Alameda Corridor-East Construction Authority Indirect Cost Rate Proposal

P1594-0089
Indirect Cost Rate Proposal 
Fiscal Years 2017-18 and 2018-19 

At the request of the Independent Office of Audits and Investigations, the California State Department of Finance, Office of Audits and Evaluations (Finance) completed an audit of the Alameda Corridor-East Construction Authority (ACE) Indirect Cost Rate Proposal (ICRP) for fiscal year (FY) 2017 /18 and 2018/19. The purpose of the audit was to determine whether the FY 2017/18 and 2018/19 ICRPs, including fringe benefit rates, were presented in accordance with Title 2 Code of Federal Regulations (CFR) Part 200 and Caltrans Local Assistance Procedures Manual (LAPM). The complete audit report is attached.

Based on the audit, Finance determined the ACE's 2017 /18 and 2018/19 ICRPs were not in compliance with 2 CFR 200 and the LAPM. Finance identified weaknesses in the ACE's review process when preparing the ICRPs resulting in unallowable costs impacting the 2017/18 and 2018/19 ICRP rates. The audited rates are as follows: 

Fiscal Year:
2017/18

Proposed Rate:
184.6%

Audited Rate:*
132.2%

Fiscal Year:
2018/19

Proposed Rate:
282.2%

Audited Rate:*
151.4%

*Base: Total Direct Salaries and Wages plus Fringe Benefits

Please provide our office with a corrective action plan, including time lines, by August 21, 2019.