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Indirect Cost Information and Templates

The Government of the District of Columbia Office the State Superintendent of Education (OSSE) has, in cooperation with the US Department of Education (DOE), developed an indirect cost proposal to be used by local education agencies (LEAs) in the District of Columbia. OSSE has been delegated the authority by DOE to review indirect cost proposals and to approve indirect cost rates for LEAs. The Office of Management and Budget (OMB) Uniform Grant Guidance (UGG), Title 34, 2 CFR 200 Uniform Administrative Requirements, Cost Principles, And Audit Requirements for Federal Awards, and the Education Department General Administrative Regulations (EDGAR), contain provisions for determining indirect cost rates for grantees and subgrantees of federal grants.

Indirect costs are generally administrative costs such as the salaries and expenses for LEA personnel who are engaged in administrative activities from which the entire LEA benefit. In theory, all such costs can be charged directly. However, practical limitation and consideration of efficiency in accounting preclude such an approach. Developing an indirect cost proposal and rate is a means of determining in a reasonable manner the percentage of allowable indirect costs that each federal grant should bear, subject to limitations in grant awards and the availability of funding. The approved indirect cost rate provides LEAs with a standardized mechanism to recover indirect costs from federal programs that is acceptable to federal grantor agencies.

LEAs must obtain OSSE’s approval of the indirect cost rate for the fiscal year by submitting an indirect cost proposal and applicable support documentation to OSSE for review and approval. A new indirect cost rate must be obtained for each fiscal year. LEAs are not required to develop an indirect cost proposal; however, LEAs which fail to do so will not be allowed to recover any indirect costs related to federal programs.