State of MaineDepartment of EducationLocal Education Agency Indirect Cost Rate ProposalSeptember 30, 2015

Presented by:Nelson Clugston, Vice President Sheri Smith, Principal

Consultantnelsonclugston@maximus.com SheriLSmith@maximus.com

Presentation Topics• Defining Indirect Costs

• Indirect Cost Rates

• Types of Costs

• LEA ICRP Workbook and Instructions

• Data Needed

• Let’s Get Started

• Implementation

• References

Defining Indirect Costs

• Costs that are “incurred for a common or joint purpose benefiting more than one cost objective, and not directly assignable to cost objectives benefited without effort disproportionate to results achieved.”

Indirect Cost Rates

• Unrestricted Rate – Applies to grants not subject to the supplement-not-supplant legislative restriction

• Restricted Rate – Applies to grants that are made under federal programs with supplement-not-supplant requirements. Most USDE grants have this clause.

o Some costs that are considered to be indirect when calculating the unrestricted rate are “adjusted” to direct costs when calculating the restricted rate

o The template being provided will calculate both rates based on the data that you provide when filling in each tab of the workbook.

o A listing of restricted rate grants by CFDA number is available as a reference on MDE’s website

%

Predetermined Rate is applicable to a specified current or future period based on an estimate of the costs to be incurred during the period. It is not subject to adjustment

Provisional Rates is a temporary rate applicable to a specified period pending the establishment of a final rate for the period

Fixed with Carry-Forward Rates is a rate that is adjusted by the difference between the estimated costs and the actual costs of the period covered by the rate. The variance is carried forward as an adjustment to the rate computation of a subsequent period.

Types of Rates

Carryforward Calculation

FY15 Rate based on FY13 CostsFY13 Actual Indirect Costs $100,000FY13 Actual Direct Costs $5,000,000FY15 Indirect Cost Rate:

$100,000/$5,000,000 = 2.00%

FY15 Carryforward CalculationFY15 Actual Indirect Costs $110,000FY15 Actual Direct Costs $4,500,000

FY15 Indirect Costs Recovered:$4,500,000 * Rate of 2.00% = $90,000Less Actual Indirect Costs of $110,000= Under Recovery of $20,000

FY17 Rate based on FY15 CostsFY15 Actual Indirect Costs $110,000FY15 Under Recovery $ 20,000Total FY17 Indirect Costs $130,000Divided by FY15 Actual Direct

$4,500,000 FY17 Indirect Cost Rate = 2.89%

Life Cycle of Indirect Cost Plans

July, 2016Begin Using New Rates

July – November, 2015Prepare FY 2017 ICRP based on FY 2015

Costs November 30, 2015Submit FY 2017 ICRP to

MDE for review and approval

December, 2015 – May, 2016MDE Reviews and Approves

ICRPs

June, 2016MDE issues FY 2017 ICRP Rate

Agreements to LEAs

Types of Costs

Direct

Indirect

Exclude/Disallow

Allowable Costs

• Necessary & reasonable for proper & efficient performance of Federal programs

• Be allocable to Federal awards under provisions of this Circular

• Be authorized & not prohibited by State or local laws or regulations

• Conform to limitations imposed by any other Federal FFP regulations

• Be consistent with policies that are uniform for both federally assisted & other activities

• Be accorded consistent costing treatment

• Follow GAAP, unless otherwise prescribed

• Not included as match for another Federal program

• Be net of all applicable credits

To be allowable, costs must meet the following general criteria:

Direct Costs

Direct costs are those that can be identified specifically with a particular cost objective. Examples of direct costs are

Compensation of employees who work in the program Supplies and materials used for the program Equipment purchased and used for the program Travel expenses incurred specifically to carry out the program

Function Code Series that would incur direct costs include: 1000 Instruction 2100 Support Services-Student 2200 Support Services-Instruction 2400 Support Services-School Administration 2700 Student Transportation 3100 Child Nutrition Operations 3200 Enterprise Operations 3300 Community Services Operations

Indirect Costs

Indirect costs are those that are incurred for a common or joint purpose benefiting more than one cost object. In addition, indirect costs cannot be readily identified as benefiting a particular cost objective. Examples of indirect costs include the salaries and expenses for the following:

Data Processing Accounting Personnel Purchasing

Indirect Cost, cont’d.

