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Notice

Notice of Indirect Cost Rates for the Office of National Marine Sanctuaries for Fiscal Year 2006

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AGENCY:

National Oceanic and Atmospheric Administration (NOAA), Commerce.

ACTION:

Notice of indirect cost rates for the Office of National Marine Sanctuaries for Fiscal Year 2006.

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SUMMARY:

The National Oceanic and Atmospheric Administration's (NOAA's) Office of National Marine Sanctuaries (ONMS) is announcing the establishment of new indirect cost rates on the recovery of indirect costs for its component organizations involved in natural resource damage assessment and restoration activities for fiscal year (FY) 2006. The indirect cost rates for this fiscal year and dates of implementation are provided in this notice. More information on these rates and the NMSP policy can be obtained from the address provided below.

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FOR FURTHER INFORMATION CONTACT:

Harriet Sopher, 301-713-3125, ext. 271; (FAX: 301-713-0404; e-mail: Harriet.Sopher@noaa.gov.

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SUPPLEMENTARY INFORMATION:

The mission of the ONMS with respect to Natural Resource Damage Assessment is to restore injuries to sanctuary resources caused by releases of hazardous substances or oil under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) (42 U.S.C., 9601 et seq.) or the Oil Pollution Act of 1990 (OPA) (33 U.S.C., 2701 et seq.), or physical injuries under the National Marine Sanctuaries Act (NMSA) (16 U.S.C., 1431 et seq.). The NOAA ONMS consists of the following component organizations: Thirteen National Marine Sanctuaries and one National Monument within NOAP's National Ocean Service. The ONMS conducts Natural Resource Damage Assessments (NRDA) as a basis for recovering damages from responsible parties and uses the funds recovered to restore injured sanctuary resources.

When addressing NRDA incidents, the costs of the damage assessment are recoverable from responsible parties who are potentially liable for an incident. Costs include direct and indirect costs. Direct costs are costs for activities that are clearly and readily attributable to a specific output. In the context of the ONMS, outputs may be associated with damage assessment cases, or may be represented by other program products such as damage assessment regulations. In contrast, indirect costs reflect the costs for activities that collectively support the ONMS's mission and operations. For example, indirect costs include general administrative support and traditional overheads. Although these costs may not be readily traced back to a specific direct activity, indirect costs may be allocated to direct activities using an indirect cost distribution rate.

Consistent with standard Federal accounting requirements, the ONMS is required to account for and report the full costs of its programs and activities. Further, the ONMS is authorized by law to recover reasonable costs of damage assessment and restoration activities under CEROLA, OPA, and the NMSA. Within the constraints of these legal provisions and their regulatory applications, the ONMS has the discretion to develop indirect cost rates for its component organizations and formulate policies on the recover of indirect cost rates subject to its requirements.

The ONMS Indirect Cost Effort

In October 2002, the ONMS hired the public accounting firm Cotton & Company (C&C) to: (1) Evaluate the cost accounting system and allocation practices; (2) recommend the appropriate indirect cost allocation methodology; and, (3) determine the indirect cost rates for the organizations that comprise the ONMS.

The ONMS requested an analysis of its indirect costs for fiscal year 2002. The goal was to develop the most appropriate indirect cost rate allocation methodology and rates for the ONMS component organizations. C&C has continued its assessment of the ONMS indirect cost rate system and structure annually from FY2002 through FY2006.

C&C concluded that the cost accounting system and allocation practices of the ONMS component organizations are consistent with Federal accounting requirements. C&C also determined that the most appropriate indirect allocation method was the Direct Labor Cost Base for all ONMS component organizations. The Direct Labor Cost Base is computed by allocating total indirect costs over the sum of direct labor dollars plus the application of NOAA's leave surcharge and benefits rates to direct labor. The indirect cost rates that C&C has computed for the ONNS component organizations were further assessed as being fair and equitable. A report on C&C's effort, their assessment of the ONMS's cost accounting system and practice, and their determination respecting the most appropriate indirect cost methodology and rates can be obtained from: Harriet Sopher, ONMS 1305 East West Highway, Silver Spring, MD 20910.

C&C reaffirmed that the Direct Labor Cost Base is the most appropriate indirect allocation method for the development of the FY 2006 indirect cost rates.

The ONMS Indirect Cost Rates and Policies

The ONMS will apply the indirect cost rates for FY 2006 as recommended by C&C for each of the ONMS component organizations as provided in the following table:

ONMS component organizationFY 2006 indirect rate (percent)
Office of National Marine Sanctuaries (ONMS)137.35
ONMS Florida Keys National Marine Sanctuary (FKNMS)216.43

The FY 2006 rates identified in this policy will be applied to all damage assessment and restoration case costs incurred between October 1, 2005 and present, using the Direct Labor Cost base allocation methodology. The ONMS will use the FY 2006 rates for future fiscal years until year-specific rates can be developed. For cases that have been settled and for costs claims paid prior to the effective date of the fiscal year in question, the ONMS will not re-open any resolved matters for the purpose of applying the rates in this policy. For cases not settled and cost claims not paid prior to the effective date of the fiscal year in question, costs will be recalculated using the rates in this policy.

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Dated: September 25, 2008.

Daniel J. Basta,

Director, Office of National Marine Sanctuaries.

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[FR Doc. E8-23453 Filed 10-3-08; 8:45 am]

BILLING CODE 3510-NK-M