In summierung, 2 CFR 200, Subpart A, Abteilung 200.57 defines an indirect cost rate offer as the documentation prepared via a non-Federal business to substantiate its request for the establishment of an indirecly cost rate. 2 CFR Appendix II to Section 200 - Indirect (F&A) Costs Identification also Assign, and Rate . 2.0 Loading Home Buying Calculators How Much House Can Afford Mortgage Calculator Rent Buy Closing Costs Calculator Helpful Guides Home Buying Guide Veteran Home Buying Guide Compare Rates Today Mortgage Rates Year Mortgage. CARS will allow your organization to document your already established federally approved indirect cost rate, or complete an indirect cost rate proposal (see State Negotiated Rate above). Total Federal funds involved. Title changed on 3.B from Time Distribution Report to Personnel Activity Report. This method should also be used where an organizations major functions benefit from its indirect costs to approximately the same degree, and may be used where the level of Federal awards to an organization is relatively small. A predetermined rate is typically not subject to adjustment. As a reminder, the indirect cost rate proposal must not include expressly unallowable costs identified in 2 CFR 200, Subpart E, Sections 200.420 through 200.475. Review changes in the indirect cost rate allocation bases for propriety, if applicable. Make any agreed upon changes, and request any revised, and/or supporting documentation. Before sharing sensitive information, make sure youre on a federal government site. Any changes in accounting practice to include changes in the method of charging a particular type of cost as direct or indirect and changes in the indirect cost allocation base or allocation methodology requires the prior approval of the M/OAA/CAS/OCC. Determine if USAID is the federal cognizant agency, i.e. Entitys written policy for allocating and identifying direct and indirect costs, i.e. Determine that the applicable cost principles stated in 2 CFR 200 were followed. (A) An indirect cost pool of $200,000 (B) A salary and fringe total of $300,000. Note that responsibility for each specific organization is based on the first letter of its name, i.e. ceiling rates or amounts.c. Organizations without a current or provisional NICRA. A separate indirect cost rate(s) is usually necessary for each department or agency of the governmental . 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. ), 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 proposals must follow the cost principles available at 2 CFR Part 200, Appendix VII. The rate should be expressed as the percentage of allowable indirect costs to the allocation base costs selected. 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. Added to the last paragraph additional information from the 2 CFR 200.430 (i) addressing the standards for documentation of personnel expenses. The most basic formula for calculating a grantee's actual indirect cost rate is to divide total indirect costs (also called the indirect cost pool) by total direct costs (also called the direct cost base ). If the de minimis . In your application, you must include your project budget and the base, rate, and amount of indirect costs you will recover during period of performance. A list of subawards under your prime awards (required for Modified Total Direct Cost (MTDC) base only). Grantees should send their submission to NON- PROFIT-ICR-PROPOSAL@USAID.GOV. Schedule of all awards grouped by funding agency with majority federal funding listed on top. 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. The rate is based on an estimate of the costs to be incurred during the period. Document meeting, telephone conversations, and e-mails. Once a NICRA is issued, either by a Mission or M/OAA/CAS/OCC, this NICRA will apply to all Federal awards. An official website of the United States government. Examples include depreciation on buildings, equipment and capital improvement, interest on debt associated with certain buildings, equipment and capital improvements, and operations and maintenance expenses. M/OAA/CAS/OCC will be the federal cognizant agency for the issuance of the NICRA until the organization no longer has USAID prime awards, or the preponderance of funds shifts to another U.S. federal agency and cognizance has been transferred. Create your eSignature and click on the OK . Confirm that the organization has a USAID prime award that includes indirect cost rates. To calculate the rate, you would divide (A) by (B), yielding an indirect cost rate of 66.66%. Applicable audited financial statements including any affiliated organizations, and 2 CFR 200, Subpart F, Section 200.500, Audit Requirements. 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 (, ). Two federal agencies, DOD and the Department of Health and Human Services (HHS), negotiate indirect cost rates used to reimburse higher education institutions for . To get started, create 4 more columns in your spreadsheet and label them as Direct, Indirect, Unallowable and Comments. Q: Does both my department and my division need to approve the cost-share for my proposal? 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). If your organization does not have a current negotiated (including provisional) rate or has an expired rate, your organization may choose to negotiate a rate with its cognizant agency. The purpose of this spreadsheet is to identify effected awards, gauge materiality and identify any indirect cost limitations. See Appendix II of this guide titled, Frequently Asked Questions, for additional information on the 10% De minimis rate. 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. Direct costs are salaries, services, and goods that are directly related to the project and are accounted for with a high degree of accuracy. Some examples of these types of activities include: The checklist below addresses the documentation to provide and steps needed when an organization is seeking a NICRA for the first time. 