HOUSTON ADVANCED RESEARCH CENTER

Finding #2024-001 – Other Noncompliance. Applicable federal program: U. S. Environmental Protection Agency, Passed through Texas Commission on Environmental Quality, Nonpoint Source Implementation Grants, Low Impact Development 2020, Assistance Listing #66.460, Contract period: 11/06/20 – 04/30/26, Contract number: 582-21-10148. Criteria: Allowable costs – Uniform Guidance, Subpart E Cost Principles, §200.434 states that the value of services and property donated to the recipient or subrecipient may not be charged to the federal award either as a direct or indirect cost. Condition and context: Under the terms of its agreement with the Texas Commission in Environmental Quality, HARC receives reimbursement for a percentage of the expenditures incurred in performance of the funded program. Donated services utilized in performance of the program were included in reimbursement submitted to the grantor. Cause: A lack of understanding that in-kind donations may not be charged to the federal award as reimbursable costs. Effect: As a result of not following federal grant requirements for the allowability of in-kind donations, unallowed costs were charged to the program. Questioned costs: $140,545. Recommendation: Re-emphasize to program and accounting personnel federal grant requirements for the allowability of in-kind donations. Views of responsible officials and planned corrective actions: Management agrees with the finding. See Corrective Action Plan.