Office of School Finance WVDE INDIRECT COSTS Indirect

  • Slides: 15
Download presentation
Office of School Finance - WVDE INDIRECT COSTS

Office of School Finance - WVDE INDIRECT COSTS

Indirect Costs - Defined Costs not readily identifiable with a specific federal project Costs

Indirect Costs - Defined Costs not readily identifiable with a specific federal project Costs are incurred for the joint benefit of more than one project

Direct costs - defined Costs that are readily identifiable to a specific project Costs

Direct costs - defined Costs that are readily identifiable to a specific project Costs are charged directly to the project Cannot be considered indirect if they are charged directly

Unallowed costs - defined Costs that are not allowed to be charged to a

Unallowed costs - defined Costs that are not allowed to be charged to a federal project OMB Circular A-87 provides a complete listing of unallowed costs Examples include: Marketing Losses from uncollectible accounts

Indirect Cost Plan - defined A simplified means to determine the fair share of

Indirect Cost Plan - defined A simplified means to determine the fair share of indirect costs that each federal project must bear

Obtaining an indirect cost rate A rate must be determined each year Plan developed

Obtaining an indirect cost rate A rate must be determined each year Plan developed by WVDE, approved by USDE The rate is based on actual expenditures two years earlier (FY 11 rate based on FY 09 actual) Plan includes an adjustment between estimated and actual indirect costs two years later Simplified, the indirect cost rate = indirect costs unallowed costs + direct costs

You receive restricted and unrestricted indirect cost rates Process is web-based CSBO is

You receive restricted and unrestricted indirect cost rates Process is web-based CSBO is the contact person for determining the rates

Two rates – which do I use? Restricted rate – use for federal projects

Two rates – which do I use? Restricted rate – use for federal projects that contain the “supplement but not supplant” provision (that is MOST projects) Unrestricted rate – use for all other federal projects (example: child nutrition)

How do I use the rate? For budgeting purposes: Total amount of federal award

How do I use the rate? For budgeting purposes: Total amount of federal award Approved indirect cost rate Budgeted direct costs $200, 000 2. 23% $195, 637 ($200, 000 / (1. 0 + 0. 0223)) Budgeted indirect costs $ 4, 363 ($195, 637 * 0. 0223)

For actual expenditures: Actual direct costs $185, 440 Approved indirect cost rate 2.

For actual expenditures: Actual direct costs $185, 440 Approved indirect cost rate 2. 23% Indirect costs charged to the project $4, 135 ($185, 440 x 0. 0223)

Be careful when you apply the rate You may not apply the indirect cost

Be careful when you apply the rate You may not apply the indirect cost rate to all actual expenditures: You cannot apply the rate to capital outlay �Equipment, buildings, land, building improvements which exceed $5, 000 Some grants have a limit on total indirect cost �Title III – 2% of the grant �Carl Perkins – 5% of the grant

Be careful about the time period The approved rate for FY 11 is to

Be careful about the time period The approved rate for FY 11 is to be used for ACTUAL expenditures from July 1, 2010 through June 30, 2011 Actual expenditures do not include outstanding encumbrances at year end

How does the federal project get charged? Calculate the actual indirect costs based on

How does the federal project get charged? Calculate the actual indirect costs based on actual expenditures at least quarterly The CSBO will make a journal entry to charge the indirect cost amount to each federal project as an expenditure

Which projects are charged indirect costs? All Federal projects are charged the appropriate indirect

Which projects are charged indirect costs? All Federal projects are charged the appropriate indirect cost rate, including ARRA and SFSF State projects are not subject to indirect costs %

Your Questions

Your Questions

Indirect Costs 1 Indirect Costs Defined Indirect costsIndirect Costs 1 Indirect Costs Defined Indirect costs
Costs Variable costs costs of Fixed costs costsCosts Variable costs costs of Fixed costs costs
Indirect Object Pronouns Indirect Object Pronouns Indirect objectIndirect Object Pronouns Indirect Object Pronouns Indirect object
INDIRECT QUESTIONS INDIRECT QUESTIONSPRESENTE SIMPLE We use indirectINDIRECT QUESTIONS INDIRECT QUESTIONSPRESENTE SIMPLE We use indirect
INDIRECT OBJECT PRONOUNS REVIEW I Indirect Objects IndirectINDIRECT OBJECT PRONOUNS REVIEW I Indirect Objects Indirect
The Nature of Costs Explicit Costs Accounting CostsThe Nature of Costs Explicit Costs Accounting Costs
Capital Costs Operating maintenance costs life Cycle costsCapital Costs Operating maintenance costs life Cycle costs
BUDGETED COSTS Andr Rudder FEES vs COSTS CostsBUDGETED COSTS Andr Rudder FEES vs COSTS Costs
Types of Costs Fixed Costs Variable Costs 1Types of Costs Fixed Costs Variable Costs 1
PRODUCTION COSTS Definitions Short run costs costs thatPRODUCTION COSTS Definitions Short run costs costs that
Golden Horseshoe 2013 WVDE Office of Instruction VeronicaGolden Horseshoe 2013 WVDE Office of Instruction Veronica
WVDE System of Support Michele Blatt Office ofWVDE System of Support Michele Blatt Office of
Uniform Grant Guidance Laura Pauley CPA WVDE OfficeUniform Grant Guidance Laura Pauley CPA WVDE Office
UTILIZING YOUR HUMAN CAPITAL Donna Peduto WVDE OfficeUTILIZING YOUR HUMAN CAPITAL Donna Peduto WVDE Office