Indirect Cost Guidance for Recipients of EPA Assistance Agreements

Notification Date:  August 21, 2018

Purpose:  This Recipient/Applicant Information Notice (RAIN) informs recipients and applicants of a new policy that aligns indirect costs (IDCs) under EPA assistance agreements (grants and cooperative agreements) with 2 CFR Part 200, while providing consistency and flexibility for EPA assistance agreement recipients.

Background:  The implementation of the Uniform Administrative Requirements, Cost Principles and Audit Requirements for Federal Awards at 2 CFR Part 200 revised IDC flexibilities and requirements. This policy seeks to align EPA and recipient practices with 2 CFR Part 200, while balancing the need for flexibility.

Policy Summary:  Prior to drawing down EPA funds for IDCs, and/or using unrecovered IDCs as cost-share, recipients must have an approved rate and an EPA-approved budget that includes IDCs. The policy defines different approved IDC rate types, and includes regulatory exception opportunities, that require EPA approval, on a case-by-case basis that can increase recipient options, such as:

• Use of the 10% de minimis rate, even if a recipient has had an IDC rate in the past;
• Continued use of fixed rates with carry-forward for up to four years past expiration;
• (Institutions of Higher Education Only) Use of current negotiated rate, rather than using the same rate for the life of the grant; and
• General exceptions if a recipient has been out of compliance with the IDC requirements set forth in 2 CFR Part 200.

Related Resources:

• Indirect Cost Policy for Recipients of EPA Assistance Agreements (PDF)(1 pg, 237 K)
• Indirect Cost Guidance for Recipients of EPA Assistance Agreements (PDF)(9 pp, 856 K)
• Statutory Restrictions on Indirect Costs in EPA Financial Assistance Programs (PDF)(2 pp, 110 K)
• RAIN 2018 G02 - Indirect Cost Guidance for Recipients of EPA Assistance Agreements (PDF)(1 pg, 322 K)