Calculating Indirect Cost (IDC)

1 CalculatingIndirect Cost (IDC)Texas A&M Forest Service Grants Program Training SeriesThis is the slide title Grants Program Training Series Those costs incurred for a common or joint purpose benefitting more than one cost objective, and not readily assignable to the cost objectives specifically benefitted, without effort disproportionate to the results achieved. (2 CFR )in other words, these costs are necessary for the organization to operate in an efficient manner and cannot be easily assigned to any one costs are:ExamplesWhy charge to grants?Who negotiates rate?FY15 -FY18 ratesWhat is Indirect cost?Modified Total Direct CostThis is the slide title Grants Program Training SeriesCentralized Administration & Facilities Maintenance Human Resources Payroll Computer Support Accounting Services Purchasing Inventory Control Grants Management Facilities & Grounds MaintenanceExamples:What may be considered Indirect costs?

2 Departmental Costs Salaries of clerical & administrative staff Utilities Phones General office supplies Computers & electronics Uniforms Automobiles Office furnishings postage Copy machinesExamplesWhy charge to grants?Who negotiates rate?FY15 -FY18 ratesModified Total Direct CostExamplesThis is the slide title Grants Program Training Series It is the intent of the state legislature that all state agencies and institutions establish guidelines to recover all F&A [IDC] costs based on the rates negotiated with the federal cognizant agency. System Regulation Section is required by System regulationWhy charge Indirect costs to grants?

3 ExamplesWhy charge to grants?Who negotiates rate?FY15 -FY18 ratesModified Total Direct CostWhy charge to grants?This is the slide title Grants Program Training SeriesThe System Office of Budgets & Accounting is responsible for preparing and negotiating the Indirect Cost rate agreement, also known as the Facilities and Administrative (F&A) agreement, for all the College Station-based components (including TFS) and Texas A&M University at Policy Section is negotiated by the SystemWho negotiates the Indirect cost rate?ExamplesWhy charge to grants?Who negotiates rate?FY15 -FY18 ratesModified Total Direct CostWho negotiates rate?

4 Indirect Cost Rates for FY15 -FY18:Facilities and Administrative Cost Rates For All College Station-Based System Components & TAMUGTYPEFROMTORATE (%) MTDCOn CampusOrganized MTDCOn CampusOrganized MTDCOn MTDCOn CampusOther Sponsored Activities* MTDCOn CampusIPA MTDCOff CampusAll Programs** same rates and conditions as those cited for fiscal year ending August 31, is the slide title Grants Program Training SeriesBase:All salaries & wages, fringe benefits, materials, supplies, services, travel and subgrants& subcontracts up to the first $25,000 of each subgrantor subcontract (regardless of the period covered by the subgrantor subcontract).

5 These items are charged total direct costs shall excludeequipment, capital expenditures, charges for patient care, student tuition remission, rental costs of off-site facilities, scholarships, and fellowships as well as the portion of each subgrantand subcontract in excess of $25,000. These items are NOT charged Total Direct CostWhat is Modified Total Direct Cost (MTDC)?ExamplesWhy charge to grants?Who negotiates rate?FY15 -FY18 ratesModified Total Direct CostModified Total Direct CostThis is the slide title Grants Program Training SeriesIf the total budget has yet to be determined, use the following formula to calculate IDC:Total Direct Costs -IDC Exempt Costs x IDC rate = IDCF ront-in methodStep 4 Calculating IDCF ront-inStep 1 Step 2 Step 3 This is the slide title Grants Program Training SeriesStep 1: Identify Direct Costs and determine IDC eligibilityStep 4 Front-inCalculating IDC.

6 Front-in methodStep 1 Budget CategoryAmountEligible for IDCS alaries200, , , & Materials57, Outlay30, Direct Costs (TDC)397, 2 Step 3 Front-InThis is the slide title Grants Program Training SeriesStep 2: Calculate IDC Base by subtracting IDC exempt costs from Total Direct CostsStep 4 Calculating IDC: Front-in methodStep 2 Step 1 Step 3 Front-InBudget CategoryAmountEligible for IDCS alaries200, , , & Materials57, Outlay30, Direct Costs (TDC)397, : Capital Outlay30, Base (MTDC)367, is the slide title Grants Program Training SeriesCalculating IDC: Front-in methodStep 3 Step 3: Calculate IDC by multiplying IDC Baseby IDC RateBudget CategoryAmountEligible for IDCS alaries200, , , & Materials57, Outlay30, Direct Costs (TDC)397, : Capital Outlay30, Base (MTDC)367, : IDC 102, 4 Step 1 Front-InStep 2 This is the slide title Grants Program Training SeriesStep 1 Step 2 Step 3 Front-InCalculating IDC: Front-in methodStep 4 Step 4: Complete Final BudgetBudget CategoryAmountSalaries200, , , & Materials57, Outlay30, (28% MTDC)102, Award500, is the slide title Grants Program Training SeriesIf the total award amount is known, use the following formula to calculate IDC.

7 Total Award -IDC Exempt Costs= IDC[1 + IDC rate] x IDC rateBack-in methodStep 5 Step 1 Calculating IDCStep 2 Step 3 Step 4 This is the slide title Grants Program Training SeriesStep 1: Identify known Direct Costs and determine IDC eligibilityStep 5 Calculating IDC: Back-in methodStep 1 Step 2 Step 3 Step 4 Budget CategoryAmountEligible for IDCS alaries200, , , Space Rental12, Outlay10, (printing, postage , M&R, misc. exp.)?YesIDC?Total Award500, is the slide title Grants Program Training SeriesStep 2: Calculate Total IDC Base Plus IDC by subtracting IDC exempt costs from Total AwardStep 5 Calculating IDC: Back-in methodStep 2 Step 1 Step 3 Step 4 Budget CategoryAmountEligible for IDCS alaries200, , , Space Rental12, Outlay10, (printing, postage , M&R, misc.)

8 Exp.)YesIDCT otal Award500, Workshop Space Rental12, Capital Outlay10, IDC Base Plus IDC478, is the slide title Grants Program Training SeriesStep 3: Calculate IDC Base by dividing Total IDC Base Plus IDC by [1 + IDC Rate]Step 5 Calculating IDC: Back-in methodStep 3 Step 1 Step 2 Step 4 Budget CategoryAmountEligible for IDCS alaries200, , , Space Rental12, Outlay10, (printing, postage , M&R, misc. exp.)YesIDCT otal Award500, : Workshop Space Rental12, : Capital Outlay10, IDC Base Plus IDC478, by: [1+IDC Rate of ] Base373, is the slide title Grants Program Training SeriesStep 4: Calculate IDC by multiplying IDC Base by IDC RateStep 5 Calculating IDC: Back-in methodStep 4 Step 1 Step 2 Step 3 Budget CategoryAmountEligible for IDCS alaries200, , , Space Rental12, Outlay10, (printing, postage , M&R, misc.

9 Exp.)?YesIDC?Total Award500, : Workshop Space Rental12, : Capital Outlay10, IDC Base Plus IDC478, by: [1 + IDC Rate] Base373, : IDC , is the slide title Grants Program Training SeriesBudget CategoryAmountSalaries200, , , Space Rental12, Outlay10, (printing, postage , M&R, misc. exp.)117, (28% MTDC)104, Award500, 5: Calculate budget available for Other by subtracting all other budget items from total award. Complete Final 4 Calculating IDC: Back-in methodStep 5 Step 1 Step 2 Step 3