cost allocation methodology. To prevent substantial overpayment or underpayment of indirect cost during the fiscal year, a revised provisional rate may be requested by the organization. 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. These costs are allocated equitably across all of your organizations activities. Availability of data on square footage, number of transactions, employees, purchase orders, etc.e. If your organization has a NICRA, you may apply to your cognizant agency for a one-time extension of a current agreement for a period of up to four years, in accordance with, if you do not have a current or provisional negotiated rate (except for local governments claiming central service costs under. Employee signature and Supervisor approval of labor hours (verifiable whether your timekeeping is electronic or manual) are evident. The .gov means its official. Calculating Indirect Cost Rate for Non-Profits - PLANERGY Software Laws, Regulations and Guidance. To calculate the rate, you would divide (A) by (B), yielding an indirect cost rate of 66.66%. 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). PDF Indirect Cost Rates Handbook - Texas Education Agency 200.414(f), a description of the modified total direct cost The CPS should include, as a minimum, the following information: The Statement of Treatment of Paid Absences certificate recognizes the organizations treatment of vacation, holiday, sick, and other paid absences. In dieser fixed-priced type grants, individual run offices may authorize the use of lock indirect cost rates using the IRS Form 990 alternative calculation method. Indirect costs represent administrative expenses associated with the cost of doing business that are not readily identified project activities. PredeterminedA predetermined indirect cost rate is applicable to a specified current or future period, usually the organization's fiscal year. direct salaries and wages including (or excluding) fringe benefits, direct salaries and wages including vacation, holiday, sick pay, and other paid absences, Provides the separate rates for allocating. PDF A Guide for Indirect Cost Rate Determination - DOL Promotion, lobbying, and other forms of public relations. Indirect Cost Calculator | NFWF An organization 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. Facilities and administrative costs Facilities costs are the overall costs of operating and maintaining facilities owned or leased by the organization in which activities that may directly or indirectly support your project are taking place. Review executive compensation of the top five executives for reasonableness. Document meeting, telephone conversations, and e-mails. 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. Below are the names, email addresses and telephone numbers of the Contract Specialist responsible to negotiate each organizations indirect cost rate agreement (NICRA). 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.). If the rate agreement in effect at the beginning of the period does not cover the entire period of performance, then NEH will use the rate in effect for the last year of the negotiated rate agreement to determine indirect costs for the duration of the period of performance, Likewise, recipient organizations that issue subawards (referred to as pass-through entities) must accept subrecipients applicable federally negotiated indirect cost rates. The statements must be reconciled to the indirect cost rate(s) calculation. 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. Indirect cost proposals must follow the cost principles available at 2 CFR Part 200, Appendix VII. A 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. As of November 1, 2016 the following changes have been made to the OCC Guide for Non-Profit Organizations. Make any agreed upon changes, and request any revised, and/or supporting documentation. If adequately supported, a revised provisional rate will be issued. Stick to the step-by-step recommendations below to eSign your nicra form: Select the document you would like to sign and click on the Upload button. Grantees should send their submission to NON- PROFIT-ICR-PROPOSAL@USAID.GOV. 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. The site is secure. The column labelled as indirect is where you place all of the general costs of being in business. MTDC excludes equipment, capital expenditures, charges for patient care, rental costs, tuition remission, scholarships and fellowships, participant support costs and the portion of each subaward in excess of $25,000. 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. When calculating indirect costs, select the appropriate cost base, as established in the NICRA, to determine the direct costs to be multiplied by the applicable negotiated indirect cost rate. 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. Indirect Cost Rate Proposal (ICR) Checklist for First Time NICRA. The 2 CFR 200.430(i), Standards for Documentation of Personnel Expenses, states that charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed. 