Utah Department of Administrative Services Office of Administrative Rules

Utah Administrative Code

The Utah Administrative Code is the body of all effective administrative rules as compiled and organized by the Division of Administrative Rules (see Subsection 63G-3-102(5); see also Sections 63G-3-701 and 702).

NOTE: For a list of rules that have been made effective since January 1, 2017, please see the codification segue page.

NOTE TO RULEFILING AGENCIES: Use the RTF version for submitting rule changes.

R277. Education, Administration.

Rule R277-424. Indirect Costs for State Programs.

As in effect on January 1, 2017

Table of Contents

R277-424-1. Definitions.

A. "Board" means the Utah State Board of Education.

B. "Direct costs" means costs which can be easily, obviously, and conveniently identified by the Utah State Office of Education with a specific program.

C. "Indirect costs" means the costs of providing indirect services. Restricted and non-restricted indirect costs are defined in R277-425, "Budgeting, Accounting and Auditing Handbook for Utah School Districts."

D. "Indirect Services" means services which cannot be identified with a specific program.

E. "LEA" means a local education agency, including local school boards/public school districts and charter schools.

F. "Non-restricted indirect cost rate" means a rate assigned to each LEA annually, based on the ratio of non-restricted indirect costs to direct costs as reported in the annual financial report for the specific LEA.

G. "Restricted indirect cost rate" means a rate assigned to each LEA annually based on the ratio of restricted indirect costs to direct costs as reported in the annual financial report for the specific LEA.

H. "Unallowable costs" means expenditures directly attributable to governance. Governance includes salaries and expenditures of the office of the superintendent, the governing board, election expenses, and expenditures for fringe benefits which are associated with unallowable salary expenditures.

R277-424-2. Authority and Purpose.

A. This rule is authorized by Article X, Section 3 of the Utah Constitution which vests general control and supervision of public education in the Board, Section 53A-1-402(1)(e) which directs the Board to adopt rules for financial, statistical, and student accounting requirements, and Section 53A-1-401(3) which allows the Board to adopt rules in accordance with its responsibilities.

B. The purpose of this rule is to establish Board standards for claiming indirect costs for state programs.

R277-424-3. Standards.

A(1) LEAs may charge indirect costs to state funded programs.

(2) The Board shall not authorize or pay indirect costs to higher education institutions for state funded contractual work.

B. Prior to the beginning of each fiscal year, the Utah State Office of Education publishes a schedule of the indirect cost rates for state programs. The schedule is developed from data gathered from the Annual Financial Reports submitted by the LEAs. Each program schedule shows whether or not the restricted or non-restricted indirect cost rate applies and whether or not indirect costs are allowable or applicable.

C. Recovery of indirect costs is subject to availability of funds. If a combination of direct and indirect costs exceeds funds available, then the LEA may not recover the total cost of the project or program. Recovery of indirect costs for state programs is optional for LEAs.

D. Indirect costs for state programs may be recovered only to the extent that direct costs were incurred. The indirect cost rate is applied to the amount expended, not to the total grant, in order to determine the amount for indirect costs.


education finance

Date of Enactment or Last Substantive Amendment

November 8, 2012

Notice of Continuation

September 14, 2012

Authorizing, Implemented, or Interpreted Law

Art X Sec 3; 53A-1-402(1)(f); 53A-1-401(3)

Additional Information


For questions regarding the content or application of rules under Title R277, please contact the promulgating agency (Education, Administration). A list of agencies with links to their homepages is available at http://www.utah.gov/government/agencylist.html or from http://www.rules.utah.gov/contact/agencycontacts.htm.