(Sample) Indirect Cost Proposal FYE 12/31/98
| Elimin- | Indirect | Direct | Project A | Project B | Project C | (4) | ||
|
Salaries & Wages |
Total | Ations | Costs | Costs | NSF | DOE | NASA | IR&D |
| B. Able, President | 70,000 | 25,000 | 45,000 | 15,000 | 5,000 | 15,000 | 10,000 | |
| J. Brue, Sr. Scientist | 65,000 | 15,200 | 49,800 | 23,800 | 10,000 | 8,000 | 8,000 | |
| P. Dent, Engineer | 60,000 | 4,800 | 55,200 | 0 | 40,000 | 10,000 | 5,200 | |
| C. Kipe, Scientist | 50,000 | 4,000 | 46,000 | 30,000 | 12,000 | 4,000 | ||
| S. Smith, Typist | 30,000 | 12,400 | 17,600 | 10,000 | 6,000 | 1,000 | 600 | |
| M. Jones, Accounting | 45,000 | 45,000 | 0 | 0 | 0 | 0 | 0 | |
| Total Salaries & Wages | 320,000 | 106,400 | 213,600 | 78,800 | 73,000 | 34,000 | 27,800 | |
| (3) | (B) | |||||||
| FICA | 24,480 | 24,480 | ||||||
| Health Insurance | 28,000 | 28,000 | ||||||
| Consultant Fees | 49,000 | 3,000 | 46,000 | 13,000 | 27,000 | 3,750 | 2,250 | |
| Depreciation | 10,000 | 10,000 | ||||||
| Entertainment/Penalties | 3,500 | 3,500 | ||||||
| Equipment | 23,000 | 23,000 | ||||||
| Legal & Accounting | 5,000 | 5,000 | ||||||
| Materials & Supplies | 20,000 | 1,500 | 8,500 | 9,400 | 2,500 | 900 | 5,700 | |
| Office Supplies | 2,000 | 2,000 | ||||||
| Computer Services | 6,500 | 1,000 | 5,500 | 4,500 | 1,000 | |||
| Postage & Telephone | 1,500 | 1,500 | ||||||
| Printing & Publication | 3,000 | 400 | 2,600 | 1,400 | 700 | 500 | ||
| Rent | 12,000 | 12,000 | ||||||
| Utilities | 2,400 | 2,400 | ||||||
| Travel | 6,000 | 600 | 5,400 | 3,600 | 800 | 750 | 250 | |
| Subawards | 95,000 | 95,000 | ||||||
| Total Expenses | 611,380 | 121,500 | 198,280 | 291,600 | 110,700 | 105,000 | 39,900 | 36,000 |
| (1) | (2) | (A) | (C) |
Indirect Cost Pool (divided by)
(A) 198,280
Salaries and Wages Distribution Base
(B) 213,600 = 92.8%
OR
Indirect Cost Pool (divided by)
(A) 198,280
Modified Total Direct Cost Distribution Base (C)
291,600 = 68%
(1) Indirect cost proposal should be based on actual cost data for the most current ended accounting year and should be submitted with the financial statements (F/S) for that year. The total amount of expenses per the indirect cost proposal should be reconciled to the total expenses reported in the F/S. A second "budgeted" indirect cost proposal(s) should be provided if it is expected that the indirect cost rate will change significantly during the actual period of the award (if covering more than one acounting year, a proposal should be provided for each year). Where projected costs in any particular cost category have significantly increased, an explanation for the increase should be provided.
(2) Both direct costs and indirect costs shall exclude capital expenditures. Unallowable costs are also excluded, unless they 1) include the salaries of personnel, 2) occupy space, and (3) benefit from the organization's indirect costs; in which case they are included as a direct cost (see applicable cost principles which identify other unallowable costs). Distorting items such as subawards and participant support costs should be excluded from the distribution base.
(3) Fringe benefits, including FICA, non-work time, health, etc., in this example are included in the indirect cost pool and therefore would not be proposed as a separate direct cost element. (Although not separately itemized, vacation, holiday and sick are included in the indirect salaries and wages amounts in this example.) It can be appropriate, however, to segregate fringe type costs and allocate these costs to direct and indirect salary and wage categories in determining total indirect and direct amounts. It would then be appropriate to propose fringe benefits as a separate rate applied to direct salaries and wages.
(4) It is NSF's policy to treat Independent Research and Development (IR&D) as a direct cost.
Direct costs are those costs that can be identified specifically with a particular final cost objective, i.e., a particular award, project, service, or other direct activity of an organization. Indirect costs are those that have been incurred for common or joint objectives and cannot be readily identified with a particular final cost objective. After direct costs have been determined and assigned directly to awards or other work as appropriate, indirect costs are those remaining to be allocated to benefiting cost objectives. Where an organization's major functions benefit from its indirect costs to approximately the same degree, the allocation of indirect costs may be accomplished by (1) separating the organization's total costs for the period as either direct or indirect and (2) dividing the total allowable indirect costs (net applicable credits) by an equitable distribution base. The distribution base may be total direct costs (excluding capital expenditures and other distorting items, such as major subawards and participant support costs), direct salaries and wages, or other base which results in an equitable distribution. (It should be noted that NSF policy is to treat Independent Research and Development (IR&D) as direct costs.)