Finding Text
Condition: The Organization charged indirect costs to the grant that exceeded the maximum allowed amount under the grant. The excess indirect cost charged to the grant was $23,584. Criteria: Recipients and subrecipients that do not have a current Federal negotiated indirect cost rate (including provisional rate) may elect to charge a de minimis rate of up to 10 percent of modified total direct costs (MTDC). Cause: The Organization charged indirect costs based on the rate in the grant award agreement. Context: The total amount of indirect costs charged to the grant was $55,029.Questioned Cost: $23,584. Recommendation: We also recommend the Organization charge the 10 percent de minimis indirect cost rate to the grant until a provisional indirect cost rate is received from the federal government. Views of Responsible Official and Planned Corrective Action: The Organization agrees that the indirect costs charged to the grant exceeded the maximum allowed under the grant. The Organization understood that it could charge a higher initial provisional indirect rate, reflecting the Organization’s actual rate of allowable indirect costs, as stated in the subrecipient agreement while a negotiated indirect cost rate was pending. As the negotiated rate was not completed, the Organization understands that the initial provisional rate was not applicable and the 10% de minimis rate applies from the inception of the award agreement. The Organization will charge the de minimis indirect rate to the project until a federally negotiated rate agreement is approved by the government.