Indirect Cost

Calculation of Indirect Cost Rates

Indirect cost rates are calculated each year for all school districts, educational cooperatives, and open-enrollment charter schools.  These rates are based on expenditure data from the second-preceding fiscal year using a carryforward methodology.

Beginning in 2015-16, expenditures on subawards will be treated differently due to changes in these calculations prescribed by the federal agency.  Each LEA will be required to submit a list of these expenditures to FGM.  Any  subaward expenditure amounts above $25,000 will be excluded from the rate calculation.  They should also be excluded from the application of the rate by the LEA when recouping indirect costs.  This methodology replaces a previous practice of excluding expenditures above $25,000 for all purchased services.

  1. ADE delegation agreement with USDE (PDF)
  2. Subaward Examples (PDF)
  3. Subaward Reporting Form (XLSX)
  4. 2020-21 School District Rates (PDF)
  5. 2020-21 Educational Services Cooperative Rates (PDF)
  6. 2020-21 Open Enrollment Charter Rates (PDF)

Application of Indirect Cost Rates

Indirect costs are used to recover expenses related to a federal program that cannot be charged directly. This recovery is still subject to the LEAs budget restrictions. This is a working excel document to help calculate the actual amount of funds the district can take for indirect costs.                

  1. Calculating Indirect Costs with Actual Expenditures (XLSX)

Prior Year Indirect Cost Rates

Districts, charters and educational cooperatives charging indirect costs must keep documentation showing indirect cost rates for audit purposes. The rates listed below are for historical purposes and should not be used on current year expenditures.

  1. 2019-20 School District Rates (PDF)
  2. 2019-20 Educational Services Cooperative Rates (PDF)
  3. 2019-20 Open Enrollment Charter Rates (PDF)

For more information, please contact:

April Cooper, Federal Funding
Phone:  501-683-5291
Mahoganey Franklin, Federal Funding
Phone:  501-682-4482
Amy Thomas, Federal Finance Coordinator
Phone:  501-682-3636