Many grants allow for indirect cost allocations. This does not change the amount of grant awards.
Indirect cost is a budgeted item.
Once earned, indirect cost allocations are recorded as revenue in the general fund. A grantee may elect to use the indirect cost allocation to cover the operating expenditures and other costs, including administrative costs and fixed costs, incurred in administering the grant. The indirect cost allocation may be based on a specified percentage of the award. For federal grants, indirect cost allocations are based upon an indirect cost rate. This rate is calculated annually by TEA based on the Schedule of Expenditures for Computation of Indirect Cost in the annual financial report.