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3.11 Indirect Costs

Establishment of Indirect Cost Rates

The requirements for the development and submission of indirect cost proposals and cost allocation plans are set out in Appendices III ??? VII of 2 C.F.R. ?? 200. A non-federal entity should follow the guidelines applicable to its type of organization:

If it is determined that OJP or the OVW is your cognizant agency for indirect cost negotiation, you may refer to Indirect Costs resource document [PDF ??? 32Kb] for instructions on how to prepare an indirect cost proposal for submission to DOJ.??

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There is an exception: If you are a unit of local government, you are not required to submit an indirect rate cost agreement. However, you are required to prepare and retain your indirect cost proposal on file for review. See 2 C.F.R. Part 200, Appendix VII.D.??

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Generally, if an indirect cost proposal is not submitted within 90 days after the award date, indirect costs may not be recovered for the period prior to submission of the proposal.

  • To support the indirect cost proposal, as an award recipient you are responsible for ensuring that independent audits of your organization are conducted in accordance with existing Federal auditing and reporting standards set forth in the applicable audit requirements. A copy of the audit report must be submitted to your cognizant Federal agency to support the indirect cost proposal.
  • As part of requesting an indirect cost rate, you must submit with your indirect cost allocation plan a signed certification stating that the plan only includes allowable costs.
  • Additional guidance for completing an indirect cost proposal as an award recipient, as well as examples of how certain information should be provided, is available through the U.S. Department of Health and Human Services (HHS) Program Support Center website.

After negotiations, your cognizant Federal agency will establish either a provisional, final, or fixed-with-carry-forward indirect cost rate, depending on the cost principles that apply to your type of organization.