1. Home
  2. Finance and Grants
  3. Grant Compliance and Administration
  4. Compliance and Reporting

Indirect Cost Rates

The US Department of Education (USDE) has given ÁñÁ«ÊÓÆÁ 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 ÁñÁ«ÊÓÆÁ 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.  ÁñÁ«ÊÓÆÁ allows these grantees to use indirect cost rates to recover the organization-wide administrative costs of managing state grants as well.

Rate Types

ÁñÁ«ÊÓÆÁ issues two indirect cost rates to school systems, including school districts and open-enrollment charter schools, 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 ÁñÁ«ÊÓÆÁ 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, ÁñÁ«ÊÓÆÁ 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  • No indirect cost rate extensions are allowed, and all indirect cost rate extensions beyond 2017-2018 were rescinded.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 ÁñÁ«ÊÓÆÁ every year.

For further information on the updated ICRP data collection process, please review the October 30, 2025, 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, ÁñÁ«ÊÓÆÁ 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 ÁñÁ«ÊÓÆÁ 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.

Training Module

ÁñÁ«ÊÓÆÁ 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 districts must request indirect cost rates for school year 2026-2027 through the submission of the ICRP ACW.  The submission deadline for the ICRP ACW is January 16, 2026.  Any district that does not submit an ICRP ACW by January 16, 2026, may not be issued indirect cost rates for 2026-2027.

Reviewing, Approving, and Certifying the ICRP

The ICRP will be available in Spring 2026 in the secure GFFC Reports and Data Collections application (accessible through ÁñÁ«ÊÓÆÁL). 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 ÁñÁ«ÊÓÆÁ by submitting the .  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 2026-2027 school year.

 

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:

 

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

 

  Print
Contact Information

Federal Fiscal Compliance and Reporting Division

(512) 463-9127 (phone)
compliance@tea.texas.gov (email)