Notes

  • If a state/local governmental subgrantee is considering changing a position to direct federal funding, care must be taken to avoid supplanting (the substitution of federal funding for a general cost of government).
  • State Subgrantees
    . A state agency may be paid the state’s negotiated rate obtained from a cognizant agency as evidenced by a letter on file which is renewed annually.
  • Local and Nonprofit Subgrantees
    . Where a local government is not a primary recipient of federal funds, TxDOT will negotiate and/or monitor the subgrantee’s IDCR Plan and an annual approval letter approved by a local government containing a certification signed by a government official specifying the year applied. The rate proposal and related documentation must be made available for federal and state audit for four years after final payment and other pending matters are closed, and should be maintained annually in the subgrantee’s file. See 2 C.F.R. Part 200, Appendix IV. The rate does not have to be federally approved. TxDOT cannot routinely grant an IDCR to subgrantees. Each subgrantee must have submitted an IDCR Plan for review and acceptance.
  • Non-profit agencies must also provide an annual approval letter containing a certification signed by the Board of Directors, a CPA or an Executive Director and specifying the year applied and the rate. Local agencies, universities and contractors that have a negotiated rate by a cognizant agency may be paid that rate.
  • TxDOT and the subgrantee may mutually agree to an IDCR lower than that established by the cognizant agency. If any proposing agency has never had a negotiated indirect cost rate by a cognizant agency or TxDOT, the proposing agency may include an indirect cost rate of up to ten percent (10%) of the total amount of federal funds awarded for all direct salaries and wages, applicable fringe benefits, materials and supplies, services, travel, and subawards and subcontracts up to the first $25,000 of each subaward or subcontract.
    TxDOT will allow a subgrantee to use the 10% de minimus rate if they do not have a current negotiated rate.
  • The level of risk and exposure should be factors when determining the required oversight.
The responsibility does not end after a signed agreement or certificate is placed in the project file. TxDOT must periodically review and monitor subgrantee IDCR plans to provide reasonable assurance that the requirements are being followed. This monitoring should ensure that the plan is current and accurately reflects indirect costs.