What is an indirect cost rate?
An indirect cost is an expense that you incur that is necessary to implementing the grant, but may be difficult to identify with your grant. For example, indirect costs may include money spent for heat, light, rent, telephone, security, accounting, and Internet use. If your organization prefers to use all of its grant funds for direct project costs, you are not required to charge the grant for indirect costs. If you wish to charge indirect costs, however, you must use a negotiated restricted indirect cost rate for this competition. If you do not have a negotiated rate, you may request a provisional rate. You will then have 90 days to submit the necessary paperwork to the Department to receive a negotiated indirect cost. For more information, please see: http://www.ed.gov/about/offices/list/ocfo/fipao/icgindex.html.
A. An indirect cost rate is the ratio of an organization??s indirect costs to some element of its direct costs, e.g., direct salaries and wages. Once determined, the rate is used to compute grantee indirect cost entitlement. The entitlement is accomplished by multiplying the indirect cost rate by the direct salaries and wages charged to a grant or contract. An indirect cost rate is the net product of an indirect cost rate proposal. Preparation and Use of Plans: Q. Who is responsible for the preparation of state and local central service cost allocation plans and indirect cost proposals? A. It is the responsibility of each state and local government to prepare timely central service cost allocation plans and indirect cost proposals where indirect cost reimbursement is sought. Q. Must the indirect cost proposal or the central service cost allocation plan be prepared centrally for each state or local department performing under federal grant programs? A. There is no requirement that an in
