Indirect Cost Rates
1
A Brief Introduction
• Indirect Cost Rates are intended to defray the costs associated
with implementation of grant programs housed within
districts.
• Indirect Cost Rates Do NOT increase your grant amount.
• You do not have to apply for or apply IDC’s to grants received.
2
How the presentation is split up
Title
Current calculation of IDC rate from Exp
Change to calculation of IDC rate from Exp
New carry forward calculation
Additional Changes with the new agreement
Reclassification of costs
References
Slide #
4-10
11-12
16-18
19-20
21-24
25
3
Current calculation of IDC rate from Exp
4
5
Funds <50 and
Object not in (‘910’,’971’)
6
Funds <50 and
Object not in (‘910’,’971’)
Direct
Step 1: Fund <50
Function Not In ('25XX','28XX','4XXX','52XX','62XX')
Object Not In ('7XX','710','715','720','725','73X','74X' ,'971','910')
Step 2:Fund<50, Function 62XX, Object 940
Step 3: Funds NOT in ('01','14','24','25','26','28','29') And <"50",
"25XX"Function, Object Not in
('7XX','710','715','720','725','73X','74X','971','910')
All summed then minus Indirect Step 2 and Indirect Step 3
7
Funds <50 and
Object not in (‘910’,’971’)
Indirect
Step 1: Funds In ('01','14','24','25','26','28','29'), Function "25XX", Object
Not In ('7XX','710','715','720','725','73X','74X',’971’,’910’)
Direct
Step 1: Fund <50
Function Not In ('25XX','28XX','4XXX','52XX','62XX')
Object Not In ('7XX','710','715','720','725','73X','74X' ,'971','910')
Step 2: Fund "15", Program Like "1**" Or "271", Function "25xx", Object
Not In ('7XX','710','715','720','725','73X','74X')
Step 3: Fund "21", In Objects ('1XX','2XX‘) (Section VII green guide pg 33 A 2)
Step 2:Fund<50, Function 62XX, Object 940
Step 3: Funds NOT in ('01','14','24','25','26','28','29') And <"50",
"25XX"Function, Object Not in
('7XX','710','715','720','725','73X','74X','971','910')
All summed then minus Indirect Step 2 and Indirect Step 3
8
Funds <50 and
Object not in (‘910’,’971’)
Indirect
Step 1: Funds In ('01','14','24','25','26','28','29'), Function "25XX", Object
Not In ('7XX','710','715','720','725','73X','74X',’971’,’910’)
Direct
Step 1: Fund <50
Function Not In ('25XX','28XX','4XXX','52XX','62XX')
Object Not In ('7XX','710','715','720','725','73X','74X' ,'971','910')
Step 2: Fund "15", Program Like "1**" Or "271", Function "25xx", Object
Not In ('7XX','710','715','720','725','73X','74X')
Step 3: Fund "21", In Objects ('1XX','2XX) (Section VII green guide pg 33 A 2)
Step 2:Fund<50, Function 62XX, Object 940
Cap Outlay
Step 3: Funds NOT in ('01','14','24','25','26','28','29') And <"50",
"25XX"Function, Object Not in
('7XX','710','715','720','725','73X','74X','971','910')
Step 1: Funds <50, Objects In ('7XX','710','715','720','725','73X','74X')
All summed then minus Indirect Step 2 and Indirect Step 3
Step 3: Funds <50, Function 4XXX, Object Not In
('7XX','710','715','720','725','73X','74X')
Step 2: Funds <50 Function 62XX, Object <>940
9
Funds <50 and
Object not in (‘910’,’971’)
Indirect
Step 1: Funds In ('01','14','24','25','26','28','29'), Function "25XX", Object
Not In ('7XX','710','715','720','725','73X','74X',’971’,’910’)
Direct
Step 1: Fund <50
Function Not In ('25XX','28XX','4XXX','52XX','62XX')
Object Not In ('7XX','710','715','720','725','73X','74X' ,'971','910')
Step 2: Fund "15", Program Like "1**" Or "271", Function "25xx", Object
Not In ('7XX','710','715','720','725','73X','74X')
