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Indirect Cost Rate Initiative

Nonprofit Initiatives

Discretionary Award Process

Capacity Building Training

Discretionary Award Tracker

Returnable Grant Fund

Contract Compliance Support

Indirect Cost Rate Initiative


Indirect Cost Rate Initiative

NYC's Indirect Cost Rate Initiative supports human services providers by acknowledging and funding critical indirect costs and standardizing cost allocation practices.

In February 2019, the City of New York adopted the Health and Human Services (HHS) Cost Policies and Procedures Manual (Cost Manual) to standardize cost allocation practices for HHS contracts and Indirect Cost Rate (ICR) calculations. The Cost Manual is intended to be a living document that is updated from time to time.

The Fiscal Year (FY) 2020 Adopted Budget established an ICR Funding Initiative based on the Cost Manual, managed by the Office of Management and Budget and Mayor's Office of Contract Services through the City Implementation Team (CIT). The initiative is intended to make it easier for nonprofits to do business with the City, as it acknowledges and pays for critical indirect costs to deliver human services.

Please see the Background section below for a history of the Initiative. The CIT kept the sector informed of Initiative updates through regular communications, which are contained in the Archive of Email Communications section. The Archive of Resources also contains information and job aids that the CIT shared with the sector for assistance in completing important milestones.

ICR Application for FY26

The FY 2026 ICR Application Process will tentatively open January 2025 for eligible providers. FY 2026 eligible providers will be organizations that either:

have an FY23 Accepted ICR that will be expiring on June 30, 2025, or

do not yet have an Accepted ICR because the organization entered City human services contracting after the last open application period

If your organization falls under condition (i), has an expiring FY23 ICR, you will receive an email from the CIT providing next steps and more information. If your organization does not have an Accepted ICR and falls under condition (ii), you may email the CIT at CIT@mocs.nyc.gov during the application period to confirm eligibility and next steps. Please note that this inbox is not monitored outside of application periods.

Organizations have three possible entryways:

Independent Accountant's Report: Organizations choosing to pursue a rate higher than 10% through an Independent Accountant's Report should provide their Certified Public Accountant (CPA) with a Schedule of ICR based on their most recent available schedule of functional expenses. The City offers an ICR worksheet to support providers in the development of a Schedule of ICR (see final tab in the linked worksheet). The City of New York wishes to acknowledge The New York State Society of Certified Public Accountants' Not-for-Profit Organizations Committee for its feedback on the Independent Accountant's Report.

Negotiated Indirect Cost Rate Agreement (NICRA): Subject to additional review, the rate listed on the submitted NICRA will be the organization's City Accepted ICR for the three-year validity period. If you anticipate that your organization's NICRA will deviate significantly from the active or provisional rate after application, consider applying with a recent Independent Accountant's Report.

10% de minimis

If your organization was eligible to apply for a City Accepted ICR during an open application window and did not apply or receive one by the deadline, it will have defaulted to a 10% De Minimis ICR.

The FY 2025 ICR Application Process was available from February through April 2024. The CIT extended expiring FY22 Accepted ICRs for an additional fiscal year through FY25. As such, providers with rates expiring June 30, 2024 may continue to use their FY22 Accepted ICRs through June 30, 2025. Providers with extended FY22 Accepted ICRs will be eligible to apply for a new rate during the FY26 ICR Application Process.

The City will regularly roll out the ICR application process for expiring ICRs and new providers. Unless communicated otherwise, the application period will open in January and close in April, to align with the forthcoming fiscal year's contract budgeting process.

Viewing Accepted ICRs in PASSPort

Upon application approval, the CIT will upload confirmation of the Accepted ICR to your organization's PASSPort profile. Providers can see their Accepted ICR in PASSPort by visiting their Vendor Profile and clicking Documentation, then scrolling down to Miscellaneous Documents. The "document type" label will reflect your organization's ICR entryway. Clicking the document will allow your organization to see your Accepted ICR, your verification documentation, and the ICR validity date. Please note that if your organization defaulted to a 10% De Minimis ICR, there will be no available documentation.

Submit an inquiry to the MOCS Service Desk for questions about PASSPort.

Using an Accepted ICR in PASSPort Budgets

We have received a number of questions regarding the use of budget modifications to fund Accepted ICRs. We offer the following tips and information:

A provider may use its Accepted ICR to develop its PASSPort contract budget(s) pursuant to the Accepted ICR validity dates.

Purchase Orders in PASSPort now feature an Indirect Cost tab, which includes a table displaying the budgeted ICR. This table will automatically refresh as new budget lines are added. Budget preparers should ensure appropriate selection of Item Category per line and compare the budgeted ICR to their organization's Accepted ICR.

City contracting agencies will use allowance funding to cover increases in Accepted ICRs. Where appropriate, agencies will process a budget modification in lieu of a contract amendment to move this unallocated funding into the budget for invoicing.

