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Washington, D.C. 20525

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Indirect Cost Guidance

Office of Audit and Debt Resolution (OADR)

February 2024 
1

Contents

1.0 Background and Purpose................................................................................................................... 2

2.0 Distinguishing Direct from Indirect Costs.......................................................................................... 3

3.0 Options for Calculating Indirect Costs (choose, A, B, or C).............................................................. 3

4.0 Negotiating an Indirect Cost Rate...................................................................................................... 5

5.0 Who is my Cognizant Agency for Indirect Costs? ............................................................................. 5

6.0 Steps to Submit Indirect Cost Rate Proposal to AmeriCorps ........................................................... 7

7.0 Requesting a Federally Negotiated Indirect Cost Rate Extension ................................................... 8

8.0 ICRP Submission, Review and Approval Process Summary ............................................................. 9

9.0 Key References to Trainings and Resources: ................................................................................. 10

Attachment 1. Indirect Cost Proposal Checklist for Non-profit and Commercial Organizations.......... 11

Attachment 2. Indirect Cost Rate Proposal Checklist for State Workforce Agencies ............................ 12

Attachment 3. Sample: Cost Policy Statement......................................................................................... 13
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1.0 Background and Purpose

This guide is designed to provide AmeriCorps applicants and grantees with the 

foundational knowledge necessary to effectively manage, and consistently allocate and

apply indirect costs associated with AmeriCorps awards. AmeriCorps Office of Inspector 

General has identified a need for better controls and procedures on how to charge indirect 

costs to Federal awards. This resource aims to foster transparency, efficiency and 

accountability around indirect costs by identifying: 

 the different types of indirect cost rates available to AmeriCorps applicants; 

the conditions under which those costs can be claimed;

the steps involved in submitting an indirect cost rate proposal;

the process by which AmeriCorps negotiates and approves indirect cost rate

proposals.







The guidance outlined in this document is rooted in Federal statutes, regulations, and other 

applicable standards. Recognizing the complexity of those standards and the critical nature 

of accurately determining and applying indirect cost rates, this guidance has been 

prepared to serve as one-stop-shop to equip grantees with the relevant resources, 

knowledge, and tools necessary to navigate the complexities of indirect costs, ensuring 

consistency, and compliance with Federal regulations. 

In addition to the information outlined in this resource, AmeriCorps applicants and 

grantees are encouraged to visit our Grantees and Sponsors webpage for resources, 

including eGrants instructions, grant terms and conditions, pre-award requirements, 

financial reporting requirements, and training and technical assistance. 

Any outstanding questions concerning indirect cost rates can be directed to 

IndirectCostRate@americorps.gov. AmeriCorps’ Office of Audit and Debt Resolution 

(OADR), which is responsible in administering the negotiant and approval of indirect cost 

rate proposals and extensions, actively manages that inbox. 
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2.0 Distinguishing Direct from Indirect Costs

According to 2 CFR 200.413, Direct Costs are “costs that can be identified specifically with a 

particular final cost objective, such as a federal award, or other internally or externally funded 

activity, or that can be directly assigned to such activities relatively easily with a high degree 

of accuracy.” In other words, direct costs are costs that are readily allocable to a particular 

project. They can include costs such as program staff salaries, volunteer stipends, member 

living allowances, uniforms, and member gear. They are directly allocated to the project and 

tracked. 

Indirect costs are the hidden costs that support a project. They include general expenses for 

the organization’s administration that are incurred for common or joint objectives, and not 

readily identifiable to a specific project or cost objective. Typically, indirect costs are the 

expenses of doing business and include costs such as administrative salaries and wages; 

accounting and auditing services; rent, leases, and mortgages; basic office supplies and 

equipment; building maintenance and utilities; and Directors and Officers Insurance. The 

Uniform Guidance classifies indirect costs into two broad categories: The first category, 

“Facilities,” is defined as depreciation on buildings, equipment, and capital improvement; 

interest on debt associated with certain buildings, equipment, and capital improvements; 

and operations and maintenance expenses. The second category, which is more applicable 

for AmeriCorps grants and often used interchangeably with indirect costs in eGrants, is 

“Administration.” These costs are defined as general administration and general expenses 

such as the director's office, accounting, personnel, and all other types of expenditures not 

listed specifically under one of the subcategories of Facilities. However, the Uniform 

Guidance notes that it is not possible to specify the types of cost which may be classified as 

indirect (Facilities and Administration) in all situations. Identification with a Federal award 

rather than the nature of the goods and services involved is the determining factor in 

distinguishing indirect (Facilities and Administration) costs of Federal awards. 

