Some programs do not pay indirect costs or have a limitation on the amount of indirect costs collected; can these programs be excluded from the direct cost base?
According to 2 CFR 225 (A-87), Appendix A, Section C.3.b, “All activities which benefit from the governmental unit‘s indirect costs, including unallowable activities and services donated to the governmental unit by third parties, will receive an appropriate allocation of indirect costs.” Also, Section C.3.c states that “Any cost allocable to a particular Federal award or cost objective under the principles provided for 2 CFR part 225 may not be charged to other Federal awards to overcome fund deficiencies, to avoid restrictions imposed by law or terms of the Federal awards, or for other reasons.” We interpret these guidelines to mean that all programs regardless of funding (or lack of funding) for indirect cost recoveries must be considered in the base for purposes of determining indirect cost rates. All programs that benefit from the organization‘s indirect cost (which includes space occupancy and human resources costs) must be allocated their share of the organization‘s indirect cost
Related Questions
- Does the $2 million direct cost limitation for Network applications include the indirect costs of the subcontracts? Is the budget for the Networks $2 million total or $2 million per year?
- Some programs do not pay indirect costs or have a limitation on the amount of indirect costs collected; can these programs be excluded from the direct cost base?
- What budget items are excluded from the indirect cost base?
