How is the restricted indirect cost rate computed?
Section 76.569 of EDGAR states that the maximum amount of indirect costs under a grant is determined by the following formula: Indirect costs=(Restricted indirect cost rate) x (Total direct costs of the grant minus capital outlays, subgrants, and other distorting or unallowable items as specified in the grantee’s indirect cost rate agreement) Furthermore, if a grantee uses a restricted indirect cost rate, the grantee must exclude the general management and fixed costs covered by that rate from the direct costs it charges to the grant.