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. Establish a final ICR for a prior fiscal year. Once an agency is assigned cognizance for a particular nonprofit organization, the assignment will not be changed unless there is a shift in the dollar volume of the Federal awards to the organization for at least five years. Your organization may also selectively apply the de minimis rate in cases in which it does not have an applicable rate. Care needs to be taken to ensure that amounts claimed do not exceed award limitations or indirect cost rate ceilings. Indirect rates are used for Incurred Costs Proposals. SR 17 Et Al, Strategic Pavement Preservation 2023 | WSDOT Provide any input related to any anticipated changes in business volume, organizational structure, and/or indirect rate structure for the new fiscal year. To get started, create 4 more columns in your spreadsheet and label them as Direct, Indirect, Unallowable and Comments. Refer to Section 2. UA 10.4.1D, Angelina Ball, Sr. Instruction teaching and training activities of an institution except for research training. Nonetheless, 2 CFR 200, Subpart F, Appendix IV, Section C.2.c. For each type of rate proposed provide a detailed rate calculation to include the pool of expenses, the base of application, and all unallowable costs. The proposal and related documentation must be retained for audit. Costs must be consistently charged as either indirect or modified total direct costs, and may not be double charged or inconsistently charged as both. Join Team Meeting or dial in +1 (206) 531-0324 Access Code 524-008-947# (available 10:30 a.m. on bid day - bids opened after 11:00 a.m.) New to Teams? 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. Description of Cost Allocation Methodology. Examples include costs for clerical and managerial staff, depreciation, office space rental, and utilities. State/Local Governments may support the indirect costs that they incurred by submitting an Indirect Cost Rate (ICR) proposal or a Cost Allocation Plan (CAP) to their Federal cognizant agency. 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. 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. RBCS may at its discretion, increase the total level of funding available in this funding round from any available source provided the awards meet the requirements of the statute which made the funding available to the Agency. The checklist below addresses the documentation to provide and steps needed when seeking a revised provisional rate and/or final rates. This audit and certified indirect cost proposal will serve as the primary basis for the negotiation of final rates for the audited period. 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). Determine whether these unallowable or non-allocable items should be added to the distribution/allocation base. states a breakout of the indirect cost component into two broad categories, Facilities and Administration as defined in subparagraph A.3 of this appendix is required. The ceiling indirect cost rates or the indirect cost rates cited in grants or agreements, whichever is lower, will be used to determine the maximum allowable indirect costs on the grants or agreements. a 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 a rate adjustment in future years. A NICRA establishes the following to calculate indirect costs: The rate(s) established in a NICRA are typically effective for a two- to four-year period. 2 CFR 200, Subpart F, Appendix IV, Section C.2.g states that the result of each negotiation must be formalized in a written agreement between the cognizant agency for indirect costs and the nonprofit organization. A predetermined rate is typically not subject to adjustment. Budget Preparation: Indirect (F&A) Costs - University of Idaho Consistency in charging specific items of cost.b. 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. Indirect cost pools must be distributed to benefitted cost objectives on bases that will produce an equitable result in consideration of relative benefits derived (, The cognizant agency for indirect costs is the federal agency that is responsible for establishing cost allocation plans or indirect cost proposals on behalf of all federal agencies (, ). 2 CFR 200, Subpart F, Appendix IV, Section B.2.e. Perform a mathematical verification of each indirect cost rate calculation provided by the organization. To determine the MTDC base to which the F&A rate will be applied, add all direct costs then subtract the exclusions. Determine that "pass-through" funds have been excluded from the base. Two federal agencies, DOD and the Department of Health and Human Services (HHS), negotiate indirect cost rates used to reimburse higher education institutions for . 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. Under this method, common costs such as depreciation, rental costs, operation and maintenance of facilities, telephone expenses, and the like are pro-rated individually as direct costs to each category and to each award or other activity using a base which accurately measures the benefits provided to each award or other activity. Where an organization's indirect costs benefit its major functions in varying degrees, indirect costs must be accumulated into separate indirect cost pools. Responsibility for the negotiation of indirect cost rates for sub-awardees rests with the prime recipient. State/local governments' indirect costs are normally charged to federal awards by the use of an approved indirect cost rate. If chosen, this methodology once elected must be used consistently for all Federal awards until such time as a non-Federal entity chooses to negotiate for a rate, which the non-Federal entity may apply to do at any time. 