The indirect costs rate is limited by federal statute or regulation. Refer to Section 2. F&A costs for the first $25,000 of each consortium may be included in the modified total direct cost base, when calculating the overall F&A rate, as long as your institution's negotiated F&A rate agreement does not express prohibit it. Decide on what kind of electronic signature to generate. An official website of the United States government. The appeal must be in writing and must be postmarked within thirty (30) calendar days of receipt of the AOs final decision. The cost base describes the direct cost pool (types of costs and cost caps) to which the indirect cost rate is applied. Each reclassification and adjustment must be explained in notes to the reconciliation schedule. The final indirect cost rates are negotiated based on the audited actual indirect cost rates. ), please provide all applicable final indirect cost rate data as specified in the Federal Acquisition Regulation (FAR) 52.216-7 (d) (2) (iii) for that . Indirect Cost Rate Proposal (ICR) Checklist for First Time NICRA. The rate is expressed as a percentage of indirect costs (numerator) and direct costs (denominator). Although there are different methodologies available for allocating costs, the methodology used should result in an equitable distribution of costs to programs. Your organization needs an indirect cost rate for: management information, to be in compliance with Federal regulations, 2 CFR Part 200, Subpart E & Appendix IV, or the FAR (whichever applies), close-out purposes, and for audit documentation. To facilitate equitable distribution of indirect expenses to the cost objectives served, it may be necessary to establish a number of pools of indirect (F&A) costs. Maintenance of membership rolls, subscriptions, publications, and related functions. Examples include salaries and benefits for staff and consultants working on the project, project-related travel, and supplies and equipment used on the project. If you have never received a negotiated indirect cost rate, you may elect to charge a de minimis rate of 10 percent of modified total direct costs. Breakdown of indirect salaries by position title, amount and indirect percentage. 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. Review the organization chart for a visual picture of the flow of responsibility, identification of areas of common costs, and the location of those areas in which federally-funded activity exists. it is crucial to calculate the indirect costs both using the sponsor's indirect costs rate as well as our federally negotiated rate to ensure we are not charging excess indirect costs. 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). Nonetheless, 2 CFR 200, Subpart F, Appendix IV, Section C.2.c. Whether an organization has an automated or manual personnel activity reporting system there must be procedures, controls and an audit trail of documentation to support the labor costs. Georgia Tech's Facilities & Administrative (F&A) rates are established and approved by the Office of Naval Research (ONR). The direct funding of indirect costs.b. The AO must place a copy of the final decision in the award files. Knowing these procedures while preparing an indirect cost rate proposal, may make the review process more efficient and timely. Create your eSignature and click on the OK . IMPORTANT NOTE: Under 2 CFR 200 Appendix III C. 7., rates are fixed for the life of the sponsored agreement. The Appendix III includes the indirect cost proposal (ICP) checklist for nonprofit entities which identifies the required documentation to be provided by each non-profit organization. MTDC is defined at 2 CFR 200.68 as being: "All direct salaries and wages, applicable fringe benefits, materials and supplies, services, travel, and up to the first $25,000 of each subaward (regardless of the period of performance of the subawards under the award). If an organization believes the future rates will be materially different than the previous finalized rates, it should propose the more accurate provisional rates with adequate supporting documentation and rationale. Negotiated indirect cost rate approval does not need to be included in the application but will need to be provided if a grant is awarded. Per 2 CFR Section 200.1 (definition of MTDC), standard exclusions include expenditures for: Capital equipment Capital expenditures Participant support costs Patient care charges Rental of space Scholarships and fellowships 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. The accounting system structure and capabilities should also be considered. The allocation base selected by the non-profit organization must be: Per 2 CFR 200, Subpart F, Appendix IV, Section C.2.b., organizations that do not have a NICRA with the Federal government are required to provide their initial indirect cost proposal immediately but no later than 3 months after the effective date of the Federal award which first incorporates indirect cost rates. a permanent rate determined after an organizations actual costs for a current year are known. This extension will be subject to the review and approval of the cognizant agency for indirect costs. 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 (2 CFR Appendix III (c)(7)(a)). General & Administrative (G&A) rate. A final rate is used to adjust indirect costs claimed based on a provisional rate. See also 2 CFR 200, Subpart E, Section 200.442, Fundraising and investment management costs, and. See Appendix II of this guide titled, Frequently Asked Questions, for additional information on the 10% De minimis rate. 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. The site is secure. A separate indirect cost rate(s) is usually necessary for each department or agency of the governmental . Below are the names, email addresses and telephone numbers of the Contract Specialist responsible to negotiate each organizations indirect cost rate agreement (NICRA). You should choose the base that would result in the fairest and most equitable allocation of indirect costs across your funding sources. 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. Include the level of transaction testing performed by the independent auditor on direct and indirect costs claimed. Scam Advisory: Recent reports indicate that individuals are posing as the NEH on email and social media. Direct costs must align with the cost principles, including allowability (2 CFR 200.403), reasonableness (2 CFR 200.404), and allocability (2 CFR 200.405). describing how the organization will calculate indirect costs. 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. indirect cost rate agreement. When preparing your budget, you must treat costs that you classify as direct or indirect consistently. A copy of the organizations bonus policy. Prior year audited financial statements including any affiliated organizations, and the single audit in accordance with 2 CFR 200, Subpart F, Section 200.512(a)(1). 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. Some nonprofit organizations treat all costs as direct costs except general administration and general expenses. The proposal and related documentation must be retained for audit. , are incurred for the benefit or joint objectives of a specific project and organizational activities. Organized Research research and development activities of an institution that are separately budgeted and accounted for as scientific research and generally not scholarly inquiry of the type most often supported by NEH. 