It is imperative to note that any item of cost incurred, either as a direct or an indirect (F&A) 

cost, be treated consistently across similar circumstances, to avoid possible double charging 

of Federal awards. A cost may not be assigned to a federal award as a direct cost if any other 

cost incurred for the same purpose in like circumstances has been allocated to the Federal 

award as an indirect cost.

3.0 Options for Calculating Indirect Costs (choose, A, B, or C)

Based on qualifying factors, applicants may either use a Federally approved indirect cost 

rate or a 10 percent de minimis rate of modified total direct costs or may claim certain costs 

directly. 2 CFR 200.4133 states that local governments, and Indian Tribes may use previously 

approved indirect cost allocation plans. All methods must be applied consistently across all 

federal awards. Applicants that have a federal negotiated indirect cost rate, or that will be 

using the 10% de minimis rate, must enter that information in the Organization section in 

eGrants. However, per statute and regardless of the option used, no more than five percent 

of federal funds awarded by AmeriCorps may be used to recover indirect costs on 

AmeriCorps State and National grants. 
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Applicants choose one of three methods to calculate allowable administrative costs – a 

CNCS-fixed percentage rate method, a federally approved indirect cost rate method, or a 

de minimis method. Regardless of the option chosen, the CNCS share of administrative 

costs is limited to 5% of the total CNCS funds actually expended under this grant, per 

section 121(d) of the National and Community Service Act of 1990, as amended and 

AmeriCorps’ regulations at 45 CFR 2521.95 and 2540.110. 

A. CNCS-Fixed Percentage Method Five/Ten Percent Fixed Administrative Costs Option 

(Applicable ASN Applicants/Grantees Only):

The CNCS-fixed percentage rate method allows you to charge administrative costs up to a 

cap without a federally approved indirect cost rate and without documentation supporting 

the allocation. If you choose the CNCS-fixed percentage rate method (Section III.A. in 

eGrants), you may charge, for administrative costs, a fixed 5% of the total of the CNCS funds 

expended. To charge this fixed 5%, the grantee match for administrative costs may not 

exceed 10% of all direct cost expenditures. 

B. Federally Approved Indirect Cost Rate:

If you have a federally approved indirect cost rate, this method must be used, and the 

rate will constitute documentation of your administrative costs, not to exceed the 5% 

maximum federal share payable by AmeriCorps. Specify the Cost Type for which your 

organization has current documentation on file, i.e., Provisional, Predetermined, Fixed, or 

Final indirect cost (IDC) rate. Supply your approved IDC rate (percentage) and the base 

upon which this rate is calculated (direct salaries, salaries, and fringe benefits, etc.). 

AmeriCorps does not restrict the overall indirect cost rate claimed. It is at your discretion 

whether or not to claim your entire IDC rate to calculate administrative costs. If you choose 

to claim a lower rate, please include this rate in the Rate Claimed field. 

C. De Minimis Rate of 10% of Modified Total Direct Costs:

Organizations who do not currently have a federally 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)) and who receive 

less than $35 million in direct federal funding may indefinitely use a de minimis rate of 10% 

of modified total direct costs (MTDC). Additional information regarding what is included in 

MTDC, and use of this option can be found at 2 CFR 200.414(f) and 200.68. If you elect to 

use this option, you must use it consistently across all federal awards. 

