1. Presented by: Freddie Isaac March 28, 2013

2.  Direct costs are those costs that can be identified specifically with a particular sponsored project.  Direct costs consist of salaries and wages, fringe benefits, material and supplies, services, travel, etc.

3.  Indirect costs are those costs that cannot be identified specifically with a particular sponsored project but are necessary to the operation of the organization and the performance of its programs.  Examples of indirect costs: operating and maintaining facilities, administrative salaries, equipment, and tuition are examples of the types of costs that are usually treated as indirect costs.

4.  Provisional rate: a temporary indirect cost pending the establishment of a final rate.  Predetermined rate: is a rate based on an estimate of costs to be incurred.  Final rate: not usually subject to adjustment.  Fixed rate: similar to predetermined rate except the rate is carried forward

6.  Who needs an indirect cost rate? ◦ Any organization in which cost can no longer be identified with a direct cost source.  Why do I need an indirect cost rate? ◦ So that the organization can have more efficient accounting records which helps with audits, and financial management.  Which agency should approve my indirect cost rate(s) and issue a Negotiation Agreement? ◦ Usually the agency you receive the most funds from.