Within the MDE LEA Chart of Accounts, the following function number series have been identified as potentially having indirect costs:

2310 Board of Education 2317 Board of Education-Audit Services 2318 Board of Education-Legal Services 2321 Office of the Superintendent 2323 State and Federal Relations 2510 Fiscal Services 2520 Purchasing, Warehousing and Distributing 2560 Public Information Services 2570 Personnel Services 2580 Administrative Technology Services 2600 Utilities 2610 Building Care & Operations 2620 Building Maintenance 2630 Grounds 2640 Equipment 2650 Vehicles (other than Student Transportation 2660 Security 2670 Safety

• Bad Debts

• Capital Outlay

• Contributions

• Entertainment

• Legislative & most Judicial Costs

• Contributions to Reserve Funds

• Research & Development Costs

• Fines & Penalties

• Alcoholic Beverages

• Lobbying

• Idle Facilities

Unallowable Costs - Examples

Data Needed

• Expenditure Report that includes total costs, regardless of funding source

• Audited Financial Statements

• Table of Organization

• Square Footage by Indirect and Direct Service Areas

• Listing of Direct Service SubContracts and SubAwards that exceed $25,000

• Wages, Benefits and other Costs related to Central Service Departments that will be adjusted for the restricted rate

• Paid Leave Balance Pay-Out at Termination by Employee, Fund and Department

Steps

Determine Total Expenditures

Identify Unallowable and Excluded Costs

Determine Direct Costs

Determine Indirect Costs

Reconcile Proposal to Financial Statements

Select the Distribution Base

Compute the Indirect Cost Rates

LEA ICRP Workbook LayoutThe first six tabs are documents that are required to be submitted as shown in the Cost Allocation Guide for State and Local Governments published by USDE. They include:

Schedule of Expenditures-Unrestricted Rate

Schedule of Expenditures-Restricted Rate

Calculation of Indirect Cost Rate-Restricted Rate

Fixed Rate with Carry-Forward Adjustment-Unrestricted Rate

Fixed Rate with Carry-Forward Adjustment-Restricted Rate

Restricted Rate Subsidiary Schedule-Restricted Rate

Certificate of Indirect Costs

LEA ICRP Workbook Layout, continued

Schedules A through E and Attachments 1 and 2 are supporting documents that provide necessary details for preparation of the required documents at the front of the workbook. They include:

Schedule A-Schedule of Subcontracts Schedule B-Unallowed and Excluded Costs Schedule C-Square Footage by Building Schedule D-Paid Leave by Department Schedule E-Restricted Rate Adjustments Attachment 1-Federal Funds by Function Number Attachment 2-State & Local Funds by Function

Number

LEA ICRP Workbook Instructions

MDE has also provided a detailed instruction booklet to assist in preparation of the ICRP workbook. The workbook includes:

Introduction Indirect Cost Rate Information Approval Process Classification of Costs Rate Types ICR Calculation Methodology (step by step instructions) LEA Application of Indirect Cost Rates

Let’s Get Started!

Things You Will Need

• Detailed expenditure report for all funds by fund and function*

• Audited Financial Statements

*If you can roll up expenditures to the 2-digit function level, it will save you

time: (2100, 2200, 2300, etc.)

Things You Will Use

• LEA ICRP Workbook Template

• LEA ICRP Instruction Booklet

MDE LEA Template and Instructions

The Maine Department of Education has contracted with MAXIMUS Consulting Services, Inc. to prepare, a template and instructions to be used by the State’s LEAs that will calculate both restricted and unrestricted indirect cost rates that meet the standards set by the U. S. Department of Education. The template and instructions can be located at:

http://www.maine.gov/education/audit/indirectcostrate.shtml

Schedule of Expenditures – Unrestricted Rate

Fund Descriptions: General FundInstruction and Support:

1000 Instruction  

2100 Support Services-Student  

2200 Support Services-Instruction  

2300 Support Services-General Administration  

2400 Support Services-School Administration  

2500 Central Services  

2600 Operation and Maintenance of Plant  

2700 Student Transportation  

3100 Child Nutrition Operations  

3200 Enterprise Operations  

3300 Community Services Operations  

  Unpaid Leave at Termination  

Facilities Acquisition and Construction:

4100 Land Acquisition  

4200 Land Improvement  

4300 Architecture & Engineering  

4400 Educational Specifications Development  

4500 Building Acquisition and Construction  

4600 Site Improvement  

4700 Building Improvements  

4900 Other Facilities Acquisition & Construction  

Debt Service:

5000 Debt Service  

  Total Sub-recipient Expenditures -

Don’t be intimidated by the first worksheet!

