A federal audit has criticized the U.S. Agency for International Development for lacking the processes, documentation, and systems to monitor grantees’ overhead costs.
Though USAID agreed that “the accuracy, process and procedures” of its systems could be improved, in its response to the findings, the agency also shot back — stating the audit offered a “distorted view” of USAID’s systems and a “misunderstanding” of the agency’s indirect cost rate processes.
The audit centered on the Negotiated Indirect Cost Rate Agreements that U.S. government agencies, including USAID, provide to the organizations and contractors they work with. More commonly known as NICRAs, these rates allow partners to get paid for overhead costs, including rent expenses, personnel fees, and administrative costs.