The organizational profile provides the basic structure of the organization and should include, at a minimum, the following components:

• A statement of major activities performed at the organization, including a description of the organization's mission, services performed for the general public, member services, fundraising, lobbying, research grants and contracts, etc. (should be 1–2 pages in length).
• Organizational chart(s) and any information or material explaining the various services and functions of each unit.
• Based on the information provided in the statement of major activities, describe which services are allowable and allocable to federal grants and contracts, under 2 CFR 200 Subpart E, or FAR Part 31, as applicable.
• Based on the organizational charts, indicate which units are indirect (administrative) functions of the organization.

The purpose of the CPS is to establish a clear understanding between the organization and the federal government regarding what costs will be charged directly and what costs will be charged indirectly. The CPS also provides awardee personnel with a record of the awardee's practices in the event of personnel changes.

The CPS should include the following information:

1. Statement on general accounting policies, including, but not limited to:

1. Basis of accounting (accrual or cash basis).
2. Fiscal year end.
3. Method of allocating indirect costs.
4. Statement of allocation base for the indirect cost rate.
5. Statement of allocation base for the fringe benefits (if using a fringe benefit rate).
6. Accounting system software description.

2. Statements for each general ledger expense account (or cost element):

Indicate whether each account is used to record direct or indirect expenses. For those accounts related to activities that are sometimes charged as both direct and indirect costs, indicate the circumstances under which the determination is made. Example accounts include, but are not limited to:

1. Salaries and wages.
2. Fringe benefits, including a statement of how fringe benefits are charged (e.g., actual basis by employee, via a fringe benefit rate, etc.) and a statement of the treatment of compensated leave costs (e.g., vacation, holiday, sick leave, etc.).
3. Travel.
4. Board expenses.
5. Supplies and materials.
6. Occupancy expenses.
7. Utilities.
8. Communications.
9. Photocopying and printing.
10. Outside services.
11. Capital items.
12. Depreciation.
13. Services to members.

3. Allocation methodology:

For each of the above general ledger accounts in which costs are allocated to more than one activity, describe the method used to allocate the costs (e.g., actual usage, square feet, cost of space, volume, etc.)

For additional guidance on preparing a CPS, you may refer to one of the applicable guides listed below. These guides provide similar but different components to the above CPS requirements:

• Non-profit organizations:
  • A Guide for Indirect Cost Rate Determination — Applicable to Nonprofit and Commercial Organizations (U.S. Department of Labor)
  • Indirect Cost Negotiations (U.S. Department of Health and Human Services)
  • Larger nonprofit organizations may find the Defense Contract Audit Agency's ICE (Incurred Cost Electronically) Model helpful.
• For-profit organizations:
  • ICE (Incurred Cost Electronically) Model (DCAA) 
  • A Guide for Indirect Cost Rate Determination — Applicable to Nonprofit and Commercial Organizations (U.S. Department of Labor)

The statement will include the following:

• A description regarding the accounting treatment of unallowable costs.
• Methods and controls in place to segregate unallowable costs.
• List of expense accounts to which the unallowable costs are charged.

The sample should provide for the distribution of hours to direct and indirect functions.

Provide the organization's written policies and procedures describing how the organization prepares its annual ICR proposal.