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[quote=Anonymous][quote=Anonymous] All OH expenses are audited.  The rates are set not by the institutions, but by the auditors.  In my case, DCAA sets the OH rates.[/quote]

One more thing. Auditors do not question or determine whether a particular OH expense is truly required for the performance of funded project, 
only that it is legal, customary, and accords with policy. Yes, if I use OH to buy a Lambo, a yacht, or throw a party with strippers, auditors will stop that.
And if I hire my niece out of high school as VP for research, they will too. 
But if the uni hires dozens of provosts, VPs, managers, associate deans, and heads of various university offices 
at 150 - 400 K packages + benefits, that is perfectly fine as long as:
1. Their posted job descriptions mention advising, guiding, managing, controlling etc. research 
2. Their educational qualifications (Ph. D in sociology, management, psychology, public policy, and what not) are "terminal degrees" appropriate to the job, 
3. No in-your-face nepotism is involved
4. Their salaries and numbers are "customary" (meaning that other similar institutions do the same)

This is like all realtors have told you you should pay 6% commission, which is "necessary" to cover the costs (as they determine that maintaining a fancy 
office with a secretary is "necessary") and "customary" (meaning that "others do the same"). Then came Redfin. 
[/quote]

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