Step 3: Fund "21", In Objects ('1XX','2XX) (Section VII green guide pg 33 A 2)
Step 2:Fund<50, Function 62XX, Object 940
Cap Outlay
Step 3: Funds NOT in ('01','14','24','25','26','28','29') And <"50",
"25XX"Function, Object Not in
('7XX','710','715','720','725','73X','74X','971','910')
Step 1: Funds <50, Objects In ('7XX','710','715','720','725','73X','74X')
All summed then minus Indirect Step 2 and Indirect Step 3
Step 3: Funds <50, Function 4XXX, Object Not In
('7XX','710','715','720','725','73X','74X')
Step 2: Funds <50 Function 62XX, Object <>940
Debt
Fund <50, Function '52XX'
10
Funds <50 and
New Method beginning for FY14 & FY18
Object not in (‘910’,’971’)
Food/
Other
Indirect
Step 1: Funds In ('01','14','24','25','26','28','29'), Function "25XX", Object
Not In ('7XX','710','715','720','725','73X','74X',’971’,’910’)
Direct
Step 1: Fund <50
Function Not In ('25XX','28XX','4XXX','52XX','62XX')
Object Not In ('7XX','710','715','720','725','73X','74X','971','910')
Step 2: Fund "15", Program Like "1**" Or "271", Function "25xx", Object
Not In ('7XX','710','715','720','725','73X','74X')
Step 3: Fund "21", In Objects ('1XX','2XX) (Section VII green guide pg 33 A 2)
Step 2:Fund<50, Function 62XX, Object 940
Cap Outlay
Step 3: Funds NOT in ('01','14','24','25','26','28','29') And <"50",
"25XX"Function, Object Not in
('7XX','710','715','720','725','73X','74X','971','910')
Step 1: Funds <50, Objects In ('7XX','710','715','720','725','73X','74X')
Step 4: Function Not in (‘31XX‘ AND Not Object '1XX','2XX')
Fund <50,
Function
'31XX' all
Objects
Not
'1XX','2XX')
Step 2: Funds <50 Function 62XX, Object <>940
Step 3: Funds <50, Function 4XXX, Object Not In
('7XX','710','715','720','725','73X','74X')
All summed then minus Indirect Step 2
Debt
Fund <50, Function '52XX'
11
Funds General and Special Revenue
funds
Excludes Operating and Residual
Equity Transfers
Direct
Funds General and Special Revenue funds
Indirect
(Step 1) All Functions but not:
(Step 1) Funds In
25XX Support Services - Business
28XX Reserved (Historical)
4XXX Facilities Acquisition and Construction Services)
52XX Capital Leases or Long Tern Notes with Board of Investments
62XX Resource Transfers
All Object but not:
01 General Fund
14 Retirement Fund
26 Impact Aid Fund
28 Technology Fund
And all funds less than fund 50 and in……
7XX Capital Outlay
725 Major Const
710 Cap Out Land
73X Major Equipt New
24 Metal Mines Fund
25 State Mining Impact
29 Flexibility Fund
25XX Support Services - Business and, Object Not in
715 Cap Out Land Improve
74X Major Equipt Replace
720 Cap Out Purch Building
971 Residual Transfers
910 Operating Transfers
7XX Capital Outlay
710 Cap Out Land
715 Cap Out Land Improve 720 Cap Out Purchase Existing Building
725 Major Construction
73X Major Equipment New
74X Major Equipment Replacement
(Step 2) Fund 15 Misc Program Fund in Programs Like 1** All Regular Programs Or 271 Indirect Costs, and
Function 25XX Support Services - Business, Object Not In ('7XX','710','715','720','725','73X','74X') see above
(Step 2) Funds General and Special Revenue funds in :
Cap Outlay
62XX Resource Transfers and 940 Indirect Costs
(Step 1) Funds General and Special Revenue funds
Objects In
7XX Capital Outlay
710 Cap Out Land
715 Cap Out Land Improve 720 Cap Out Purchase Existing
Building
725 Major Construction
73X Major Equipment New
74X Major Equipment Replacement
(Step 3) All Funds but not:
01 General Fund
14 Retirement Fund
24 Metal Mines Fund
