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3.11 Indirect Costs

No Approved Plan

If you do not have a previously approved Federal indirect cost rate, you may either negotiate an indirect cost rate with your cognizant Federal agency or you may elect to charge a de minimis rate of 10% of modified total direct costs.??

If you elect to negotiate an indirect cost rate with a DOJ component or have a rate pending with another Federal agency, a special condition will be added to the award prohibiting the obligation, expenditure, or drawdown of funds reimbursement for indirect costs until an indirect cost rate has been approved by your cognizant Federal agency, and a Grant Adjustment Notice (GAN) has been issued, or for COPS Office, the appropriate notification has been made retiring the special condition.

If you are a non-federal entity that has never received a negotiated indirect cost rate, except for those non-Federal entities described in Appendix VII to Part 200 paragraph (d)(1)(B), you may elect to charge a de minimis rate of 10% of modified total direct costs (MTDC) which may be used indefinitely. When using this method, cost must be consistently charged as either indirect or direct costs, but may not be double charged or inconsistently charged as both. Also, if this method is chosen then it must be used consistently for all Federal awards until such time as you choose to negotiate an indirect cost rate (which may be done at any time). See 2 C.F.R. ?? 200.414(f).

  • There is an exception: If you are a unit of local government which the Office of Management and Budget (OMB) has not assigned a cognizant Federal agency, then you are not required to submit your indirect cost proposal, unless the awarding agency requires a copy of the proposal. Please see the appropriate Appendix section in 2 C.F.R. ??200 as listed above.