15QKN-14-1-0001
W15QKN-20-1-1000
Recommendation:
Management should implement procedures, which ensure amounts charged as indirect costs are in accordance with rate agreements in effect.
Views of Responsible Officials:
Management concurs with the finding and has developed a plan to correct the finding.