Understanding your:
Fixed With Carry Forward Indirect Cost Rates
For Use in FY08-09 (based on FY06-07 ADE data)
The concept behind a “Fixed With Carry Forward Indirect Cost Rate” is that an accurate Indirect Cost Rate is produced for FY08-09 by first looking at the ADE data supplied in FY06-07 (what you reported as direct and indirect costs of your grants), and then looking at the Indirect Cost Rates made available for you to use in FY06-07 (based on FY04-05 ADE data). This method of calculation compares what you were able to use as an Indirect Cost Rate in FY06-07, and compares that rate to what was actually reported as Indirect Costs in the FY06-07 ADE data.
This worksheet requires you to look at the Indirect Cost Rate Worksheets from previous years. These worksheets are published on the CDE website, under school finance at:
http://www.cde.state.co.us/cdefinance/icrc.asp
Reviewing these worksheets is necessary to understand how the calculation works.
1. Look at the Direct and Indirect Costs you reported in FY04-05; this data drove the Indirect Cost Rates for use in FY06-07.
Direct = ______(a)
Indirect = ______(b)
2. The Restricted Rate produced for use in FY06-07 based on this ADE data was:
______(c)
3. Now look at the Direct and Indirect costs reported in the FY06-07 ADE data file.
Direct = ______(d)
Indirect = ______(e)
There is a Carry Forward Figure from the FY04-05 ADE data that is used in conjunction with FY06-07 ADE data to produce the Indirect Cost Rate for use in FY08-09.
(Carry Forward from your FY04-05 ADE data) = ______(f)
______(e) + ______(f) = ______(g)
The result (g) is considered to be what should have recovered as Actual Indirect Costs in FY06-07.
4. Take the Actual Direct Costs reported for FY06-07 (d) and multiply by the Restricted Rate used (made available for use) in FY06-07 (c),
______(d) x ______(c) = ______(h)
5. The result (h) is called the “Carry Forward”. Compare this Carry Forward figure (h) to the actual Indirect Costs reported in FY06-07 (e)
6. What is the difference?
______(g) - ______(h) = ______(i)
7. If the difference (i) is a negative dollar amount, you have an “Over Recovery” to be used in the Fixed with Carry Forward Calculation. This is called an “over recovery” because it is more than what was actually reported for Indirect Costs in FY06-07 (e). The assumption is that more was recovered than what was actually reported as Indirect Costs (two years later: Actual FY06-07 ADE Data). In this scenario it is common to see Indirect Cost Rates decrease.
8. If the difference (i) is a positive dollar amount, you have an “Under Recovery” to be used in the Fixed with Carry Forward Calculation. This is called an “under recovery” because it is less than what was actually reported for Indirect Costs in FY06-07 (e). The assumption is that less was recovered than what was actually reported as Indirect Costs (two years later: Actual FY06-07 ADE data). In this scenario it is common to see Indirect Cost Rates increase.
9. Now add (i) which is the Under or Over Recovery figure, to the Indirect Costs reported in FY06-07
______(i) + ______(e) = ______(j)
10. The Adjusted Indirect Cost figure is (j). Divide the Adjusted Indirect Cost figure (j) by the Direct Costs reported in FY06-07 (d)
______(j) / ______(d) = ______(k)
11. Multiply (k) by 100 and carry to two decimal places. (k) Is the Fixed with Carry Forward Indirect Cost Rate for use in FY08-09.
______(k) x 100 = ______%
Truncate (round up): ______%