Indirect costs are those that have been incurred for common or common objectives and cannot be easily identified with a specific end-cost objective. These costs are generally applied on a fair basis for all activities of the non-profit organization, depending on the benefits each of them will derive. The Indirect Cost Rate (ROI) is the ratio of total indirect expenditures to a direct cost base. A non-competitive organization creates an ROI through negotiations with its conscious federal authority by submitting a RCI proposal and other supporting documents that are audited and/or reviewed. DESCRIPTION – A pre-defined rate is a permanent rate set for a set future period based on a review of the actual costs of a previous period. These rates are only subject to correction in very unusual circumstances. (iii) permissions. Programmatic derogations must be approved in writing by the Director, the Office of Grants Management. Authorized exemptions are made available to the public. The simplified method is the most common method for organizations implementing an ROI for the first time. It is used when the main functions of an organization benefit roughly the same extent from its indirect costs. The distribution of indirect costs can be achieved by: (1) separating the total cost of the organization for the reference period as being direct or indirect and (2) the allocation of all eligible indirect costs (without applicable credits) by a fair distribution base. The result of this process is an ROI that allocates indirect costs over individual distinctions.
The following allocation bases are acceptable examples of use when indirect costs are linked to cost targets through a ROI: DESCRIPTION – An interim rate is an interim rate set for a specified period to allow financing, claim and reporting of indirect costs until a permanent interest rate is set for that period. (a) This section sets out guidelines, procedures and decision criteria for the use of an indirect cost rate different from the negotiated rate or the authorized rate for the non-federal company`s DOI premiums. These are determined in accordance with 2 CFR 200.414 (c) (3) or (f).