We’ll begin with the first column only.

Using your expenditure report, enter the total cost of Function 1000 Instruction paid by the General Fund in the first yellow cell.

In the next cell, enter the total General Fund cost of Function 21XX Support Services-Student Function 21XX includes the total of all costs for general fund function

numbers that begin with “21..” If you are unable to roll your financial data up to this level, simply

add each “21” function cost within the cell.Continue in this manner for each function number listed

until all General Fund expenditures have been accurately entered.

Check to be sure the Total in Cell C33 equals the Total General Fund Expenditures from your audited financial report.

Total Sub-recipient Expenditures (Cell C33) = Total Audited General Fund Expenditures

Att 2 State & Local Recap

FY14 Expenditures

State & Local Funds by Function #

Fund # 1000 2100 2200 2300 2400 2500 2600 2700 3100 3200 3300 Total

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

Total - - - - - - - - - - - -

Att 2 State & Local Recap

This schedule will calculate the state and localfund expenditures by function number.

It will also enter the amounts on the first tab “Schedule of Expenditures-Unrestricted Rate” in Column D “State Grants, Local Funds”.

Enter the first state or local fund number from the expenditure report in Column A.

Enter the expenditures under the appropriate function number, adding duplicate function numbers together as necessary.

Att 1 Fed Funds Recap

Go to the second-last tab in the workbook, “Att 1 Fed Funds Recap”.

Repeat the steps from Att 2 State & Local Recap using the LEA’s federal funds rather than state and local funds.

Once these number have tied to the audited federal expenditures, the amounts will carry forward to Column E on the Schedule of Expenditures-Unrestricted Rate.

Congratulations! Remember to save your work!

Next, enter costs you may have in the appropriate function number box for the LEA’s Capital Project Funds, Enterprise Funds, Internal Service Funds, Trust and Agency Funds on the Schedule of Expenditures-Unrestricted Rate (Tab 1).

Be sure each column balances to the audited expenditures.

Note: You may enter the amounts that you are tying to (from the audit) on Row 35. Row 36 will calculate any variance to assist you in balancing.

Name of Subrecipient Unit #

Schedule of ExpendituresUnrestricted Rate

Year Ended June 30, 2014

Fund Numbers: 1000, 1500, Other 2000-2232 2300-2980 3000-5000 6000 7000 8000 9000 1 2 3 4 5

Fund Descriptions: General FundState GrantsLocal Funds

FederalFunds

Capital ProjectsPerm Impr Funds

EnterpriseFunds

InternalSvc Funds

TrustFunds

AgencyFunds

TotalExpenditures

UnallowableCosts

ExcludedCosts

IndirectCosts

DirectCosts

Instruction and Support: 1000 Instruction   - -           - - - - 2100 Support Services-Student   - -           - - - - 2200 Support Services-Instruction   - -           - - - - 2300 Support Services-General Administration   - -           - - - - - 2400 Support Services-School Administration   - -           - - - - 2500 Central Services   - -           - - - - - 2600 Operation and Maintenance of Plant   - -           - - - - - 2700 Student Transportation   - -           - - - - 3100 Child Nutrition Operations   - -           - - - - 3200 Enterprise Operations   -             - - - - 3300 Community Services Operations   - -           - - - -

  Unpaid Leave at Termination                 - - - - Facilities Acquisition and Construction:

4100 Land Acquisition                 - - - - 4200 Land Improvement                 - - - - 4300 Architecture & Engineering                 - - - - 4400 Educational Specifications Development                 - - - - 4500 Building Acquisition and Construction                 - - - - 4600 Site Improvement                 - - - - 4700 Building Improvements                 - - - - 4900 Other Facilities Acquisition & Construction                 - - - -

Debt Service: 5000 Debt Service                 - - - -

  Total Sub-recipient Expenditures - - - - - - - - - - - - -

- - - - - - - - -

Tab 1 should look like this – except there should be numbers in the cells in columns with yellow cells, and your LEA name in the corner. All other cells will fill in when you complete other worksheets in the workbook.

