Finding Text
Finding Number: 2022-003 Finding Type: Federal award finding Federal Assistance Listing No.: n/a Program Name: R&D Cluster Federal Agency: Agency for Healthcare Research and Quality Pass-Through Entity: n/a Grant Number: 93-75Q80122C00002 & 93-HHSA290201700003C Federal Award Year: 2022 Control Deficiency Type: Significant deficiency over compliance Instance of Noncompliance: Yes Compliance requirement: Allowable costs Questions Costs: Yes Repeat Finding: No Criteria: The organization should have internal controls in place to provide reasonable assurance that the indirect costs are charged uniformly to both federally funded activities and other activities of the organization, and are calculated in accordance with its federal indirect costs rate proposal. Condition: During the year ended December 31, 2022, the Foundation incurred total direct costs of $1,307,707 under this federal program and of this total, $118,271 consists of expenditures related to the provision of services by an employee the VAPORHCS. According to the Foundation?s negotiated indirect costs rate, these contracted services were to be excluded from direct costs for the computation of the indirect costs to be charged to the con-tract. Cause: Foundation personnel in charge of preparing invoices were not aware that these costs should have been excluded from the direct costs when calculating the indirect cost charges. Effect: The Foundation overcharged the funder for indirect costs. Questioned costs: $28,525 Audit Recommendation: We recommend that the organization implement procedures to ensure that indirect costs are charged in accordance with its approved indirect cost rate proposal. Management?s Response: Explanation of disagreement with the audit finding. There is no disagreement with the audit findings. Action taken in response to the finding. Once the issue was identified as a result of the audit, PVARF staff worked diligently to return the excess funds to the funding source, as well as determining an effective resolution to ensure there is no reoccurrence of inappropriate billing of the foundation?s indirect cost rate. Action Plan. In addition to implementing a project management platform that accurately identify the correct indirect cost rate to be charged, PVARF is also working to ensure cross training is occurring between administrative positions, improving information sharing, and standardizing training. Name(s) of the contact people responsible for correction action. J. Rowland, H. Tyre, S. Dolan Plan completion date for corrective action plan. July 31, 2023