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Where the total direct cost of work covered by this Part at an institution does not exceed $10 million in a fiscal year, the simplified procedure described in subsections 2 or 3 may be used in determining allowable indirect (F&A) costs. Under this simplified procedure, the institution’s most recent annual financial report and immediately available supporting information must be utilized as a basis for determining the indirect (F&A) cost rate applicable to all Federal awards. The institution may use either the salaries and wages (see subsection 2) or modified total direct costs (see subsection 3) as the distribution basis. Where the cognizant agency for indirect costs is unable to reach agreement with an educational institution with regard to rates or audit resolution, the appeal system of the cognizant agency for indirect costs must be followed for resolution of the disagreement.

• Building leases, insurance, subscriptions, utilities, and office supplies may be classified as a general expense or administrative expense.
• It’s also important to note that most administrative and general expenses are tax deductible.
• A cost may not be allocated to a Federal award as an indirect cost if any other cost incurred for the same purpose, in like circumstances, has been assigned to a Federal award as a direct cost.
• (13) Any other agency or instrumentality of a multi-, regional, or intra-State or local government.

Other expenses are clearly related to the drama workshops, such as the cost of teachers and workshop materials. (2) May adjust the price to reflect the actual cost of any modifications necessary because of contract requirements. Systems and other concept formulation studies means analyses and study efforts either related to specific IR&D efforts or directed toward identifying desirable new systems, equipment or components, or modifications and improvements to existing systems, equipment, or components. Self-insurance charge means a cost which represents the projected average loss under a self-insurance plan. (2) A modification of the accrued benefit cost method that considers projected compensation levels. Profit center means (except for subparts  31.3 and 31.6) the smallest organizationally independent segment of a company charged by management with profit and loss responsibilities.

Negotiated Indirect Cost Rate Agreement (NICRA)

General and administrative expenses are indirect costs that have no direct impact on your business’s profit. The G&A expenses are those that have been incurred for the overall general executive and administrative offices of the organization and other expenses of a general nature which do not relate solely to any major function of the organization. This category must also include its allocable share of fringe benefit costs, operation and maintenance expense, depreciation, and interest costs.

• (b) Notwithstanding subsection (a), a Federal agency, Inspectors General, or GAO may conduct or arrange for additional audits which are necessary to carry out its responsibilities under Federal statute or regulation.
• Costs specifically identified as unallowable and charged to Federal awards either directly or indirectly will be refunded (including interest chargeable in accordance with applicable Federal cognizant agency for indirect costs regulations).
• Cost input means the cost, except general and administrative (G&A) expenses, which for contract costing purposes is allocable to the production of goods and services during a cost accounting period.
• Subaward means an award provided by a pass-through entity to a subrecipient for the subrecipient to carry out part of a Federal award received by the pass-through entity.
• Modernization is distinct from construction in that it leaves the existing structure in place.

An asset cost includes (as applicable) acquisition costs, construction costs, and other costs capitalized in accordance with GAAP. (iii) Royalties paid under an agreement entered into after a Federal award is made to a non-Federal entity. (a) Costs of insurance required or approved administration cost meaning and maintained, pursuant to the Federal award, are allowable. (c) Gains or losses of any nature arising from the sale or exchange of property other than the property covered in paragraph (a) of this section, e.g., land, must be excluded in computing Federal award costs.

Is there any other context you can provide?

Government – the reduction must be taken from other non-governmental sources of revenues. In any instance where an indirect cost rate other than that specified in the NICRA is used in an award, the grantee is required to acknowledge the above stipulations by providing a written acknowledgement to USAID. Refer to Appendix V for a sample https://personal-accounting.org/accounting-principle-vs-accounting-estimate-what-s/ of a deviation letter from the NICRA. It is USAID’s policy that grantees that agree to an indirect cost rate ceiling that is less than the government-wide NICRA rate in a contract or grant for cost sharing or other reasons shall not recoup the amounts occasioned by the reduction in the rates on other agreements with the U.S.

• If someone in the finance department needs to travel for tax-related paperwork, that is also an administrative expense because it does not directly bring in more money.
• On the contrary to these fixed costs stand the variable costs, which vary per product/ service sold.
• (iv) A payment must not be made to a non-Federal entity for amounts that are withheld by the non-Federal entity from payment to contractors to assure satisfactory completion of work.
• Other items may only be excluded when necessary to avoid a serious inequity in the distribution of indirect costs, and with the approval of the cognizant agency for indirect costs.
• (2) The non-Federal entity will negotiate the amount of allowable interest cost related to the acquisition of facilities with asset costs of $1 million or more, as outlined in paragraph (c)(7) of this section.

The cumulative balance of Federal awards for endowment funds that are federally restricted are considered Federal awards expended in each audit period in which the funds are still restricted. A non-Federal entity that expends $750,000 or more during the non-Federal entity’s fiscal year in Federal awards must have a single or program-specific audit conducted for that year in accordance with the provisions of this part. (1) Taxes that a governmental unit is legally required to pay are allowable, except for self-assessed taxes that disproportionately affect Federal programs or changes in tax policies that disproportionately affect Federal programs. (3) The non-Federal entity and a director, trustee, officer, or key employee of the non-Federal entity or an immediate family member, either directly or through corporations, trusts, or similar arrangements in which they hold a controlling interest.

103 Contracts with commercial organizations.

(2) Although not necessary to meet fluctuations in workload, they were necessary when acquired and are now idle because of changes in program requirements, efforts to achieve more economical operations, reorganization, termination, or other causes which could not have been reasonably foreseen. Under the exception stated in this subsection, costs of idle facilities are allowable for a reasonable period of time, ordinarily not to exceed one year, depending on the initiative taken to use, lease, or dispose of such facilities. (b) The non-Federal entity is required to make reviews of local currency gains to determine the need for additional federal funding before the expiration date of the Federal award. Subsequent adjustments for currency increases may be allowable only when the non-Federal entity provides the Federal awarding agency with adequate source documentation from a commonly used source in effect at the time the expense was made, and to the extent that sufficient Federal funds are available.

(vi) Organize the Federal cognizant agency for audit’s follow-up on cross-cutting audit findings that affect the Federal programs of more than one Federal awarding agency. (v) Coordinate the Federal awarding agency’s activities to ensure appropriate and timely follow-up and corrective action on audit findings. (i) Responsible for ensuring that the agency fulfills all the requirements of paragraph (c) of this section and effectively uses the single audit process to reduce improper payments and improve Federal program outcomes. For a cluster of programs, provide the cluster name, list individual Federal programs within the cluster of programs, and provide the applicable Federal agency name.