The devil’s in the details – true for many things including your annual indirect rate submission. Over the past few years we’ve noticed government agency auditors routinely performing certain analytic tests to check the validity of various expenses. Vacation and incentive compensation are two line items getting such attention.
Avoid audit issues by ensuring your employee handbook and company policy and procedure manual are up to date. Reported expenses must be consistent with stated policies. Also, keep track of policy updates made throughout the year. These must be included with the rate submission.