Federal Indirect Cost Rate Proposals

							ALASBO Presentation
              2009
   Indirect Cost Proposals
   Submittals
   Definitions
   Completing the forms
   An indirect cost rate is a means of determining in a
    reasonable manner the percentage of allowable
    general administrative expense that each federal
    grant should bear.
   Generally, an indirect cost rate is the ratio of total
    indirect costs to total direct costs, based on the
    Local Education Agencies (LEA’s) actual
    expenditures, exclusive of any extraordinary or
    distorting expenditures such as capital outlay and
    major subcontracts.
   LEA’s are not required to submit an indirect
    proposal. However if they do not, they will not be
    allowed to recover any indirect costs for the
    administration of federal grants.
   LEA’s are responsible for submitting their
    proposals annually to the Department of Education
    & Early Development.
   Until the Department approves a rate the LEA will
    not be able to claim indirect costs on federal
    grants.
   Proposals will be required to be submitted
    electronically to Jim Farrington at
    James.Farrington@alaska.gov
   Signature pages will still need to be submitted with
    copies of your proposal and any support
    documents. (mail, fax, pdf)
   Completed forms are due by December 31st of
    each year.
   Indirect Costs – costs of a general nature which are
    not readily identifiable with the activities of the
    grant but are, nevertheless, incurred for the joint
    benefit of those activities of programs of the
    organization.
    ◦ Expenditures cannot be classified as indirect if they are
      either program specific or site specific.
   Direct Costs - a direct cost is one that is incurred
    specifically for one activity and can be identified
    specifically with that activity.
   Disallowed Costs - OMB Circular A-87 classifies
    certain items of cost as disallowed which means
    that federal funds cannot be used for these
    purposes. These are costs directly attributable to
    governance.
    ◦ For indirect rate computation purposes, these costs are
      combined with direct costs.
   Excluded Costs - Certain items are classified in
    OMB Circular A-87 as extraordinary or distorting
    expenditures and are excluded from the
    computation of the indirect cost rate.
    ◦ Excluded costs in this category include
       capital outlay, debt service, transfer of expenditures,
        internal funds, PERS/TRS on-behalf payments, food
        and milk supplies and equipment.
    ◦ For indirect rate computation purposes, these costs are
      excluded.
   Forms are available to download on the department
    website.
    http://www.eed.state.ak.us/forms/home.cfm
   If you have difficulty downloading the forms from
    the website contact Jim Farrington and he will email
    the forms to you.
   An instruction page has been included for
    reference in completing the required forms.
   Schedule A Tab – This sheet is completed by the
    district with information from your audit. The
    instructions tab will assist you with what
    information is needed.
   Excludable Costs Tab – This sheet is completed by
    the district with information from your audit. The
    instructions tab will assist you with what
    information is needed. The totals in this tab are
    linked to the Schedule A tab and will automatically
    fill in.
   O&M Indirect Tab – On this tab is the Operations
    and Maintenance Director Guidelines. Districts will
    be required to complete this tab, or its equivalent
    in order to include indirect for the Operations and
    Maintenance Director, if applicable.
   Operations and Maintenance Guidelines – The item
    that will be allowed to be included as indirect in
    Operations and Maintenance is an
    organization(district)-wide Maintenance Director’s
    salary and benefits less any PERS/TRS on-behalf
    payments, if your district meets the requirements
    set forth for the inclusion.
   Maintenance Director Guidelines
     1. Only one position/person is allowed.
    Substitutes and temporaries are not allowed.
     2. Standard benefits are allowed. PERS/TRS on-
    behalf payments must be removed.
    3. This positions only function is the oversight and
    management of the Operations and Maintenance
    Division, which in turn serves the entire
    organization.
   Maintenance Director Guidelines (cont.)
    4. If this positions function is not as described in
    (3) above, the inclusion is not allowed.
    5. A new tab is added to the Indirect Proposal
    Worksheet for the districts to show the Director’s
    salary and benefits to be included as indirect. This
    sheet , or the equivalent, will be required to be
    completed in order to include the indirect expense.
   Maintenance Director Guidelines (cont.)
     6. By signing the Certification page your district
    certifies that you meet the guidelines stated above
    for inclusion of Operations and Maintenance as
    indirect.

    Other items in Operations and Maintenance such as
    Electricity, Heating Fuel, Insurance, Garbage, Janitorial
    Services and Supplies are not allowed.
   Schedule C Tab – This sheet requires no input from
    the district. This sheet calculates your rate based
    on a fixed rate with carry forward provision. This
    means that your rate is fixed for a specified future
    period based on an estimate of that period's level
    of operation. However, when the actual costs of
    that period become known, the difference between
    the estimate and the actual costs are carried-
    forward as an adjustment to a subsequent period.
   Certification Sheet – This sheet will fill in with your
    calculated rate from Schedule C. This sheet will
    need to be printed out and signed by the
    superintendent, then submitted with all copies and
    support documentation. (mail, fax, pdf)
   Jim Farrington
    Department of Education & Early Development
    801 West 10th Street, Suite 200
    P.O. Box 110500
    Juneau, AK 99811-0500
    907-465-2748
    907-463-5279 (fax)
    james.farrington@alaska.gov