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. Choose the My Signature button. 2 CFR 200, Subpart F, Appendix IV, Section B. identifies the following specific methods for allocating indirect costs. Send the appeal to the Deputy Assistant Administrator, Bureau for Management, U.S. Agency for International Development, Management Bureau, 1300 Pennsylvania Ave, NW, Washington, D.C. 20523. [PDF 259 KB]. 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. The rate should be expressed as the percentage which the total amount of allowable indirect costs bears to the base selected. A separate indirect cost rate(s) is usually necessary for each department or agency of the governmental . This checklist is also included in Appendix IV, Indirect Cost Rate Proposal Checklist for Subsequent NICRAs, and includes the basic instructions to complete and send your revised provisional or final indirect cost rate proposal. Administration 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 under one of the subcategories of Facilities (including cross allocations from other pools, where applicable). 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. Lobbying Cost Certificate in accordance with 2 CFR 200, Subpart E, Section 200.450(c) 2 (vi)b. The CPS should be tailored to fit the specific policies of each organization. Review severance payments for reasonableness. This Indirect Cost Rate Guide (Guide) has been prepared to assist non-profit organizations to understand the requirements for the determination of indirect cost rates for application on cost reimbursable grants and other agreements awarded by the United States Agency for International Development (USAID). 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. 2 CFR 200, Subpart F, Appendix IV, Section B.2.a., states that where an organization's major functions benefit from its indirect costs to approximately the same degree, the allocation of indirect costs may be accomplished by (i) separating the organization's total costs for the base period as either direct or indirect, and (ii) dividing the total allowable indirect costs (net of applicable credits) by an equitable distribution base. Statement of Treatment of Paid Absencesb. USAID provides the majority of the organizations funding from the Federal government. Schedule of all awards grouped by funding agency with majority federal funding listed on top. The fringe benefits base of application is total direct and indirect labor dollars. ). Submit your nominations for the 2024 NEH Jefferson Lecturer, NEH Jefferson Lecture in the Humanities nominations, General Guidance on Calculating Indirect Costs (PDF). Leave absence such as vacation, holiday, sick leave, and other paid absences were included in salaries. If no approved rate exists, the pass-through entity may negotiate an indirect cost rate with the subrecipient or accept the de minimis rate (. Refer to Appendix V for a sample of a deviation letter from the NICRA. PIs should carefully review the program guidelines to determine how the cost-share can be met by all partners. A predetermined rate may be negotiated for use on Federal awards where there is reasonable assurance, based on past experience and reliable projection of the organization's costs, that the rate is not likely to exceed a rate based on the organization's actual costs. Written policies and procedures for screening unallowable costs. The first category is direct cost which is the cost of actually doing work for clients. The result of this process is an indirect cost rate which is used to distribute indirect costs to individual Federal awards. Added to item 7. in the Indirect Cost Rate Proposal (ICR) Checklist for First Time NICRA comments on documentation to be provided by small business to support the proposed indirect cost rate. Q: Does both my department and my division need to approve the cost-share for my proposal? Indirect (F&A) cost pools must be distributed to benefitted cost objectives on bases that will produce an equitable result in consideration of relative benefits derived.. To update a 1977 study of indirect cost rates in Association of Research Libraries (ARL) member institutions, the Systems and Procedures Exchange Center (SPEC) contacted several member libraries and the National Association of College and University Business Officers (NACUBO) in 1980 for current information and documents. Description of non-profit's timekeeping system and a copy of a completed time sheet, if applicable, when an employee works on multiple activities or cost objectives. Any limitations placed upon the full recovery of indirect costs, i.e. The statements must be reconciled to the indirect cost rate(s) calculation. Modified Total Direct Costs, excludes equipment, capital expenditures, rental costs, tuition remission, scholarships and fellowships, participant support costs and the portion of each subaward in excess of $25,000. Therefore, care needs to be taken to ensure that amounts claimed do not exceed award limitations or indirect cost rate ceilings. This category must also include its allocable share of fringe benefit costs, operation and maintenance expense, depreciation, and interest costs. Download Example - Simplified Allocation Method [PDF 42 KB]. Conversely, if the organization is not successful in securing the award, no NICRA will be issued.