Indirect Cost Rate Initiative
In February 2019, the City of New York adopted the Health and Human Services (HHS) Cost Policies and Procedures Manual (Cost Manual) to standardize cost allocation practices for HHS contracts and Indirect Cost Rate (ICR) calculations. The Cost Manual is intended to be a living document that is updated from time to time.
The Fiscal Year 2020 Adopted Budget established an ICR Funding Initiative based on the Cost Manual, managed by the Office of Management and Budget and Mayor’s Office of Contract Services through the City Implementation Team (CIT). The initiative is intended to make it easier for nonprofits to do business with the City, as it acknowledges and pays for critical indirect costs to deliver human services. New York City was the first big city in the country to make this investment. Today, providers can receive an Accepted Indirect Cost Rate from the City of New York based on a 10% De Minimis policy, a Federal Negotiated Indirect Cost Rate Agreement (NICRA) or an Independent Accountant’s Report that validates an ICR greater than 10%. Details can be found in the Cost Manual.
The CIT established a Provider Work Group, with participation from City Council Finance, to advise on the rollout and implementation of the Funding Initiative. The details of the ICR Funding Initiative were announced on October 7, 2019, with claiming for indirect cost rates and funding opening on November 18, 2019, and closing on December 31, 2020. To provide greater access for smaller nonprofits, the Provider Work Group set forth a Conditional ICR option that offered organizations with ICRs greater than 10% more time to work towards an established ICR on the condition that they submit their documentation by the Initiative closing date.
The CIT kept the sector informed of Initiative updates through regular communications, which are contained in the Archive of Email Communications section below. The Archive of Resources also contains information and job aids that the CIT shared with the sector for assistance in completing important milestones. Among these resources is the Delta Template, which served as a basis for providers to calculate the additional ICR funding for each of their contracts. In total, 361 organizations successfully completed the process for ICR funding to receive Accepted ICRs and annual baselined funding of $94 million.
Providers that did not apply for or receive an Accepted ICR from the City by December 31, 2020 defaulted to an Accepted ICR of 10% de minimis. This default rate is effective beginning Fiscal Year 2021 and valid through Fiscal Year 2023. Organizations should continue to consult the Cost Manual to ensure that their human services cost allocations align with City guidelines.
ICR Application in FY23
The Fiscal Year 2023 Indirect Cost Rate Application Process opened on March 15, 2022 for eligible providers. Fiscal Year 2023 eligible providers are organizations that either (i) have an FY20 Accepted ICR that will be expiring on June 30, 2022, or (ii) do not yet have an Accepted ICR because the organization entered City contracting after December 31, 2020.
If your organization has an expiring Fiscal Year 2020 ICR, you will receive an email from the CIT providing next steps and more information. If you are a provider that entered City contracting after December 31, 2020 and do not have an Accepted ICR, please email us at CIT@mocs.nyc.gov for next steps.
Organizations have three possible entryways:
- Independent Accountant’s Report: Organizations choosing to pursue a rate higher than 10% through an Independent Accountant’s Report should provide their Certified Public Accountant (CPA) with a Schedule of ICR based on their most recent available schedule of functional expenses. The City offers an ICR worksheet to support providers in the development of a Schedule of ICR (see final tab in the linked worksheet). The City of New York wishes to acknowledge The New York State Society of Certified Public Accountants' Not-for-Profit Organizations Committee for its feedback on the Independent Accountant’s Report.
- Negotiated Indirect Cost Rate Agreement (NICRA)
- 10% de minimis
The Fiscal Year 2023 ICR Application Process will be available through September 1, 2022. Information about additional funding will come upon close of the application period.
The Fiscal Year 2023 Application Process is designed to establish an Accepted ICR that will be valid for three years (I.e., through Fiscal Year 2025). The Fiscal Year 2023 Accepted ICR can be used beginning July 1, 2022 for proposals and to reallocate funds for Fiscal Year 2023 budgets, in coordination with the contracting agencies.
If your organization is eligible to apply for a Fiscal Year 2023 Accepted ICR and chooses not to submit an application, it will default to a 10% De Minimis Indirect Cost Rate, effective July 1, 2022.
Providers that received an Accepted ICR in Fiscal Year 2021 have an ICR valid through Fiscal Year 2023 (June 30, 2023). The City will continue the ICR application process each year for expiring ICRs and new providers. For future fiscal years, the application process will open every January and close April 1, to align with the contract budgeting process.
FY20 and FY21 ICR Funding Amendments
For providers with Delta Templates approved in Fiscal Years 2020 or 2021, the City is issuing ICR Amendments through PASSPort, the City’s Procurement and Sourcing Solutions Portal. Additional funding through an ICR Amendment may only be used by a provider for indirect costs. Providers may contact their contracting agency for questions about their amendment. Submit an inquiry to the MOCS Service Desk for questions about PASSPort.
Using an Accepted ICR and Budget Modifications
We have received a number of questions regarding the use of budget modifications to fund Accepted ICRs. We offer the following tips and information:
- A provider may use its Accepted ICR to develop its HHS contract budget(s) pursuant to the Accepted ICR validity dates provided above.
