2020-21 Indirect Cost Rate Request
The last thing you need is another task to complete this spring, right? No worries! This task is easy, and it can help you get back some money and spend federal grant funds at the same time! Today’s tip is about how to go about requesting an indirect cost rate. Indirect Cost are the costs grantees can charge back to their grant to recover their organization wide administrative costs of managing federal grants, budgeting, purchasing, auditing, and payroll processing. TEA allows grantees to use restricted indirect cost rates to recover the organization-wide administrative costs of managing state grants. It’s like paying yourself back for grant work not paid for by the grant. Restricted indirect cost rates are usually fairly low, but it’s better than nothing!
How do I obtain an indirect cost rate?
Each year, charter schools must request an indirect cost rate from TEA. TEA will access certified Public Education Information Management System (PEIMS) data related to each charter school’s resident public-school district and their respective calculated indirect cost rates to determine rates for charters schools that have requested rates. To view the TEA memo about the process, click here.
All open charter schools will now be required to submit an online survey known as the Request for an Indirect Cost Rate for Charter Schools for 2020-21 by March 31, 2020. The purpose is to let TEA know if you want an indirect cost rate issued for the 2020-21 school year or not.
We, at Charter School Success, strongly recommend that you request an Indirect Cost rate, even if you are not certain you will claim indirect cost during the 2020-21 school year.
All open-enrollment charter schools are required to respond, regardless of whether or not they wish to have an indirect cost rate issued, by replying “yes” or “no” on the form. Your response will let TEA know that as an open-enrollment charter school you are aware of the process. Just because you request a rate does NOT require you to use it. On the flip side, if you don’t ask for one, you are out of luck.
To access the survey, click on the link above. It only takes a minute to complete.
Once the March 31 deadline has passed, TEA will post the Indirect Cost Rate in the GFFC Reports and Data Collections located in TEAL. This is expected to happen on or about July 1, 2020.
Helpful tips about Indirect Costs
- You do not have to put indirect costs in the grant in schedule (BS6001 for ESSA; BS6006 in IDEA) in order to claim indirect costs. You do have to ensure that funds are available before including indirect costs in your draw down requests. However, if you know for sure you want to claim indirect costs, you can include them in your budget schedules in the grant up front to earmark the funds. If you decide to do it at the end of the year and did not have it in your grant budget page, it is still allowed, and you do not have to amend to draw them down.
- You can wait until the end of the year to see if funds are remaining to draw down indirect costs, or you may choose to draw them down throughout the year.
- Indirect costs percentage is calculated on amounts expended, not the total grant award.
- Indirect costs are not included in local budget when calculating maintenance of effort (MOE). They are considered an expenditure as part of the federal grant.
- Want to spend 100% of your grant funds on direct services to students? That’s OK too! Claiming indirect costs is totally optional.
- For more information regarding Indirect Cost rates, check out TEA’s Indirect Cost Rates page.