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.
15% De Minimis Rate
2 CFR200.414 (f) Recipients and subrecipients that do not have a current Federal negotiated indirect cost rate (including provisional rate) may elect to charge a de minimis rate of up to 15 percent of modified total direct costs (MTDC). The recipient or subrecipient is authorized to determine the appropriate rate up to this limit. Federal agencies and pass-through entities may not require recipients and subrecipients to use a de minimis rate lower than the negotiated indirect cost rate or the rate elected pursuant to this subsection unless required by Federal statute or regulation. The de minimis rate must not be applied to cost reimbursement
contracts issued directly by the Federal Government in accordance with the FAR. Recipients and subrecipients are not required to use the de minimis rate. When applying the de minimis rate, costs must be consistently charged as either direct or indirect costs and may not be double charged or inconsistently charged as both. The de minimis rate does not require documentation to justify its use and may be used indefinitely. Once elected, the recipient or subrecipient must use the de minimis rate for all Federal awards until the recipient or subrecipient chooses to receive a negotiated rate.
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
2 CFR 200.414 (g) recipient or subrecipient with a current Federal negotiated indirect cost rate may apply for a one-time extension of that agreement for up to four years. This extension will be subject to review and approval by the cognizant agency for indirect costs. If this extension is granted, the recipient or subrecipient may not request a rate review until the extension period ends. The recipient or subrecipient must re-apply to negotiate a new rate when the extension ends. After a new rate has been negotiated, the recipient or subrecipient may again apply for a one-time extension of the new rate in accordance with this paragraph.
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.