8756 INDIRECT COST RATE PROPOSAL (Revised 2/99)
Department or program costs can be categorized into three types:
(See SAM Section 8752.1 for descriptions of these costs.)
Direct
Departmental indirect
Central service
Indirect costs (both departmental and central service) are generally assigned to a program or organizational unit by an indirect cost rate or by some other cost application technique. Indirect cost rates are usually expressed as percentages. These percentages express the relationship of the sum of departmental indirect and central service costs to a direct cost base. Commonly used direct cost bases include direct salaries and wages costs, direct personal services costs, or total direct costs. The aggregation of all costs (direct, indirect, and central service), the analysis of cost relationships, and, finally, the computation of rate(s) are the basic steps involved in developing an ICRP.
8756.1 FEDERAL INDIRECT COST RATE PROPOSAL (ICRP)
(Revised 2/99)
Each department that receives federal funds must prepare an ICRP. The ICRP should be prepared in accordance with the Office of Management and Budget (OMB) Circular A-87, "Cost Principles for State, Local and Indian Tribal Governments" and the guide "Cost Principles and Procedures for Establishing Cost Allocation Plans and Indirect Cost Rates for Agreement with the Federal government" (ASMB C-10) published by the federal Department of Health and Human Services. The federal website is:
HTTP://WWW.WHITEHOUSE.GOV/WH/EOP/OMB/HTML/OMBHOME.HTML#.DOCS.
In the fall of each year, the DOF, FSCU, notifies departments with federal funding of the central service costs (SWCAP) apportioned to them for the next fiscal year. The reports are available via the Internet at website:
HTTP://WWW.DOF.CA.GOV/FISA/PROSWCAP/PROSWCAP.HTM
Departments send their ICRPs to the DOF, FSCU, for review and approval before sending the proposal to the cognizant federal agency for approval. Generally, the federal agency from which a department receives the most funding is designated as the cognizant federal agency. ICRPs are to be filed with the cognizant federal agency at least six months before the start of the fiscal year to which the ICRP applies. To facilitate processing of an ICRP, include the department's organization code on all ICRP documents.
Departments with federal funding must file ICRPs unless exempted by the DOF, FSCU. Requests for Exemption should be sent to FSCU with full explanations. Footnote and cross reference all amounts in ICRP schedules and sub-schedules. 8756.1 ILLUSTRATION 1 shows a sample ICRP calculation.
Departments required to submit ICRPs for FSCU review must include the ICRP summary form with all ICRPs. This form summarizes basic data about the department and acts as a checklist for proper preparation of ICRPs. Most items on this form require only that a box be checked. However, an other than "normal" response requires additional comments indicated by either "describe" or "explain" on the form. 8756.1 ILLUSTRATION 2 shows a sample ICRP summary form.
8756.2 NON-FEDERAL INDIRECT COST RECOVERIES
(Revised 3/90)
Departments which receive reimbursements from other than Federal funding sources will also ensure that full costs are included in charges for goods provided and services performed. The basic principles and cost elements included are the same as for Federal ICRPs (see SAM Section 8756.1) with one exception; non-Federal cost recoveries will include the larger of the department's central service costs, SWCAP or Pro Rata. See 8756.1 ILLUSTRATION 1 for a sample indirect cost calculation.