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. NEH does not reimburse indirect costs under the following types of awards: NEH Project BudgetApplicant organizations submit an NEH project budget using the Research and Related budget form, unless otherwise instructed in the NOFO. Historic federal grants available for infrastructure and clean energy can bring significant financial and compliance risks for for-profit federal grant These records, among other conditions disclosed in this section, must be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; and are incorporated into the official records of the non-Federal entity. For companies with federal contract expenditures, or subcontract expenditures under a federal contract in a particular fiscal year under flexibly-priced contracts (e.g., Cost Plus Fixed Fee etc. 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. The result of this process is an indirect cost rate which is used to distribute indirect costs to individual Federal awards. 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. Therefore, the organization must agree in writing not to recoup the reduction in the rates on other awards with the U.S. Government - the reduction must be taken from other non-governmental sources of revenues. To obtain an indirect cost rate, a grantee must submit an indirect cost proposal to its cognizant agency and negotiate an indirect cost agreement. If a small business has clearly established indirect cost rates, pools and bases that an external CPA firm has validated, this should be sufficient for the recognition of indirect cost rates under the award. All Federal agencies are required to use the rates and methodology negotiated by USAID and the related organization. Major nonprofit organizations are defined in 2 CFR 200, Subpart E, Section 200.414(a) as those which receive more than $10 million dollars in direct federal funding. The checklist below addresses the documentation to provide and steps needed when seeking a revised provisional rate and/or final rates. Perform a mathematical verification of each indirect cost rate calculation provided by the organization. The rate is expressed as a percentage of indirect costs (numerator) and direct costs (denominator). 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. Cognizant agency for indirect costs 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 200.1). To prevent substantial overpayment or underpayment of indirect cost during the fiscal year, a revised provisional rate may be requested by 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.). No hearing will be provided. 200.414(f), a description of the modified total direct cost Include the level of transaction testing performed by the independent auditor on direct and indirect costs claimed. 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. This section provides two examples of calculating indirect costs. 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. cost allocation methodology. 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. 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. If applicable, a reconciliation spreadsheet should be provided to support the organizations claimed labor cost. The organization must maintain a time distribution system for use by employees whose time is charged to more than one cost objective. 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. A number of ARL members conducted new studies and research in 1979 to . Example: Consider a sponsored project award with these instructions: The total award is $100,000; Equipment is budgeted at $20,000; The indirect cost rate is 15%, excluding equipment Indirect cost Proposal Checklist for First Time NICRA of this guide for the required documentation. For local educational agencies (LEAs), issues with the limit can occur if revenues from taxes . Download Example - Personnel Cost Worksheet [PDF 52 KB]. 2 CFR 200, Subpart F, Appendix IV, Section C.1.b., c., d., and e identifies and defines the following indirect cost rates: ProvisionalA provisional rate or billing rate is a temporary indirect cost rate applicable to a specified period and is used for interim billings pending the establishment of a final rate for the period. Indirect costs, also referred to as facilities and administrative costs (F&A), are incurred for the benefit or joint objectives of a specific project and organizational activities. Indirect costs, also referred to as, facilities and administrative costs (F&A). Official websites use .gov A .gov our belongs to an official government organization in the United States. Description of Cost Allocation Methodology. A: PIs typically work with their collaborators to determine how each institution will provide resources towards the 50% cost-share commitment. Refer to the Notice of Funding Opportunity (NOFO) for statutory or administrative information regarding the allowability of indirect costs. Document meetings, telephone conversations, and e-mails. 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. An indirect cost rate represents the ratio between the total indirect costs and benefiting direct costs, after excluding and or reclassifying unallowable costs, and extraordinary or distorting expenditures. 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. There are instances when the allocation base will include annual, sick, and holiday leave as part of the base of application. Refer to Section 2. PIs should carefully review the program guidelines to determine how the cost-share can be met by all partners. 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). A NICRA generally includes the following information: EIN (Employer Identification Number)of the organization. Examples of unallowable activities include: services to members, maintenance of membership rolls, public relations, lobbying, and fund raising. Examples include salaries and benefits for staff and consultants working on the project, project-related travel, and supplies and equipment used on the project. 