Congratulations! You are done with Tab 1

Excluded and Disallowed Costs

Schedule B-UnallowExclude

Sch of Exp Unrestr, Cols 2

and 3Go to Schedule B toward the end of the workbook where we will begin to enter excluded and disallowed costs.

The costs on Schedule B will flow forward to the Schedule of Expenditures, Columns 2 and 3 for Unallowed and Excluded costs.

0 0

School District Unit #

Unallowed and Excluded Costs

FY14 Object Numbers Series Fund Code Series

342X 3450 5400 6300 6800 7200 7300 8200 8300 9000 3000 7000

Architect,Engineer,Projects Legal** Advertising**

Food &Related

Supplies Construction

Supplies Buildings Equipment Judgments Debt

Service Other Uses

of Funds Capital

Projects

*InternalService Fund

Costs

SubContractPayments>$25,000

OtherExcluded

Costs

TotalExcluded

Costs

BadDebtsFines

Penalties Contingencies

Entertainment &Contributions to other

Organizations

TotalUnallowable

Costs

Instruction and Support:

1000 Instruction - -

2100 Support Services-Student - -

2200 Support Services-Instruction - -

2300 Support Services-General Administration - -

2400 Support Services-School Administration - -

2500 Central Services - -

2600 Operation and Maintenance of Plant - -

2700 Student Transportation - -

3100 Child Nutrition Operations - -

3200 Enterprise Operations - -

3300 Community Services Operations - -

  Unpaid Leave at Termination - -

Facilities Acquisition and Construction:

4100 Land Acquisition - -

4200 Land Improvement - -

4300 Architecture & Engineering - -

4400 Educational Specifications Development - -

4500 Building Acquisition and Construction - -

4600 Site Improvement - -

4700 Building Improvements - -

4900 Other Facilities Acquisition & Construction - -

Debt Service:

5000 Debt Service - -

Total Disallowances and Exclusions - - - - - - - - - - - - - - - - - - -

*All Costs for Internal Service Funds #7000

**See Instructions for excluded cost in these areas

Schedule B-Unallowed and Excluded Costs

Specific Guidelines-Excluded Costs

Object Number Series• 342X Architect, Engineer, Projects• 3450 Legal• 5400 Advertising• 6300 Food• 6800 Construction Supplies• 7200 Buildings• 7300 Equipment• 8200 Judgments• 8300 Debt Service• 9000 Other Uses of Funds

Fund Code Series

3000 Capital Projects

7000 Internal Service

Specific Guidelines-Unallowable Costs

• Bad Debts• Fines• Penalties• Contingencies• Entertainment• Contributions to other organizations

Unallowable Costs can not be charged to federal funds. They will be added back to the base to calculate the rate. They include:

SubContracts & SubAwards

All data entered on Schedule B so far has been pulled from the expenditure report

EXCEPT

SubContract Payments > $25,000

The data for this column will be generated from the Sch A SubContracts tab

Subcontracts & Subawards

Subrecipient entity receives funds from a prime recipient to carry out a portion of a program via

ContractGrantOther Agreement

Include on Schedule A if:Expenditure > $25,000Expenditure is a

program/direct costEntity works

independently and is responsible for decision making

Key to determining whether to include a contract on Schedule A

The concept for excluding all of the cost except the first $25,000 of these subcontracts/subawards is that the contract is not receiving the same level of administrative/indirect cost support as the program would if it was being operated in-house.

For example, a program being operated independently at an external location will not benefit from the Accounting, HR, Facilities and IT services to the extent that it would if the LEA housed and staffed the program.

