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Indirect Cost Resources

General Indirect Cost Policy Updates

OMB Guidance on State and Local Fiscal Recovery Fund

The Office of Management and Budget (OMB) approved a request from the U.S. Department of the Treasury, Office of Recovery Programs (Treasury ORP) to permit direct State and Local Fiscal Recovery Fund (SLFRF) recipients to exclude their SLFRF award, Assistance Listing Number 21.027, from their direct cost base used to calculate their Federal indirect cost rate. Email us if you have any questions or to request to amend your previously negotiated indirect cost rate affected by this exception.

OMB Guidance on CARES Act Funding

This note is to announce that, pursuant to its authority under 2 C.F.R. § 200.102(a), the Office of Management and Budget (OMB) has approved an exception to 2 C.F.R. § 200.405(b), Allocable Costs, and allow tribal, state, and local governments to exclude from the direct cost base any CARES Act funds that deny indirect cost recovery. This exception applies to CARES Act funding granted under the Treasury’s Coronavirus Relief Fund (CARES Act, P.L. No. 116-136, Division A, Title V (2020), codified at 42 U.S.C. § 801) that does not permit indirect cost recovery. In addition, such CARES Act funding should not be included toward the threshold amount for indirect cost rate proposal submission requirements per 2 C.F.R. Part 200, Appendix VII, paragraph D.1.b. Email us if you have any questions.

10% De Minimis Rate

2CFR200.414 (f) In addition to the procedures outlined in the appendices in paragraph (e) of this section, any non-Federal entity that has never received a negotiated indirect cost rate, except for those non-federal entities described in Appendix VII to Part 200—States and Local Government and Indian Tribe Indirect Cost Proposals, paragraph D.1.b, may elect to charge a de minimis rate of 10% of modified total direct costs (MTDC) which may be used indefinitely. As described in §200.403 Factors affecting allowability of costs, costs must be consistently charged as either indirect or direct costs, but may not be double charged or inconsistently charged as both. 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. 

The use of de minimis rates does not require the review and approval of the cognizant agency for indirect costs. Therefore, Indirect Cost Services does not provide approval of de minimis rates.

Possible Rate Extensions

2CFR 200.414 (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. This extension will be subject to the review and approval of the cognizant agency for indirect costs. If an extension is granted the non-federal entity may not request a rate review until the extension period ends. At the end of the 4-year extension, the non-federal entity must re-apply to negotiate a rate. Subsequent one-time extensions (up to four years) are permitted if a renegotiation is completed between each extension request.

Filing for Rate Extensions: Only final and predetermined rates may be eligible for consideration of rate extensions. Requests for rate extensions of a current rate will be reviewed on a case-by-case basis. Please send your request to our office indicating the rate and fiscal periods to be covered by the rate extension.

Please be advised that we cannot extend fixed with carryforward or provisional rate types. Refer to the COFAR FAQs for additional information.


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