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<br /> <br />2 <br />Revised 9/8/2021 <br /> Dire ct and Indirect Costs: There is no universal rule for classifying certa in <br />costs as either direct or indirect (also known as Facilities &Administration <br />(F&A) costs) under every accounting system. A cost may be direct with <br />respect to some specific service or function, but indirect with respect to the <br />Federal award or other final cost objective. Therefore, it is essential that each <br />item of cost incurred for the same purpose be treated consistently in like <br />circumstances either as a direct or F&A cost in order to avoid double -charging <br />of Federal awards. Guidelines for determining direct and F&A costs char ged to <br />Federal awards are provided in 45 CFR §§75.412 to 75.419. Requirements for <br />development and submission of indirect (F &A) cost rate proposals and cost <br />allocation plans are contained in Appendices III-VII and Appendix IX to Part <br />75. <br /> <br /> Commercial (For -Profit) Organizations: Indirect Costs are allowable <br />under awards to for -profit organizations . For -profit organizations must <br />still obtain a negotiated indirect cost rate agreement which covers the <br />grant supported activities and the applicable period of performance . <br />For-profit entities which receive the preponderance of their federal <br />awards from HHS may contact the Division of Financial Advisory <br />Services (DFAS), Indirect Cost Branch, available at <br />http://oamp.od.nih.gov/dfas/indirect-cost-branch to negotiate an indirect <br />cost rate. Otherwise, for-profit organizations are limited to the 10% de <br />minimis rate in accordance with 45 CFR §75.414(f). <br /> <br /> Cost Allocation: In accordance with 45 CFR §75.416 and <br /> Appendix V to Part 75 – State/Local Governmentwide Central Service <br />Cost Allocation Plans, each state/local government will submit a plan to <br />the U.S. Department of Health & Human Services Cost Allocation <br />Services for each year in which it claims central service costs under <br />Federal awards. Guidelines and illustrations of central service cost <br />allocation plans are provided in a brochure published by the U.S. <br />Department of Health & Human Services entitled “A Guide for State, <br />Local and Indian Tribal Governments: Cost Principles and Procedures <br />for Developing Cost Allocation Plans and Indirect Cost Rates for <br />Agreements with the Federal Government.” A copy of this brochure <br />may be obtained from the HHS' Cost Allocation Services at <br />https://rates.psc.gov . A current, approved cost allocation plan must be <br />provided to CMS if central service costs are claimed. <br /> Appendix VI to Part 75 – Public Assistance Cost Allocation Plans, state <br />public assistance agencies will develop, document and implement, and <br />the Federal Government will review, ne gotiate, and approve, public <br />assistance cost allocation plans in accordance with Subpart E of 45 CFR <br />part 95. The plan will include all programs administered by the state <br />public assistance agency. Where a letter of approval or disapproval is <br />transmitted to a state public assistance agency in accordance with <br />Subpart E, the letter will apply to all Federal agencies and programs. <br />This Appendix (except for the requirement for certification) summarizes <br />the provisions of Subpart E of 45 CFR part 95. <br /> <br />DocuSign Envelope ID: 7832B0E4-F34E-430E-A3C2-1A6A14F29307