The indirect cost rates for Federal and State non-restricted and restricted programs will be calculated from data obtained from the Annual Financial Report (AFR). The data from a given fiscal year is used to determine the rates for the second year following; e.g., FY 04's data determines FY 06's rates; FY 05's data determines FY 07's rates, etc. Costs from function 2500-Support Services Central are used to calculate the Restricted Rate and costs from function 2500 and 2600-Operation of Plant are used to calculate the Unrestricted Rate. Property-700 and Other Costs-800 are excluded costs when calculating indirect cost rates.
Once the AFR data has been approved by the USOE and the district (Schedule L), the respective indirect cost rates as derived from the AFR will then become the approved rates to be used by the district for the forthcoming fiscal year.
It should be noted that amounts charged to Function 2500 - Support Services Central are key factors in calculating both the non-restricted and restricted rates. In those districts where the Business Administrator performs both administrative and business functions, salary and other expenditures should be equitably apportioned between 2300 - Support Services - General Administration and 2500 - Support Services - Central.
Typically, a school food program incurs disproportionate expenses in comparison to the other programs served by the indirect cost pool. Within all indirect costs, there may be costs directly allocable to the school food program (e.g. purchasing, accounting, warehousing, etc.). If these particular costs are determinable, it would follow that the remaining balance of indirect costs would still in some way benefit the school food program much in the same way they benefit all the other instructional programs. If a practicable division of school food/instruction indirect costs is feasible, a SPECIAL school food program indirect cost rate can be calculated. To determine the rate, only the middle column of Schedule J need be completed. In the absence of a Schedule J allocation, an indirect cost rate for the school food program will not be calculated and the non-restricted rate shall apply.
School Districts may have legitimate reasons to include or exclude significant costs from the direct or indirect cost bases. If such an exception is desired, a supporting schedule providing details should be submitted so that an appropriate allowance may be made, if possible.
Use charges cannot be included in the restricted indirect cost rate calculation except for those amounts computed on facilities and equipment used by the indirect cost pool functions. However, a use charge may be developed and included in the non-restricted indirect cost rate calculation.
Claiming indirect costs is optional for districts; however, indirect cost rates will be established for every district/charter as a matter of record. See Board Rule R277-424, Indirect Costs for State Programs. State Special Education funding is exempt from indirect costs. CTE except for Comprehensive Guidance and Food Service programs are subject to the unrestricted indirect cost rate.
Current Year Rates
Past Year Rates
Schedule H - Indirect Cost Eligibility
School Lunch Indirect Costs Information
Indirect Cost Agreement