Part III - Chapter 17: Indirect Costs - Office of Justice Programs A grantee that expends less than $750,000 during the entity's fiscal year in federal awards is exempt from the single audit required by 2 CFR 200, Subpart F, Section 501(d). Another revision adds language to 2 CFR 200.414(f) to clarify that when a non-Federal entity is using the de minimis rate for its Federal grants, it is not required to provide proof of costs that are covered under that rate. 2018 District and Charter School Indirect Cost Rates, effective 7/1/2017 - 6/30/2018. Below are the names, email addresses and telephone numbers of the Contract Specialist responsible to negotiate each organizations indirect cost rate agreement (NICRA). The purpose of this spreadsheet is to identify effected awards, gauge materiality and identify any indirect cost limitations. M/OAA/CAS/OCC establishes Negotiated Indirect Cost Rate Agreements (NICRA) for U.S. and foreign organizations with awards issued by the Bureau for Managements, Office of Acquisition and Assistance (M/OAA) in Washington, DC. NSF's Cost Analysis and Pre-Award Branch negotiates indirect cost rates for the organizations for which NSF has rate cognizance. Example Personnel Cost Worksheet regarding timesheet with comments from the 2 CFR 200 addressing the use of records to support the work performed. When an organization considers the final indirect cost rate to be a reasonable estimate of its rate for coming year, it will be established as the new provisional rate. Timekeeping is performed in accordance with company policies and procedures. Indirect Cost Negotiations PSC offers a full range of top-level review and negotiation services for indirect cost rates and cost allocation plans associated with Federal grants and contracts. If an extension is granted the non-Federal entity may not request a rate review until the extension period ends. 2. First Time Provisional NICRA SubmissionPrepare the indirect cost rate proposal by using the Indirect Cost Rate (ICR) Proposal Checklist for First Time NICRAs included in Section 2.E. An indirect cost rate is calculated as a percentage by dividing the total allowable indirect costs by an equitable distribution base, as an example: Indirect pool$150,000Distribution base$776,700Indirect cost rate19.31%. The G&A expenses are those that have been incurred for the overall general executive and administrative offices of the organization and other expenses of a general nature which do not relate solely to any major function of the organization. Follow up, after reviewing the indirect cost proposal, with questions, and/or concerns and may request additional documentation, and/or narrative responses, in support of the proposal (for more detailed steps see Section 2.G., Indirect Cost Proposal M/OAA/CAS/ OCCs Review Procedures, of this guide.). Facilities is defined as general administration and general expenses such as the director's office, accounting, personnel and all other types of expenditures not listed specifically un. For small businesses, supporting documentation can include reviewed financial statements with the associated indirect cost calculations. Determine that the proposal reconciles with the supporting audit, official budget and financial statements. eCFR :: 2 CFR 200.332 -- Requirements for pass-through entities. Share sensitive information only on official, secure websites. The direct funding of indirect costs.b. If a state's plan satisfies the requirements of the Social Security Act, the federal government acting through HHS helps fund the program according to a matching formula. Your Notice of Award (NoA) contains administrative information, legislative and fiscal data, and names and phone numbers of grant and program office staff. If thisde minimisapproach is chosen, the 10% rate must be applied consistently across all an organization's federal awards until the organization chooses to negotiate an indirect cost rate. ceiling rates or amounts.c. Reconciliation schedule for each indirect cost pool and allocation base showing each reclassification and adjustment to the financial statements to arrive at the cost pools and allocation bases. A copy of the IRS letter granting nonprofit status. Tracking and recovering those costs are among the biggest challenges that any grant administrator will face. Failure by the parties to agree on any final rate(s) under this provision is considered a dispute within the meaning of the Standard Provision, Disputes. If a dispute arises in a negotiation of an indirect cost rate between the cognizant agency for indirect costs and the nonprofit organization, the dispute must be resolved in accordance with the appeals procedures of the cognizant agency for indirect costs. ( a) The differences between direct and indirect costs and the principles for determining the general indirect cost rate that a grantee may use for grants under most programs are specified in the cost principles for An official website of the United States government. The indirect cost rate is designed