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Resolve the $16,351 in questioned salary expenses for which Caltech has not agreed to reimburse NSF and direct Caltech to repay or otherwise remove the sustained questioned costs from its NSF awards.

Direct Caltech to provide documentation supporting that it has repaid or otherwise credited the $418 of questioned salary expenses for which it has agreed to reimburse NSF.

Direct Caltech to strengthen its policies and procedures by retroactively establishing expiration dates on its use of the Other Paid Leave Pool on Federal awards and ensuring that these expiration dates align with the expiration dates and criteria specific to Flexibility 6 of Office of Management and Budget Memorandum M-20-17.

Resolve the $31,856 in questioned subaward expenses for which Caltech has not agreed to reimburse NSF and direct Caltech to repay or otherwise remove the sustained questioned costs from its NSF awards.

Direct Caltech to strengthen its internal control processes and procedures surrounding the transfer of significant portions of NSF-funded research to other organizations. Updated processes could include: a. Establishing procedures to verify whether the scope of work for a proposed subcontract on an NSF award is programmatic in nature before issuing the subcontract. If the scope of work is programmatic in nature, Caltech should obtain the NSF Grants Officer’s approval before issuing the subcontract. Caltech could obtain this approval either as part of the initial NSF grant proposal/budget or through a formal request to transfer the research or effort, submitted through NSF’s FastLane system. b. Requiring periodic training for Caltech personnel that are permitted to subaward, issue, or subcontract out research under NSF awards, to ensure that they request the appropriate approvals. c. Establishing procedures to confirm that Caltech personnel perform pass-through entity risk assessments to identify the appropriate monitoring procedures when Caltech awards NSF research to a pass-through entity. d. Establishing periodic monitoring procedures to ensure that Caltech appropriately assesses indirect costs on the first $25,000 invoiced by each subawardee.

Direct Caltech to provide documentation supporting that it has repaid or otherwise credited the $1,515 of questioned indirect costs for which it has agreed to reimburse NSF.

Direct Caltech to strengthen its monitoring procedures and internal control processes for applying indirect costs to Federal awards. Updated procedures could include: a. Requiring that personnel review rental expenses charged to NSF awards to assess whether the expenses included indirect costs. Specifically, Caltech should ensure the general ledger account codes it establishes to account for equipment rental charges do not apply indirect costs. b. Requiring that personnel review capitalized expenses charged to an NSF award to ensure that the capitalized amount includes all applicable costs.

Direct Caltech to quantify the total indirect costs inappropriately applied to NSF awards as a result of its rental equipment account inappropriately applying indirect costs and to reimburse NSF for the appropriate amount.

Direct Caltech to provide documentation supporting that it has repaid or otherwise credited the $581 of questioned salary and fringe costs for which it has agreed to reimburse NSF.

Direct Caltech to strengthen its administrative and management controls and processes surrounding the charging of salary to Intergovernmental Personnel Act awards. Updated processes could include requiring departmental payroll personnel to perform additional procedures to ensure that Caltech appropriately established initial salary payments, including verifying that all payments are within the Intergovernmental Personnel Act assignment dates.

Direct Caltech to update its current award set-up practices to require that, when setting up accounts established for NSF awards, personnel ensure that the accounts apply indirect costs using either the rates that were established in the Negotiated Indirect Cost Rate Agreement in effect as of the date of the NSF grant award or the rates identified in the NSF award letters, as appropriate.