25 State Mining Impact Fund
26 Impact Aid Fund
28 Technology Fund
29 Flexibility Fund
And all funds less than fund 50 and in……
(Step 3) Fund 21 Comp Absences, In Objects 1XX Salary, 2XX Benefits (Section VII green guide pg 33 A 2)
(Step 2) 62XX Resource Transfers but not in 940 Indirect Costs
25XX Support Services - Business and, Object Not in
971 Residual Transfers
910 Operating Transfers
7XX Capital Outlay
710 Cap Out Land
715 Cap Out Land Improve 720 Cap Out Purchase Existing Building
725 Major Construction
73X Major Equipment New
74X Major Equipment Replacement
All summed then minus Indirect Step 2
(Step 3) 4XXX Facilities Acquisition and Construction Services)
But Object Not In :
7XX Capital Outlay
710 Cap Out Land
715 Cap Out Land Improve 720 Cap Out Purchase Existing
Building
725 Major Construction
73X Major Equipment New
74X Major Equipment Replacement
Debt
Funds General and Special
Revenue funds
52XX Capital Leases or Long Tern
Notes with Board of Investments
12
Funds General and Special Revenue
funds
Excludes Operating and Residual
Equity Transfers
New Method beginning for FY14 & FY18
Direct
Food/
Funds General and Special Revenue funds
(Step 1) All Functions but not:
Indirect
25XX Support Services - Business
28XX Reserved (Historical)
4XXX Facilities Acquisition and Construction Services)
52XX Capital Leases or Long Tern Notes with Board of Investments
62XX Resource Transfers
(Step 1) Funds In
01 General Fund
14 Retirement Fund
26 Impact Aid Fund
28 Technology Fund
And all funds less than fund 50 and in……
24 Metal Mines Fund
25 State Mining Impact
29 Flexibility Fund
25XX Support Services - Business and, Object Not in
All Object but not:
971 Residual Transfers
910 Operating Transfers
7XX Capital Outlay
710 Cap Out Land
715 Cap Out Land Improve 720 Cap Out Purchase Existing Building
725 Major Construction
73X Major Equipment New
74X Major Equipment Replacement
7XX Capital Outlay
725 Major Const
710 Cap Out Land
73X Major Equipt New
715 Cap Out Land Improve
74X Major Equipt Replace
720 Cap Out Purch Building
(Step 2) Fund 15 Misc Program Fund in Programs Like 1** All Regular Programs Or 271 Indirect Costs, and
Function 25XX Support Services - Business, Object Not In ('7XX','710','715','720','725','73X','74X') see above
(Step 3) Fund 21 Comp Absences, In Objects 1XX Salary, 2XX Benefits (Section VII green guide pg 33 A 2)
(Step 2) Funds General and Special Revenue funds in :
Due to Montana approving Restricted rates only.
62XX Resource Transfers and 940 Indirect Costs
Cap Outlay
Other
(Step 3) All Funds but not:
01 General Fund
14 Retirement Fund
24 Metal Mines Fund
25 State Mining Impact Fund
26 Impact Aid Fund
28 Technology Fund
29 Flexibility Fund
And all funds less than fund 50 and in……
(Step 1) Funds General and Special Revenue funds
Objects In
7XX Capital Outlay
710 Cap Out Land
715 Cap Out Land Improve 720 Cap Out Purchase Existing
Building
725 Major Construction
73X Major Equipment New
74X Major Equipment Replacement
Funds General and Special
Revenue funds
25XX Support Services - Business and, Object Not in
971 Residual Transfers
910 Operating Transfers
7XX Capital Outlay
710 Cap Out Land
715 Cap Out Land Improve 720 Cap Out Purchase Existing Building
725 Major Construction
73X Major Equipment New
74X Major Equipment Replacement
(Step 4) Function 31XX School Foods Objects 1XX Salary & 2XX Benefits
are included all other Function 31XX & Objects are excluded.
