Indirect Cost Rates for Nonprofit Organizations: Reimbursement of Facilities and Administrative Costs

Recording of a 110-minute CPE video webinar with Q&A

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Conducted on Wednesday, July 7, 2021

Recorded event now available

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Course Materials

This course will identify the guidance within 2 CFR Part 200 and provide strategies and best practices to achieve the organization’s costing goals. The panel will provide practical, hands-on context to help you increase your direct and indirect cost recovery and manage your indirect costs rate. The panel will also describe the different rate development methodologies and allocation questions, discuss strategies for enhancing indirect costs recovery and other guidance to mitigate risk.

Description

Almost every non-profit must engage in the process of negotiating federal indirect rates or developing a cost allocation plan to charge costs directly to awards (and sometimes both). Nonprofits face unique challenges in recovering indirect costs either through indirect rates or by directly allocating traditional indirect costs and recovering them as direct costs from awards. These challenges are driven by the various and unique types of awards that non-profit organizations receive, and many times the direct allocation of traditional indirect costs is required.

As non-profits go through this process, many often wonder if they have done everything within the constraints of federal regulations to maximize the organization’s direct and indirect cost recovery. In this session, we will discuss strategies that may be employed to maximize direct and indirect cost recovery (with an emphasis on indirect), both through indirect rates and the direct allocation methodology. We will discuss some unique challenges with the various federal agencies negotiating rates with non-profits and how you should prepare and review recent rate agreements to give you some helpful tips.

There is significant confusion regarding the allocation of indirect costs to various awards depending on the award type. It is not uncommon for an organization to charge some indirect costs through a rate and other indirect costs directly to the award since that is the only method to recover those costs.

Listen as our panel explores rules and best practices for indirect cost rates as used by nonprofits.

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Outline

  1. Establishing cost practices and policies
  2. Indirect cost methods
  3. Joint cost allocations
  4. Identifying allowed and allowable costs
  5. Negotiating indirect cost reimbursements

Benefits

The panel will discuss these and other relevant topics:

  • Treatment of fundraising and development costs
  • Typical examples of direct and indirect costs and why it varies for NFP organizations
  • Administration and negotiation of indirect rates
  • Negotiation process and how to respond to audit requests
  • Types of indirect cost rates and the pros and cons of each one

Faculty

Weekes, Alex
Alex P. Weekes, CPA
Principal
ML Weekes & Company

Mr. Weekes has worked for more than 25 years serving clients receiving grants and contracts from federal agencies,...  |  Read More

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