Per 45 CFR 75.2, Modified Total Direct Cost (MTDC) means 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). MTDC excludes equipment, capital expenditures, charges for patient 

care, rental costs, tuition remission, scholarships and fellowships, participant support costs 

and the portion of each subaward in excess of $25,000. Other items may only be excluded 

when necessary to avoid a serious inequity in the distribution of indirect costs, and with the 

approval of the cognizant agency for indirect costs.
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Options for Calculating Indirect Costs Summary Matrix: 

A: B: C:

CNCS-Fixed Federally Approved De Minimis Rate

Percentage Indirect Cost Rate

(5/10% Fixed 

Method)

Eligibility Rules AmeriCorps State Organization has Organization does 

and National only, a negotiated indirect not currently have a 

per 45 CFR §2521.95 cost rate agreement NICRA and receives 

(NICRA) less than $35M in direct 

from cognizant federal funding. 

federal agency. 

Must use for all federal 

Must use this rate grants

Maximum Budgeted 5% of direct CNCS Total indirect 10% of Modified Total 

Amount costs in CNCS Share costs calculation is Direct Costs (MTDC) as 

(less is (Total CNCS share of based on agreement, defined in 2 CFR 

allowable and direct costs x 0.0526) of which no more §200.1. 

should and 10% of all direct than 5% of 

be explained) costs in direct CNCS costs No more than 5% of 

Grantee Share (total can be in direct CNCS costs can 

direct costs x 0.10) * CNCS Share (total be in CNCS Share (total 

CNCS share of direct CNCS share of direct 

costs x 0.0526) for costs x 0.0526) for 

ASN and VGF ASN and VGF 

grantees* grantees*

4.0 Negotiating an Indirect Cost Rate

Applicants that choose to pursue a federally negotiated rate must negotiate an indirect cost 

rate with their cognizant Federal agency. The cognizant Federal agency is the agency that 

provides the largest amount of direct Federal funds to the organization. See Section 5.0 for 

additional cognizant agency details. It is the responsibility of the applicant or grantee to 

obtain a final negotiated rate for each year indirect costs are claimed. Applicants must 

submit an indirect cost rate proposal immediately after receiving notification that a federal

award will be made but in no event, later than three months after the effective date of the 

Federal award. AmeriCorps negotiates indirect cost rates only with direct grantees. 

Subrecipients must negotiate their rates with their primary award recipients. Organizations 

that have previously established an indirect cost rate must submit their subsequent proposal 

within six months after the close of the organization’s fiscal year unless the organization has 

been approved for an indirect cost rate extension. 

5.0 Who is my Cognizant Agency for Indirect Costs? 

Cognizant agency for indirect costs means the Federal agency responsible for reviewing, 

negotiating, and approving indirect cost proposals on behalf of all Federal agencies. The 

cognizant agency for indirect cost is not necessarily the same as the cognizant agency for 

audit. 
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Each organization is assigned or derived to a single cognizant agency which acts on behalf

of all federal agencies by reviewing and accepting indirect cost rates. Once established, a

cognizant agency will typically remain cognizant for up to a period of 5 years unless 

circumstances change, such as a shift in the source of the majority of direct funding in 

which case the designation of the cognizant agency could potentially be reevaluated. 

Indirect cost rates approved by cognizant agencies are acceptable by all Federal agencies, 

unless otherwise stipulated by Federal statute, or regulation, or agency head or delegate, 

in accordance with 2 C.F.R. § 200.414(c)(1). OMB is responsible for assigning federal

agencies to serve as cognizant agencies to review and accept indirect cost rates for 

organizations receiving financial awards. OMB’s Office of Federal Financial Management

has been tasked with this responsibility. The chart below helps organizations determine 

who their cognizant agency for indirect costs is.

Entity Type Cognizant Agency for Indirect Costs Reference

2 CFR 200

Institutions 

of Higher 

Education

(IHEs)

Cost negotiation cognizance is assigned to the Department 

of Health and Human Services (HHS) or the Department of 

Defense's Office of Naval Research (DOD), normally 

depending on which of the two agencies (HHS or DOD) 

provides more funds directly to the educational institution 

for the most recent three years. In cases where neither HHS 

nor DOD provides Federal funding directly to an 

educational institution, the cognizant agency for indirect 

costs assignment must default to HHS.

