Employment and Training Administration Advisory System U.S. Department of Labor
Washington, D.C. 20210 |
CLASSIFICATION
Indirect Costs CORRESPONDENCE SYMBOL OFAM DATE August 21, 2002 |
TRAINING AND EMPLOYMENT GUIDANCE LETTER NO. 6-02
TO: |
ALL STATE WORKFORCE LIAISONS ALL STATE WORKFORCE AGENCIES ALL STATE WORKER ADJUSTMENT LIAISONS ALL ONE?STOP CENTER SYSTEM LEADS |
FROM: | EMILY STOVER DeROCCO Assistant Secretary | |
SUBJECT: | Guidance on the Recovery of Indirect Costs |
RESCISSIONS | EXPIRATION DATE |
Continuing |
and Reporting System (ICESAFARS or FARS), under the auspices of the Interstate Conference of Employment Security Agencies. OCD extended its annual SESACAS certification procedures to the ICESA/FARS accounting system, which permitted SESAs to continue to charge indirect costs to ES and UI grants without having to submit an indirect cost rate proposal to OCD each year.
Due to the variety of accounting systems available to and adopted by SESAs in recent years, ETA agrees with OCD's determination to discontinue SESACAS and FARS certification (waiver request) procedures, and only approve indirect cost/cost allocation proposals that are in full compliance with OMB Circular A-87 requirements.
4. Policy. In order for a SWA to claim indirect costs incurred on or after July 1, 2003, under a federal grant, contract, or cooperative agreement, the indirect costs must be contained in a cost allocation plan and/or indirect cost rate proposal developed in accordance with the requirements of OMB Circular A-87 and approved by the SWA's cognizant federal agency.
5. Action Required. SWAs claiming indirect costs incurred on federal grants, contracts, and cooperative agreements are required to develop and submit cost allocation plans and/or indirect cost rate proposals to the Office of Cost Determination or other cognizant federal agency in accordance with OMB Circular A-87 and this TEGL. Required documentation for cost allocation plans and indirect cost rate proposals is described in Circular A-87 and ASMB C-10. SWAs should pay special attention to Attachments C and E of Circular A-87. OMB Circular A-87 is available on the Internet at http://www.whitehouse.gov/omb/circulars/a087/a087-all.html and ASMB C-10 is available at www.hhs.gov/grantsnet/state/asmbc10.pdf.
If DOL is the cognizant agency for SWA indirect costs, the SWA shall prepare and submit indirect cost/cost allocation proposals to OCD annually for state fiscal years beginning on or after July 1, 2003. If a SWA expects to be unable to prepare and negotiate an indirect cost agreement by this date, or has already submitted its proposal, OCD is prepared to grant an extension to the beginning of the state's next fiscal year upon receipt of a written request that explains why an extension is needed. If the DOL is not the cognizant agency, the SWA shall request instructions for the preparation of indirect cost proposal(s) from the cognizant federal agency.
6. Inquiries. Questions and requests for technical assistance concerning the development of cost allocation plans and/or indirect cost rate proposals should be directed to your Regional Cost Negotiator. The Office of Cost Determination's negotiators' addresses and telephone numbers are available on the Internet in Appendix V of the Indirect Cost Rate Determination Guide for Non-profit Organizations at http://www.dol.gov/oasam/programs/guide.htm.