September 2003 Letter regarding Indirect Cost

Dear CESA Administrator:

Purpose of Indirect Cost Rates

The U.S. Office of Management and Budget Circular A-87 requires local government agencies to establish an approved indirect cost allocation plan and rate to recover indirect costs related to federal grants and contracts. Each state department of education must have a local education agency (LEA) indirect cost rate plan approved by its federal cognizant agency to assure that LEAs have the capability to claim indirect costs in federally assisted programs. A copy of the 2003-04 LEA indirect cost plan that has been already prepared on behalf of school districts and CESAs is available on the DPI internet website at: dpi.wi.us/sfs/indirect.html.

Calculation of Rates for 2003-04 Fiscal Year

The calculation of the Indirect Cost Rate for the 2003-04 year is based upon expenditures for the year ended June 30, 2002. For the year ended June 30, 2002, the CESA Annual Report, Form PI 1523, was eliminated and replaced by an EXCEL spreadsheet which summarized fiscal revenues and expenditures. More detailed expenditure data, however, is needed in order to calculate your indirect cost rate for 2003-04. We have prepared an additional EXCEL spreadsheet for use in calculating your indirect cost rates for this year. A hard copy is enclosed for your review and we have posted it on our website for your use at pi1161.pdf. Please complete the spreadsheet using data for the year ended June 30, 2002 and return to our department by November 1, 2003. Include any necessary adjustments on the form which in prior years you would have reported on Form PI 1161.

Enclosures

The indirect cost proposal summarizes which expenditure accounts are considered direct costs, restricted indirect costs and unrestricted indirect costs for the purpose of calculating indirect cost rates. These have been considered in the preparation of the EXCEL spreadsheet, a blank copy which is also enclosed.

If you have any questions regarding the Indirect Cost Plan or the completion of the EXCEL spreadsheet, please contact Gene Fornecker at 608/267-7882 or eugene.fornecker@dpi.wi.gov

Sincerely,

David Carlson, Director
School Financial Services Team

DC/glf
Encl.

For questions about this information, contact dpifin@dpi.wi.gov (608) 267-9114

Last updated on 2/25/2008 12:04:10 PM