Indirect Cost Rates
The US Department of Education (USDE) has given TEA authority to issue indirect cost rates for independent school districts (districts), 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.
TEA issues two indirect cost rates to local educational agencies (LEAs), a restricted rate and an unrestricted rate.
- Restricted Rate - 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 Rate - 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 Districts
For school year 2020-2021 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- No indirect cost rate extensions are allowed, and all indirect cost rate extensions beyond 2017-2018 were rescinded.
- Indirect cost rates must be requested by districts every year, and then calculated by TEA every year.
For further information on the updated ICRP data collection process, please review the November 3, 2022, To The Administrator Addressed letter (TAA) and the Indirect Cost Rate Guidance Handbook.
ICRP Additional Costs Workbook (ACW) and Instruction Manual
The district ICRP and ACW have been updated. To assist districts, 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, districts are asked to provide a small amount of additional costs data to TEA through the submission of an ICRP ACW. Districts can easily obtain the additional costs data by running simple queries within their financial accounting systems. Districts will not be required to analyze or classify any costs in the ICRP ACW.
- ICRP Additional Costs Workbook (Excel)
- ICRP Additional Costs Workbook (PDF) not for completion - Coming Soon!
- ICRP Additional Costs Workbook Instruction Manual (PDF)
- ICRP Additional Costs Workbook Frequently Asked Questions (FAQs)
TEA has developed a PowerPoint training module explaining the process and instructions for completing the ICRP ACW which may be accessed here:
- ICRP Additional Costs Workbook PowerPoint Training (PP)
- ICRP Additional Costs Workbook PowerPoint Training (PDF)
The procedure requires that districts must request indirect cost rates for school year 2023-2024 through the submission of the ICRP ACW. The submission deadline for the ICRP ACW is January 19, 2023. Any district that does not submit an ICRP ACW by January 19, 2023, may not be issued indirect cost rates for 2023-2024.
Reviewing, Approving, and Certifying the ICRP
The ICRP will be available in Spring 2023 in the secure GFFC Reports and Data Collections application (accessible through TEAL). Districts are required to review the completed ICRP data and the calculated indirect cost rates contained within the ICRP.
Instructions for completing the district 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 indirect cost rates from TEA by submitting the Request for an Indirect Cost Rate for Charter Schools for 2023-2024 Survey. A TAA letter will notify open-enrollment charter schools of the survey and the deadline to submit the survey request to receive indirect cost rates for the 2023-2024 school year.
Indirect Cost Rate Utilization Survey: due from all LEAs by September 15, 2023
The Texas Education Agency (TEA) serves as the cognizant agency and is responsible for issuing indirect cost rates to local educational agencies (LEAs) in the state. To perform this function, TEA is required to periodically review and update its agreement with the United States Department of Education (USDE), and the Federal Fiscal Compliance and Reporting (FFCR) Division is currently in the process of collecting data required to be submitted to USDE.
For the new agreement, USDE has requested data on indirect cost rate utilization by LEAs. To obtain this required data, the FFCR Division is conducting a brief survey to determine if LEAs claimed indirect costs in fiscal years (FYs) 2020 (school year 2019–2020), 2021 (school year 2020–2021), and/or 2022 (school year 2021–2022), and on what type(s) of grants the indirect costs were claimed.
Therefore, completion/submission of the survey by September 15, 2023, is required of all LEAs (independent school districts and charter schools) that have been issued indirect cost rates in any of the last three years (FYs 2020, 2021, or 2022).
- Indirect Cost Rate Utilization Survey (survey link)
- Indirect Cost Rate Utilization Survey (PDF Version)
Current and Prior-Year Indirect Cost Rates for Open Enrollment Charter Schools, Districts, and Education Service Centers
The following links lead to current and prior-year indirect cost rates for districts and open-enrollment charter schools:
- 2024 District and Charter School Indirect Cost Rates, effective 7/1/2023 - 6/30/2024
- 2023 District and Charter School Indirect Cost Rates, effective 7/1/2022 - 6/30/2023
- 2022 District and Charter School Indirect Cost Rates, effective 7/1/2021 - 6/30/2022
- 2021 District and Charter School Indirect Cost Rates, effective 7/1/2020 - 6/30/2021
- 2020 District and Charter School Indirect Cost Rates, effective 7/1/2019 - 6/30/2020
- 2019 District and Charter School Indirect Cost Rates, effective 7/1/2018 - 6/30/2019
- 2018 District and Charter School Indirect Cost Rates, effective 7/1/2017 - 6/30/2018
The following links lead to current and prior-year indirect cost rates for education service centers:
- 2024 Education Service Center Rates, effective 7/1/2023 - 6/30/2024
- 2023 Education Service Center Rates, effective 7/1/2022 - 6/30/2023
- 2022 Education Service Center Rates, effective 7/1/2021 - 6/30/2022
- 2021 Education Service Center Rates, effective 7/1/2020 - 6/30/2021
- 2020 Education Service Center Rates, effective 7/1/2019 - 6/30/2020
- 2019 Education Service Center Rates, effective 7/1/2018 - 6/30/2019
- 2018 Education Service Center Rates, effective 7/1/2017 - 6/30/2018
Archived Indirect Cost Rates
Indirect cost rates dating to 2013 are available for open-enrollment charter schools, districts, and Education Service Centers.