1. Fiscal Year 2015 Rates INDIRECT COST CALCULATIONS

2. Office of Management and Budget (OMB) – Circular A-87 US Department of Education Delegates authority for rate determination to states Delegation agreement renews every five years AUTHORITY 2

4. Costs of a general nature which are not readily identifiable with the activities of the grant but are incurred for the joint benefit of those activities and other activities or programs of the organization. WHAT ARE INDIRECT COSTS? 4

5. Central accounting function WHAT ARE INDIRECT COSTS? 5

6. Costs that are incurred specifically for one activity and can be identified specifically with that activity. WHAT ARE DIRECT COSTS? 6

7. Special ed teacher salary WHAT ARE DIRECT COSTS? 7

8. Costs that require minimal administrative support. WHAT ARE EXCLUDED COSTS? 8

9. Capital outlay WHAT ARE EXCLUDED COSTS? 9

10. Items for which federal funds cannot be used. WHAT ARE UNALLOWED COSTS? 10

11. Fines and penalties WHAT ARE UNALLOWED COSTS? 11

12. The indirect cost rate is a device for determining what portion of allowable general administrative expenses each federal grant should bear INDIRECT COST RATE 12

13. FORMULA: indirect costs x 90% direct costs + unallowed costs INDIRECT COST RATE 13

14. Audited AFR is used for the calculations Expenditures must be classified properly! FY 13 is used to calculate FY 15 rates INDIRECT COST RATE 14

15. Federal review of rate methodology going on now Errors already found: 1.Apply the rates from July 1 – June 30 2.KBE must approve 3.Adjustment opportunity More changes could be required FEDERAL REVIEW 15

16. Rates must be applied the same way they are calculated 1. APPLY THE RATES JULY 1 – JUNE 30 16

17. If you used the FY 13 rate for Jul, Aug, or Sept 2013 you must correct any overcharge Calculate the indirect costs using the FY 14 rate for those months Reduce future indirect costs in FY 14 to correct the total charged 1. APPLY THE RATES JULY 1 – JUNE 30 17

18. Agreement is between USDE and KDE Local boards should recognize the rate but approval is not required 2. KBE MUST APPROVE THE RATES 18

19. Impossible to get every district calculation correct simply by applying the account structure Districts must review and certify the rates by affirming adjustment amounts, if any 3. ADJUSTMENT OPPORTUNITY 19

20. Results of your calculation must comply with OMB Circular A-87 http://www.whitehouse.gov/omb/circulars_a087_2004 HOW DO I KNOW WHAT ADJUSTMENTS TO MAKE? 20

21. Unallowed costs per A-87 Donations and contributions Employee health and welfare costs Coding Errors not Material to the AFR SAMPLE ADJUSTMENTS 21

22. “Instructions for Indirect Cost Adjustments for Calculating Indirect Cost Rates” KDE website HOW DO I MAKE ADJUSTMENTS? 22

23. 1.Log onto SEEK system 2.“Financial Forms & Tools” 3.“Indirect Cost Adjustments” 4.Enter adjustment amounts Positive number will subtract the amount Negative number will add the amount 5.“Save” HOW DO I MAKE ADJUSTMENTS? 23

24. You must log into the system anyway Check box WHAT IF I HAVE NO ADJUSTMENTS? 24

25. No problem Simply repeat the process WHAT IF I NEED TO ADJUST AGAIN? 25

26. By completing the adjustment form: Certify accuracy CERTIFICATION 26

27. Window for adjustments will be open March 7 – March 28 WHEN DO I NEED TO DO THIS? 27

28. RESOURCES OMB Circular A-87 Cost Allocation Guide for State and Local Governments (USDE) KDE website Rate calculations Summary guidance Archived video