to provide a method for full cost recovery, and it is an equitable, logical and consistent process for allocating costs not directly associated with a single grant/contract, project or cost objective. Indirect cost rate proposal, detailing indirect expenses by function and cost category, fund distribution of the direct cost base by function and cost category, and including a reconciliation between the proposal and the financial statements for the applicable fiscal years; all differences must be explained. The indirect costs allocated to each function are then distributed to individual Federal awards and other activities included in that function by means of an indirect cost rate(s). Each grouping must then be allocated individually to benefitting functions by means of a base which best measures the relative benefits. Prior to the preparation of an indirect cost rate proposal and supporting documentation, the cost principles in 2 CFR 200, Subpart E should be reviewed to determine if the costs proposed are reasonable, allowable and allocable. Grantees should send their submission to NON- PROFIT-ICR-PROPOSAL@USAID.GOV. Indirect costs are those that are incurred for common or joint objectives and therefore cannot be identified readily and specifically with a particular sponsored project, an instructional activity, or any other institutional activity (2 CFR 200.1).. Predetermined or fixed rates may replace provisional rates at any time prior to the close of the organization's fiscal year. Indirect Cost Rate Methods must be formalized Indirect Cost Rate Not needed if you have only one federal funding source . Which agency should approve my indirect cost rate (s) and issue a Negotiation Agreement? indirect cost rates. Note that Section 2 of the Guide identifies steps to prepare an indirect cost rate proposal. There are instances when the allocation base will include annual, sick, and holiday leave as part of the base of application. UA 10.4.1D, Angelina Ball, Sr. Assure that the indirect cost rate calculation is in accordance with the accepted rate methodology. Title 2 of the Code of Federal Regulation Part 200 (2 CFR 200), titled Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards establishes the federal requirements for the determination of allowable and unallowable direct and indirect costs, and is available at the following website: http://www.ecfr.gov. Negotiate rates as responsible stewards of federal funds. You will need to know your organization's applicable indirect cost base (or MTDC), the applicable indirect rate, and proposal budget in US dollar values. EF. Indirect cost rate proposal preparation policies and procedures, which describe how the organization prepares its annual indirect cost rate proposal. Completed lobbying certificate, which verifies that the organization does not include lobbying costs in their indirect costs. A lock Conferences except those held to conduct the general administration of the non-Federal entity, Maintenance, protection, and investment of special funds not used in operation of the non-Federal entity. A Negotiated Indirect Cost Rate Agreement (NICRA) is a formal written agreement between your organization and its cognizant federal agency describing how the organization will calculate indirect costs. In some instances, a single indirect cost rate for all activities of an organization or for each major function of the organization may not be appropriate, since it would not take into account those different factors which may substantially affect the indirect costs applicable to a particular segment of work. What is an indirect cost rate? Reliability and accuracy of an organizations labor charging system is essential. Maintenance of membership rolls, subscriptions, publications, and related functions. Specific instructions on the computation of indirect cost rates with the conditions on when to use each method are contained in 2 CFR 200, Subpart F, Appendix IV, Section B. Lobbying Cost Certificate in accordance with 2 CFR 200, Subpart E, Section 200.450(c) 2 (vi)b. ( 2 ) All requirements imposed by the pass-through entity on the subrecipient so that the Federal award is used in accordance with Federal statutes, regulations and the terms and conditions of the Federal award; Sample Indirect Cost Rate Proposals The following is an example of Indirect Cost Rate Proposal methodologies using the Single Rate Method and Two Rate Method. Indicate which, if any, of the following the organization used to establish executive compensation, and provide the following supporting documentation: Approval by the board or compensation committee. the dated Theindirectcostrate(s)contained ay herein 18,2000 areforuse ongrants andcontractswiththeFederalGovernmenttowhich OM B Circular A-122 appliessubjecttothelimitationscontained theCircularandSection II-A, below. If the awardee still disagrees and does not sign the rate agreement with NSF, then the appeal procedures should be invoked within 30 days of issuance of the unilateral rate agreement (seePAPPG XII) or the right of appeal may be lost and the agreement is determined to be in effect. Provide the amount of executive compensation paid to the top 5 executives. What is an indirect cost rate? Rate per mile. The Appendix IV includes a sample of a deviation letter to be issue when an indirect cost rate other than that specified in the NICRA is used in an award. NSF's Cost Analysis and Pre-Award Branch is responsible for negotiating and issuing indirect cost rates for NSF's cognizant awardees. 