Appendix III

Paragraph C.11

Nonprofit 

organizations

Unless different arrangements are agreed to by the Federal 

agencies concerned, the Federal agency with the largest 

dollar value of Federal awards directly funded to an 

organization will be designated as the cognizant agency for 

indirect costs for the negotiation and approval of the 

indirect cost rates. Non-profit organizations must develop 

and submit a new indirect cost proposal to AmeriCorps no 

later than six months prior to the expiration of their current 

rate. 

Appendix IV

Paragraph C.2.a

Indian tribes Each Indian tribal government desiring reimbursement of 

indirect costs must submit its indirect cost proposal to the 

Department of the Interior (its cognizant agency for indirect 

costs).

Appendix VII

Paragraph. D.1.c

States and 

local 

governments

The cognizant agency responsible for review and approval 

is the Federal agency with the largest dollar value of total 

Federal awards with a governmental unit. All departments 

or agencies of the governmental unit desiring to claim 

indirect costs under Federal awards must prepare an 

indirect cost rate proposal and related documentation to 

support those costs and retain the documentation for audit. 

Departments or agencies receiving less than $35 million 

are not required to submit an Indirect Cost Rate Proposal to 

its cognizant agency unless required by the cognizant 

agency. However, a governmental department or agency 

unit that receives more than $35 million in direct Federal 

funding must submit its indirect cost rate proposal to its 

cognizant agency for indirect costs.

Appendix VII

Paragraph D.1
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6.0 Steps to Submit Indirect Cost Rate Proposal to AmeriCorps

The Indirect Cost Rate Proposal (ICRP) consists of the documentation prepared by an 

organization to substantiate its request for the establishment of an indirect cost rate, as 

described in Appendixes to Part 200 of the Uniform Administrative Requirements, Cost 

Principles, and Audit Requirements for Federal Awards (Appendix IV to 2 C.F.R. Part 200— 

Indirect (F&A) Costs Identification and Assignment, and Rate Determination for Nonprofit 

Organizations through Appendix VII to Part 200—States and Local Government and Indian 

Tribe Indirect Cost Proposals). 

The ICRP package normally includes the proposal, related audited financial statements, 

and other detailed supporting documents (e.g., general ledger, trial balance, etc.) For 

organizations seeking a negotiated rate from AmeriCorps, submission requirements vary 

depending on the type of rate an organization chooses to negotiate. Negotiated indirect 

cost rates approved by AmeriCorps are normally valid for one year. 

ICRPs must be submitted no later than six months prior to the current rate’s expiration date 

when request a new rate. Your organization can seek prior approval from AmeriCorps, by 

submitting a request to IndirectCostRate@americorps.gov, to use the rate proposed in 

your ICRP as your provisional rate until AmeriCorps has notified you of the accepted rate. 

Note that AmeriCorps will review all ICRPs against the provisions codified in 2 CFR 200 

Subpart E. 

An indirect cost proposal checklist has been provided via attachments 1, 2, and 3 to assist 

organizations interested in pursuing an indirect rate. Further, the key procedures for 

pursuing a federally negotiated indirect rate when AmeriCorps is the designated 

cognizant agency have been outlined below. 

1. Grantees prepare and submit an indirect cost rate proposal to AmeriCorps via the

indirect cost rate mailbox maintained by OADR

(IndirectCostRate@americorps.gov).

2. Proposals must be prepared in accordance with 2 CFR Part 200.414.

3. OADR verifies that AmeriCorps is the cognizant agency for indirect costs for the

applicant and reviews the indirect cost proposal for completeness.

4. OADR initiates negotiation process through its partnering Federal agency, the

Department of Veterans Affairs, Office of Budget Oversight (VA/OBO), to verify the

proposed rate.

5. VA/OBO completes the ICRP final review within the established timelines. VA/OBO

typically completes final validation of ICRPs within three months of receipt of the

ICRP package.

6. Upon VA/OBO’s validation of the rate, OADR submits a draft of the NICRA to the

applicant for their review.
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7. Following the applicant’s review of the NICRA, OADR formally issues the NICRA.

8. The applicant inputs their indirect cost rate information into the AmeriCorps online

grants management system and performs any necessary adjustments based on the

rate agreement issued by VA/OBO. For instructions on how to enter indirect cost

rate information into an eGrants account, refer to eGrants Indirect Cost Rate (IDCR)

User Instructions.

