Finding Text
Finding 2023-001
Nonmaterial Noncompliance – Special Tests
Criteria: The Council should ensure that indirect costs allocated to federal programs do not exceed the indirect cost rate approved by U.S. Department of the Interior.
Condition: Indirect cost allocation appears to be greater than the approved rate.
Questioned costs: Using indirect cost schedule provided by the Council, salary and fringe benefits and respective indirect costs allocated to federal projects were allocated $48,860 over the allowable limit.
Context: Review of the indirect costs applied to federal projects appeared to be higher than the approved rate.
Effect: Indirect costs allocated to projects that exceed the approved rate may not be reimbursed or the Council may be required to pay back the difference to the funding agency if reimbursement has already occurred.
Cause: Allocation automatically generated.
Recommendation: We recommend procedures be implemented to ensure that the automatic allocation is reviewed and reconciled with the approved rate at least annually.
Management’s Response: Management agrees with the finding. See corrective action plan.