What are indirect costs and how are they determined for new applicants?
Indirect costs are those costs which are allocable to a particular cost objective, such as a grant, cooperative agreement, procurement contract, service, or other activity, in accordance with the relative benefits received. OMB Circular A-122 (or other OMB Circulars for certain other types of Recipients) provides guidance for non-profit organizations as to appropriate indirect cost allocation bases and methods, by stating that the distribution base may be total direct costs (excluding capital expenditures and other distorting items, such as major subcontracts or subgrants), direct salaries and wages, or other bases which result in an equitable distribution.
