Letter Regarding Indirect Costs to CESA Administrators

October 3, 2005

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 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 2004-05 Fiscal Year

The calculation of the Indirect Cost Rate for the 2005-06 year is based upon expenditures for the year ended June 30, 2004. The rate computation previously submitted by your CESA has been reviewed by the Department and may have been modified. Please review the attached rate computation.

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. The attached spreadsheet calculation which was prepared by your CESA indicates your approved indirect cost rates for 2005-06 including any adjustment for carry-forward rate adjustment per the approved Indirect Cost plan.

If you have any questions regarding the Indirect Cost Plan, 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 12:04:11 PM