As in effect on May 1, 2008
A. "Indirect Services" means services which cannot be identified with a specific program. All support services programs are indirect services of instruction programs.
B. "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."
C. "Direct costs" means costs which can be easily, obviously, and conveniently identified with a specific program.
D. "Restricted indirect cost rate" means a rate assigned to each school district annually based on the ratio of restricted indirect costs to direct costs as reported in the annual financial report for the specific district.
E. "Non-restricted indirect cost rate" means a rate assigned to each school district annually, based on the ratio of non-restricted indirect costs to direct costs as reported in the annual financial report for the specific district.
F. "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.
G. "Board" means the Utah State Board of Education.
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)(f), U.C.A. 1953, which directs the Board to adopt rules for financial accounting requirements, and Section 53A-1-401(3), U.C.A. 1953, which allows the Board to adopt rules in accordance with its responsibilities.
B. The purpose of this rule is to establish standards for claiming indirect costs for state programs.
A(1) If the state funding for a program is very limited and the operation of the program in the school district does not create a significant burden of extra expenditures beyond the direct cost needs of the program, no indirect costs are charged against the program for indirect services.
(2) If a program allocation is moderately large and its use of indirect services and the time necessary to run the program do not significantly affect the school district's financial operation of the program, a charge for indirect costs may be taken from the total state program allocation by the school district according to the school district restricted indirect cost rate.
(3) If a program allocation is very large and its use of indirect services and the time necessary to run the program significantly affect the school district's financial operation of the program, a charge for indirect costs may be taken from the total state program allocation by the school district according to the school district non- restricted indirect cost rate.
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 Form F-4 Financial Reports submitted by the school districts. The schedule shows for each program whether the restricted or non- restricted indirect cost rate applies or whether indirect costs are unallowable or not 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 school district may not recover the total cost of the project or program. Recovery of indirect costs for state programs is optional for school districts.
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
1987
October 5, 2007
Art X Sec 3; 53A-1-402(1)(f); 53A-1-401(3)
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