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1. A governmental department or agency unit that annually receives more than $35 million in direct Federal funding must submit its indirect cost rate proposal to its cognizant agency for indirect costs; or
2. Those governmental departments or agency units that are not required to submit their indirect cost rate proposals to their cognizant agency for indirect costs.  Such entities must still develop an indirect cost proposal in accordance with the requirements under 2 CFR 200 and maintain the proposal and related supporting documentation for audit.  Examples of such departments or agencies are those whose cognizant federal agency is Health and Human Services (HHS).  In some situations, HHS may allow a governmental department or agency to develop their indirect cost rate proposal, but not require them to submit it for approval.  The reason for this is that HHS does not have the resources or capacity to review and approve all the indirect cost rate proposals from all of its different grantees.  In these cases, the governmental department or agency must still develop and document their indirect cost rate and be able to provide it to auditors if needed.

Is the 10% de minimis rate option available for subrecipients?

Yes. Prime recipients who subaward some or all of the Federal award to eligible subrecipients must approve either the 10% de minimis rate, or negotiate an indirect rate with the subrecipient, in lieu of a Federally-negotiated indirect cost rate. see 2 CFR 200.331(a)(4).

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