Final Regulations on Direct Grant Programs

The Office of the Chief Financial Officer at the U.S. Department of Education (ED) posted final regulations regarding Direct Grant Programs today in the Federal Register. Through these regulations, ED’s prior regulations governing the determination and recovery of indirect costs by grantees are amended to address procedural aspects related to the establishment of temporary indirect cost rates.

The final regulations specify the temporary rate that will apply to grants generally and clarify how indirect costs are determined for a group of applicants that apply for a single training grant. These regulations are effective January 7, 2008.
According to ED, these final regulations impose no additional burdens on applicants for discretionary grants or recipients of those grants. The final regulations merely specify the rate at which grantees can recover indirect costs during a temporary period when the grantee does not have an indirect cost rate recognized by the Federal Government and establish procedural requirements regarding temporary indirect cost rates. While these final regulations prohibit a grantee from recovering indirect costs if the grantee has not submitted its indirect cost proposal within the 90 days after the date ED issues the Grant Award Notifications, the burden and timing of submitting an indirect cost rate proposal under the procedures in the Federal cost principles do not change at all.

You can view the Federal Register notice at http://www.ed.gov/legislation/FedRegister/finrule/2007-4/120707a.html.