2 CFR 200, Subpart E, Section 200.414 (f) specifies that any non-Federal entity that has never received a negotiated indirect cost rate may elect to charge a de minimis rate of 10% of modified total direct costs (MTDC) which may be used indefinitely. The Office of Management and Budget (OMB) published Title 2 of the Code of Federal Regulations Part 200 (2 CFR 200), titled Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards to streamline the Government-wide guidance on Administrative Requirements, Cost Principles, and Audit Requirements for Federal awards. Selecting the best ICR is an Alternatively, the Cost Analysis and Pre-Award Branch may issue a recommendation for an award-specific rate. Provisional rate or billing rate is a temporary ICR applicable to a specified period which is used for funding, interim reimbursement, and reporting indirect costs on federal awards pending the establishment of a final rate for the period. (i.e., capital expenditures and major contracts and subgrants). General Rule: Offisite, Alexis Johnson, Closeout Contract Specialist. 2 CFR 200, Subpart F, Appendix IV, Section B. identifies the following specific methods for allocating indirect costs. Immediately upon receiving an appeal, the Deputy Assistant Administrator, Bureau for Management, or designee, and the AO must forward the appeal to the Bureau for Management, Office of Acquisition and Assistance, Compliance Division (M/OAA/C) at compliance@usaid.gov. 2 CFR 200, Subpart A, Section 200.56 defines Indirect (facilities & administrative (F&A)) costs for Major nonprofit organizations: Indirect (F&A) costs means those costs incurred for a common or joint purpose benefitting more than one cost objective, and not readily assignable to the cost objectives specifically benefitted, without effort disproportionate to the results achieved. See also 2 CFR 200, Subpart E, Section 200.442, Fundraising and investment management costs, and. If you receive a multi-year award, we will include information on anticipated subsequent funding periods and their tentative levels of funding. The AO must place a copy of the final decision in the award files. Level of Federal fundingvalue= c. Reports generated from their accounting systemd. If use of privately owned automobile is authorized or if no Government-furnished automobile is available. These records must support the distribution of the employees salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. In this case, the type of rate, percentage rate, and application base will be specified in the award letter. The Negotiated Indirect Cost Rate Agreement shall specify: (a) the final rate(s), (b) the base(s) to which the rate(s) apply, and (c) the period(s) for which the rate(s) apply. a. Percentage rate. Some issues that may be raised by an M/OAA/CAS/OCC indirect cost rate negotiator during, or after, the review of an indirect cost rate proposal, usually result from non-profit organizations not following the required procedures. Frequently asked questions about financial assistance Be aware that the NICRA does not change any monetary ceiling, obligation or specific cost allowance or disallowance provided for in each award between the parties. The fringe benefits base of application is total direct and indirect labor dollars. Download Example - DStatement of Treatment of Paid Absence, Lobbying Cost Certificate, and Certificate of Indirect Cost [PDF 47 KB]. PDF Indirect Cost Rate Agreement and Rate Proposal Guidance How can we determine our cognizant agency for our indirect cost rate(s)? It is a required standard form used as a states that provisional and final rates must be negotiated where neither predetermined nor fixed rates are appropriate. Generally, an organization uses the prior years final indirect cost rates as the new provisional (until amended) rates when an organization believes the final rates represent a reasonable estimate of the next years expected actual rates. Although there are different methodologies available for allocating costs, the methodology used should result in an equitable distribution of costs to programs. Make any agreed upon changes, and request any revised, and/or supporting documentation. Title changed on 3.B from Time Distribution Report to Personnel Activity Report. The ICR will then apply across all federal grant programs that an organization operates. FixedA fixed rate is an indirect cost rate with the same characteristics as a predetermined rate, except that the difference between the estimated costs and the actual