Every cost-reimbursable award has an indirect cost rate. And every government agency mandates an annual incurred cost submission (true up report) that must reflect your actual costs and be prepared in accordance with FAR.
IT ALL STARTS WITH THE INDIRECT COST RATE.
The presence of FAR 52.216-7 in the terms and conditions of your contract, cooperative agreement, or notice of grant award means you have a cost-reimbursable award. The following types of awards almost always have FAR 52.216-7 embedded in the terms and conditions of award:
When you initially propose the project, you request an indirect cost rate in order to provisionally (temporarily) invoice the government for your allowable expenses each month. Then, on an annual basis, you must show the government how you used the money, if you used it properly, and if you owe them anything. Every year.
YOUR PROVING GROUND: THE ANNUAL INCURRED COST SUBMISSION.
The annual incurred cost submission is effectively a true-up report you must prepare and submit within 180 days of your fiscal year end. It reflects how you calculate your final costs including your actual indirect cost rate. Once submitted, you are required to reimburse the government for any costs over-billed.
This is not a simple form; it’s incredibly complicated with multiple inputs, required schedules and, depending on the agency, optional schedules.
There is a 100% chance that this award will be audited.
THE JAMESON SOLUTION
There are a number of ways we can help our clients as they prepare for, submit, and defend their “True Up” Report.