INDIRECT COST RATE PROPOSAL PREPARATION AND NEGOTIATION

Get Your Accounting Done Right

Indirect costs represent the expenses of doing business that are not readily identified with a particular grant, contract, project function or activity, but are necessary for the general operation of the organization and the conduct of activities it performs. In theory, costs like heat, light, accounting and personnel might be charged directly if little meters could record minutes in a cross-cutting manner. Practical difficulties preclude such an approach. Therefore, cost allocation plans or indirect cost rates are used to distribute those costs to benefiting revenue sources.

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An indirect cost rate is simply a mechanism for determining fairly and conveniently within the boundaries of sound administrative principle, what proportions of Departmental/organization administration costs each programs should bear. An indirect cost rate represents the ratio between the total indirect costs and benefiting direct costs, after excluding and or reclassifying unallowable costs, and extraordinary or distorting expenditures. (i.e., capital expenditures and major contracts and subgrants). Indirect Cost Rate allows for each program or activity represented in the direct costs base to assume their fair share of indirect costs when the rate is applied.

An indirect cost negotiation agreement is a document that formalizes the indirect cost rate negotiation process. There are four types of rates that can be requested in your proposal: Provisional, Final, Predetermined, and Fixed (Fixed Carry-forward). If your organization have never applied for Indirect Cost Rate, you will be qualified to use flat 10% rate to charge all of your programs.

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We communicate and negotiate the rate directly with ICR office so that you could concentrate of success of your programs.

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Give us a call at 907-290-8100 to get your services started. The consultation is FREE.