1. Presented by Kristy Hartsell, Fiscal Analyst III Oregon Department of Education OASBO Conference July 2009 LEA Indirect Cost Rate

2. United States Education Department (USED) Site Visit August 2008 by Indirect Cost Group members from USED. Topics to enhance Unused Leave – capture and reconcile Time Distribution Indirect calculation – General Mgmt Sub-Award List – capture and reconcile Carry Forward calculation 1

3. Enhancements by Oregon Department of Education (ODE) New object codes for Unused Leave Monitoring by ODE program offices on Time Distribution General Management Costs mandatory adjustment for Indirect Addition of Sub-Award List to reconcile Carry Forward calculation template used to calculate adjustment 2

4. New Object Codes Object #117 – Unused/Terminal Leave OMB Circular A-87, Attachment B, paragragh 8.d(3) Object #270 – Early (Post) Retirement Health Benefits OMB Circular A-87, Attachment B, paragragh 8.f As of July 1, 2009, for Executive Level 3

5. Mandatory Adjustments General Management –Supt, Deputies, Heads of Sections and Boards of Education should be charged to Direct cost base-2 step adjustment EDGAR 76.565 – (organization-wide) Contracts in excess of $25,000 – Fully captured and reconcilable to a list of individual Sub- Awards/subcontracts Unused/Terminal Leave – From 2009-2010SY forward, capture costs using object code #117. OMB A-87, Attachment B, Paragraph 8d(3). 4

6. General Management Cost Adjustment Definition - EDGAR 34 CFR 76.565 - General Management costs are those for the direction and control of the grantees affairs that are organization- wide. Section 76.565(b) defines the types of costs that are considered general management and may be included in the pool (numerator). Section 76.565(c) defines what types of costs and positions (salaries and related costs) that must be excluded from the pool because they are not considered general management costs under this section of EDGAR and for purposes of calculating a restricted rate. These costs (such as CEO, Deputy, Heads of Components, etc.) must be removed from the pool and included in the base (denominator). Language from USED as of 7-20-09 5

7. Calculating Unallowable Adjustments Review Organization Chart Determine unallowable Compensation Costs for the CEO and Deputy CEO Determine unallowable Compensation Costs for Heads of Components Determine unallowable Related Operating and Occupancy Costs 6

8. U/A (CEO) U/A (Deputy CEO) U/A = Unallowable XYZ ORGANIZATION STEP 1 7

9. Unallowable Process Step 2 - Compensation of CEO & Deputy: Chief Executive Officers and Deputys Compensation Costs (Salaries & Benefits) are unallowable and should be in base. 8

10. Unallowable Process Step 3 - Heads of Components compensation: The organization has three Components reporting directly to the CEO and/or Deputy CEO Legal Services Fiscal Services Personnel Services The Compensation Costs are unallowable!! 9

11. The following units are NOT Components: Procurement & Purchasing Budget Data Services Public Relations The units DO NOT report to the CEO and therefore are not defined as Components. Unallowable Process 10

12. Step 4 - Related Operating (34 CFR 76.567): Determine the Operating Costs related to the immediate offices of the CEO, Deputy and each Head of Components (including admin assistant and/or secretary). Step 5 - Occupancy Costs (34 CFR 76.568): Determine unallowable Occupancy Costs that are associated with organization-wide functions Unallowable Process 11

13. Sub-Award List The Sub-Award/subcontract list is to provide ODE the ability to reconcile contract adjustments in excess of $25,000. New for 2009-2010 Indirect rate Different amount than contract adjustment Completed each year for Indirect calculations 12

14. Carry Forward Calculation Standard template provided by USED Carry forward uses two previous years data, ODD with ODD, EVEN with EVEN Over or Under recovery impacts next ODD or EVEN year rate Update in the calculation of budgeted to actual Indirect rates (after adjustments) 13

15. Carry Forward Update Current Status ODE stepsYour Steps FinalizedRemove Carry Forward and re-send email for final and call each entity individually Receive revised final rate email on 7-27-09 or 7-28-09 CertifiedRemove Carry Forward before final rate email sent Wait for final rate email Adjustments in Progress Remove Carry ForwardWait until 7-30-09 to continue w/adjustments PreliminaryRemove Carry ForwardBegin adjustments 7-30-09 14

16. Next Steps Assemble information Prepare spreadsheets / templates Read and understand EDGAR Document rationale Follow guidance 15

17. Resources U.S. Education Department (USED) Indirect Cost Determination Guidance for State and Local Government Agencies (Blue Book ) Office of Management and Budget (OMB) Circular A-87 Education Department of General Administrative Regulations (EDGAR), Title 34 http://www.ed.gov/policy/fund/reg/edgarReg/edgar.html http://www.ed.gov/policy/fund/reg/edgarReg/edgar.html U.S. Education Department Indirect Cost Rate Overview at http://www.ed.gov/about/offices/list/ocfo/intro.html http://www.ed.gov/about/offices/list/ocfo/intro.html 16

18. Questions ? Kristy Hartsell Fiscal Analyst III Oregon Department of Education kristy.hartsell@state.or.us 503.947.5619 17