[Federal Register Volume 72, Number 118 (Wednesday, June 20, 2007)]
[Notices]
[Pages 33979-33980]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 07-3018]


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DEPARTMENT OF COMMERCE

National Oceanic and Atmospheric Administration


Notice of Indirect Cost Rates for the National Marine Sanctuary 
Program for Fiscal Year 2004

AGENCY: National Oceanic and Atmospheric Administration (NOAA), 
Commerce.

ACTION: Notice of indirect cost rates for the National Marine Sanctuary 
Program for fiscal year 2004.

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SUMMARY: The National Oceanic and Atmospheric Administration's (NOAA's) 
National Marine Sanctuary Program (NMSP) 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) 2004. 
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.

FOR FURTHER INFORMATION CONTACT: Harriet Sopher, 301-713-3125, ext. 
271; (FAX: 301-713-0404; email: [email protected].

SUPPLEMENTARY INFORMATION: The mission of the NMSP 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 NMSP consists of the following component organizations: Thirteen 
Marine Sanctuaries and one National Monument within NOAA's National 
Ocean Service. The NMSP conducts Natural Resource Damage Assessments 
(NRDAs) 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 NMSP, 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 
NMSP'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 NMSP 
is required to account for and report the full costs of its programs 
and activities. Further, the NMSP is authorized by law to recover 
reasonable costs of damage assessment and restoration activities under 
CERCLA, OPA, and the NMSA. Within the constraints of these legal 
provisions and their regulatory applications, the NMSP has the 
discretion to develop indirect cost rates for its component 
organizations and formulate policies on the recovery of indirect cost 
rates subject to its requirements.

The NMSP's Indirect Cost Effort

    In October 2002, the NMSP 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 NMSP.
    The NMSP 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 NMSP component 
organizations. C&C has continued its assessment of the NMSP's indirect 
cost rate system and structure from FY2002 to present.
    C&C concluded that the cost accounting system and allocation 
practices of the NMSP 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 NMSP 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 NMSP component organizations were further assessed as 
being fair and equitable. A report on C&C's effort, their assessment of 
the NMSP's cost accounting system practice, and their determination 
respecting the most appropriate indirect cost methodology and rates can 
be obtained from: Harriet Sopher, NMSP 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 
2004 indirect cost rates.

[[Page 33980]]

The NMSP's Indirect Cost Rates and Policies

    The NMSP will apply the indirect cost rates for FY 2004 as 
recommended by C&C for each of the NMSP component organizations as 
provided in the following table:

------------------------------------------------------------------------
                                                               FY 2004
                                                               indirect
                NMSP component organization                      rate
                                                              (percent)
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National Marine Sanctuary..................................
Program (NMSP).............................................       125.40
NMSP Florida Keys National.................................
Marine Sanctuary (FKNMS)...................................       198.37
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    The FY 2004 rates identified in this policy will be applied to all 
damage assessment and restoration case costs incurred between October 
1, 2003 and September 30, 2004, using the Direct Labor Cost base 
allocation methodology. For cases that have settled and for costs 
claims paid prior to the effective date of the fiscal year in question, 
the NMSP 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. 
The NMSP will use the FY 2004 rates for future fiscal years until year-
specific rates can be developed.

    Dated: June 11, 2007
Daniel J. Basta,
Director, National Marine Sanctuary Program.
[FR Doc. 07-3018 Filed 6-19-07; 8:45 am]
BILLING CODE 3510-NK-M