Suggested Compliance Procedures De Minimis Indirect Cost Rate – Note: The following subsections identify requirements specific to each type of entity. Suggested Audit Procedures Compliance (Substantive Tests) – (Reference / link to documentation where testing was performed testing): The following suggested audit procedures apply to any non-Federal entity using a de minimis indirect cost rate, whether as a recipient or a subrecipient. None of the procedures related to indirect costs in the sections organized by type of non-Federal entity apply when a de minimis rate is used. Consider the results of the testing of internal control in assessing the risk of noncompliance. Use this as the basis for determining the nature, timing, and extent (e.g., number of transactions to be selected) of substantive tests of compliance. 1. Determine that the non-Federal entity has not previously claimed indirect on the basis of a negotiated rate. Auditors are required to test only for the three fiscal years immediately prior to the current audit period. 2. Test a sample of transactions for conformance with . a Select a sample of claims for reimbursement of indirect and verify that the de minimis rate was used consistently, the rate was applied to the appropriate base, and the amounts claimed were the product of applying the rate to a modified total direct costs base. b Verify that the costs included in the base are consistent with the costs that were included in the base year, i.e., verify that current year modified total direct costs do not include costs items that were treated as indirect costs in the base year. 3. For a non-Federal entity conducting a single function, which is predominately funded by Federal awards, determine whether use of the de minimis indirect cost rate resulted in the non-Federal entity double-charging or inconsistently charging costs as both direct and indirect.
Suggested Compliance Procedures – De Minimis Indirect Cost Rate Note: The following subsections identify requirements specific to each type of entity. Suggested Audit Procedures – Compliance (Substantive Tests) (Reference / link to documentation where testing was performed testing): The following suggested audit procedures apply to any non-Federal entity using a de minimis indirect cost rate, whether as a recipient or a subrecipient. None of the procedures related to indirect costs in the sections organized by type of non-Federal entity apply when a de minimis rate is used. Consider the results of the testing of internal control in assessing the risk of noncompliance. Use this as the basis for determining the nature, timing, and extent (e.g., number of transactions to be selected) of substantive tests of compliance. 1. Determine that the non-Federal entity has not previously claimed indirect on the basis of a negotiated rate. Auditors are required to test only for the three fiscal years immediately prior to the current audit period. 2. Test a sample of transactions for conformance with . a Select a sample of claims for reimbursement of indirect and verify that the de minimis rate was used consistently, the rate was applied to the appropriate base, and the amounts claimed were the product of applying the rate to a modified total direct costs base. b Verify that the costs included in the base are consistent with the costs that were included in the base year, i.e., verify that current year modified total direct costs do not include costs items that were treated as indirect costs in the base year. 3. For a non-Federal entity conducting a single function, which is predominately funded by Federal awards, determine whether use of the de minimis indirect cost rate resulted in the non-Federal entity double-charging or inconsistently charging costs as both direct and indirect.
UG%20ED%20ODE%20PT%20Boilerplate%202018_IPAv_Final_Sept2018.docx