1. Q: What is ICR?
A: "ICR" stands for "Indirect Cost Recovery." ICR is a mechanism that allows a CS to recover costs associated with running an organization that cannot be directly linked and billed to a specific project.
2. Q: What is NICRA?
A: "NICRA" stands for "Negotiated Indirect Cost Recovery Agreement." This is an agreement that determines the rate and the base of application for which a CS can recover indirect costs. USAID typically takes the lead on negotiating these agreements. USDA will accept a NICRA rate as determined by USAID. When a CS has no USAID-determined rate, USDA will allow the CS to charge a maximum rate of 10% on ITSH as well as each direct administrative cost item of the program budget except capital expenditures over $5,000.
3. Q: What can NICRA be applied against?
A: Like USAID food aid agreements, the CS may collect ICR on allowable items in accordance with their agreement. This could include direct administrative costs and other costs related to its activities. This is a new USDA policy applicable to all 2002 food aid agreements.
For a CS with a negotiated ICR agreement, the USAID negotiated rate and base will apply.
For a CS without a negotiated ICR agreement, the USDA maximum of 10% will apply. NICRA will not be applied on individual capital expenditures costing more than $5,000. NICRA will be applied on line items totaling more than $5,000 as long as no individual item purchased costs more than $5,000.
4. Q: Will the NICRA expansion cover all agreements?
A: The expansion of NICRA to cover direct administrative costs and other project costs applies to all 2002 agreements and is not retroactive to agreements signed prior to 2002.
5. Q: If the NICRA allows application against the monetization activities, is the CS required to submit additional information to USDA?
A: Yes. Under the new NICRA policy, the CS must submit itemized budgets that provide sufficient detail to ensure the appropriate application of NICRA. USDA will continue to require detailed budgets for administrative expenses and will now require a listing of project expenses if NICRA is applicable.
6. Q: On what may I spend the NICRA allocation?
A: The NICRA allocation is intended to cover overhead costs that cannot be linked to a specific grant or program. The application of NICRA and the use of the reimbursement depends on the accounting system of the CS.
7. Q: Can a CS request and receive additional NICRA funds if actual NICRA rates replace any provisional rates in effect when the agreement was signed?
A: A CS can request additional NICRA funds if its rate increases; however, due to fiscal year program constraints, CCC may not be able to accommodate the request. This is especially true with CCC funding for dollar administrative expenses, which cannot exceed $10.0 million. As for increased funding through monetization funds, CCC may be able to more easily accommodate this request; however, CCC’s response will rely on the CS’s ability to show that removing project funds will not adversely affect the projects.
8. Q: If USAID’s calculation decreases the NICRA rate, does the CS have to recalculate its NICRA and return overpayments to CCC?
A: In the case of dollars from CCC, if the NICRA rate declines and all of the dollars are not expended, we would subtract the remaining dollars from the final cash disbursement. Note, this subtracted figure should include ICR since it is applied at the time of actual expenditure. In the case of monetization dollars, we would require that any excess be put into the approved projects.