Finding Text
Finding 2022-011 Program Affected: 66.818 Brownfields Assessment and Cleanup Cooperative Agreements U.S. Environmental Protection Agency Contract year: 2022 FAIN: 00A00664 / 00A00676 / 00A00909 Criteria: The federal compliance supplement allows a de minimis indirect cost rate of 10% which may be applied by organizations which do not have a negotiated indirect cost rate. However, the contract for the major federal program specifies that the Organization may only use "5% of the amount of federal funding for this cooperative agreement for administrative costs, including indirect costs." Condition and Context: During the test of the allowable costs, indirect costs were compared to the amount allowed under the contracts. The Organization did not apply either the indirect cost rate allowed under the contract, nor did it apply the indirect cost rate to the appropriate cost basis when calculating indirect costs to charge to the federal program. Cause and Effect: The Organization does not have internal processes to properly identify costs related to the program. However, we did not identify indirect costs charged in excess of the allowable amount as specified in the contract as a result of our testing. The indirect cost charged to the federal grant by the Organization was determined to be less than was allowable under the contract. Questioned Costs: N/A Identification of Repeat Findings: N/A Recommendation: We recommend the Organization update its policies to calculate indirect costs based on the contractually allowed basis and using rates as specified in its federal contracts. Views of Responsible Officials and Planned Corrective Actions Management agrees with the finding. See attached Planned Corrective Actions. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding. See attached Planned Corrective Actions.