Federal awarding agencies are required to review and approve the indirect cost rates where they are the designated cognizant agency. In addition, where a prime recipient (i.e., state or other direct recipient of a Federal award) makes a sub-award to a lower tier organization, it is responsible for the review and approval of the sub-recipients indirect cost rate if one has not been approved by a Federal agency.
Resources
Many Federal agencies have found that they are not able to develop the necessary “in-house” resources to fulfill this responsibility. Likewise, the majority of prime recipients have found that they do not have the expertise or resources to meet this responsibility.
ICS Experience
The ICS team has a combined total of over 50 years in the review and negotiation of indirect cost rates. This team includes staff who have worked with various state agencies in negotiating indirect cost rates and other settlements with the grantor agencies and the former Director of the DHHS Division of Cost Allocation.
Approach
ICS has developed a set of policies and procedures to “mirror” the Federal process. This includes an automated system designed to control all assignments, review “checklists” to ensure that all requirements are met and a review process by which all assignments are independently reviewed by another member of the ICS team.
Documentation
After the review, a complete documentation package is provided to the Federal or prime recipient that supports the recommended indirect cost rate. The package also includes a draft negotiation agreement and cover letter that may be used by the Federal agency or prime recipient.
Results
This approach allows either a Federal agency or a prime recipient to gain the services of subject matter experts to fulfill its responsibilities at a minimum of cost.
Involvement
ICS is currently under contract with a number of state government agencies to perform this service and has in the past been the recipient of contracts awarded by Federal agencies to provide this important service.