9. Applicants are required to perform all necessary adjustments to their internal

accounting records, FFRs, and other financial reports, including repaying any

indirect costs billed to the award that exceeded the final rate agreement issued by

AmeriCorps’ Office of Audit and Debt Resolution.

7.0 Requesting a Federally Negotiated Indirect Cost Rate Extension

Organizations that have a current federally negotiated cost rate may apply for a onetime extension of that rate agreement for a period of up to four years. Extension 

requests are subject to the review and approval of the cognizant agency for indirect 

costs. If the extension is granted the organization may not request a rate review until the 

extension period ends. At the end of the extension period, the organization must reapply to negotiate a rate. If AmeriCorps is your cognizant agency for indirect cost 

negotiation, and you would like to request an extension, your organization should 

prepare an extension request, per the requirements below, and submit your request to 

IndirectCostRate@americorps.gov. See steps under Section 6.0 on how to submit your 

indirect cost rate proposal. If AmeriCorps is not your cognizant agency for indirect cost 

negotiation, and you would like to request an extension, you should contact your Grants

Officer at your cognizant agency for more information. 

Extension Request Requirements

AmeriCorps will consider extension requests from organizations that have held an 

indirect cost rate through AmeriCorps for at least three years. AmeriCorps can only 

consider extensions of final or predetermined rates (not provisional or fixed). The 

extension request must include the following:

1. A written request on organizational letterhead for an extension of the current

indirect cost rate agreement. The written request must indicate the rate and

fiscal periods requested in the extension (1-4 years). It must be signed by the

authorized representative for your organization.

2. A copy of the indirect cost rate agreement for which your organization is seeking

an extension. The rate agreement must be current (i.e., not expired).

Criteria for Evaluation for Extension Requests

Each extension request will be assessed based on consistency of the rate over the 

last three years, timeliness of previous submissions, delinquent debts, and fiscal 

findings identified through compliance monitoring, single audits, and OIG audits. 
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8.0 ICRP Submission, Review and Approval Process Summary

Applicant/Grantee AMERICORPS (OADR) VA/OBO

Phase

Ready to 

Negotiate or 

Extend Indirect 

Cost Rate?

See Section 3.0. 

(Options for 

Calculating 

Indirect Costs)

Yes No

Is AmeriCorps 

the Cognizant 

Agency for 

Indirect Costs?

Grantee submits ICRP to OADR 

IndirectCostRate@americorps.gov

See section 7.0 

for guidance.

No

Yes

No

OADR follows-up 

with applicant as 

necessary

Yes

OADR Shares ICRP 

package to VA/OBO 

GPDICRP@va.gov for 

validation

OADR provides applicant 

with box.com link for any 

additional/future 

documentation uploads

Is the ICRP 

Package 

Complete and 

Accurate?

VA/OBO 

Initiates 

Validation

GPDICRP@va.gov

Follows-up directly 

with applicant for 

any additional 

information

GPDICRP@va.gov

confirms final 

validation within 

60-90 days with

OADR

OADR shares draft 

NICRA to applicant 

for review/

signature

Applicant returns signed 

copy to OADR

OADR issues final 

approved NICRA

Applicant files NICRA for 

documentation

Indirect Cost Rate Proposal (ICRP) Submission, Review, and Approval Process Flowchart
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9.0 Key References to Trainings and Resources: 

 Best Practices in Budget Development Training:

For each competition, AmeriCorps provides an overview of the function of AmeriCorps

budget, the budget management process, and the keys for submitting a compliant and

competitive AmeriCorps budget and budget narrative. Refer to Information Session

section of the Funding Opportunities Page under each respective funding opportunity

for relevant recorded trainings. These trainings also include other relevant topics

including sample budget narratives for cost reimbursement grant budget narrative and

planning grant budget narratives.

