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NOFA Q&A

Question

7/27/2016
Please provide further clarification on indirect vs administrative rates.

The OMB Guidance explicitly requires pass-through entities and all federal agencies to reimburse a nonprofit’s indirect costs by applying the nonprofit’s federally negotiated indirect cost rate, if one already exists. If a negotiated rate does not yet exist, then nonprofits are empowered either to request negotiating a rate or to elect the default rate of 10 percent of their modified total direct costs (MTDC). As a result of this newer guidance, LAHSA allowed agencies to request 10% admin on the most recent CES for singles and youth RFP. Can you clarify why only 7% is allowed for this RFP?

Answer

The 7% limitation is for Administration, not the indirect cost rate. HUD currently only funds up to 7% for administration.