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Indirect Costs

Indirect Costs. Application of Indirect Cost Rate Agreements. What are Indirect Costs?. Accounting term used to assign or charge costs that are common to two or more of a recipient’s projects or operations

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Indirect Costs

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  1. Indirect Costs Application of Indirect Cost Rate Agreements

  2. What are Indirect Costs? Accounting term used to assign or charge costs that are common to two or more of a recipient’s projects or operations Incurred for common or joint objectives and can’t be readily identified with a specific grant or activity

  3. In order to include Indirect Costs in Agreements… • All cooperators must have a current, signed, negotiated indirect cost rate agreement for indirect costs to be assessed • A copy must be provided to APHIS with each award

  4. Recognition of the ICRA OMB instructs agencies to recognize indirect cost rate agreements negotiated with other parties

  5. Statutory Cap • Section 705 of Agricultural Appropriation Bill • Limits the indirect cost rate for cooperative agreements with non-profits (includes universities) to 10% • Does not apply to grants

  6. Application of Statutory CapExample 1 Kansas State University Cooperative Agreement Total Award = $100,000 They have a NICRA of 15%, the basis for application is exclusively salaries and wages. The financial plan and SF-424A state that $50,000 will be spent on salaries and wages, the remaining $50,000 is for travel, supplies, and training. Is the correct application: A – 15% (NICRA) X $50,000 (NICRA Basis for Application) =$7,500 -or- B – 10% (Statutory Cap) X $100,000 (Total Direct Costs) = $10,000

  7. For Example 1, the correct application is…. A – 15% (NICRA) X $50,000 (NICRA Basis for Application) = $7500 because it is less than the 10% Statutory cap amount which works out to be $10,000. Their NICRA is actually less!

  8. Application of Statutory CapExample 2 Yellowstone Fish and Wildlife Society (Nonprofit) Cooperative Agreement Total Award = $100,000 They have a NICRA of 30%, the basis for application is salaries , wages and fringe benefits. The financial plan and SF-424A state that $70,000 will be spent on salaries and wages, the remaining $30,000 is for travel, contracts and equipment. Is the correct application: A – 30% (NICRA) X $70,000 (NICRA Basis for Application) =$21,000 -or- B – 10% (Statutory Cap) X $100,000 (Total Direct Costs) = $10,000

  9. For Example 2, the correct application is…. B – 10% (Statutory Cap) X $100,000 (Total Direct Costs) = $10,000 because the NICRA calculation exceeds the 10% Statutory cap.

  10. Questions?

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