Common use of Indirect Cost Clause in Contracts

Indirect Cost. These cost categories are used to distribute costs of general administrative operations that have not been directly charged to individual subrecipient programs. The Indirect Cost expenditures distribute administrative overhead costs to each program element, project or service grouping. Two separate local rates may apply to the agreement period (i.e., one for each local fiscal year). Use Calendar Rate 1 to reflect the rate applicable to the first part of the agreement period and Calendar Rate 2 for the rate applicable to the latter part. Indirect costs are not allowed on programs elements designated as vendor relationship. An indirect rate proposal and related supporting documentation must be retained for audit in accordance with records retention requirements. In addition, these documents are reviewed as part of the Single Audit, subrecipient monitoring visit, or other State of Michigan reviews. Following is further clarification regarding indirect rate and/or cost allocation approval requirements to distribute administrative overhead costs, in accordance with Title 2 CFR Part 200 (formerly Circular A-87 2 CFR Part 225, Appendix E), for Local Health Departments budgeting indirect costs: 1. Local Health Departments receiving more than $35 million in direct Federal awards are required to have an approved indirect cost rate from a Federal Cognizant Agency. If your Local Health Department has received an approved indirect rate from a Federal Cognizant agency, attach the Federal approval letter to your MI E-Grants Grantee Profile. 2. Local Health Departments receiving $35 million or less in direct Federal awards are required to prepare indirect cost rate proposals in accordance with Title 2 CFR and maintain the documentation on file subject to review. 3. Local Health Departments that received approved indirect cost rates from another State of Michigan Department should attach their State approval letter to their MI E-Grants Grantee Profile. 4. Local Health Departments with cost allocation plans should reflect these allocations in the Other Cost Distributions budget category. See Section M. Other Cost Distribution for budgeting guidance. 5. As a Subrecipient of federal funds from MDHHS, a Local Health Department that has never received a negotiated indirect cost rate, your Local Health Department may elect to charge a de minimis rate of 10% of modified total direct costs (MTDC) based on Title 2 CFR part 200 requirements. MTDC includes all direct salaries and wages, fringe benefits, supplies and materials, travel, services, and contractual expenses up to the first $25,000 of each contract. MTDC excludes all equipment, capital expenditures, charges for patient care, rental costs, tuition remission, scholarships and fellowships, participant support costs, and portions subcontractual/subaward expenses in excess of $25,000 per contract. Attach a current copy of the letter stating the applicable indirect costs rate or calculation information justifying the de minimis rate calculation to you MI E-Grants Grantee profile. Detail on how the indirect costs was calculated must be shown on the Budget Detail Schedule. The amount of Indirect Cost should be allocated to all appropriate program elements with the total equivalent amount reflected as a credit or minus in the Administration projects.