After a thorough review of SubContracts, enter the following information on Schedule A Schedule of Subcontracts for each DepartmentFunction number that incurred the expense*Object Code that incurred the expense*Vendor Name*Original SubContract amountPeriod of PerformanceCurrent fiscal year expenditure*

*Required Data

Schedule A Preparation

Excluded SubContracts

Schedule A-SubContracts

• Total the amounts in Column I-Contract payments in excess of $25,000 for each function number

• Enter the amount by function number on Schedule B

Schedule B-Excluded Costs

• Enter the total exclusion amount by function number from Schedule A-SubContracts in the appropriate cell in Column O-SubContract Payments>$25,000

• Sch B Total in Row 31 for Column O = Sch A Total in Row 41 for Column I

This step is a lot of work, but it decreases the base, which increases the rate, which means more $$ for your LEA!

0 0Name of Subrecipient Unit #

Square Footage by BuildingFiscal Period July 1, 2013 through June 30, 2014

Departments

Building Description Address Superintendent

State& FederalRelations Fiscal

PurchasingWarehousingDistributing

PublicInformation Personnel

AdministrativeTechnology All Other

Total UsableSquare Feet

Building 1 0

Building 2 0

Building 3 0

Building 4 0

Building 5 0

Building 6 0

Building 7 0

All Other 0Total All Buildings 0 0 0 0 0 0 0 0 0

Superintendent 0State & Federal Relations 0Fiscal 0Purchasing,Warehousin,Distrib 0Public Information 0Personnel 0Administrative Technology 0

(A) Subtotal 0(B) Total All Buildings 0

(A) / (B) Ratio for Indirect Cost Staff #DIV/0!

Schedule C-Square Footage by Building

Calculate % of total square footage occupied by “indirect” departments

ABC School Street, City, ME Square Footage*

*List the square footage occupied by each of the indirect departments listed in columns D through J in “ABC School”

Enter the occupied square footage for direct departments (all other space) in Column K

Repeat for the next six schools/buildings

If the LEA has more than 7 buildings, enter the totals for all other buildings in the row for “All Other”

0 0Name of Subrecipient Unit #

Schedule of Paid Leave by DepartmentFiscal Period July 1, 2013 through June 30, 2014

Unused Leave Payments Unrestricted Restricted Unrestricted Restricted*

Dept # Department Name Employee NameIndirect

(X)Direct

(X)Indirect

(X)Direct

(X) Indirect

Employees ($) Direct

Employees ($) Indirect

Employees ($) Direct

Employees ($)

AmountPaid to

SeparatingEmployees

RestrictedRate

Adjustment      $ - $ - $ - $ -   $ -       $ - $ - $ - $ -   $ -       $ - $ - $ - $ -   $ -       $ - $ - $ - $ -   $ -       $ - $ - $ - $ -   $ -       $ - $ - $ - $ -   $ -       $ - $ - $ - $ -   $ -       $ - $ - $ - $ -   $ -       $ - $ - $ - $ -   $ -       $ - $ - $ - $ -   $ -       $ - $ - $ - $ -   $ -       $ - $ - $ - $ -   $ -       $ - $ - $ - $ -   $ -       $ - $ - $ - $ -   $ -       $ - $ - $ - $ -   $ -       $ - $ - $ - $ -   $ -       $ - $ - $ - $ -   $ -       $ - $ - $ - $ -   $ -

$ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - Total $ - $ - $ - $ - $ - $ -

*NOTE: Payments to separating employees for termination benefits and/or unused leave are treated as indirect costs when computing both the Restricted and Unrestricted RatesEXCEPT: Those employees who are indirect for the Unrestricted Rate, but direct for the Restricted Rate are considered to be Direct costs when calculating the rates.

