SECTION 109.3003. Indirect Cost Rates

(a) Pursuant to authorization in 34 Code of Federal Regulations (CFR), §75.561(b) and §76.561(b), the Texas Education Agency (TEA) has been delegated the authority by the United States Department of Education (USDE) to issue indirect cost rates to local educational agencies (LEAs) and education service centers (ESCs).

(b) Pursuant to 34 CFR, §75.561(b) and §76.561(b), to recover any indirect costs for the administration of federal grants, an entity must have an approved indirect cost rate. Indirect cost rates will be issued for a one-year period from July 1 to June 30. A new indirect cost rate must be requested each year.

(c) For the one-year period an entity has been issued an indirect cost rate, it can claim indirect cost revenue on applicable grants during that period. As indirect cost revenues are earned in the Special Revenue Fund on federally funded grants, these revenues can be transferred from the Special Revenue Fund to the General Fund. After the indirect cost revenue has been recorded in the General Fund, the revenues can be used for any legal purpose.

(d) Guidance concerning the process for requesting an indirect cost rate for entities where TEA is the cognizant agency, including LEAs and ESCs, has been developed by TEA in conjunction with federal statutes and guidance from USDE. The definitions, standards, and procedures to request an indirect cost rate are outlined in the Indirect Cost Rate Guidance Handbook provided in this subsection.

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(e) Guidance provided in the handbook described in subsection (d) of this section will be updated as necessary by the commissioner of education to align with subsequent updates, modifications, and amendments to the statutory authority and USDE guidance.

(f) To the extent that this section conflicts with any other commissioner or State Board of Education rule, including the Financial Accountability System Resource Guide, the provisions of this section control.

Source Note: The provisions of this §109.3003 adopted to be effective February 26, 2014, 39 TexReg 1152; amended to be effective June 29, 2021, 46 TexReg 3878