 References to 2 CFR 200 (Uniform Guidance)

Title Part | Section 

Subpart A - Acronyms and Definitions 200.0 – 200.1

Subpart B - Pre-Federal Award Requirements and Contents of 

Federal Awards

200.100 – 200.113

Subpart C - Post Federal Award Requirements 200.200 – 200.216

Subpart D - Post Federal Award Requirements 200.300 – 200.346

Subpart E - Cost Principles 200.400 – 200.476

Subpart F - Audit Requirements 200.500 – 200.521

Full Text of Notice of Funding Opportunity Appendix I 

Contract Provisions for Non-Federal Entity Contracts Under 

Federal Awards

Appendix II 

Indirect (F&A) Costs Identification and Assignment, and Rate 

Determination for Institutions of Higher Education (IHEs)

Appendix III

Indirect (F&A) Costs Identification and Assignment, and Rate 

Determination for Nonprofit Organizations

Appendix IV

State/Local Governmentwide Central Service Cost Allocation Plans Appendix V

Public Assistance Cost Allocation Plans Appendix VI

States and Local Government and Indian Tribe Indirect Cost 

Proposals 

Note* A cost allocation plan explains which costs are determined 

to be direct or indirect. Rather than being an indirect cost rate 

itself, it explains why the entity classifies specific costs as direct or 

indirect. The cost allocation plan also addresses direct costs that 

may be shared among different programs. AmeriCorps does not 

accept cost allocation plans from non-governmental entities as an 

acceptable method for charging indirect costs unless such 

alternative methodology has been approved in writing by the 

cognizant agency for indirect costs.

Appendix VII

Nonprofit Organizations Exempted From Subpart E of Part 200 Appendix VIII 

Hospital Cost Principles Appendix IX

Data Collection Form (Form SF–SAC) Appendix X 

Compliance Supplement Appendix XI 

Award Term and Condition for Recipient Integrity and 

Performance Matters

Appendix XII 
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Attachment 1. Indirect Cost Proposal Checklist for Non-profit and 

Commercial Organizations

a. Submit once unless changes are observed:

1a. Organizational chart,

1b. Nonprofits - Narrative explaining compliance with 2 CFR 

§200.430(a)(1)(2) & (3) and the standards for documentation of

personnel expenses. 

1c. Signed Cost Policy Statement.

b. An indirect cost rate proposal(s) providing the following:

2a. Personnel Costs Worksheet, including fringe benefits breakdown.

2b. Allocation of Personnel Worksheet, providing indirect/direct time charges.

2c. Fringe Benefits Worksheet, 

 2d. Statement of Total Costs, supporting the indirect and direct costs

incurred by expense category,identified by Federal agency, specific 

government grant, contract, and other non-government activities. 

 2e. Statement of Indirect Costs, including indirect cost pool(s), allocation 

base(s), and indirect costrate(s) proposed.

c. Audited financial statements, if available. If audited financial statements are not 

available, IRS Form990 (non-profits) or compilation/review financial statements (forprofits) for the final rate proposal. Approved budget for provisional proposal, if 

needed. Note: The Statement of Total Costs (2d. above) must reconcile to Financial

Statements. If not, please provide a reconciliation statement.

d. Certification that the indirect cost rate proposal was prepared in a manner 

consistent with the applicable cost principles set forth in 2 CFR Part 200, Subpart E & 

Appendix IV for non-profits, or the Federal Acquisition Regulation (Part 31) for 

commercial organizations. The certifications should be signedby the 

President/Executive Director, or Comptroller/ CFO.

e. A listing of grants and contracts by Federal agency, subagency, program office 

funding source, award amount, period of performance, and the indirect cost

(overhead) limitations (if any) applicable to each, suchas, ceiling rates or amounts 

restricted by administrative or statutory regulations, applicable to the period(s) of the 

proposal(s). This listing must be supported with copies of the approved federal grants 

or contracts notification awards (1st page).
12

Attachment 2. Indirect Cost Rate Proposal Checklist for State Workforce 

Agencies

1. Submit once unless changes are observed: 

____1a. Organizational chart, 

____1b. Employee time sheet sample, providing for distribution of hours to 

direct/indirect functions. Narrative explaining compliance with 2 CFR 

§200.430(a)(1)(2) & (3) and the standards for documentation of personnel expenses. 

