Using Indirect Cost Rate vs. De Minimis (10%) for CoC
By Patricia Leslie
San Diego City and County CoC
We submitted an AAQ about how to handle an Indirect Cost Rate in the CoC Application and learned that what an agency does in the CoC Application can impact their other federal awards.
Indirect Cost Rate
Section 6A of the FY 2018 CoC NEW project application – Indirect Cost Rate
A new applicant for CoC funds has an approved indirect cost rate and does not plan to use the 10% de minimis rate.
How are the indirect costs included in the CoC application budget? If not included in the budget is the indirect cost rate added to total during the contracting period if the application is provisionally awarded?
Nongovernmental organizations that have a Federally negotiated indirect cost rate must clearly state in the project application(s) the approved rate and distribution base and must include a letter or other documentation from the cognizant agency showing the approved rate. Project applicants that have never received a Federally negotiated indirect cost rate and elect to use the de minimis rate must clearly state the use of the de minimis rate of 10 percent of Modified Total Direct Costs (MTDC) in the project application(s).
As described in 2 CFR 200.403, costs must be consistently charged as either indirect or direct costs but may not be double charged or inconsistently charged as both. Once an organization elects to use the de minimis rate, the organization must apply this methodology consistently for all Federal awards until the organization chooses to negotiate for a rate, which the organization may apply to do at any time. Documentation of the decision to us the de minimis rate must be retained on file for audit.