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2 CFR 200 Compliance Supplement (Frequently Asked Questions—July 2017 update)
200.331
.331-8 Pass-Through Entities That Have Previously Paid Indirect Costs
Q: Can a pass-through entity that paid actual or negotiated indirect costs to a subrecipient prior to the Uniform Guidance now impose the 10 percent de minimis rate on that same subrecipient?
A: No. The 10 percent de minimis rate is for non-Federal entities that have never received a negotiated indirect cost rate. If a pass-through entity paid negotiated or actual indirect costs to a specific subrecipient in the past, they should continue to negotiate and award indirect costs to that subrecipient in accordance with their prior practice. If a pass-through entity has never awarded or negotiated actual indirect costs with that subrecipient, and the subrecipient does not have a Federally approved indirect cost rate agreement, then the pass-through entity can provide the 10 percent de minimis rate or negotiate a rate with that subrecipient. If the pass-through entity negotiated an approved indirect cost rate with its subrecipient in the past, a de minimis rate cannot be applied.
.331-9 Negotiating Indirect Costs with State Agencies
Q: If one department within a state government negotiates indirect costs with a subrecipient that does not have a Federally approved rate, are all departments/agencies within that state government obligated to also negotiate an indirect cost rate with that subrecipient?
A: No. Each pass-through entity has a separate subaward arrangement with each subrecipient. For example, a State’s Health department has negotiated and approved an indirect cost rate to pay indirect costs to a subrecipient. If the State’s Transportation department subawards to the same subrecipient, and the State’s Transportation department should consider the negotiated rate already provided by the State’s Health department. Also, since this subrecipient has received a negotiated indirect cost from the State, it does not have the option of using the de minimis rate because this subrecipient has negotiated an indirect rate with another state department. In the case, where a subrecipient has no federal awards and there is no defined federal cognizance, the awarding of grants to the same subrecipient by other pass through entities must consider consistency and fairness when reviewing indirect costs. Therefore, the State Transportation department has two choices: (i) accept the State Health department’s negotiated rate or (ii) negotiate its own rate with the subrecipient. (See §200.331(a)(4)). Therefore, a subrecipient may not have a negotiated indirect cost rate with one State agency and the 10 percent de minimis rate with another State agency within the same State.
200.414
.414-1 De Minimis Rate and Governments
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