Indirect Cost Rates for Nonprofit Organizations: Reimbursement of Facilities and Administrative (F&A) Costs

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


Conducted on Wednesday, July 17, 2019

Recorded event now available

or call 1-800-926-7926
Program Materials

This webinar will provide accounting advisers to nonprofit organizations with a detailed guide to developing indirect cost rates in a practical, hands-on context. The panel will describe the different rate development methodologies and allocation questions, discuss strategies for moving indirect costs into direct expenses, and offer guidance in presentation and disclosure to both government agencies and private donors.

Description

Nonprofit organizations receiving grants or contracts from the federal government must follow strictly defined rules for allocating and reimbursement of indirect costs, those expenditures incurred for common or joint objectives which aren't readily identifiable with a particular program or purpose. Advisers to nonprofits, even those not receiving government monies, must be familiar with the principles of developing indirect cost rate methodologies, regardless of whether those nonprofits receive government grants.

The task starts with identifying indirect costs and choosing the correct method of allocation: simple method, multiple allocation base method, or direct allocation. From there, nonprofits and advisers must consider joint costs and whether costs are allowed or allowable. It’s important to understand the nuances between the different methodologies and which one is best for your organization and assists in maximizing reimbursement of direct and indirect costs.

The organization must also consider whether to charge the 10% de minimus or use a negotiated indirect rate agreement (NICRA). These choices can have a consequential impact on the cash flow of a nonprofit entity. This session is intended for anyone who would like to better understand the basic requirements, inputs, and objectives that make up this calculation. The discussion session will include a high-level perspective regarding how the regulations, financial and other data inputs, and submission and negotiation processes work together and will provide practical insight into the application of the F&A rate to the organization’s awards.

Even nonprofit organizations that do not engage with governmental agencies must often disclose indirect costs to donors and other stakeholders. Designing a system to calculate indirect rates also is a process that requires careful consideration. Experiences from nonprofit consultants on dealing with the practical realities of indirect costing under Uniform Guidance can help hone your approach.

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:

  • Selecting and allocating indirect costs under the three designated methods
  • Identifying and allocating joint costs
  • Administration and negotiation of indirect rates under Uniform Guidance (2 CFR 200)
  • Determining allowed and allowable costs
  • Best procedures and practices for identifying and getting repaid for indirect costs

Faculty

Lenz, Cara
Cara W. Lenz, CPA

Senior Manager
ML Weekes & Company

Over the last eleven years, Ms. Lenz has provided a variety of services for clients who receive grants and contracts...  |  Read More

Weekes, Alex
Alex P. Weekes

Partner
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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