Indirect Costs and Cost Allocation for Federal Grantees

Costs charged to federal grants must be allocable, meaning they are assigned to benefiting grants in accordance with relative benefits received by those grants. In this class, we will dig into key concepts, policies, procedures, and methods to ensure costs are charged based on benefit received. We will cover details of cost allocation plans/cost policy statements, indirect cost rate proposals, negotiated indirect cost rate agreements, and central service cost allocation plans, describing the nature and key steps associated with these. We will reinforce key concepts such as setting up a chart of accounts to track an indirect cost pool, tracking true indirect costs even if you have a negotiated rate, having uniform policies and procedures for federal and non-federally financed activities, practicing consistent treatment of direct and indirect costs, and ensuring costs of a nature or type that would be unallowable on federal grants are not included in pools of cost allocated in part or whole to those grants. We will also discuss the many potential ways allowed under 2 CFR 200 to claim indirect cost on federal grants, including the de minimis indirect rate, a rate negotiated with a federal agency or pass-through entity, and a public assistance cost allocation plan, or the direct allocation method. (Upcoming dates: 2/10/27, 8/27/27)