office of school finance - wvde. indirect costs - defined costs not readily identifiable with a...
TRANSCRIPT
![Page 1: Office of School Finance - WVDE. Indirect Costs - Defined Costs not readily identifiable with a specific federal project Costs are incurred for the joint](https://reader035.vdocuments.us/reader035/viewer/2022062619/551558d955034674578b46c0/html5/thumbnails/1.jpg)
Office of School Finance - WVDE
![Page 2: Office of School Finance - WVDE. Indirect Costs - Defined Costs not readily identifiable with a specific federal project Costs are incurred for the joint](https://reader035.vdocuments.us/reader035/viewer/2022062619/551558d955034674578b46c0/html5/thumbnails/2.jpg)
Indirect Costs - Defined
Costs not readily identifiable with a specific federal project
Costs are incurred for the joint benefit of more than one project
![Page 3: Office of School Finance - WVDE. Indirect Costs - Defined Costs not readily identifiable with a specific federal project Costs are incurred for the joint](https://reader035.vdocuments.us/reader035/viewer/2022062619/551558d955034674578b46c0/html5/thumbnails/3.jpg)
Direct costs - defined
Costs that are readily identifiable to a specific project
Costs are charged directly to the project
Cannot be considered indirect if they are charged directly
![Page 4: Office of School Finance - WVDE. Indirect Costs - Defined Costs not readily identifiable with a specific federal project Costs are incurred for the joint](https://reader035.vdocuments.us/reader035/viewer/2022062619/551558d955034674578b46c0/html5/thumbnails/4.jpg)
Unallowed costs - defined Costs that are not allowed to be
charged to a federal project OMB Circular A-87 provides a
complete listing of unallowed costs Examples include:
Marketing Losses from uncollectible accounts
![Page 5: Office of School Finance - WVDE. Indirect Costs - Defined Costs not readily identifiable with a specific federal project Costs are incurred for the joint](https://reader035.vdocuments.us/reader035/viewer/2022062619/551558d955034674578b46c0/html5/thumbnails/5.jpg)
Indirect Cost Plan - defined A simplified means to determine the
fair share of indirect costs that each federal project must bear
![Page 6: Office of School Finance - WVDE. Indirect Costs - Defined Costs not readily identifiable with a specific federal project Costs are incurred for the joint](https://reader035.vdocuments.us/reader035/viewer/2022062619/551558d955034674578b46c0/html5/thumbnails/6.jpg)
Obtaining an indirect cost rate A rate must be determined each year Plan developed by WVDE, approved by USDE The rate is based on actual expenditures two
years earlier (FY 11 rate based on FY 09 actual)
Plan includes an adjustment between estimated and actual indirect costs two years later
Simplified, the indirect cost rate =indirect costs
unallowed costs + direct costs
![Page 7: Office of School Finance - WVDE. Indirect Costs - Defined Costs not readily identifiable with a specific federal project Costs are incurred for the joint](https://reader035.vdocuments.us/reader035/viewer/2022062619/551558d955034674578b46c0/html5/thumbnails/7.jpg)
You receive restricted and unrestricted indirect cost rates
Process is web-based CSBO is the contact person for
determining the rates
![Page 8: Office of School Finance - WVDE. Indirect Costs - Defined Costs not readily identifiable with a specific federal project Costs are incurred for the joint](https://reader035.vdocuments.us/reader035/viewer/2022062619/551558d955034674578b46c0/html5/thumbnails/8.jpg)
Two rates – which do I use? Restricted rate – use for federal
projects that contain the “supplement but not supplant” provision (that is MOST projects)
Unrestricted rate – use for all other federal projects (example: child nutrition)
![Page 9: Office of School Finance - WVDE. Indirect Costs - Defined Costs not readily identifiable with a specific federal project Costs are incurred for the joint](https://reader035.vdocuments.us/reader035/viewer/2022062619/551558d955034674578b46c0/html5/thumbnails/9.jpg)
How do I use the rate?
For budgeting purposes: Total amount of federal award
$200,000 Approved indirect cost rate
2.23% Budgeted direct costs
$195,637($200,000 / (1.0 + 0.0223))
Budgeted indirect costs $ 4,363
($195,637 * 0.0223)
![Page 10: Office of School Finance - WVDE. Indirect Costs - Defined Costs not readily identifiable with a specific federal project Costs are incurred for the joint](https://reader035.vdocuments.us/reader035/viewer/2022062619/551558d955034674578b46c0/html5/thumbnails/10.jpg)
For actual expenditures: Actual direct costs
$185,440 Approved indirect cost rate
2.23% Indirect costs charged to the project
$4,135 ($185,440 x 0.0223)
![Page 11: Office of School Finance - WVDE. Indirect Costs - Defined Costs not readily identifiable with a specific federal project Costs are incurred for the joint](https://reader035.vdocuments.us/reader035/viewer/2022062619/551558d955034674578b46c0/html5/thumbnails/11.jpg)
Be careful when you apply the rate You may not apply the indirect cost rate
to all actual expenditures: You cannot apply the rate to capital outlay
Equipment, buildings, land, building improvements which exceed $5,000
Some grants have a limit on total indirect cost
Title III – 2% of the grant Carl Perkins – 5% of the grant
![Page 12: Office of School Finance - WVDE. Indirect Costs - Defined Costs not readily identifiable with a specific federal project Costs are incurred for the joint](https://reader035.vdocuments.us/reader035/viewer/2022062619/551558d955034674578b46c0/html5/thumbnails/12.jpg)
Be careful about the time period The approved rate for FY11 is to be
used for ACTUAL expenditures from July 1, 2010 through June 30, 2011
Actual expenditures do not include outstanding encumbrances at year end
![Page 13: Office of School Finance - WVDE. Indirect Costs - Defined Costs not readily identifiable with a specific federal project Costs are incurred for the joint](https://reader035.vdocuments.us/reader035/viewer/2022062619/551558d955034674578b46c0/html5/thumbnails/13.jpg)
How does the federal project get charged? Calculate the actual indirect costs
based on actual expenditures at least quarterly
The CSBO will make a journal entry to charge the indirect cost amount to each federal project as an expenditure
![Page 14: Office of School Finance - WVDE. Indirect Costs - Defined Costs not readily identifiable with a specific federal project Costs are incurred for the joint](https://reader035.vdocuments.us/reader035/viewer/2022062619/551558d955034674578b46c0/html5/thumbnails/14.jpg)
Which projects are charged indirect costs? All Federal projects are charged the
appropriate indirect cost rate, including ARRA and SFSF
State projects are not subject to indirect costs
%
![Page 15: Office of School Finance - WVDE. Indirect Costs - Defined Costs not readily identifiable with a specific federal project Costs are incurred for the joint](https://reader035.vdocuments.us/reader035/viewer/2022062619/551558d955034674578b46c0/html5/thumbnails/15.jpg)
Your Questions