Interagency Agreement with DOI

Interagency Agreement with DOI

Indirect Cost Rate Program Changes 01/24/2018 INTERAGENCY AGREEMENT WITH DOI EDA has entered into a working relationship with the U.S. Department of Interior, Interior Business Center (IBC) to issue indirect cost rates to organizations for which EDA is the cognizant agency As of August 1, 2017, the Office of Indirect Cost Services for IBC is negotiating, issuing, and countersigning indirect rate agreements on behalf of EDA EDA is still the cognizant agency 2 BRIEF HISTORY OF EDAS INDIRECT COST RATE PROGRAM

Previously managed by the DOC Office of Acquisition Management (OAM) EDA inherited the program in 2013 Initial process was slow and costly Required non-profits to submit indirect cost proposals for review by contract accountants Required EDDs to submit indirect cost Certificates for review by contract accountants Revised process in 2015 EDA created rate thresholds based on historically approved rates, enabling the approval of low rates below the threshold without requiring review by contract accountants Limited level of expertise and unsatisfactory level of focused and quality customer service 3

BENEFITS OF WORKING WITH DOI DOI runs Interior Business Center, a federal shared service specializing in indirect cost rate management Full service, including: Receive proposals directly from grantee; coordinate with the grantee as needed; answer questions; negotiate the rate; sign and send grantee acceptance letter; review and consider changes to Cognizant Agency status Expertise and ability to determine the best rate type for both the organization and the federal agency. Capacity to review and approve multi-year rate extensions that were newly authorized by OMB 2 CFR 200 (1 to 4 year extensions) only for negotiated rates Moving towards an online database system for tracking of indirect cost rates for organizations

4 NEW PROCESS: NON-PROFIT Non-profit organizations ICR Proposal or Cost Allocation Plan DOI IBC Assigned to a specialist ICR Negotiated (can take about 4 months) Negotiated rate letter sent to organization * During this transition over the next year, all indirect cost documentation and questions should be directed to Bernadette Grafton via [email protected] 5 NEW PROCESS: STATE/LOCAL/INDIAN TRIBAL GOVT State and Local Governments and Indian Tribal Governments Receiving less than $35M per year in Federal funding Government organization not required to, but may, submit Certificate of Indirect Costs

to EDA and retain full Proposal for audit EDA provides acknowledgment letter to organization Organization may request a full review, following the process below EDA or other Federal Agency may request a full review at any time, following the process below Receiving more than $35M per year in Federal funding ICR Proposal or Cost Allocation Plan DOI IBC Assigned to a specialist ICR Negotiated (can take about 4 months) Negotiated rate letter sent to organization * During this transition over the next year, all indirect cost documentation and questions should be directed to Bernadette Grafton via [email protected] 6 NEW PROCESS: ECONOMIC DEVELOPMENT DISTRICTS

Note: EDDs may not be required to submit anything at all to their cognizant agency. Per 2 CFR 200 Appendix VII Subpart D (you can find it here: https://www.ecfr.gov/cgi-bin/text-idx?SID=456ff2 8fbb0ff3540894168058b6f54b&mc=true&node= pt2.1.200&rgn=div5#ap2.1.200_1521.vii ): "b. A governmental department or agency unit that receives more than $35 million in direct Federal funding must submit its indirect cost rate proposal to its cognizant agency for indirect costs. Other governmental department or agency must develop an indirect cost proposal in accordance with the requirements of this Part and maintain the proposal and related

supporting documentation for audit. These governmental departments or agencies are not required to submit their proposals unless they are specifically requested to do so by the cognizant agency for indirect costs." (italics added) Less time Less burden More options While it is likely that the majority of EDDs fall under this exception, we cannot assume that all EDDs are exempt. 7

NEW PROCESS: ECONOMIC DEVELOPMENT DISTRICTS 8 OPTIONS FOR EXEMPT ORGANIZATIONS 1. Dont submit anything to EDA for review or approval If an organization chooses to follow this option, then they must submit their Certificate of Indirect Costs along with their grant application in order to collect on indirect costs. 2. Submit Certificate of Indirect Costs to EDA and request an

acknowledgment letter Organization should submit the acknowledgment letter and their Certificate of Indirect Costs along with their grant application 3. Submit Cost Allocation Plan for review and approval by DOI for a 5 year period, unless changes need to be made (PILOT) Organization will submit their approval letter from DOI 4. Submit a full Indirect Cost Rate Proposal for negotiation by DOI Organization will submit their Negotiated Indirect Cost Rate Agreement (NICRA) from DOI

* During this transition over the next year, all indirect cost documentation and questions should be directed to Bernadette Grafton via [email protected] 9 CERTIFICATES OF INDIRECT COST 10 ACKNOWLEDGMENT LETTER TEXT With this letter, the Economic Development Administration (EDA), a component of the Department of Commerce, acknowledges receipt of your Indirect Cost Rate Certificate for FY 2018 dated 11/28/2017. As a unit of state or local government that receives less than $35

million in annual cumulative direct Federal funding, you are not required to submit an indirect cost rate proposal to EDA and, consequently, EDA will not review your submission at this time. For more information on this requirement, see 2 C.F.R. part 200, App. VII D.1.b. Your organization is required to develop an indirect cost rate proposal in accordance with 2 C.F.R. part 200 and retain it with related supporting documentation for audit. For more information on this requirement, see 2 C.F.R. part 200, App. VII D.1.b. and 2 C.F.R. 200.333. EDA reserves the right to review this or future indirect cost rate proposals at a later time to ensure conformity with the requirements of 2 C.F.R. part 200. Typically, EDA will exercise this right if there is a relevant audit finding, a concern is raised by another government agency concerning a particular indirect cost rate, and/or if EDA finds an anomaly in an indirect cost rate proposal. In such circumstances EDA may review such an indirect cost rate proposal itself or through another Federal agency. Please contact my office at 202-482-2917 if you have any questions or concerns. 11

COMMON QUESTIONS What if a state agency wont accept my non-negotiated indirect cost rate even though I am not required to receive one? How is this process different from the old process? I would like to get a rate extension. What is the process? 12 RESOURCES EDAs Indirect Cost Instructions: https://www.eda.gov/tools/grantee-forms/ DOI Guidance for State and Local Governments: https://www.doi.gov/ibc/services/finance/indirect-Cost-Services/insular-areas DOI Indirect Cost Negotiation Services:

https://www.doi.gov/ibc/services/finance/indirect-Cost-Services/ If you have any questions at all or want to discuss anything in more detail, please contact Bernadette Grafton using the Indirect Costs email address ( [email protected]) or by calling her at 202-482-2917 13 I N N OVAT I O N . R EG I O N A L C O L L A B O R AT I O N . J O B C R E AT I O N . U.S. Economic Development Administration U.S. Department of Commerce www.eda.gov www.facebook.com/eda.commerce

www.twitter.com/US_EDA www.youtube.com/EDACommerce www.linkedin.com/company/us-department-of-commerce-economicdevelopment-administration 14

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