For budgets where providers have surplus funding in their direct costs, providers may request a budget modification to reallocate funds to their indirect costs, up to their Accepted ICR.

In exercising a budget modification request, providers may use the PASSPort Financials automatic budget modification, which allows for expedited budget modifications up to 10% (cumulative) of the total contract value without preapprovals or delays in invoicing. Please note that adding new budget line(s) or changing line-item categorization will trigger agency review regardless of percentage allocation.

As budget modifications do not allow for invoice submission, the CIT recommends that providers and agencies coordinate modifications that entail allowance allocation at fiscal year budget approval or as a reconciliation activity at the end of the fiscal year.

Providers should not expect allowance allocation for indirect costs if their actual allowable expenses are less than their Accepted ICR, or there are surplus direct costs. Any request to reallocate surplus indirect costs to direct costs is at the discretion of the contracting agency.

Questions related to budget modification guidance and reviews should be directed to contracting agencies.

Please see the following instructional materials on budget modifications:

How to Create and Modify Budgets in PASSPort

PASSPort Financials includes learning resources and answers to FAQs on budgets, invoices, purchase orders, and more.

Submitting Budget Modifications in PASSPort Video

Using an Accepted ICR in RFP Proposals

Effective immediately, providers with an Accepted ICR, as defined by the Cost Manual, may use their Accepted ICRs in RFP proposals. The following language will now be standard in future Health and Human Services RFPs, and released status RFPs in PASSPort will be amended to include this new language. If an RFP is missing this language, please notify the designated agency contact.

"All price and budget proposals should be prepared in accordance with The City of New York's Health and Human Service Cost Policies and Procedures Manual (Cost Manual). For the purpose of responding to this solicitation, proposers may budget up to an Accepted Indirect Cost Rate or use the 10% de minimis Indirect Cost Rate."

Please contact the solicitation's issuing agency with questions about content included in the RFP or your organization's proposal.

Need help or have a question about PASSPort? Submit an inquiry to the MOCS Service Desk!

Background

New York City was the first big city in the country to make this investment. Today, providers can receive an Accepted ICR from the City of New York based on a 10% De Minimis policy, a federal NICRA, or an Independent Accountant's Report that validates an ICR greater than 10%. Details can be found in the Cost Manual.

The CIT established a Provider Work Group, with participation from City Council Finance, to advise on the rollout and implementation of the Funding Initiative. The details of the ICR Funding Initiative were announced on October 7, 2019, with claiming for indirect cost rates and funding opening on November 18, 2019, and closing on December 31, 2020. To provide greater access for smaller nonprofits, the Provider Work Group set forth a Conditional ICR option that offered organizations with ICRs greater than 10% more time to work towards an established ICR on the condition that they submit their documentation by the Initiative closing date.

Among these resources is the Delta Template, which served as a basis for providers to calculate the additional ICR funding for each of their contracts. In total, 361 organizations successfully completed the process for ICR funding to receive Accepted ICRs and annual baselined funding of $94 million. For providers with Delta Templates approved in Fiscal Years 2020 or 2021, the City issued ICR amendments through PASSPort, the City's Procurement and Sourcing Solutions Portal.

Archive of Resources

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Implementation

FY23 ICR Application Process Video Webinar for existing providers with ICR rates that expire June 30, 2022 that provides information about the FY23 application process, eligibility, doors of entry, and timeline, with an interactive Q&A session.

ICR Investment Timeline This timeline documents key milestones for the ICR Funding Initiative.

ICR Funding Initiative FY20 Policy Video Webinar that provides more information about the implementation of the FY21 Adopted Budget and revisions to FY20 amendments. Providers may refer to this Technical Update FAQ that answers questions received during the webinar sessions.

ICR Funding Initiative Video An overview of an October 7th Sector and City Agency Briefings, providing timelines and process for organizations to establish and claim their ICR and request funding. The Briefing Powerpoint is available here.

Job Aids

FY20 ICR Amendment Calculator Excel worksheet that providers can use to calculate their FY20 ICR Amendments.

Delta Template Job Aids Instructional materials to assist with the process of receiving, completing, and submitting the Delta Template.

Delta Template Instructional Video

Delta Template Instructions

ICR Funding Initiative Provider Checklist Tool providers can use to track the completion of the steps needed to receive the ICR funding.

Registration Tip Sheet List of tips providers can consult to support timely contract and amendment registration.

Budget Modification Job Aids

Budget Modification Job Aid for Providers Claiming De Minimis

Budget Modification Job Aid for Providers Claiming Greater Than 10%

Video on Budget Modifications and Accepted ICRs

Provides technical assistance on the budget modification process and guidance on cost allocations pursuant to the Cost Manual, as well as the difference between a budget modification and an ICR Amendment.