Indirect Cost. These cost categories are used to distribute costs of general administrative operations that have not been directly charged to individual subrecipient programs. The Indirect Cost expenditures distribute administrative overhead costs to each program element, project or service grouping. Two separate local rates may apply to the agreement period (i.e., one for each local fiscal year). Use Calendar Rate 1 to reflect the rate applicable to the first part of the agreement period and Calendar Rate 2 for the rate applicable to the latter part. Indirect costs are not allowed on programs elements designated as vendor relationship. relationship An indirect rate proposal and related supporting documentation must be retained for audit in accordance with records retention requirements. In addition, these documents are reviewed as part of the Single Audit, subrecipient monitoring visit, or other State of Michigan reviews. Following is further clarification regarding indirect rate and/or cost allocation approval requirements to distribute administrative overhead costs, in accordance with Title 2 CFR Part 200 (formerly Circular A-87 A- 87 2 CFR Part 225, Appendix E), for Local Health Departments budgeting indirect costs: 1. Local Health Departments receiving more than $35 million in direct Federal awards are required to have an approved indirect cost rate from a Federal Cognizant Agency. If your Local Health Department has received an approved indirect rate from a Federal Cognizant agency, attach the Federal approval letter to your MI E-Grants Grantee Profile. 2. Local Health Departments receiving $35 million or less in direct Federal awards are required to prepare indirect cost rate proposals in accordance with Title 2 CFR and maintain the documentation on file subject to review. 3. Local Health Departments that received approved indirect cost rates from another State of Michigan Department should attach their State approval letter to their MI E-Grants Grantee Profile. 4. Local Health Departments with cost allocation plans should reflect these allocations in the Other Cost Distributions budget category. See Section M. Other Cost Distribution for budgeting guidance. 5. As a Subrecipient of federal funds from MDHHS, a Local Health Department that has never received a negotiated indirect cost rate, your Local Health Department may elect to charge a de minimis rate of 10% of modified total direct costs (MTDC) based on Title 2 CFR part 200 requirements. MTDC includes all direct salaries and wages, fringe benefits, supplies and materials, travel, services, and contractual expenses up to the first $25,000 of each contract. MTDC excludes all equipment, capital expenditures, charges for patient care, rental costs, tuition remission, scholarships and fellowships, participant support costs, and portions subcontractual/subaward expenses in excess of $25,000 per contract. Attach a current copy of the letter stating the applicable indirect costs rate or calculation information justifying the de minimis rate calculation to you MI E-Grants Grantee profile. Detail on how the indirect costs was calculated must be shown on the Budget Detail Schedule. The amount of Indirect Cost should be allocated to all appropriate program elements with the total equivalent amount reflected as a credit or minus in the Administration projects.

Indirect Cost. These cost categories are used to distribute costs of general administrative operations that have not been directly charged to individual subrecipient programs. The Indirect Cost expenditures distribute administrative overhead costs to each program element, project or service grouping. Two separate local rates may apply to the agreement period (i.e., one for each local fiscal year). Use Calendar Rate 1 to reflect the rate applicable to the first part of the agreement period and Calendar Rate 2 for the rate applicable to the latter part. Indirect costs are not allowed on programs elements designated as vendor relationship. relationship An indirect rate proposal and related supporting documentation must be retained for audit in accordance with records retention requirements. In addition, these documents are reviewed as part of the Single Audit, subrecipient monitoring visit, or other State of Michigan reviews. Following is further clarification regarding indirect rate and/or cost allocation approval requirements to distribute administrative overhead costs, in accordance with Title 2 CFR Part 200 (formerly Circular A-87 2 CFR Part 225, Appendix E), for Local Health Departments budgeting indirect costs: 1. Local Health Departments receiving more than $35 million in direct Federal awards are required to have an approved indirect cost rate from a Federal Cognizant Agency. If your Local Health Department has received an approved indirect rate from a Federal Cognizant agency, attach the Federal approval letter to your MI E-Grants Grantee Profile. 2. Local Health Departments receiving $35 million or less in direct Federal awards are required to prepare indirect cost rate proposals in accordance with Title 2 CFR and maintain the documentation on file subject to review. 3. Local Health Departments that received approved indirect cost rates from another State of Michigan Department should attach their State approval letter to their MI E-Grants Grantee Profile. 4. Local Health Departments with cost allocation plans should reflect these allocations in the Other Cost Distributions budget category. See Section M. Other Cost Distribution for budgeting guidance. 5. As a Subrecipient of federal funds from MDHHS, a Local Health Department that has never received a negotiated indirect cost rate, your Local Health Department may elect to charge a de minimis rate of 10% of modified total direct costs (MTDC) based on Title 2 CFR part 200 requirements. MTDC includes all direct salaries and wages, fringe benefits, supplies and materials, travel, services, and contractual expenses up to the first $25,000 of each contract. MTDC excludes all equipment, capital expenditures, charges for patient care, rental costs, tuition remission, scholarships and fellowships, participant support costs, and portions subcontractual/subaward expenses in excess of $25,000 per contract. Attach a current copy of the letter stating the applicable indirect costs rate or calculation information justifying the de minimis rate calculation to you MI E-Grants Grantee profile. Detail on how the indirect costs was calculated must be shown on the Budget Detail Schedule. The amount of Indirect Cost should be allocated to all appropriate program elements with the total equivalent amount reflected as a credit or minus in the Administration projects.