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Department of Health and Human Services

Office of Inspector General -- AUDIT

"Internal Indirect Cost Reviews Performed by Colleges and Universities," (A-01-91-04016)

April 23, 1993

Complete Text of Report is available in PDF format (1.19 MB). Copies can also be obtained by contacting the Office of Public Affairs at 202-619-1343.


The Office of Inspector General and the Assistant Secretary for Management and Budget requested that major schools under HHS' cognizance conduct internal reviews of their current procedures (self scrubs) to ensure that only allowable costs are included in the indirect costs allocated to Federal research. This management advisory report provides the results of those reviews. We found that 193 of the 261 major schools under HHS' cognizance have completed self scrubs as of January 31, 1993 and have identified unallowable costs totaling $62.9 million. Based on past experience, approximately 10 percent of the total unallowable cost was allocated to Federal research. The withdrawal of these costs from allocations to Federal research reduces indirect cost rates at various schools from one-tenth of 1 percent to as much as 4 percent.