Indirect Cost Rates

The US Department of Education (USDE) has given TEA authority to issue indirect cost rates for independent school districts (ISDs), open-enrollment charter schools, and certain other government entities.  To recover any indirect costs, these grantees must request and receive a new indirect cost rate for every school year.

Grantees that receive their indirect cost rates from TEA use the rates to recover their organization-wide administrative costs of managing federal grants, such as costs related to accounting, budgeting, purchasing, auditing, and payroll processing.  TEA allows these grantees to use indirect cost rates to recover the organization-wide administrative costs of managing state grants as well.

Rate Types

TEA issues two indirect cost rates to LEAs, a restricted rate and an unrestricted rate.

  • Restricted Rates - The restricted indirect cost rate is used for grant programs where the supplement, not supplant requirement applies. The majority of the grants that TEA administers are subject to supplement, not supplant, and the restricted indirect cost rate is applied to them.
  • Unrestricted Rates - The unrestricted indirect cost rate is applied to grants not subject to the supplement, not supplant requirement.

Updates to the Indirect Cost Rate Proposal (ICRP) Process for ISDs

For fiscal years 2018-2019 and beyond, TEA received a new Delegation Agreement from USDE that specifies the USDE-approved indirect cost rate calculation methodology.

In the delegation agreement, the following provisions are mandated by USDE:

  • No indirect cost rate extensions are allowed, and all indirect cost rate extensions beyond 2017-2018 are rescinded.
  • Indirect cost rates must be requested by ISDs every year, and then calculated by TEA every year.

For further information on the updated ICRP data collection process, please review the November 29, 2018, To The Administrator Addressed letter (TAA).

ICRP Additional Costs Workbook (ACW) and Instruction Manual 

The ISD ICRP and ACW have been updated.  To assist ISDs, TEA has developed a data collection methodology that populates PEIMS data into an ICRP.  However, a small amount of the required ICRP data cannot be obtained through PEIMS.  Therefore, ISDs are asked to provide a small amount of additional costs data to TEA through the submission of an ICRP ACW.  ISDs can easily obtain the additional costs data by running simple queries within their financial accounting systems.  ISDs will not be required to analyze or classify any costs in the ICRP ACW.

Training Module

    TEA has developed a PowerPoint training module explaining the process and instructions for completing the ICRP ACW which may be accessed here:

    Submission Deadline 

    The procedure requires that ISDs must request an indirect cost rate for school year 2019-2020 through the submission of the ICRP ACW.  The submission deadline for the ICRP ACW is January 18, 2019.  An ISD that does not submit an ICRP ACW by January 18, 2019, may not be issued an indirect cost rate for 2019-2020.

    For detailed submission information, please refer to the November 29, 2018, TAA letter.

    Reviewing, Approving, and Certifying the ICRP

    The ICRP is available in the secure GFFC Reports and Data Collections application (accessible through TEAL). ISDs are required to review the completed ICRP data and the calculated indirect cost rates contained within the ICRP.

    Instructions for completing the ISD review/approval/certification process are available in the Indirect Cost Rate Proposal Certification Instructions for School Districts.

      Requesting an Indirect Cost Rate for Open-Enrollment Charter Schools 

      Open-enrollment charter schools request an indirect cost rate from TEA by submitting the Request for an Indirect Cost Rate for Charter Schools for 2019-2020 Survey. Refer to the February 14, 2019 TAA letter which notifies open-enrollment charter schools of the survey and the March deadline to submit the survey request to receive indirect cost rates for the next school year.


      Current and Prior-Year Indirect Cost Rates for Open Enrollment Charter Schools, ISDs, and Education Service Centers

      The following links lead to current and prior-year indirect cost rates for ISDs and open-enrollment charter schools:

      The following links lead to current and prior-year indirect cost rates for education service centers:

      Archived Indirect Cost Rates

      Indirect cost rates dating to 2013 are available for open-enrollment charter schools, ISDs, and Education Service Centers.

      Contact Information

      Federal Fiscal Compliance and Reporting Division

      (512) 463-9127 (phone) (email)