A Plain Language Guidance Document

Federal grant recipients and subrecipients often face confusion about who can do what when it comes to indirect cost rates. This plain-language reference tool lays it out clearly: what funders and PTEs can do (such as accept a NICRA or allow the de minimis rate) and what they can’t do (like negotiating rates without authority or capping ICRs without legal basis). It also includes a section for nonprofits that administer federal or state funds, clarifying their specific responsibilities and limits.

Whether you’re a public agency, nonprofit intermediary, or direct recipient, this tool helps clarify your role and stay compliant with 2 CFR 200.332 and 200.414.

This document Includes:
Plain-language breakdown of allowable and prohibited actions
Guidance for funders and PTEs with or without federal delegation
Key citations from 2 CFR 200.332 and 200.414
Special note for nonprofit funders

Misunderstanding indirect cost rate rules can lead to noncompliance, audit findings, or even disallowed costs. Funders and PTEs often unintentionally overstep by negotiating rates they don’t have the authority to issue, or denying legitimate cost recovery to subrecipients. This tool helps prevent those missteps by making the rules crystal clear.