What if my agency does not have an approved indirect cost rate agreement or our rate is expired?

If you have not submitted a proposal for an indirect cost rate (IDC) agreement you may choose one of the following options for including indirect costs in your proposed budget: (1) Select the EPA 15% Default Indirect Cost Rate for the life of the agreement, or (2) choose not to charge the indirect cost rate for the life for the agreement.

All applicants can also elect to use a de minimus rate of 15% of modified total direct costs (MTDC), which does not require the submission of an IDC proposal and/or an extension request. The grantee can simply charge 15% of MTDC as part of their submitted budget. Please note that MTDC includes all direct salaries and wages (personnel cost category), applicable fringe benefits (fringe cost category), materials and supplies (supply cost category), services, travel (travel cost category), and up to the first $50,000 of each subaward (as listed under the other cost category). MTDC excludes equipment, capital expenditures, charges for patient care, rental costs, tuition remission, scholarships and fellowships, participant support costs, and the portion of each subaward in excess of $50,000.

Tribal applicants specifically can budget for IDCs using their submitted draft rate, pending approval; see FAQ titled “If I am a Federally recognized Tribe, can I charge indirect costs?”

Similarly, exceptions to use an expired rate may be granted by EPA according to EPA IDC Policy; please see ‘how do I request a regulatory exception to use an expired ‘fixed rate with carry-forward’ IDC agreement’ FAQ for more information.