Schedule D-Paid Leave by Department

Schedule D-Paid Leave by Department

• All leave payments made to terminating employees is required to be an indirect cost

• This schedule identifies each original leave payment as direct or indirect

• The only staff members who are different for the restricted rate than for the unrestricted rate are those adjusted on Schedule E

• The worksheet will calculate any adjustment and carry it to the appropriate schedules

Schedule of Restricted Rate Adjustments

July 1, 2013 thru June 30, 2014

Adjustments for Restricted Rate

Unrestricted Indirect Unrestricted Indirect

Department on Function Object Indirect Indirect Direct Direct Direct Total Excluded Indirect Total

Table of Organization Codes Codes Employee Name Positions Salary Benefits Salary Benefits Other Costs Direct Costs Costs Other Costs* Costs

Executive Staffs

             

2310 - Board Services 3000-8100 All Other Costs - -   -       - -

2310 - Board Services 1500-2300 Name Position -   -       - -

2310 - Board Services 1500-2300 Name Position -   -       - -

2310 - Board Services 1500-2300 Name Position -   -       - -

2310 - Board Services 1500-2300 Name Position -   -       - -

2310 - Board Services 1500-2300 Name Position -   -       - -

2310 - Board Services 1500-2300 Name Position -   -       - -

2310 - Board Services 1500-2300 Name Position -   -       - -

2310 - Board Services 1500-2300 Name Position -   -       - -

2310 - Board Services 1500-2300 Name Position -   -       - -

2310 - Board Services 1500-2300 Name Position -   -       - -

2310 - Board Services 1500-2300 Name Position -   -       - -

Total $ - $ - $ -   $ -   $ -   $ - $ - $ - $ -

             

2317 - Board of Education-Audit Svcs 3000-8000 All Other Costs             - -

2318 - Board of Education-Legal Svcs 3000-8000All Other Costs            

- -

Total $ - $ - $ -   $ -   $ -   $ - $ - $ - $ -

            

2321 - Office of the Superintendent 1000-2000 Name Position -   -       - -

2321 - Office of the Superintendent 1000-2000 Name Position -   -       - -

2321 - Office of the Superintendent 3000-8000 All Other Costs                 -     -

Total $ - $ - $ -   $ -   $ -   $ - $ - $ - $ -

             

2323 - State and Federal Relations 1000-2000 Name Position               -

2323 - State and Federal Relations 3000-8000 All Other Costs               -

Total $ - $ - $ -   $ -   $ -   $ - $ - $ -   $ -

             

2510 - Fiscal Services 1000-2000 Name Position -   -       - -

2510 - Fiscal Services 1000-2000 Name Position -   -

      -

-

2510 - Fiscal Services 3000-8000 All Other Costs                 - - -

Total $ - $ - $ -   $ -   $ -   $ - $ - $ - $ -

             

2520 - Purchase,Warehouse,Distrib 1000-2000 Name Position               -

2520 - Purchase,Warehouse,Distrib 3000-8000 All Other Costs               -

Total $ - $ - $ -   $ -   $ -   $ - $ - $ -   $ -

             

Schedule E Restricted Rate Adjustments

Schedule E-Restricted Rate Adjustments

When calculating a restricted indirect cost rate, “General Management Costs” does not include expenditures for:1) The governing body (members of the board of

education) of the grantee (Function 2310);2) Compensation of the chief executive officer

(superintendent of a school district) of the grantee (Function 2321) and heads of component offices;

3) Compensation of the chief fiscal officer* (treasurer of a school district) of the grantee (Function 2510); and

4) The operation of the immediate offices of these officers

Column A-Schedule EDepartment on

Table of Organization Schedule EIdentifies indirect costs for the unrestricted rate.Identifies adjustments for the restricted

rate.Column A – Enter where each

employee can be located on the LEA’s Organizational Chart

For example, each board member is most likely located in the same place on the T/O. However, there may be employees in Fiscal Services that are located in different places on the T/O. Each employee needs to be located on the T/O.

______________2310 - Board Services

______________2321 - Office of the Superintendent

______________2323 – State and Federal Relations

Unrestricted Indirect

Function Object Indirect Indirect

Codes Codes Employee Name Positions Salary Benefits

2510 - Fiscal Services 1000-2000 Name Position

2510 - Fiscal Services 1000-2000 Name Position

2510 - Fiscal Services3000-8000

All Other Costs    

Total $ $

Schedule E Unrestricted Salaries & Benefits

Function 2510 – Fiscal Services FY15 Expenditures1000 Salaries $125,0002000 Benefits $ 19,0003000 Supplies $ 4,0004000 Travel $ 5007000 Equipment $ 7,000