costs of the period covered by the rate is carried forward as an adjustment to the rate computation of a subsequent period. No hearing will be provided. rate, except for those non-Federal entities described in 2 CFR Part 200, Appendix VII, Section D(1)(b) and 45 CFR Part 75, Appendix VII may elect to charge a de minimis rate of . Please provide a schedule showing the amount excluded under each subaward. Administration of group benefits on behalf of members or clients, including life and hospital insurance, annuity or retirement plans, and financial aid. Grants.gov The SF-424 must be submitted in Grants.gov. discretionary grants and cooperative . To the extent that indirect costs are reasonable, allowable and allocable, they are a legitimate cost of doing business payable under a U.S. Government contract or grant. Reconciliation of total expenses included in the indirect cost rate proposal to financial statement total expenses and explaining any reconciling items from the indirect cost pool or direct cost base. Billings and charges to federal grants and contracts must be adjusted if the final rate varies from the provisional rate. ), a. Frequently Asked Questions (FAQs) | U.S. Department of Labor (xiv) Indirect cost rate for the Federal award (including if the de minimis rate is charged) per 200.414. The proposed allocation base(s) is subject to negotiation and approval by USAID. Indirect Cost Rates 75.560 General indirect cost rates; exceptions. Completed certificate of indirect costs, signed by an organization representative who has the authority to contractually bind the organization. In order to recover indirect costs related to federal awards, most organizations must negotiate an indirect cost rate with the federal agency that provides the preponderance of funding to that organization in the case of colleges and universities, this is usually the Department of Health and Human Services. Leave absence such as vacation, holiday, sick leave, and other paid absences were included in salaries. NSF negotiates formal negotiated indirect cost rate agreements, or NICRAs, for ~100 organizations. The grantee is required to provide written notification to the indirect cost negotiator prior to implementing any changes which could affect the applicability of the approved rates. The AOs decision is final unless the recipient appeals the decision. General Information Overhead, Special Cost and Closeout Branch When the U.S. Agency for International Development (USAID) provides the majority of a non-profit organization's Federal funding, it is the cognizant Federal agency for negotiating the organization's indirect cost rates. a. If adequately supported, a revised provisional rate will be issued. Indirect cost rates are also known as indirect rates or Facility and Administrative rates (F&A rates). Billing & funding forms; Certification acceptance; Consultant agreements & indirect cost rate . NSF's Indirect Cost Rate Policies How does the effective date apply to negotiated indirect cost rates? How do you provide the detail for the sub-awards under the "other" line item? Treatment of paid absences and signed statement of treatment of paid absences if it has changed. Determine that the applicable cost principles stated in 2 CFR 200 were followed. If indirect costs are allowed under the terms of the award, the entity will then be ready to prepare an indirect cost rate proposal beginning with the following steps: a. Some nonprofit organizations treat all costs as direct costs except general administration and general expenses. A final rate is not subject to adjustment. Each reclassification and adjustment must be explained in notes to the reconciliation schedule. PDF Indirect Cost Rates - Arizona Department of Economic Security If the organization subsequently wins the award a NICRA will then be issued. Generally, for commercial, for-profit companies and nonprofit organizations, the Federal agency that provides the most funding is the cognizant agency and normally responsible to establish indirect cost rates. allowable costs incurred and are subject to . Provide a Certificate of Indirect Costs in accordance with 2 CFR 200, Subpart F, Appendix IV, Section D. Documentation and steps needed to finalize indirect cost rates: a. The following links lead to current and prior-year indirect cost rates for education service centers: 2024 Education Service Center Rates, effective 7/1/2023 - 6/30/2024. Special attention will be given to the choice of the individual indirect cost rate allocation bases to ensure they result in an equitable allocation of indirect costs to final cost objectives. Confirmation Code for Filing the 2023-24 PSA (added 05-Jul-2023) Previous year confirmation code sent to all private schools for filing the 2023-34 PSA; Annual Private School Affidavit Filing Notice (added 05-Jul-2023) Annual reminder notice sent to all private schools regarding filing the private school affidavit. PDF A Guide for Indirect Cost Rate Determination - U.S. Department of Labor Please refer to