Indirect Cost

Indirect Cost Overview

Fiscal & Administrative Review Assistance for IDHS Providers

What are indirect costs?
Costs incurred for common or joint objectives and cannot be readily identified with a particular final cost objective.

What is an indirect cost rate?
A calculation used to fairly determine the proportion of indirect costs each specific grant program should bear. An indirect cost rate is the relation between the total indirect expenses and a direct cost base.

Does my organization need an indirect cost rate?
An organization must have a negotiated indirect cost rate agreement (NICRA) or elect to use the Federal 10% de minimis rate to be reimbursed for any indirect costs within a program. All State of Illinois grantees also have the option to select "no rate" and not claim any indirect costs.

What options are available to my organization to obtain an indirect cost rate?

  1. Use current Federally Approved Indirect Cost Rate
  2. Negotiate a rate with the State of Illinois by submitting an Indirect Cost Rate Proposal (ICRP) to the State of Illinois' Centralized Indirect Cost System through the Grantee Portal
  3. Elect to use the 10% "de minimis" rate of Modified Total Direct Costs (MTDC)
  4. Elect to use a "restricted" or "special" rate that is statutorily required by a specific grant program's rules

Indirect cost reminders

  1. Indirect costs are reimbursed based on an approved indirect cost rate
  2. Review your specific funding notice for any indirect cost restrictions or requirements
  3. Follow the indirect cost election process and use a consistent approach to applying indirect costs throughout the grant award period
  4. Select an indirect cost election in the Grantee Portal on an annual basis. Note - The election for "no rate" and "de minimis" continue indefinitely once initially selected

Centralized Indirect Cost Rate Process
All State of Illinois grantees receiving awards from Illinois grant making agencies must substantiate or elect an indirect cost rate for their organization. Grantees that wish to negotiate a rate with the State of Illinois will start their election process in the Grantee Portal and the case will then be sent to the Crowe Activity Review System (CARS) to begin negotiation.

Please click on the Centralized Indirect Cost Rate System link to begin the indirect cost rate election process and obtain access to resources and points of contact to assist your organization in completing this process.