This section provides details to assist both CoC and ESG programs better understand indirect costs and how they can be calculated and charged under these programs. For more information, please see the HUD Indirect Cost Toolkit for CoC and ESG programs.
All costs can be classified as either ‘direct’ or ‘indirect,’ and the cost type governs how they are allocated. The following are examples of direct and indirect costs:
Looking for definitions of the common CoC and ESG Program terms referenced throughout the Virtual Binders?
Due to the diverse characteristics and accounting practices of non-profit organizations, it is not possible to specify the types of cost that may be classified as indirect cost in all situations. However, a cost may not be allocated as an indirect cost if any similar costs have been assigned as a direct cost.
State/local governments’ indirect costs are normally charged to federal awards by the use of an approved indirect cost rate. A separate indirect cost rate(s) is usually necessary for each department or agency of the governmental unit claiming indirect costs under federal awards.