Reports and Press

The City Council of The City of New York FY20 Adopted Expense Budget Adjustment Summary / Schedule C

Reports to New York City Council

July 2020

March 2020

November 2019

Press Releases

April 23, 2021 Mayor de Blasio, Speaker Johnson announce increased support for nonprofits and human service providers. Media availability video and transcript available.

December 10, 2019 Mayor de Blasio, Speaker Johnson and City Council announce the launch of the Indirect Funding Initiative.

Archive of Email Communications

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Fiscal Year 2023

March 29, 2023: FY24 ICR Application Process is now open for eligible providers!

Fiscal Year 2022

March 15, 2022: FY23 ICR Application Process is now open for eligible providers!

Fiscal Year 2021

April 23, 2021: Important Update on ICR Funding Initiative

March 17, 2021: FY21 ICR Funding Policy Update

January 22, 2021: Indirect Cost Rate Amendments in PASSPort

December 29, 2020: TODAY 5 PM! Submit Delta Templates

December 22, 2020: December 15 Recommended Milestone Has Passed, Submit Delta Templates ASAP

December 17, 2020: December 15 Recommended Milestone Has Passed, Submit Delta Templates ASAP

December 15, 2020: Today! December 15 Milestone for Outstanding Templates

December 10, 2020: Upcoming December 15 Milestone for Delta Templates

December 8, 2020: December 15 Milestone for Outstanding Templates

December 4, 2020: Deadline Has Passed

December 1, 2020: Final Deadline Today for Indirect Entryways

November 30, 2020: Deadline Is Here

November 25, 2020: Deadline Approaching

November 24, 2020: December 1st Final Deadline for Indirect Entryways

November 19, 2020: Deadline Approaching (targeted outreach – providers that have not entered Initiative)

November 18, 2020: Accepted ICR FAQ (targeted outreach – providers with Accepted ICRs)

November 17, 2020: December 1st Final Deadline for Indirect Entryways

November 12, 2020: Deadline Approaching (targeted outreach – providers that have not entered Initiative)

November 10, 2020: December 1st Final Deadline for Indirect Entryways

November 5, 2020: Deadline Approaching (targeted outreach – providers that have not entered Initiative)

November 4, 2020: December 1st Final Deadline for Indirect Entryways

October 29, 2020: 3 Days Left to November 1st Deadline for Entryways

October 20, 2020: Upcoming Deadline and Reminders

October 15, 2020: Upcoming Deadline and Reminders

October 6, 2020: Upcoming Deadline and Reminders

September 29, 2020: Upcoming Deadline and Reminders

September 22, 2020: FAQ on Initiative Updates

September 15, 2020: FY20 ICR Amendment Calculator

September 8, 2020: Technical Update Video

September 1, 2020: Revised Cost Manual and Additional Webinar

August 25, 2020: Update on Indirect Funding Initiative

August 20, 2020: Invitation to Webinar

August 18, 2020: Update on Indirect Funding Initiative

August 11, 2020: Update on Indirect Funding Initiative

Fiscal Year 2020

June 16, 2020: 3 Days Left for FY20 Entryway Selection

June 9, 2020: 10 Days Left for FY20 Entryway Selection

June 2, 2020: FY21 Announcements and Revised Cost Manual

May 26, 2020: June Deadlines for FY20 ICR Processing

May 19, 2020: May 22nd Deadline for FY20 Retroactive Funding

May 15, 2020: Initiative Reminders

May 6, 2020: New! Delta Template Video

April 28, 2020: Initiative Reminders

April 22, 2020: Delta Template Revisions

April 15, 2020: Initiative Reminders

April 8, 2020: Initiative Reminders

March 31, 2020: Message from the CIT

March 10, 2020: Initiative Reminders

March 3, 2020: Initiative Reminders

February 25, 2020: Delta Templates

February 18, 2020: Cost Manual Additions

February 11, 2020: Investment Timeline

February 4, 2020: Entryway Submission

January 28, 2020: 4 Days Remaining for FY20-Only Conditional ICR Election

January 21, 2020: Reminder For FY 20-Only Conditional ICR

January 14, 2020: Additional Job Aids Now Available

January 7, 2020: Deadline for Conditional ICR Approaching

December 31, 2019: New Year's Reminders

December 24, 2019: Holiday Reminders

December 16, 2019: Delta Templates

December 9, 2019: Deadline for Conditional Rate

December 3, 2019: Entryway Resources Available

November 26, 2019: Revised Cost Manual and Provider Checklist

November 18, 2019: Claiming Starts Today

November 12, 2019: Revised Cost Manual and FAQs

October 28, 2019: Independent Accountant's Report

October 18, 2019: October 7 Briefing Video

October 8, 2019: Follow-Up to October 7th Briefing

September 12, 2019: Indirect Information Survey

September 6, 2019: Invitation to October 7th Briefing