2510-Total Expenditures $155,500

Expenditure Report Example

Adjustments for Restricted Rate

Unrestricted Indirect

Indirect Indirect Direct Direct Direct Total

Salary Benefits Salary Benefits Other Costs Direct Costs

80000 12000 80000   12000       92000

45000 7000 -   -       -

                -

$ 125000 $ 19000 80000   12000   $ -   $ 92000

Schedule E-Adjust Salaries & Benefits for Restricted Rate

Unrestricted Indirect

Direct Total Excluded Indirect Total

Other Costs Direct Costs Costs Other Costs* Costs

    - -

    - -

    - - -

$ -   $ - $ - $ - $ -

Schedule E-Other Costs

Adjustments for Restricted Rate

Unrestricted Indirect Unrestricted Indirect

Department on Function Object Indirect Indirect Direct Direct Direct Total

Exclud

ed Indirect Total

Table of Organization Codes Codes

Employee

Name Positions Salary Benefits Salary

Benefit

s Other Costs

Direct Costs Costs

Other Costs* Costs

Fiscal Services 2510 - Fiscal Services

1000-2000

Jane Doe Treasurer

80,000 12,000

80,000   12,000      

92,000 92,000

Accounting Department

2510 - Fiscal Services

1000-2000

John Buck Accountant

45,000

7,000 -  

-      

-

52,000

2510 - Fiscal Services 3000-

8000

All Other Costs

            2,880  

2,880 7,000

4,500

11,500

Total 125,000

19,000

80,000  

12,000  

2,880  

94,880

7,000

4,500

155,500

Schedule E-Fiscal Services Example Completed

Schedule E – Other Notes

• Insert additional rows as needed• Be sure to copy formula cells when adding rows• All Facilities indirect costs are the total cost times the

rate calculated on Schedule C• Indirect Costs from the Restr Adj flow

forward to the Schedules of Expenditures for the Unrestricted and Restricted Rates as appropriate

Certification

Once the LEA has completed the ICRP, the Certification must be signed by a staff member who has the authority to bind the LEA, normally at the Treasurer’s position or above.

The certification assures that

the costs are allowable and that unallowable costs have been adjusted Costs that have been treated as indirect costs have not been also claimed

as direct costs Similar types of costs have been accounted for consistently MDE will be notified of any accounting changes that would affect the rate

ImplementationABC GrantExample ExpendituresFY15

Wages $200,000Benefits 40,000Supplies 5,000SubContracts (1) 100,000Equipment 10,000Total Costs $355,0001st $25k SubC - 75,000Capital Equip - 10,000Allowable Costs $270,000FY15 Rate x 10%Indirect Costs $ 27,000

Indirect Cost Rate is applied to allowable grant costs only

Rate can be used only for the fiscal year for which it is approved

Rate can be used only after it has been approved

Rates are based on prior year expenditures (even/odd years)

FY15 costs calculate FY17 rate

FY16 costs calculate FY18 rate, etc.

Allowable costs can be Direct, Indirect, Excluded or

Disallowed

No cost can be both Direct and Indirect

RECAP

Training Questions & Answers

Is Workers’ Compensation Cost a direct or indirect cost?The cost of Workers’ Compensation follows the employee. Therefore, the cost of Workers’ Compensation for a direct-service employee is a direct cost, and the cost of Workers’ Compensation for an indirect-service employee is an indirect cost.

Are Subcontracts the same as Subcontractors?Subcontracts are for the work of subcontractors. Be sure that subcontracts that are listed in this workbook are for the work performed for direct services only. Do not include contracts for indirect departments, such as outsourcing the payroll function in the fiscal office.

Is the LEA required to prepare the ICRP if all federal costs are direct costs?Preparation of the Indirect Cost Rate Proposal is NOT REQUIRED of any LEA. If the LEA wants to recover its indirect costs from federal grants, then the LEA can choose to prepare an ICRP and submit it to MDOE for issuance of an approved rate. However, preparation of the ICRP is an OPTION being offered to the LEAs by the MDOE. Whether you can recover indirect costs from a federal grant or contract depends on the grant/contract itself. Some grants will allow recovery of indirect costs, some have a cap on the percent or dollar amount you can recover, and others do not allow for the recovery of indirect costs.