Montana Arts Council : Report On Examination of Financial Statements .. 1981

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Indirect Cost Reimbursement The federal government recognizes and provides for reimburse- ment to state agencies for indirect costs incurred in the administra- tion of federal grants. Section 17-3-111, MCA, and Management Memo 4-81-7 require that each agency negotiate agreements with the federal government to recover, to the fullest extent possible, indirect costs of administering federal grants.
During fiscal years 1979-80 and 1980-81, the Council received federal grants totaling $351,614 and
...$398,258, respectively. We estimated that approximately $856 could have been reimbursed to the General Fund in fiscal year 1979-80 and $1,664 in fiscal year 1980-81 had the agency submitted and received an approved indirect cost plan.
6 The Council stated that the indirect costs would be deducted from the overall grant causing a reduction in service provided with grant funds. The state General Fund provides limited support to all federal grants through accounting services and administration.
Failure to claim these costs allows the agency to provide additional funding for direct grant costs contrary to state policy and places the burden of indirect costs on the General Fund.


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