[Federal Register Volume 73, Number 194 (Monday, October 6, 2008)]
[Notices]
[Pages 58126-58127]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E8-23453]


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DEPARTMENT OF COMMERCE

National Oceanic and Atmospheric Administration


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

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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[[Page 58127]]

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.

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

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:

------------------------------------------------------------------------
                                                              FY 2006
              ONMS component  organization                 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.

    Dated: September 25, 2008.
Daniel J. Basta,
Director, Office of National Marine Sanctuaries.
[FR Doc. E8-23453 Filed 10-3-08; 8:45 am]
BILLING CODE 3510-NK-M