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Indirect Cost Rates. Phil Boone: MDE - Office of State Aid & School Finance. What is an Indirect Cost Rate?. A ratio representing the proportion of district expenditures used for “overhead” as opposed to direct costs of programs. How is an indirect cost rate used?. - PowerPoint PPT Presentation
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Indirect Cost Rates
Phil Boone: MDE - Office of State Aid & School Finance
04/19/232
What is an Indirect Cost Rate?
• A ratio representing the proportion of district expenditures used for “overhead” as opposed to direct costs of programs.
04/19/233
How is an indirect cost rate used?
• Adjusting grant revenue to include indirect costs.
• $100,000 grant with 5% rate.
• Program costs: $95,238
• $95,238 x 5% = $4,762
• $95,238 + $4762 = $100,000
04/19/234
Types of Rates
• Special Education
• Restricted
• Unrestricted
• Medicaid
04/19/235
Special Education Rate
• Report RO416
• ISD rate is weighted average
• Based on FID data
• No district input needed
• Published in April for current year
• Capped at 15%
04/19/236
Restricted Rate
• Applicable to most federal education grants
• Does not include ops/maint, Chief Executive Officer (CEO)
• “Supplement vs. Supplant”
• Capped at 15%
04/19/237
Unrestricted Rate
• Applicable to federal School Lunch grants
• Includes ops/maint, CEO costs
• Capped at 15%
04/19/238
Medicaid Rate
• Applies to Medicaid School Based Services grants
• Includes ops/maint, CEO costs
• Capped at 25%
04/19/239
How are the rates calculated?
• Costs are drawn from district’s FID, published to MDE website as report RO418A
• Preliminary rates are calculated on report RO418
04/19/2310
RO418A
04/19/2311
RO418
04/19/2312
What should the district do?
First Step: Reconcile the R0418 to your expenditure trial balance/FID
submission.Note: R0418 Total Expense column does not
include any function codes 49x and later
Or to look at it another way:
R0418 Total Expense column only includes function codes 1xx through 45x
04/19/2313
Cost adjustments
• Spreadsheet form DS-4513
• Exclusions on 1st page
• Re-classifications on 2nd page
• Limited window
• Due June 1
04/19/2314
Automatic Exclusions
R0418A automatically excludes all costs from the following funds:
Debt Service Funds
Capital Project Funds
Internal Service Funds
Other Funds (District Wide Reporting, Capital Assets, and Long Term Liability Funds)
04/19/2315
Automatic Exclusions
MDE will have already identified these exclusions:
• Capital Outlay (6xxx)
• Cost of food (56xx)
• Interest (72xx)
• Claims and Judgments (75xx)
• Taxes Abated and Written Off (76xx)
04/19/2316
Requesting additional exclusions
• Amount of contracted service in excess of $25,000.– See $25,000 rule document on MDE website
• Fines and penalties
• Interest expenses
04/19/2317
DS-4513 exclusions
04/19/2318
Automatic Reclassifications
• State codes 2XX-8XX
• Indicates grant funded activity
• If indirect, must reclassify as direct cost
04/19/2319
Requesting additional reclassifications
• Legal and Audit expenditures
• CEO costs
• Any grant funded indirect costs not identified by State code
04/19/2320
DS-4513 reclassifications
04/19/2321
Final RO418
• Costs adjusted by DS-4513
• Posted to web
• Alert to district via monthly State School Aid UPDATE
04/19/2322
Final RO418