September 26, 2014
TO THE ADMINISTRATOR ADDRESSED
Subject: J-2 Schedule of Expenditures for the Computation of Indirect Costs in the Annual Financial and Compliance Report
The Texas Education Agency (TEA) previously used the submission of a J-2 Schedule of Expenditures for the Computation of Indirect Costs (J-2) in the Annual Financial and Compliance Report to determine a federal indirect cost rate for school districts as required by the Financial Accountability System Resource Guide (FASRG), Module 1–Financial Accounting and Reporting (FAR), Section 1.6.1–Indirect Cost Rates. Effective September 1, 2014, the TEA no longer uses the submission of the J-2 schedule and its contents to determine the federal indirect cost rate for school districts. In addition, the electronic submission of the J-2 schedule remains optional according to the Electronic Report Submissions Standards referred to in the FASRG, Module 7–Data Collection and Reporting.
School districts in need of a federal indirect cost rate must now request the rate through a new Indirect Cost Rate Proposal as explained in the Division of Federal Fiscal Compliance and Reporting’s September 16, 2014, To The Administrator Addressed letter titled New Process for Indirect Cost Rates 2014 (http://www.tea.state.tx.us/index4.aspx?id=25769817604).
These changes only apply to school districts; they do not apply to 501(c)(3) nonprofit charter holders, governmental charter holders, or college and university charter holders.
Director, Division of Financial Compliance