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The 10% de minimis indirect cost rate is a Federally-recognized rate non-Federal entities (with 10% De Minimis Indirect Cost Rate) receiving grants or cooperative agreements may use to recover allowable indirect costs. Anchor top top
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All grant and cooperative agreements |
Definition
Defined under § 200.56 Indirect (facilities & administrative (F&A)) costs. Indirect (F&A) costs means those costs incurred for a common or joint purpose benefitting more than one cost objective, and not readily assignable to the cost objectives specifically benefitted, without effort disproportionate to the results achieved. To facilitate equitable distribution of indirect expenses to the cost objectives served, it may be necessary to establish a number of pools of indirect (F&A) costs. Indirect (F&A) cost pools must be distributed to benefitted cost objectives on bases that will produce an equitable result in consideration of relative benefits derived.
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Overview
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The Uniform The Uniform Grant Guidance allows any non-Federal entity that has never received a negotiated indirect cost rate to elect to charge a a de minimis rate rate of 10% of modified total direct costs (MTDC), which may be used indefinitely . If as a non-Federal entity chooses to charge the 10% de minimis rate, then the non-Federal entity must use this rate consistently for all Federal awards until such time as the non-Federal entity chooses to negotiate for a rate. There are some non-Federal entities that are exempted from charging the 10% de minimis rate. This information is provided in Appendix VII to 2 CFR Part 200 (D)(1)(b).
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Federally-negotiated rate. This option for recipient (and sub-recipient) recovery of proper indirect costs incurred during work under Federal awards removes administrative barriers smaller organizations previously faced receiving and implementing Federal financial assistance. With the introduction of the de minimis rate, these organizations can now charge allowable costs which indirectly support the direct work on the Federally-funded project(s) that were previously unavailable to them because of the large administrative burden associated with the negotiation process.
10% De Minimis Indirect Cost Rate
Guidance
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2 CFR 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards
§200.412 Classification of costs.
There is no universal rule for classifying certain costs as either direct or indirect (F&A) under every accounting system. A cost may be direct with respect to some specific service or function, but indirect with respect to the Federal award or other final cost objective. Therefore, it is essential that each item of cost incurred for the same purpose be treated consistently in like circumstances either as a direct or an indirect (F&A) cost in order to avoid possible double-charging of Federal awards. Guidelines for determining direct and indirect (F&A) costs charged to Federal awards are provided in this subpart.
[78 FR 78608, Dec. 26, 2013]
2 CFR 200.414 Indirect (F&A) costs.
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Yes. As long as the State fish and wildlife agency has never had an indirect cost rate approved by its cognizant Federal agency and it meets the requirements established under Appendix VII to Part 200—States and Local Government and Indian Tribe Indirect Cost Proposals (D)(1)(b).
What entities are not allowed to charge the 10% de minimis rate for indirect?Anchor exceptions exceptions
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