All summed then minus Indirect Step 2
31XX School Foods not Objects
1XX Salary
2XX Benefits
(Step 2) 62XX Resource Transfers but not in 940 Indirect Costs
(Step 3) 4XXX Facilities Acquisition and Construction Services)
But Object Not In :
7XX Capital Outlay
710 Cap Out Land
715 Cap Out Land Improve 720 Cap Out Purchase Existing
Building
725 Major Construction
73X Major Equipment New
74X Major Equipment Replacement
Debt
Funds General and Special
Revenue funds
52XX Capital Leases or Long Tern
Notes with Board of Investments
13
New Schedule A
and Carry Forward Calculation
14
LE 0098 Great Falls EL
1XXX
21XX
221X
222X
23XX
24XX
25XX
26XX
27XX
31XX
33XX
35XX
62XX
Totals
Schedule A for
07 Cascade SS 0278 Great Fall Public Schools
Instruction
Support Services Students
Improvement of Instruction Services
Educational Media Services
Support Services General Administration
Support Services School Administration
Support Services Business
Operation and Maintenance of Plant Services
Student Transportation Services
Food Services
Community Services
Extracurricular Athletics
Resources Transferred to Other School District or Cooperatives
Total Exp
Direct
Indirect
Cap Outlay Debt
Other
30,625,326.90 30,568,374.92
29,312.73
27,639.25
0
0
3,043,828.54 2,954,147.59
89,680.95
0
0
0
784,781.29
780,847.69
0
3,933.60
0
0
1,281,906.37 1,281,906.37
0
0
0
0
850,572.87
850,572.87
0
0
0
0
2,748,267.61 2,748,267.61
0
0
0
0
1,781,110.34
0 1,762,370.11
18,740.23
0
0
6,259,443.63 6,253,440.63
0
6,003.00
0
0
1,751,611.17 1,751,611.17
0
0
0
0
3,010,173.53 3,003,373.53
0
6,800.00
0
0
28,018.36
28,018.36
0
0
0
0
437,055.76
437,055.76
0
0
0
0
2,062.68
2,062.68
0
0
0
0
52,604,159.05 50,659,679.18 1,881,363.79
63,116.08
0.00
0.00
LE 0099 Great Falls HS
1XXX
21XX
221X
222X
23XX
24XX
25XX
26XX
27XX
33XX
34XX
35XX
4XXX
Total Exp
Direct
Indirect
Cap Outlay Debt
25,076,819.69 25,019,389.87
7,419.80
50,010.02
1,977,799.59
1,908,389.00
69,410.59
0
1,137,760.20
1,135,733.80
0
2,026.40
414,624.99
414,624.99
0
0
370,127.41
370,127.41
0
0
2,054,429.19
2,054,429.19
0
0
1,213,361.89
0 1,126,420.89
86,941.00
4,783,228.32
4,783,228.32
0
0
728,478.04
728,478.04
0
0
91,332.87
91,332.87
0
0
259,488.44
259,488.44
0
0
764,159.55
764,159.55
0
0
10,535.90
0
0
10,535.90
Instruction
Support Services Students
Improvement of Instruction Services
Educational Media Services
Support Services General Administration
Support Services School Administration
Support Services Business
Operation and Maintenance of Plant Services
Student Transportation Services
Food Services
Community Services
Extracurricular Athletics
Facilities Acquisition and Construction Services
62XX Resources Transferred to Other School District or Cooperatives
Totals
LE 0098 Great Falls EL
LE 0099 Great Falls HS
Indirect/Direct
Indirect/Direct
860,657.38
39,742,803.46
Preliminary Rate
3.71%
3.13%
860,657.38
0
38,390,038.86 1,203,251.28
0
149,513.32
Other
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0.00
0
0.00
Adjusted Rate
15
New Carry Forward Method
Line B Preliminary Indirect Cost Rate
These are the rates generated from what was reported in the Trustee Financial Summaries (TFS) submitted annually to Montana OPI.
This would be using the same methodology as what is currently on the Schedule A
Year, in this section is referring to the year the indirect cost rate will be applied for. Recall that TFS data will be two years prior.
SS
SS Name
LE
LeName
2008
2009
2010
2011
0278 Great Falls Public Schls
0098
Great Falls Elem
0.0439
0.0268
0.0216
0.0346
0278 Great Falls Public Schls
0099
Great Falls H S
0.0289
0.0444
0.0335
0.0304
Line C Approved Indirect Cost Rate
These are the rates after reclassification has occurred. LE's will still have the option to reclassify costs from Direct to Indirect,
with approval and supporting documentation.
Although this is currently titled Approved Indirect Cost Rates the title will need to change to something other than this,
perhaps Adjusted Rate After Reclassification.
Year in this section is referring to the year the indirect cost rate will be applied for. Recall that TFS data will be two years prior.
