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# What is a federally approved indirect cost rate?

## What is a federally approved indirect cost rate?

An indirect cost rate (ICR) is the ratio between the total indirect expenses and a direct cost base. A nonprofit establishes an ICR through negotiations with its cognizant federal agency by submitting an ICR Proposal and other supporting documentation, which is subject to review and/or audit.

How do you calculate indirect cost of federal grants?

Indirect Cost Calculation: A Base Amount is determined by adding together all direct costs (-) minus any items which are exempt from IDC costs. (Base Amount) x (Indirect Cost Rate) = Total Indirect Costs.

### Who approved indirect cost rates?

All organizations must submit their final indirect cost rate proposals within 180 days of the end of your organization’s fiscal year….

• The negotiated rates must be accepted by all Federal awarding agencies.
• The Federal awarding agency head or delegate must notify OMB of any approved deviations.

What is the 10 de minimis indirect cost rate?

The 10% de minimis indirect cost rate is a Federally-recognized rate that non-Federal entities may use to recover allowable indirect costs on grants or cooperative agreements.

#### How are indirect cost rates applied?

Indirect costs are costs which cannot be directly identified with a single contract or grant. The indirect costs are applied equitably across all of the business activities of the organization, according to the benefits each gains from them.

What is the formula for calculating indirect cost rates?

The indirect cost rate formula is calculated by dividing the total indirect cost pool by the total amount of direct costs, and then multiplying that number by each cost object’s direct costs.

## What is a government reimbursable agreement?

Reimbursable agreements are a means by which an entity needing supplies or services (the requesting entity) obtains them from a Federal agency (the servicing agency). Among government agencies, reimbursable agreements can be in the form of either an interagency or intra-agency agreement.

What is the difference between direct cite and reimbursable?

With the Reimbursement Order (Category I), the assisting agency pay for the items up front and is then reimbursed by the requesting agency. With Direct Citation (Category II), the requesting agency provides the funds up front. The overseeing agency then receives the MIPR in the contracting system.