Section 1.F below titled Determination of Indirect Cost Rates and Cost Allocation for information on the base of application. Overhead rate. Listing of all grants and contracts that were active during the fiscal year, including total dollar amount, period of performance, and indirect cost limitations. Based on various information available (e.g., historical cost information and the level of funding being requested), the branch negotiates the funding of indirect costs, typically as a rate. Provide requested supporting documentation to facilitate the proposal reviews. Information to Complete the Application for Federal Assistance (SF-424) in . Determine if USAID is the federal cognizant agency, i.e. Also, 2 CFR 200, Subpart E, Section 430(i)(3) states that in accordance with Department of Labor regulations implementing the Fair Labor Standards Act (FLSA) (29 CFR part 516),charges for the salaries and wages of nonexempt employees, in addition to the supporting documentation described in this section,must also be supported by records indicating the total number of hours worked each day. What is in your Notice of Award (NoA)? A schedule that summarizes total cost by line item expenditure, which should include , but not be limited to: Total expenditures (reconcilable to the audit if using actual numbers), Indirect cost rate calculation and federal percentage. Direct costs are identified specifically with a particular final cost objective, such as a Federal award, or other internally or externally . Prepare the following documents, and have them signed by the Executive Director, or other designated official with the organizations signature authority (examples of each of these can be found in Section 3 of this guide. Click on the following headings to learn more about negotiating an indirect cost rate with NSF: Once NSF's Cost Analysis and Pre-Award Branch receives and accepts an awardee's indirect cost rate proposal, it verifies that the proposal complies with the applicable federal cost principles. 2 CFR 200, Subpart F, Appendix IV, Section B.3.a, states that where an organization's indirect costs benefit its major functions in varying degrees, indirect costs must be accumulated into separate cost groupings. Description of changes in accounting or cost allocation methods made since that last submission. Indirect Costs - Guide Sheet - Office of Justice Programs After the review and negotiation is finalized, NSF sends a letter detailing the results of the negotiation, also known as a NICRA, to be signed by the awardee. The site is secure. 4. These records must be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated, and be incorporated into the official records of the non-Federal entity. The rate should be expressed as the percentage which the total amount of allowable indirect costs bears to the base selected. The Appendix I includes a sample of the USAID Negotiated Indirect Cost Rate Agreement (NICRA). eCFR :: 2 CFR 200.414 -- Indirect (F&A) costs. Did your organization receive more than $10 million in federal funding of direct costs in the fiscal year(s) in which you are requesting an indirect cost rate? This page outlines important information regarding the U.S. National Science Foundation's indirect cost rate policies. Where an organization's indirect costs benefit its major functions in varying degrees, indirect costs must be accumulated into separate indirect cost pools. After USAID issues a final indirect cost rate, M/OAA/CAS/OCC will establish a provisional rate for the next fiscal year. of this guide. Reconcile the indirect cost rate proposal to the audited financial statements. Indirect cost rates identified in the NICRA apply to all cost reimbursable awards that incorporate provisional indirect rates. A budget modification is required as indicated in Chapter 3.5 Adjustment to Awards. ( a) General. The appeal must be in writing and must be postmarked within thirty (30) calendar days of receipt of the AOs final decision. Note: Due to limitations of funds provided under assistance awards, grants and cooperative agreements, additional funds will not be provided to cover increases in indirect costs, regardless of the type of rate used. Replaced statement under 3.A. The portion of subawards that exceed $25,000 (per subaward, regardless of period). Note: Due to limitations of funds provided under assistance awards, grants and cooperative agreements, additional funds will not be provided to cover increases in indirect costs, regardless of the type of rate used. The first set of procedures is for an organization seeking its first NICRA and the second set is related to the issuance of subsequent NICRAs. Administrative Assistant, Download Example - Multiple Allocation Method, Title changed in the section 3.B of the Table of Contents from Time Distribution Report to Personnel Activity Report. Final rate means an indirect cost rate applicable to a specified past period which is based on the actual costs of the period.

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