89-2  Obsolete

Recent Federal Audits of Colleges and Universities
April 5, 1989

    The U.S. Department of Health and Human Services is again auditing colleges and universities.  Federal auditors have either begun or completed audits at forty three randomly chosen institutions across the country.  The remaining major colleges and universities, including Indiana University, are expected to be audited in the next phase.

   One of the items auditors are reviewing is the cost of proposal preparation.  Costs associated with proposal preparation cannot be charged as a direct cost to sponsored projects as they are considered an indirect cost item.  However, costs of program reports should be budgeted and can be charged as a direct cost to sponsored projects.  Please keep this distinction in mind and be sure that all costs associated with proposal preparation are considered as indirect costs.