I C R P

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I C R P
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What is ICRP?

• Indirect Cost Rate Proposal
• The documentation prepared by a governmental
  unit in accordance with OMB Circular A-87 to
  substantiate its request for the establishment of
  an
• indirect cost rate.

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Why do we prepare ICRP?

• Comply with Senate Bill 45 requiring
• all non-reimbursement Capital Outlay
• Support projects to include the
• functional indirect costs as part
• of project costs.

• Comply with the States Full Cost Recovery Policy
  to recover full costs whenever goods or services
  are provided for others.

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What are Full Costs?

• DIRECT COSTS
• Identifiable with a specific cost objective.

• INDIRECT COSTS
• Not identifiable with a specific
• cost objective.
• Not assignable to specific cost objective
• without disproportionate expense.

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How are indirect costs assessed to projects?
The Department utilizes Indirect Cost Rates to
charge individual projects for their fair share
of Indirect costs.

• Program Functional Rate
• Administration Rate

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What is the Program Functional Rate?

• Total Indirect Cost
• ----------------------------------
  Functional Rate
• Direct Labor

• Examples of indirect costs
• Non-project Management Supervision
• Non-project Travel Per Diem
• Non-project Training

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PROGRAM FUNCTIONAL RATE

• Component
• Indirect EAs
• Off-the-Top EAs with Distribution
• to multiple programs

Calculation Indirect Cost Pool Program
Functional INDIRECT LABOR OE ------------------
---------------- Functional Rate
Base
44.70 Capital Outlay Support Program
Functional DIRECT LABOR (Rate
effective from 07-01-07 to 06-30-08)
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What is the Administration Rate?

• Total Indirect Cost
• ----------------------------------
  Administration Rate
• Direct Labor

• Examples
• Audits
• Accounting
• Personnel

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ADMINISTRATION RATE

• Component
• General Administration
• Legal Services
• Professional Technical Services
• Building Equipment depreciation
• Bond Interest Expense
• Central Service Costs (SWCAP ProRata)

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ADMINISTRATION RATE The Administration
Rate is computed in two steps
Calculation STEP 1 Total Administration costs
are prorated to Departments
major programs.
STEP 2 Prorated Administration Costs are
divided by the program Direct Labor
Indirect Cost Pool
Administration LABOR OE
-------------------------------------
Administration Rate Base
27.87 Program 20.xx
Program Functional DIRECT LABOR
(Rate effective from 07-01-07 to 06-30-08)
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Both Rates Are Added TogetherFor Billing

• e.g. Capital Outlay Support (rates
  effective from 07-01-07 to 06-30-08 business
  month)
• PROGRAM FUNCTIONAL RATE 44.70
• ADMINISTRATION RATE 27.87
• 
  -------------
• Billing Rate 72.57

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How are indirect costs assessed to Reimbursed
Projects?

• Indirect Cost Assessment on a Reimbursement
  project
• Project Direct Labor cost 3,500.00
  
• Apply Payroll Reserve Rate x
  61.30
• Loaded Labor (3,500 plus 61.30)
  5,645.50
• Apply Indirect Cost Rate x
  72.57
• Indirect Cost Assessment (5,645.50 times
  72.57) 4,096.94

• Indirect cost assessment posted to project as
  O.E.costs
• Project EA FS Program Object
  Indirect Cost Assessment
• R 20.10. 093
  4,096.94

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How are indirect costs assessed to SB45 Projects?

• Indirect Cost Assessment on a SB45 project
  
• Project Direct Labor cost 3,500.00
  
• Apply Payroll Reserve Rate x
  61.30
• Loaded Labor (3,500 plus 61.30)
  5,645.50
• Apply Indirect Cost Rate x
  44.70
• Indirect Cost Assessment (5,645.50 times
  44.70) 2,523.54

• Indirect Assessment posted to project as
  O.E.costs
• Project EA FS Program Object
  Indirect Cost Assessment
• T 20.10. 193
  2,523.54

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Who is impacted by ICRP?

• Resource Managers and Project Managers

• Projection and budget estimates

• Planning and allocating resources

• Project management.

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Questions?
Jack Kelsey 916-227-4298
Nia Jiang 916-227-9238