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3.11 Indirect Costs

Lobbying Costs and the Indirect Cost Pool

When a non-Federal entity seeks reimbursement for indirect costs, total lobbying costs must be separately identified in the indirect cost rate proposal and thereafter treated as other unallowable activity costs in accordance with the procedures in 2 C.F.R. ?? 200.413 (Direct Costs).

Requirements for recipient organizations:

  • Unallowable costs associated with the indirect cost pool (e.g., lobbying) must be added to the direct cost base.
  • Non-Federal entities must submit, as part of their annual indirect cost rate proposal, a certification that they are in compliance with all the requirements and standards under 2 C.F.R. ?? 200.450 (Lobbying).

Exemption from some record-keeping requirements:

  • Recipient organizations will not be required to create time logs, calendars, or similar records for purposes of complying with this section during any particular calendar month when:
    • The employee engages in lobbying and 25 percent or less of the employee???s compensated hours of employment during that calendar month constitutes lobbying; and
    • Within the preceding 5-year period, the non-Federal entity has not materially misstated allowable or unallowable costs of any nature, including legislative lobbying costs.
  • When the first two conditions listed above are met, organizations are not required to establish records to support the allowability of claimed costs in addition to records already required or maintained.
  • Also when the first two conditions are met, the absence of time logs, calendars, or similar records will not serve as a basis for disallowing costs by contesting estimates of lobbying time spent by employees during a calendar month.