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Indirect Cost Resources

Indian Tribal Governments Frequently Asked Questions

Our FAQs provide information on frequent questions or concerns. If you have questions about specific topics not included here, please contact us


The cognizant agency for negotiating indirect cost rates shall be the federal agency that provides the majority of the federal funding (per OMB guidance). However, the Indirect Cost Services is the federal cognizant agency designated by OMB to negotiate indirect cost rates for all Indian tribal governments and their component units regardless of funding. Component units are legally separate organizations for which the elected officials of the primary government are financially accountable.

Indirect Cost Services has created sample proposal formats, checklists, and templates to assist you in completing the ICP and Cost Allocation Plan (CAP) proposals. Please select the appropriate sample proposal for your type of organization (i.e., tribal governments). Although it is not required that you follow our ICP or CAP format, doing so will expedite the review process because our format will contain the information needed to process either the ICP or CAP proposals.

In order to avoid situations like this, tribal entities may want to request that their CPA include the detailed program information in the supplemental section of the audit. Without the detailed information in the audit, the tribal entity may be required to provide a copy of the general ledger or CPA work sheets to support the costs included in the proposal.

No. Indirect Cost Services will only consider the indirect cost collections/recoveries received from funding agencies as indirect cost collections. Tribal supplements to program indirect cost collections are NOT counted, although tribal supplements (used for indirect cost expenditures) need to be excluded from the direct cost base. Tribal supplements used for indirect cost collections are not counted. Doing so would overstate the indirect cost collection amounts and thus have a detrimental impact to the tribal entity's carryforward amount.

According to 2 CFR Part 200 Subsection 200.405(b) Allocable Costs, "All activities which benefit from the non-Federal entity's indirect (F&A) cost, including unallowable activities and donated services by the non-Federal entity or third parties, will receive an appropriate allocation of indirect costs.

Also, 2 CFR 200.405 (c) states, “Any cost allocable to a particular Federal award under the principles provided for in this part may not be charged to other Federal awards to overcome fund deficiencies, to avoid restrictions imposed by Federal statutes, regulations, or terms and conditions of the Federal awards, or for other reasons."

We interpret these guidelines to mean that all programs regardless of funding (or lack of funding) for indirect cost recoveries must be considered in the base for purposes of determining indirect cost rates. All programs that benefit from the organization's indirect cost (which includes space occupancy and human resources costs) must be allocated their share of the organization's indirect cost pool.

Yes. Indirect cost collections/recoveries identified by program funding sources must be supported by one of the following documents types:

  • Audited financial statements (preferred);
  • A letter from the CPA who performed the audit;
  • A copy of the audited general ledger showing the grand total of indirect;cost collection/recovery by program funding sources, or
  • Documents from the funding agencies.

Only legal salaries (in-house attorneys) or legal costs (for contracted legal services) related to an allowable indirect cost activity and supported with adequate documentation will be eligible for inclusion in the indirect cost pool. Legal costs related solely to general government operations (an unallowable cost) or to direct cost activities (i.e., federal awards) are not allowable in the indirect cost pool. Governments may, however, apply to program managers to recover direct legal costs from funding agencies through program agreements.

Legal salaries must related to allowable indirect cost activities and be adequately documented and supported in accordance with 2 CFR Part 200 Subsection 200.430(8)(i)(vii) in order to be included in the indirect cost pool. Please see below for further explanation of adequate salary documentation requirements for employees (attorneys or legal staff) that work on multiple activities. Contracted indirect legal services costs should be supported with billings or contract invoice documentation.

Federal regulations (i.e., the Uniform Guidance 2 CFR Part 200 Subsection 200.430) require that employee salaries and wages be properly documented and approved. The required documentation includes:

Salary and Wage Certifications: Used when employees are expected to work on a single federal award or cost objective during the period being certified. The certifications should be:

  • Prepared at least semi-annually and
  • Signed by the employee or supervisory official with first-hand knowledge of the employees' work.

Personnel Activity Reports or equivalent documentation are required for employees who work on multiple activities, that is:

  • More than one Federal award or
  • A Federal and a non-Federal award or
  • An indirect and a direct cost activity or
  • Two or more indirect activities with different cost allocation bases or
  • An unallowable activity and a direct or indirect cost activity.

Personnel Activity Reports or equivalent documentation must meet the following criteria:

  • Prepared at least monthly;
  • Signed by the employee;
  • Account for the total activity for which each employee is being compensated; and,
  • Reflect an after-the-fact distribution of the work that has actually been completed by each employee.

As the cognizant agency, we have the right to approve substitute systems for allocating salaries and wages in place of activity reports. Substitute systems may include random sampling that meets acceptable statistical sampling standards, case counts, or other quantifiable measures of employee effort. We may accept sampling that does not fully comply with sampling standards provided that the amounts involved are minimal or would result in a lower cost.

Restricted rates are reviewed and approved by the Department of Education and are applicable only to certain DOE programs. Please contact DOE for information about format and submission requirements:

Ms. Frances L. Outland, CPA
Director, Indirect Cost Group
Financial Improvement and Post-Audit Operations
U.S. Department of Education
Office of the Chief Financial Officer
550 12th Street, SW, Room 6017
Washington, DC 20202-4450

Phone: 202-245-8082

These two amounts need to match to ensure the indirect costs allocated to the federal programs through the carryforward calculation are fair and equitable so federal programs will bear only their share of the indirect costs. Any difference between the federal expenditures reported in the base and the SEFA amounts in the audit must be explained.

This requirement is only applicable for tribal entities that negotiate the fixed carryforward rate. For tribal entities that negotiate the provisional/final rate, this requirement does not apply.

Up to 50% of the salaries and expenses directly attributable to managing and operating Federal programs of the chief executive and their staff may be included as indirect costs without documentation. If a tribe requests more than 50% of council costs, we would require supporting documentation. Examples are personnel activity reports, position descriptions, activity logs, minutes of meetings, time study, etc. Do not submit the documents with the proposal. The negotiator will determine the type of support and the amount of documentation required at the time of the desk review.

"Indirect cost pool" is the accumulated administrative costs that jointly benefit the overall organization programs and objectives. Indirect cost pool typically includes accounting/finance, payroll, HR, IT, operating and maintenance costs, etc.

"Indirect cost collections" is the amount of indirect costs that recovered or collected from programs in the base. This is typically reported as revenue.

"Indirect costs charged to programs" is the amount of indirect expenses charged or allocated to programs in the base. The amount may include both tribal and non-tribal indirect expenses. This is typically reported as expenditure.

"Directly funded indirect" is specific line item costs that are indirect in nature but are directly paid for by programs in the base. "Directly funded indirect" must be excluded from both direct and indirect. For example, the Payroll Clerk position is normally an indirect position but BIA has agreed to pay the position using program dollars. Since the position is an indirect position, it is excluded from the base because it is not a direct cost. The position is also excluded from the pool because it is being funded by program dollars. Leaving the position in the pool will result in double funding.


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