(A) (1) Direct costs are those costs that can be identified specifically with a particular final cost objective, such as a federal award, or other internally or externally funded activity, or that can be directly assigned to such activities relatively easily with a high degree of accuracy.
(2) These costs may include: salaries and fringe benefits of employees working directly on a grant-funded project; purchased services contracted for performance under the grant; travel of employees working directly on a grant-funded project; materials, supplies, and equipment purchased for use on a specific grant; and infrastructure costs directly attributable to the program (such as long distance telephone calls specific to the program, and the like).
(B) (1) Indirect costs are those that have been incurred for a common or joint purpose benefitting more than one cost objective and are not readily assignable to the cost objectives specifically benefitted without effort disproportionate to the results achieved. Costs incurred for the same purpose in like circumstances shall be treated consistently as either direct or indirect costs.
(2) These costs may include: general data processing, human resources, utility costs, maintenance, accounting, and the like.
(3) Federal education programs with supplement not supplant provisions must use a restricted indirect cost rate. In a restricted rate, indirect costs are limited to general management costs. General management costs do not include divisional administration that is limited to one component of the city, the City Council, compensation of the Clerk-Treasurer, compensation of the Mayor, and operation of the immediate offices of these officers.
(4) The salaries of administrative and clerical staff normally should be treated as indirect costs. Direct charging of these costs may be appropriate only if all of the following conditions are met:
(a) Administrative or clerical services are integral to a project or activity.
(b) Individuals involved can be specifically identified with the project or activity.
(c) Such costs are explicitly included in the budget or have the prior written approval of the federal awarding agency.
(d) The costs are not also recovered as indirect costs.
(C) Where a federal program has a specific cap on the percentage of administrative costs that may be charged to a grant, that cap shall include all direct administrative charges as well as any recovered indirect charges.
(D) Effort should be given to identify costs as direct costs whenever practical, but allocation of indirect costs may be used where not prohibited and where indirect cost allocation is approved ahead of time by the Indiana State Board of Accounts or the pass-through entity (federal funds subject to 2 C.F.R. Part 200 pertaining to determining indirect cost allocation).
(Ord. 05-2023, passed 6-27-23)