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Financial Management

What is the Modified Total Direct Cost (MTDC)?

Modified Total Direct Costs (MTDC) is the base to which indirect costs rates are applied.  MTDC includes direct salaries and wages, applicable fringe benefits, materials and supplies, services, travel, and up to the first $25,000 of each subaward.  MTDC excludes equipment, capital expenditures, charges for rent, tuition remission, participants support costs and the portion of each subaward in excess of $25,000. 

How can I request indirect costs?

You do not have to request indirect costs, but if you choose to, it is allowable.  You have two options when requesting indirect costs: using a formal Indirect Cost Rate Agreement (ICRA) or using a “De Minimis” rate.  The ICRA is a formal rate agreement that an organization has applied for and received from the federal cognizant agency (DCJS does not approve ICRAs).  Organizations must have a letter or other documentation that lists the federally-negotiated rate.

What is an indirect cost rate?

An indirect cost rate is a tool for determining the proportion of indirect costs each program should bear. It is the ratio (expressed as a percentage) of the indirect costs to a direct cost base. Organizations who wish to request indirect costs, that already have a negotiated rate with a federal cognizant agency, must use that negotiated rate in the grant application request, if indirect costs are requested. If the negotiated rate is expired, the applicant can apply for a one-time extension of up to four years without further negotiation.

What are indirect costs?

Indirect costs are those that have been incurred for common or joint objectives and cannot be readily identified with a particular final cost objective. Direct cost of minor amounts may be treated as indirect costs under the conditions described in §200.413 Direct costs paragraph (d).  After direct costs have been determined and assigned directly to awards or other work as appropriate, indirect costs are those remaining to be allocated to benefitting cost objectives.

What are direct costs?

Direct costs are "those costs that can be identified specifically with a particular sponsored project relatively easily with a high degree of accuracy." For example, the salary of a direct service provider or the purchase of specific supplies for a specific project are direct costs.

They must be:

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