2016 Q4 ISSUE COSTTREE CAPTURE. 07
Did you know that you can also use a cost plan as a strategic tool? Whether you're pursuing grants from a private grantor or a governmental agency, preparing a cost plan can help you determine which grants are best for you. By preparing a cost plan before you even start your grant applications, you'll be able to strategically plan for things like what staff you may need to hire to support the grant’s requirements. More importantly, you’ll know if you can afford the overhead costs for any grant you’re interested in by comparing your actual indirect rate percentage against the overhead cap outlined by the grantor—enabling you to pass on a grant that could have been detrimental to your agency.
In a perfect world, accepting grant funding should never have negative results. Preparing a cost plan can help minimize that risk.
A cost allocation plan is a tool that is most commonly used to calculate the indirect costs of an agency for overhead reimbursement and cost analysis.
You’ve probably heard of recent changes to the OMB Uniform Guidance (2 CFR Part 200), also known as the Omni-Circular. These changes have made it easier to receive the 10 percent de minimis indirect cost rate you are entitled to file for. But in most cases, we’ve found that overhead costs for an agency are actually closer to 40 percent. Instead of filing for the 10 percent, check the overhead cap in your grant’s requirements to see if you are able to recoup a higher amount. If so, the only way you’ll be able to do this is by preparing a cost allocation plan to help you accurately calculate and justify your true costs to your grantor.
Even if you are already creating a cost plan, you may not be using it to its full capacity. If you will be submitting your plan to a governmental agency, you will want to be fully compliant with the OMB Uniform Guidance so you are not leaving money on the table. When choosing the way to prepare your cost plan, it’s important to do research, and use a platform that will help you calculate the true cost of operations so your agency receives the full benefits of grant funding.
What Is a Cost Allocation Plan?
Strategizing with a Cost Plan