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. Again, for this approach, once the negotiated ICR is approved, organizations will calculate the actual 2 indirect costs on a periodic basis. Review severance payments for reasonableness. The following resources are provided to aid grantees in the administration of Federal grants awarded by the Department of Education. This paragraph applies to the following types of documents and their supporting records: indirect cost rate computations or proposals, cost allocation plans, and any similar accounting computations of the rate at which a particular group of costs is chargeable (such as computer usage chargeback rates or composite fringe benefit rates). Some examples of this category include central offices, such as the director's office, the office of finance, business services, budget and planning, personnel, safety and risk management, general counsel, and management information systems costs. Defines the costs that compose the indirect cost pool. 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. For reference purposes, see 2 CFR 200, Subpart D, Section 200.302, Financial Management. UA 10.4.1D, Angelina Ball, Sr. Federal award recipients that recover administrative overhead costs through the use of an indirect cost rate (ICR) must submit an annual ICR proposal to: The organization must have an established accounting system prior to being awarded a grant or contract with a federal government agency. Provide any input related to any anticipated changes in business volume, organizational structure, and/or indirect rate structure for the new fiscal year. It also provides awardee personnel with a record of the awardees practices in the event of personnel changes (only changes to accounting practices or allocation methods need be submitted after the first year). If your organization wants to negotiate a NICRA and NEH is its cognizant agency, see Guidance for Negotiating an Indirect Cost Rate Agreement with NEH. 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. To recover indirect costs related to an NEH award, your organization must either negotiate an indirect cost rate with its cognizant agency prior to a federal award or elect to use a de minimis rate of 10% of modified total direct costs (MTDC) (, A Negotiated Indirect Cost Rate Agreement (NICRA) is a formal written agreement between your organization and its. 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. Providing services and information to members, legislative or administrative bodies, or the public. Make any agreed upon changes, and request any revised, and/or supporting documentation. Download Example - Personnel Cost Worksheet [PDF 52 KB]. Document meetings, telephone conversations, and e-mails. There are instances when the allocation base will include annual, sick, and holiday leave as part of the base of application. Indirect rates are used for Incurred Costs Proposals. The Appendix II includes a list of some frequently asked questions by organizations on areas such as the OMB Super Circular (2 CFR 200); establishing indirect cost rates and a NICRA; the time period for establishing a NICRA; direct versus indirect costs; and award modification based on the NICRA. 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. Submission requirements are located on page 2 of the Uniform Budget Template as well as 2 CFR 200 Appendices IV, V & VII. 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. 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. These costs are allocated equitably across all of your organizations activities. After receiving the indirect cost proposal M/OAA/CAS/OCC will perform the following steps: Note that NICRAs are not issued to sub-awardees since there is no legal relationship between USAID and the sub-awardee. Costs must be consistently charged as either indirect or modified total direct costs, and may not be double charged or inconsistently charged as both. The result of this calculation represents the allowable indirect costs for the project. The base of application for this example is total costs excluding G&A expenses. You can find 3 variants; a drawn, uploaded or typed signature. ), you may choose to use a de minimis rate of 10% of modified total direct costs (MTDC). The rate in each case must be stated as a percentage which the amount of the particular indirect category (i.e., Facilities or Administration) is of the distribution base identified with that category.______ No. 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. For awards that incorporate these indirect cost rates, the organization needs to promptly submit adjustment billings/vouchers or final vouchers for all cost reimbursement grants, contracts or other agreements. A NICRA establishes the following to calculate indirect costs: base (s) rate (s) applicable period (s) All direct salaries and wages, applicable fringe benefits, materials and supplies, services, travel, and up to the first $25,000 of each subaward (regardless of the period of performance of the subawards under the award). 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 CPS should be tailored to fit the specific policies of each organization. Try to keep the allocation as simple as possible. Submit a draft NICRA to the organization for their review of the indirect cost rates methodology, and obtain their concurrence. When the U.S. Agency for International Development (USAID) provides the majority of a non-profit organizations Federal funding, it is the cognizant Federal agency for negotiating the organizations indirect cost rates. Note: Salaries and fringes included in this exhibit are for illustrative purposes only. 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. Replaced statement under 3.A. Certificate of Indirect Costs in accordance with 2 CFR 200, Subpart F, Appendix IV, Section D. Compile all remaining documentation identified in the indirect cost proposal checklist, such as: The following allocation bases are acceptable examples for use when indirect costs are allocated to benefiting cost objectives by means of an indirect cost rate. A final rate is not subject to adjustment. 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. PSC's dedicated employees of idirect cost tariff negotiators include domain in federal allot policy, Generally Accepted Reporting Company, business best practices, and fare marketplace values to evaluate grantee capability to perform grant activities. The AOs decision is final unless the recipient appeals the decision. 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. The administrative requirements and cost principles apply to new awards authorized on or after December 26, 2014. Once NEH issues an award, it is not obligated to make adjustments due to increases in your organizations indirect cost rate agreement. The Total Direct Cost (TDC) base includes all direct costs without exclusions. 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. Grantees should send their submission to NON- PROFIT-ICR-PROPOSAL@USAID.GOV. A copy of the organizations severance policy. 2 CFR Appendix II to Section 200 - Indirect (F&A) Costs Identification also Assign, and Rate . 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. Reconcile the indirect cost rate proposal to the audited financial statements. These costs are allocated equitably across all of your organizations activities. Depreciation schedule if depreciation is included as indirect costs. Other Sponsored Activities programs and projects that involve the performance of work other than instruction and organized research. Reimbursement of indirect costs are subject to the submission of an indirect cost rate proposal, availability of funds, statutory and administrative restrictions, and the approval of the USAID Grant Officer or authorized representative.