As described in 2 CFR 200, Subsection E, Section 200.403, Factors Affecting the Eligibility of Costs, costs must be calculated consistently as indirect or direct costs, but must not be calculated twice or inconsistently as both. If chosen, this methodology must be used consistently for all federal compensation after the election, until a non-federal entity decides to negotiate an interest rate, which the non-federal entity may request at any time. In this method, the rate is expressed as follows: Percentage of total eligible indirect costs for the selected base. The allocation basis may include total direct costs (excluding capital expenditures and other elements that distort the situation, such as large partial grants and participant support costs), direct salaries and wages or other basic costs to achieve an equitable distribution. Funding for these types of programs generally covers the direct expenses of the program, but not enough (or not at all) of the indirect overhead costs incurred by the non-profit organization in its operations. As a result, nonprofits often do not receive enough funds to fully cover their costs. 2 CfR 200, Subsection E, Section 200.414(c)(1) states that negotiated tariffs must be accepted by all federal procurement agencies. Appendix I of this guide provides an example of the NICRA used by USAID. 2 CfR 200, Subsection F, Annex IV, Section C.2.g states that the outcome of each negotiation must be formalized in a written agreement between the Indirect Cost Detection Agency and the non-profit organization. The negotiated indirect cost agreement shall specify: (a) the last sentence(s), (b) the basis(s) on which the sentence(s) apply and (c) the period(s) for which the sentence(s) apply. The negotiated agreement on indirect cost rates shall not change the monetary ceiling, the obligation or allocation of specific costs or the non-reimbursement provided for in each grant or contract between the parties. Reimbursement of indirect costs is subject to the submission of a proposal for indirect cost rates, the availability of funds, legal and administrative restrictions, and the approval of the grant officer or authorized USAID representative. Winners must have a detailed understanding of their conditions in relation to the BRI or award-specific tariffs in order to correctly calculate indirect cost recovery costs and any post-award adjustments.
Fixed prices may be negotiated if predetermined rates are not deemed appropriate. However, a fixed interest rate may not be negotiated if (i) all or a substantial portion of the organization`s federal premiums are expected to expire before the deferred adjustment can be made; (ii) the combination of federal and non-federal work within the Organization is too unpredictable to allow for a fair adjustment of the transfer; or (iii) the activities of the Organization fluctuate considerably from year to year. 2 CfR 200, Subsection F, Annex IV, Section B. sets out the following specific methods for the allocation of indirect costs. Indirect costs incurred by your organization can be allocated by one of the following methods: Predetermined A predetermined rate for indirect costs applies for a specific current or future period, usually the organization`s fiscal year. The rate is based on an estimate of the costs to be incurred during the period. A predetermined interest rate is not subject to adjustment. 2 CfR 200, Subsection F, Annex IV, Section B.4.a, states that some non-profit organisations treat all costs as direct costs, with the exception of general administration and overheads. These organizations generally divide their costs into three core categories: (i) administration and general expenses, (ii) fundraising, and (iii) other direct functions (including projects under federal grants). The indirect costs allocated to each function are then allocated between one or more indirect cost rates for individual federal premiums and other activities within that function.
Current costs such as depreciation, rental costs, operation and maintenance of facilities, telephone costs, etc. are calculated individually as direct costs for each category and for each federal price or other activity on a proportional basis that best corresponds to the respective costs. If the main functions of an organization benefit approximately equally from its indirect costs, the allocation of indirect costs can be made by (i) separating the total cost of the organization for the reference period, directly or indirectly, and (ii) dividing the total eligible indirect costs (less applicable appropriations) by an equitable allocation basis. The result of this process is an indirect cost rate that is used to allocate indirect costs among individual federal premiums. The rate should be expressed as a percentage of the eligible indirect costs in relation to the selected basic allocation costs. This method should also be used when an organization has only one primary function, which includes a number of individual projects or activities, and can be used when the amount of federal grants to an organization is relatively small. A predetermined fixed CI is a permanent interest rate set for a separate period of time equal to one or more fiscal years of the organization. Organizations have the right to charge NSF premiums at the predetermined fixed rates set out in the award documents. However, if negotiations between the organization and the NSF (or the conscious federal agency, otherwise the NSF) result in changes to the organization`s CI during the award period, the organization may charge the scholarship at the renegotiated rate that applies to direct expenses, subject to the provisions of the NSF V.D.
Allocation and Administration Guide. Here are the names. The email addresses and telephone numbers of the contracting specialist responsible for negotiating each organization`s Indirect Cost Agreement (IIAC). Note that the responsibility of each specific organization is based on the first letter of its name, i.e. ABC, Inc. is carried out by Lynn Brown and Help the Poor, Inc. is supervised by Judith Almodovar etc. An organization that does not yet have a NICRA but wishes to offer indirect costs should follow the steps below and declare that there is not yet a NICRA in response to all procurement requests, as this will be its first-class USG price. The indirect cost rates are then checked by M/OAA/CAS/OCC and the customer/purchasing manager is informed of the approved rates after negotiation with the organization. If the organization subsequently wins the award, a NICRA will be issued. Conversely, if the organization has not successfully received the award, no NICRA will be issued.