ICR for CNPICR for CNPApplication of Indirect Cost Rate for the Federal Child Nutrition Programs – Part 1

Presented by Nicholas Dunford

What are indirect costs?What are indirect costs?Those costs that have been

incurred for __________ ___________.These costs benefit _____ _____

_____ program. Identification with a single project

would require effort _____________ to the results achieved.

Examples?

What are direct costs?What are direct costs?Those that can be identified

specifically with a _______ cost objective.

Examples?

Are all costs direct or Are all costs direct or indirect?indirect?NO

◦OMB Circular A-87 defines certain costs as being ___________ and not to be used in the calculation of an indirect cost rate.

Examples?

What is an indirect cost What is an indirect cost rate?rate?A simplified means for

distributing a ____ _____ of a subgrantee’s administrative costs to federal grants.

The indirect cost rate is the ratio of the _______ costs to a ________ cost base.

What guidance establishes rules on ICR?

Does every SFA have an Does every SFA have an ICR?ICR?NO

◦Any SFA requesting an indirect cost rate from the ADE will be given one.

How does a SFA request an How does a SFA request an ICR?ICR?Check the ICR box ‘YES’ on the

AFR.

Where on the AFR?◦Pg. ___ Letter ___

What type of rate is it?What type of rate is it?ADE utilizes a _______ rate with

a carry-forward provision.

What’s a fixed rate with What’s a fixed rate with carry forward provision?carry forward provision?Estimate ______ period

operations using current year data.

Create rate based on those estimations.◦e.g. using SY2009 AFR to calculate

SY2011 ICR.When SY2011 is done, compare

_______ against estimated and difference is carried forward.

Can new SFAs get ICR?Can new SFAs get ICR?YESFor the first two years, SFA will

receive State average.After first two years, any

differences will be adjusted using the _______ ________ provision.

Why a fixed rate with carry Why a fixed rate with carry forward provision?forward provision?Three-year period showed a wide

variance in ICR from year to year.Carry forward provision attempts

to include _______ _______.

How is ICR calculated?How is ICR calculated?The Basic Formula

Actual __________ CostsPlus Carry Forward ProvisionEquals Indirect Cost Pool Total

Indirect Cost Pool TotalDivide by ________ Cost TotalEquals Fixed Rate Percentage with

Carry Forward Provision

Restricted vs. Restricted vs. Unrestricted?Unrestricted?Restricted =

◦__________ but not __________ grant requirement.

Unrestricted =◦NO __________ but not __________

grant requirement.

ICR on all grants?ICR on all grants?NO

ICR only on __________ grants that do not prohibit recovery.

__________ grants do not contain ICR provisions.

Limitations on recovery of Limitations on recovery of indirect cost?indirect cost?YES…

3 Major:◦1) __________ Rate◦2) Fund __________◦3) Direct Cost __________

How to apply ICR?How to apply ICR?Apply to _____ or _____ eligible

projects.◦SFA discretion

Apply max rate or less than max rate.◦SFA discretion◦If less than max, must be uniform.

What is max ICR?What is max ICR?Maximum rate is the _______ of:

◦Maximum ICR allowed by grant; OR◦ICR issued by ADE; OR◦Actual indirect costs

Restricted max = ____.00%Unrestricted max = ____.00%

ICR good for what period?ICR good for what period?Applied to a specific ______ fiscal

year.◦July 1 – June 30

Restrictions on indirect cost Restrictions on indirect cost fund?fund?NO

Federal statutes do not restrict use of indirect cost funds.

Contact InfoContact InfoGary Holland

1535 W JEFFERSON STBIN# 19PHOENIX, AZ 85007

(602) 364-3518gary.holland@azed.gov