Friends,

Our federal F&A rate is a salaries, wages, benefits application.  Like some of you, my institution waives partially, and sometimes fully, indirect recovery once in while either because the project is worthy or the funder will not allow recovery.

We have also put into effect another 'minimum' F&A rate.  When possible we collect our federal rate, but when not possible we request the project collect at least 10% of total direct costs.

One of our funding agencies is performing an internal audit and has disallowed payment of indirect costs to us based on the internal audit.  They are claiming the indirect rate was applied to direct costs that are excluded from application of the rate, i.e. modified total direct costs.  Our contract with this state agency budgets and identifies a 10% TDC application.

While researching the issue, it occurred to me that the OMB's do not reference a TDC rate at all.  Does this lack of reference negate the fact that I can EVER ask for a TDC rate on any federal or passthrough award?  Even though we have set a minimum rate of 10% TDC, will it always and forever be considered an MTDC rate when applied to a federal award?  Would we be better off instituting a minimum MTDC rate?

I do believe the agency has an obligation because they approved and endorsed an agreement they are now backing out of.  But, due to the fact the reimbursement involved is less than $10,000, it might not be worth fighting about.

I would appreciate your thoughts.

Terri

Terri L. Fayle
Assistant Director, OSP
University of Central Missouri
Administration 315
Warrensburg, MO  64093
660-543-8165
xxxxxx@ucmo.edu

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