____1c. Cost Policy Statement signed by a duly authorized official. 

2. An indirect cost rate proposal providing the following schedules: 

____2a. Personnel Costs Worksheet, including fringe benefits breakdown. Agencies 

may aggregate salary expense by department such as accounting, human 

resources, office of director, etc. 

____2b. Allocation of Personnel Worksheet, providing indirect/direct time charges. 

____2c. Fringe Benefits Worksheet if fringes are not directly and indirectly identified. 

____2d. Statement of Total Costs, segregated between the indirect and direct costs 

incurred by line item of expense (salaries, fringes, rent, etc.), identified by Federal 

agency, specific government grant, contract, and other non-Federal activities. 

Note that the allocation base and the amount of indirect costs allocated to each 

funding source should be identified. 

____2e. Statement of Indirect Costs, including indirect line item of expenses, 

allocation base, and indirect cost rate proposed.

 

3. ____ Financial statements (audited if available) for the applicable fiscal year. Note: The 

Statement of Total Costs (2d. above) must reconcile to Financial Statements. If not, please 

provide a reconciliation statement. 

4. ____A listing of grants and contracts by Federal agency, subagency, program office funding 

source, total dollar amount, period of performance, and the indirect cost limitations (if any) 

applicable to each, such as amounts restricted by administrative or statutory regulations, 

applicable to the period(s) of the proposal(s). This listing should also be supported by the 

approved Federal grant or contract notification award(s). 

5. ____A schedule listing any funding sources excluded from indirect cost allocation base and 

the reason for the exclusion. 

6. ____Copy of HHS approved SWCAP, if SWCAP costs are allocated to federal programs. 

7. ____Review letter of State Department of Finance approval of grantee’s ICRP submission 

documents.

8.____Signed and dated Certificate of Indirect Costs. 
13

Attachment 3. Sample: Cost Policy Statement

1. General Accounting Policies 

o Basis of Accounting — (Accrual, Cash or Modified Cash) 

Fiscal Period — (Insert your 12-month fiscal year) 

Allocation Basis — (Specify Simplified or Direct Allocation Basis) 

Indirect Cost Rate Allocation Base — (Describe allocation base) 

(Name of Agency) maintains adequate internal controls to ensure that no cost is charged 

both directly and indirectly to Federal contracts or grants. 

(Describe any other accounting policies utilized) 

o

o

o

o

o

2. Description of Cost Allocation Methodology 

o Salaries and Wages 

1. Direct Costs — (General statement describing the criteria in which employees direct 

charge their time, such as "The majority of the employees direct charge their salary 

costs since their work is specifically identifiable to specific grants, contracts, or other 

activities of the organization. The charges are supported by auditable labor 

distribution reports which reflect the actual activities of employees".) 

2. Indirect Costs — The following staff members charge 100% of their salary costs 

indirectly. 

List Appropriate Positions 

3. Mixed Charges — The following employees may charge their salary costs to both 

direct and indirect activities.

List Appropriate Positions

The distinction between direct and indirect is primarily based on functions 

performed. For example, when the positions shown are performing functions that 

are necessary and beneficial to all programs, they are indirect. When functions are 

specific to one or more programs, they are direct because they do not benefit all 

programs.

Auditable labor distribution records which reflect the actual activities of employees 

are maintained to support the mix of direct/indirect charges. 

4. Describe how release time (vacation, sick leave, holiday pay, etc.) is treated. Include 

information on whether vacation time is accrued and charged to programs when 

earned or charged when taken; whether allocated the same as the related salary cost 

or some other methodology; and whether treated as a fringe benefit or same as 

normal salary charges.

o Fringe Benefits. Describe all fringe benefits and whether a fringe benefit is tracked by the 

agency's accounting system or whether a fringe benefit rate needs to be established: 

 Travel 

Occupancy Expenses 

Supplies and Materials 

Communications 

Photocopying and Printing 

Outside Services 

Depreciation and Use Allowances 

Repairs and Maintenance 

Charges allocated down from the State such as SWCAP costs. 

Capital Items 

Legal Fees 

Audit Fees 























Signature _________________________________ Date_______________________________