At a minimum, adequate accounting systems provide for:
Organizations being considered for an NSF award are required to support the existence of an adequate accounting system. If an organization has been audited by Defense Contract Audit Agency (DCAA), or has been audited by another Federal Agency, the organization should provide a copy of the review and/or audit report resulting from the audit or review.
All organizations should complete and provide the " Information Concerning Financial Management Systems" form, (Appendix 5.) This form will be reviewed by the Cost Analysis and Audit Resolution Branch. Possible accounting system deficiencies in your submission, and suggestions for correcting deficiencies, will be discussed with the submitting organization.
Corrections to a time and effort record should be in ink and initialed by the employee.
Organizations should provide a copy of their time and effort record as an attachment to the " Information Concerning Financial Management System" form. The following sample timesheet is provided to assist you in creating a time and effort record form should your organization not currently maintain these records.
Bi-Monthly Time Record | |||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Employee Name | Employee Signature | ||||||||||||||||
Supervisor Name | Supervisor Signature | ||||||||||||||||
Month: | 16 | 17 | 18 | 19 | 20 | 21 | 22 | 23 | 24 | 25 | 26 | 27 | 28 | 29 | 30 | 31 | Total |
Project: | |||||||||||||||||
Holiday | |||||||||||||||||
Vacation | |||||||||||||||||
Sick leave | |||||||||||||||||
Other: | |||||||||||||||||
Total | |||||||||||||||||
Note: Corrections should be made in ink and initialed by employee. |
Organizations are required to support their indirect cost rate(s) shown on their grant proposal budget by submission of a current indirect cost rate agreement negotiated with a Federal agency (with financial statements for the two most current ended accounting periods), or by submission of an indirect cost proposal (view sample indirect cost proposal) and the related financial statements.
A sample indirect cost proposal is as follows:
SAMPLE INDIRECT COST PROPOSAL | |||||||||
---|---|---|---|---|---|---|---|---|---|
(Name of Organization) Indirect Cost Rate Proposal Actual (or Budgeted) Cost Data for the FY____ | |||||||||
(1) Total Actual or Budgeted Costs |
(2) Eliminations |
(3) Total Indirect Costs |
(4) Total Direct Costs |
******* Project A (NSF) |
******* Project B (DOE) |
******* Project C |
******* Project D |
******* Research & Development | |
Salaries & Wages | |||||||||
Bill Able, President | 38,000 | 6,000 | 32,000 | 4,000 | 8,000 | 10,000 | 10,000 | ||
John Brown, Scientist | 25,000 | 25,000 | 15,000 | 5,000 | 5,000 | ||||
Paul Dent, Engineer | 20,000 | 20,000 | 9,000 | 9,000 | 2,000 | ||||
Carl Kipe, Scientist | 20,000 | 20,000 | 10,000 | 10,000 | |||||
Nancy Wong, Scientist | 20,000 | 20,000 | 5,000 | 5,000 | 5,000 | 5,000 | |||
Sally Smith | 12,000 | 2,000 | 10,000 | 3,000 | 2,000 | 3,000 | 2,000 | ||
Mary Jones, Accting | 15,000 | 15,000 | |||||||
150,000 | 0 | 23,000 | 127,000 (B) |
32,000 | 21,000 | 40,000 | 12,000 | 22,000 | |
FICA | 8,500 | 2,100 | 6,400 | 1,650 | 1,100 | 1,900 | 600 | 1,150 | |
Health & Life Insurance | 5,000 | 800 | 4,200 | 1,100 | 700 | 1,250 | 400 | 750 | |
Consultant Fees | 3,000 | 3,000 | 500 | 1,000 | 500 | 1,000 | |||
Depreciation | 5,000 | 5,000 | |||||||
Entertainment | 500 | 500 | |||||||
Equipment | 5,000 | 5,000 | |||||||
Legal & Accounting | 2,000 | 2,000 | |||||||
Materials & Supplies | 9,000 | 9,000 | 3,000 | 2,000 | 3,000 | 1,000 | |||
Office Supplies | 2,000 | 2,000 | |||||||
Outside Computer Svcs | 2,500 | 500 | 2,000 | 500 | 500 | 500 | 500 | ||
Postage & Telephone | 1,500 | 1,500 | |||||||
Printing & Publications | 4,000 | 4,000 | 500 | 500 | 1,000 | 2,000 | |||
Rent | 15,000 | 15,000 | |||||||
Subawards | 50,000 | 50,000 | |||||||
Travel | 9,000 | 1,500 | 7,500 | 2,500 | 2,000 | 1,000 | 2,000 | ||
272,000 | 55,500 | 53,400 (A) |
163,100 (C) |
41,750 | 28,800 | 49,150 | 13,000 | 30,400 |
NOTE: Two indirect cost proposals should be provided. One should be based on actual cost data for the most current ended accounting period and should be submitted with the financial statements for that period. The total actual expenses as reported in the related financial statements should agree with the total cost column (1) in the indirect cost rate proposal. The second indirect cost proposal should be based on projected costs for the accounting period in which the proposed work will be performed. If this indirect cost rate varies significantly from the rate determined on actual expenses, footnote the indirect cost proposal to highlight cost areas which caused the variance and explain.
Based on various information available, e.g., historical cost information, and the amount of funding being requested, the Cost Analysis and Audit Resolution Branch will make a recommendation on the funding of indirect costs - either as an amount, or as a rate. Since indirect cost recoveries can be limited on NSF awards, and could require post-award repayments to NSF, organizations receiving awards should ensure that they understand the award conditions relating to indirect cost recoveries. These will be specified in the award letter. Conditions which could be included are as follows:
Maximum provisional rate: A maximum provisional rate is a temporary rate established for an award to permit funding and reimbursement of indirect costs pending establishment of a final rate (that rate determined at the end of an accounting period using "actual" direct and indirect cost data). This type of rate limits indirect cost recoveries to the LOWER of the maximum provisional rate established at the time of award, or the final rate, established at the end of an accounting period.
As an example, if a maximum provisional indirect cost rate of 50% was established at the time of award, but an indirect cost rate of 65% was determined based on actual financial data for an accounting period, indirect cost recoveries would be limited to 50%. However, if a final indirect cost rate of 40% was determined, indirect costs recovered in excess of the 40% rate would need to be removed as charges to the project.
Organizations having awards which contain maximum provisional rates are required to submit indirect cost proposals reconciled to financial statements for those periods during which the award is active. The Cost Analysis and Audit Resolution Branch of NSF will review indirect cost proposals and determine the appropriate final indirect cost rate.
Predetermined fixed rate: A predetermined fixed indirect cost rate is a permanent indirect rate established for a discrete period of time, usually an organization's fiscal year. Organizations should charge NSF awards at the predetermined fixed rate(s) stipulated in the award document(s). However, if negotiations between the organization and NSF (or the cognizant federal agency, if not NSF) result in changes to the organization's indirect cost rate which are not reflected in an award, the organization may charge the award at the newly negotiated rate in effect when direct cost expenditures are made, subject to the restrictions in GPM 635.1.
Fixed dollar amount: A fixed dollar amount limits organizations to that "amount" of indirect costs specified in the approved budget. It is not subject to adjustment.
Audit findings resulting in questioned costs (and, which can require repayment to NSF) have been due to the following:
Resolution of questioned cost audit findings is timely and costly for both the organization and NSF. Therefore, you should contact the NSF Cost Analysis and Audit Resolution Branch (CAARB) at (703-306-1244) if you have any questions concerning audits, and/or supporting documentation to be maintained.