Finding Text
2022-014) Allowable costs Questioned Costs: $55,464 Department of the Health and Human Services 93.600 HeadStart Cluster Grant No(s): 06CH01155403 Criteria: The Uniform Guidance section 200.403 set forth general criteria for allowability, which include the requirement for costs to be accorded consistent treatment. A cost may not be assigned to a Federal award as a direct cost if any other cost incurred for the same purpose in like circumstances has been allocated to the Federal award as an indirect cost. Condition: Costs of the City-Parish?s centralized risk management function, specifically those for general liability, professional liability and unemployment were charged and allocated to Head Start?s indirect costs pool. Insurance premiums for policies covering those risks were also charged as direct costs. Universe/ Population: The indirect cost pool used in determining the Program?s indirect cost rate for 2022 was derived from a prior year?s actual costs and amounted to $1,369,701, of which $82,036 was determined to be unallowable. Effect: The unallowed costs to HeadStart for 2022 resulting from the inclusion of the unallowed risk management cost in the indirect cost rate pool amounted to $55,464. Cause: This appears to be the result of an oversight error. Recommendation: All costs included in the indirect cost pools for allocation should be thoroughly reviewed by accounting and program personnel to ensure that the same type costs are not charged as both direct and indirect to federal programs. View of Responsible Officials: In developing the Cost Allocation Plan, the City-Parish previously excluded risk management costs in the calculation of the rate for the Head Start program. When the City-Parish began utilizing a new consultant to prepare the Cost Allocation Plan, the consultant included those costs in the rate calculation when they should have been excluded. The 2023 report will be revised to exclude costs for risk management functions and will continue to be excluded for future plans. The City-Parish does not charge the full amount of indirect costs that would be allowable based on the approved indirect cost rate to the grant programs that paid for the insurance policies. In 2022, the indirect cost allowable based on the approved rate was $1,410,223.04; however, only $131,232.00 was directly charged to the Head Start grant and $955,904.84 was used as in-kind match leaving a balance of $323,086.20 in allowable indirect cost that was not charged.