The complexity of the process depends on the number of core functions of your nonprofit. If the organization has only one primary function, it can use a simplified assignment method. If indirect costs benefit core functions to varying degrees, you can use a multiple baseline method to allocate indirect costs. Another available method is the direct allocation method used when non-profit organizations treat all costs as direct costs, with the exception of general and general administrative expenses. Your accountant will help you determine which of these three methods is most appropriate for your organization. DESCRIPTION – A predetermined sentence is a permanent sentence fixed for a given future period based on a verification of the actual costs of an earlier period. These rates are subject to adjustment only in very unusual circumstances. (i) program qualifications. A document published to reflect an estimate of the indirect cost rate negotiated between the federal government and the organization of a fellow/contractor, which reflects the indirect costs (facilities and administrative costs) and ancillary costs of the organization, which will be the same in all authorities in the United States. (2) Indirect cost reductions used as cost-sharing. Where the recipient chooses to use a lower indirect cost rate than that negotiated by the Confederation and uses the balance of the unrelected indirect costs to satisfy a cost share or match requirement imposed by the program and/or the law, are not considered a waiver of 2 CFR 200.414 (c), given that the indirect rate negotiated by the Confederation is applied within the framework of the agreement; to fulfil the conditions of the award. After submitting your indirect cost proposal to your agency, begin the negotiation process.
The results of each negotiation are formalised in a written agreement between the supervisory authority and the non-profit organisation. The Indirect Costs Control Authority will provide all relevant federal authorities with copies of the agreement. After identifying the agency that will be your supervisory authority, the second step is to calculate your indirect fee schedule.