OMB Uniform Guidance - Key Impacts on CNCS Grantees - Indirect Costs

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OMB Uniform Guidance

Key Impacts on CNCS Grantees

6 - Indirect Costs


This is the sixth in a series of messages concerning the 2 C.F.R. Part 200 (The Uniform Guidance), and what it means to CNCS grantees. The regulation section number denotes where in the Uniform Guidance the rule being discussed in this bulletin is found.

2 C.F.R § 200.414 Indirect (F&A) - Organizations have several options to recover costs expended in the process of managing federal awards.

•             Grantees receiving direct federal funds may apply for a federally negotiated indirect cost rate (IDCR) from their cognizant agency.  If grantees already have a final negotiated indirect cost rate that is within 3 months of expiration, they may request, to their cognizant agency for indirect costs, a one-time extension of that rate, if they want to continue to use their current rate on CNCS awards.   Notification of approval of that extension should be provided to the CNCS Grants Officer, a copy maintained in the recipient’s grant file and updated in eGrants under the Organization Account Record.

•             Subgrantees receiving only federal pass-through funds may use an indirect cost rate negotiated by their prime grantor.

•             Eligible grantees may elect to use a flat de minimis rate based on 10% of modified total direct costs (MTDC).  Eligibility rules are outlined in 2 C.F.R § 200.414 Indirect (F&A).

•             Grantees may charge administrative costs directly as long as those costs are charged consistent with §200.413.

•             States, local governments and Indian tribes may use approved cost allocation plans.

AmeriCorps State and National grantees have an additional option:

•             AmeriCorps State and National grantees who do not have an approved federally negotiated indirect cost rate may continue to utilize the 5% federal/10% match for administrative expenses pursuant to 2 C.F.R. §2205.414.

Why is This Important?

CNCS will be focused on ensuring that grantees have used the appropriate method for charging indirect costs and that they have recorded it accurately.  Grantees are accountable for any and all inaccuracies in recording and applying their IDCR, which may lead to costs being disallowed later, if costs claimed exceed amounts beyond what the organization is legally entitled to.

What You Should Do:

All grantees should review the Uniformed Guidance 2 C.F.R § 200.414 Indirect (F&A), as well as obtain training in charging indirect costs to ensure that all of the requirements for the specific method used have been followed scrupulously. Grantees must record their IDCR in eGrants under their organization’s account record.

Grantees should ensure that their organization has or is taking the necessary steps to follow the Uniform Guidance. Adherence to these standards is important to meet grant requirements and to satisfy any future audits or monitoring reviews. Do not send documentation to CNCS. When conducting grant oversight, CNCS staff will request specific documents and records when necessary.

If you have concerns or questions regarding appropriate requirements for indirect costs, please send them to indirectcostrate@cns.gov.  Your feedback and questions will guide us to develop additional information and assistance.

In Service,

Dana Bourne, Chief Grants Officer
Corporation for National and Community Service Grant Offices
Washington, DC and Philadelphia, Pennsylvania