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. Uniform Guidance (2 C.F.R. Refer to Section 2.E. Award Amounts: Maximum amount $200,000. Example 2: Applying a 34% Indirect Cost Rate using direct salaries and wages, excluding fringe benefits, base. Joint costs, such as depreciation, rental costs, operation and maintenance of facilities, telephone expenses, and the like are prorated individually as direct costs to each category and to each Federal award or other activity using a base most appropriate to the particular cost being prorated. 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. Written policies and procedures for screening unallowable costs. USAID predominantly uses the provisional and final indirect cost rate methodology when negotiating rate agreements. ). Of the $150,000, $40,000 is for a subcontract to WSU. Scam Advisory: Recent reports indicate that individuals are posing as the NEH on email and social media. Indirect rates are used for Incurred Costs Proposals. 2. 2 CFR 200, Subpart E, Section 200.414 (g) states that any non-Federal entity that has a federally negotiated indirect cost rate may apply for a one-time extension of a current negotiated indirect cost rate for a period of up to four years. of this guide and included as a stand-alone document in Appendix III. 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. Leave absence such as vacation, holiday, sick leave, and other paid absences were included in salaries. 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. Download Example - Simplified Allocation Method [PDF 42 KB]. The fringe benefits base of application is total direct and indirect labor dollars. If that event does not occur, a final rate will be established and upward or downward adjustments will be made based on the actual allowable costs incurred for the period involved. 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. Responsibility for the negotiation and issuance of NICRAs for foreign organizations, with no awards issued by USAID/Washingtons M/OAA, rests with the Mission (and handled by the Agreement Officer) providing the majority of the entities funding. Submission requirements are located on page 2 of the Uniform Budget Template as well as 2 CFR 200 Appendices IV, V & VII. The Appendix I includes a sample of the USAID Negotiated Indirect Cost Rate Agreement (NICRA). to a non-Federal entity unless OMB designates a specific cognizant agency for audit. The cognizant agency is typically the federalawarding agency that provides the largest amount of direct funding (as listed on the schedule of expenditures of Federal awards, see 200.510(b)) to a non-Federal entity unless OMB designates a specific cognizant agency for audit. The Total Direct Cost (TDC) base includes all direct costs without exclusions. Breakdown of indirect salaries by position title, amount and indirect percentage. You should choose the base that would result in the fairest and most equitable allocation of indirect costs across your funding sources. 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). Common locations include: Type of programs that rates are applicable to, Indirect Cost Rate (Allocation) Base Defined. 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. Subsequent NICRA Submissions to Establish Final and Provisional Indirect Cost Rates. A final rate is used to adjust indirect costs claimed based on a provisional rate. ( g) Any non-Federal entity that has a current federally-negotiated indirect cost rate may apply for a one-time extension of the rates in that agreement for a period of up to four years. A sample is as follows: The Agreement Officer (AO) decides any dispute between the organization as defined in 2 CFR 200.86, and USAID arising under an assistance award. Per 2 CFR 200.414 (f), if you do not have a current or provisional negotiated rate (except for local governments claiming central service costs under 2 CFR 200, Appendix VII D.1.b), you may choose to use a de minimis rate of 10% of modified total direct costs (MTDC). In any instance where an indirect cost rate other than that specified in the NICRA is used in an award, the grantee is required to acknowledge the above stipulations by providing a written acknowledgement to USAID. 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). To illustrate the calculation of a simplified indirect cost rate based on modified total direct costs, assume the following: (A) An indirect cost pool of $200,000 Labor is the most significant cost incurred by an organization. This checklist is also included in Appendix III, Indirect Cost Rate Proposal Checklist for First Time NICRA, and includes the basic instructions to complete and submit an indirect cost rate proposal. If no approved rate exists, the pass-through entity may negotiate an indirect cost rate with the subrecipient or accept the de minimis rate (. 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. Once established, a final indirect cost rate is used to adjust the indirect costs claimed. The measurement selected should be based on relative benefits received, and should be able to replicate the process. At the end of the 4-year extension, the non-Federal entity must re-apply to negotiate a rate. 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. For example, research rates are not applicable to the scholarly research that NEH funds, except in rare circumstances. This indirect cost rate allocates expenses related to the management or supervision of activities or cost that benefit more than one final cost objective (e.g., division middle management, supervisors, project leadership benefiting multiple awards, site rent, etc.). An indirect cost rate is simply a device for determining fairly and conveniently within the boundaries of sound administrative principles, what proportion of indirect cost each program should bear. The proposal and related documentation must be retained for audit. These procedures are broken down into two sections. Review executive compensation of the top five executives for reasonableness. Example 1: Applying a 34% Indirect Cost Rate using a MTDC base. Provide the amount of executive compensation paid to the top 5 executives. 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%.

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