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<br />Preparedness Grants Manual <br />.If the entity is a non-governmental entity (e.g., Institutions of Higher Education/hospital, nonprofit <br />organization, etc.), and is a subrecipient, indirect cost rate procedures are outlined in 2 C.F.R. § <br />200.332(a)(4) and Appendices III, IV, IX to Part 200. These types of entities may either use the <br />de minimis rate or negotiate a rate with the pass-through entity. <br />.If the subrecipient is a state or local governmental entity, indirect cost rate procedures are <br />established in Appendix VII to Part 200. <br />o Per Paragraph D.1.b. of Appendix VII, state or local governmental entities receiving grant <br />funds must develop an indirect cost rate proposal. <br />‒If the state or local entity receives more than $35 million in grant funding in a fiscal year, <br />the proposal must be approved by the cognizant agency. <br />‒If a state or local entity receives $35 million or less in grant funding in a fiscal year, they <br />must develop an indirect cost rate proposal, but that indirect cost rate proposal does not <br />need to be approved by the cognizant agency. <br />.If a state or local governmental entity wants to use the de minimis rate (instead of developing an <br />indirect cost rate proposal), they can request a case-by-case exception from FEMA (per 2 C.F.R. § <br />200.102(b)). <br />17