SS
SS Name
LE
LeName
2008
2009
2010
2011
0278 Great Falls Public Schls
0098
Great Falls Elem
0.0592
0.0107
0.0081
0.0801
0278 Great Falls Public Schls
0099
Great Falls H S
0.0378
0.0777
0.051
0.0009
16
New Carry Forward Method Pg. 2
Line D Higher of Preliminary or Approved Indirect Cost Rate
This section selects the higher value between the Preliminary and the Approved Rate.
This will become the rate that is five year averaged.
SS
SS Name
LE
LeName
2008
2009
2010
2011
0278 Great Falls Public Schls
0098
Great Falls Elem
0.0592
0.0268
0.0216
0.0801
0278 Great Falls Public Schls
0099
Great Falls H S
0.0378
0.0777
0.0510
0.0304
Line E Five Year Average with 5% Discount
This section averages five years of data from the section titled (Higher of Preliminary or Approved Indirect Cost Rate)
As an Example: Great Falls Elem LE0098 2007 the formula is =Average(0.0592+0.0268+0.0216+0.0801+0.0371)*.95
SS
SS Name
LE
LeName
2012
0278 Great Falls Public Schls
0098
Great Falls Elem
4.27%
0278 Great Falls Public Schls
0099
Great Falls H S
4.34%
17
New Carry Forward Method Pg. 3
Line F Average of LE's contained under one School System Code (SS)
The values from the section above are averaged together by SS
These are the final Approved Indirect Cost Rates for the years listed and would be considered for approval.
The final value has been rounded to 4 places
SS
SS Name
0278 Great Falls Public Schls
2012
ROUND(AVERAGE(J74:J75),4)
4.30%
Preliminary Final Rates for Approval
Adjusted Final Rate for Approval
18
New changes associated with
Delegation Agreement dated 2/3/2017
19
Delegation Agreement dated 2/3/2017
Expenditures for school districts that exceed 2,600 enrolled students must
reclassify expenditures associated with the business manager to the base
for approval of an indirect cost rate.
2600 enrolled students on the fall enrollment count of the year of the TFS
expenditures being used for determining the IDC rate.
The count is by School System.
Reported expenditures
to OPI include some
business manager
expenditures coded to
function 25XX.
OPI calculates these
expenditures as
Indirect Costs when
determining calculated
rates.
When the district applies for a
new IDC rate the requestor
needs to redirect these costs
to Direct and Unallowable
Costs (Base).
Ex. 700 business to
function 25XX.
Ex. 700 included in
indirect.
Indirect 5,000- 700
Direct 13,000+700
Indirect
Direct
=
4,300
13,700
5,000
13,000
20
Reclassification of Costs
21
What can be Reclassified as Indirect
Indirect costs as those that are incurred for a common or joint purpose
benefiting more than one cost objective. 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 costs are normally charged to federal programs through the indirect
cost rate. Grantees must be consistent in treating costs as direct or indirect
under federal awards. Once a cost is treated as direct or indirect, it should
be treated that way for all projects and activities, regardless of the source of
funding.
22
What can be Reclassified as Indirect
Salaries and Expenditures for:
Accounting, Budgeting, Payroll,
Personnel management,
Purchasing,
Labor negotiation contracts,
Mailrooms,
Computer networks, or data processing operations
are examples of costs which typically benefit several activities and programs.
These types of costs may be allocated to federal programs by means of an
indirect cost rate.
Federal regulations allow auditing costs for districts
spending over $750,000 of federal funds to be classified as an indirect cost.
23
What can be Reclassified as Indirect
Once your determine what you will want to reclassify (using caution not to
double count expenditures the OPI has already determined to be considered
indirect) The OPI has created a Indirect Cost Calculator for your use located
at:
http://opi.mt.gov/Pdf/SchoolFinance/Acct/FY12IDCCalc.xls
24
Helpful References
Federal “Green Guide” or Cost Allocation Guide for State and Local
Governments
http://www.ed.gov/about/offices/list/ocfo/fipao/icgindex.html
Montana OPI Indirect Cost Rate Information Page
http://www.opi.mt.gov/Finance&Grants/SchoolFinance/Index.html#gpm1_12
Paul Taylor
444-1257
[email protected]
25