Sneak Preview: EPA Plans Guidance for In-Kind Contribution Costs

September 23, 2016 | By Jerry Ashworth | Post a Comment

xsass_bookshot(The following was excerpted from a recent article in the Single Audit Information Service.) Environmental Protection Agency (EPA) officials plan to develop and issue internal guidance by federal fiscal year (FY) 2018 that will set forth consistent procedures for determining in-kind contribution costs for reimbursable research agreements (RRAs), in response to a recent EPA Office of Inspector General (OIG) audit.

EPA’s Office of Research and Development (ORD) partners with federal and state agencies, nongovernmental organizations and the public sector on research services using two types of reimbursable research agreements — interagency agreements (IAs) and cooperative research and development agreements (CRADAs). IAs are written agreements between EPA and another federal agency to accomplish a shared research objective with a distinct scope of work; CRADAs are agreements between a federal government laboratory and an external partner to work together on specific research and development. ORD receives a reimbursement from the partner agency or nongovernmental entity for EPA’s share of the expenses of conducting collaborative research and development under these agreements. EPA received about $43 million in reimbursements under 115 IAs and 121 CRADAs from October 2009 to March 2015.

EPA policies require ORD staff to justify RRAs to ensure that the work is consistent with the EPA’s mission and statutory authorities, and that the cost of the work is reasonable based on appropriate cost information. Under such RRAs, EPA and the partner agency or entity may contribute funds; nonmonetary resources such as personnel, facilities, equipment and other services; or a combination of funds and nonmonetary resource. These nonmonetary resources are called “in-kind contributions.” Third-party in-kind contributions also are defined in the Office of Management and Budget’s (OMB’s) uniform guidance at §200.96.

After reviewing six RRAs between EPA and other partner agencies and entities, the OIG found that ORD did not develop in-kind contribution estimates of its cost for RRAs in a complete and consistent manner. “Federal and EPA policies for internal controls and appropriated funds, as well as cost accounting standards, require that managers develop reliable cost estimates and ensure proper stewardship of federal funds,” the OIG stated. “ORD managers said they were unaware of any specific guidance for developing in-kind contribution estimates, and [EPA guidance did not] contain detailed information for developing in-kind contribution estimates. As a result, ORD was unable to reliably estimate how much it actually spends on reimbursable projects, costs are likely misstated and decisionmakers could approve projects that are not cost effective.”

(The full version of this story has now been made available to all for a limited time on Thompson’s Grants Compliance Expert site.)

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