Finding Text
Finding 2022-002 Criteria or Specific Requirement: The Code of Federal Regulations Section 200 subpart E outlines the allowability of cost provisions, including indirect costs. Specifically, 2 CFR 200.403(d) states that costs should be accorded consistent treatment to be allowable, and 200.405 defines allocable costs. Condition: During our review of allowable expenses, it was noted that indirect costs were based on the grant budget and not supported by an indirect cost pool. Cause: The Organization has not implemented a cost allocation policy to track indirect costs. Effect or Potential Effect: Indirect expenses were charged to grants and allowability was unable to be determined. Questioned Costs: $40,242. Context: All cost charged as indirect cost to the research and development cluster were based on the grant budget and not supported by allocable costs. Repeat Finding: No Recommendation: We recommend the Organization implement methodology to track overhead expenses, pool them, and allocate to each grant using a reasonable basis for allocation. Views of responsible officials: Management agrees with the finding and will implement a process to pool its overhead costs and allocate them accordingly.