USAID recently revised the process for submitting provisional Negotiated Indirect Cost Rate Agreements (NICRAs). Cost and Audit Support (CAS) Division (responsible for auditing indirect costs) Chief Stephanie Snyder shared these changes during USAID’s FY2024 third-quarter Business Forecast and Partner Update Webinar (see minute 40 of the You-Tube video).
Here is a breakdown of key updates and what they mean for implementing partners (IPs).
Key Changes to the Provisional NICRA Process
- Annual submission requirement: Provisional NICRAs must now be submitted annually.
- Effective period-end date: Each provisional NICRA year-end date will be consistent with the cost accounting fiscal period.
- Flexible effective period: IPs can choose the length of the effective period for their provisional NICRAs, ranging from one to five years.
- Faster approval: USAID aims to approve provisional NICRAs within 30 to 45 days after submission.
Submission Requirements
To ensure the use of current and accurate indirect rates, USAID now requires that provisional NICRAs be submitted at least three months before the start of the new fiscal year. The following need to be included in the submission:
- Contact information: Update any changes to the point of contact or organization’s address.
- Accounting changes: Describe any changes impacting the new fiscal year.
- Indirect cost rate calculation: Provide a detailed calculation based on the most current financial data.
- Unallowable costs: Ensure unallowable costs are excluded from projected indirect cost rate(s).
- Award information: List all USAID prime awards covered under the new fiscal year.
- Prime USAID award copy: Include a signed copy of the prime USAID award with the longest period of performance.
Effective Period-End Date
All provisional NICRAs must now identify an effective period-end date, eliminating the previous “Until Amended” status. This change requires timely annual submissions of new provisional indirect cost rate proposals. If a NICRA does not cover the period of performance of a new award, IPs will need to negotiate with the award Agreements Officer or Contracting Officers, which may involve a cost analysis for the uncovered periods.
Flexible Effective Period
IPs can now choose the length of the effective period for their provisional NICRAs, from one to five years. To negotiate a multiyear provisional NICRA, IPs must provide an indirect cost rate proposal that estimates the provisional rates for each fiscal year.