- For budgets where providers have surplus funding in their direct costs, they may request a budget modification to reallocate funds to their indirect costs, up to their Accepted ICR.
- Providers do not need to wait for registration of their ICR Amendment in order to request a budget modification within its existing budget.
- In exercising a budget modification request, providers may use the HHS Accelerator Financials automatic budget modification, which allows for expedited budget modifications up to 10% (cumulative) of the total contract value without preapprovals or delays in invoicing.
- Budget Modifications may be made between categories of Personnel Services (PS) and Other Than Personnel Services (OTPS), maximizing budget
Please see the following instructional materials on budget modifications:
Using an Accepted ICR in RFP Proposals
Effective immediately, providers with an Accepted Indirect Cost Rate (ICR), as defined by The City of New York’s Health and Human Service Cost Policies and Procedures Manual (Cost Manual), may use their Accepted ICRs in RFP proposals. The following language will now be standard in future Health and Human Services RFPs, and released status RFPs in PASSPort will be amended to include this new language. If an RFP is missing this language, please notify the designated agency contact.
“All price and budget proposals should be prepared in accordance with The City of New York’s Health and Human Service Cost Policies and Procedures Manual (Cost Manual). For the purpose of responding to this solicitation, proposers may budget up to an Accepted Indirect Cost Rate or use the 10% de minimis Indirect Cost Rate.”
Please contact the solicitation’s issuing agency with questions about content included in the RFP or your organization's proposal.
Need help or have a question about PASSPort? Submit an inquiry to the MOCS Service Desk!
Archive of Resources
- FY23 ICR Application Process Video Webinar for existing providers with ICR rates that expire June 30, 2022 that provides information about the FY23 application process, eligibility, doors of entry, and timeline, with an interactive Q&A session.
- ICR Investment Timeline This timeline documents key milestones for the ICR Funding Initiative.
- ICR Funding Initiative FY20 Policy Video Webinar that provides more information about the implementation of the FY21 Adopted Budget and revisions to FY20 amendments. Providers may refer to this Technical Update FAQ that answers questions received during the webinar sessions.
- ICR Funding Initiative Video An overview of an October 7th Sector and City Agency Briefings, providing timelines and process for organizations to establish and claim their ICR and request funding. The Briefing Powerpoint is available here.
- FY20 ICR Amendment Calculator Excel worksheet that providers can use to calculate their FY20 ICR Amendments.
- Delta Template Job Aids Instructional materials to assist with the process of receiving, completing, and submitting the Delta Template.
- ICR Funding Initiative Provider Checklist Tool providers can use to track the completion of the steps needed to receive the ICR funding.
- Registration Tip Sheet List of tips providers can consult to support timely contract and amendment registration.
- Budget Modification Job Aids
Archive of Email Communications
Over the course of this initiative, the CIT sent weekly emails to the sector. In total, more than 60 emails were sent between September 2019 and December 2020. Please find below an archive of emails.
- March 15, 2022: FY23 ICR Application Process is now open for eligible providers!
- April 23, 2021: Important Update on ICR Funding Initiative
- March 17, 2021: FY21 ICR Funding Policy Update
- January 22, 2021: Indirect Cost Rate Amendments in PASSPort
- December 29, 2020: TODAY 5 PM! Submit Delta Templates
- December 22, 2020: December 15 Recommended Milestone Has Passed, Submit Delta Templates ASAP
- December 17, 2020: December 15 Recommended Milestone Has Passed, Submit Delta Templates ASAP
- December 15, 2020: Today! December 15 Milestone for Outstanding Templates
- December 10, 2020: Upcoming December 15 Milestone for Delta Templates
- December 8, 2020: December 15 Milestone for Outstanding Templates
- December 4, 2020: Deadline Has Passed
- December 1, 2020: Final Deadline Today for Indirect Entryways
- November 30, 2020: Deadline Is Here
- November 25, 2020: Deadline Approaching
- November 24, 2020: December 1st Final Deadline for Indirect Entryways
- November 19, 2020: Deadline Approaching (targeted outreach – providers that have not entered Initiative)
- November 18, 2020: Accepted ICR FAQ (targeted outreach – providers with Accepted ICRs)
- November 17, 2020: December 1st Final Deadline for Indirect Entryways
- November 12, 2020: Deadline Approaching (targeted outreach – providers that have not entered Initiative)
- November 10, 2020: December 1st Final Deadline for Indirect Entryways
- November 5, 2020: Deadline Approaching (targeted outreach – providers that have not entered Initiative)
- November 4, 2020: December 1st Final Deadline for Indirect Entryways
- October 29, 2020: 3 Days Left to November 1st Deadline for Entryways
- October 20, 2020: Upcoming Deadline and Reminders
- October 15, 2020: Upcoming Deadline and Reminders
- October 6, 2020: Upcoming Deadline and Reminders
- September 29, 2020: Upcoming Deadline and Reminders
- September 22, 2020: FAQ on Initiative Updates
- September 15, 2020: FY20 ICR Amendment Calculator
- September 8, 2020: Technical Update Video
- September 1, 2020: Revised Cost Manual and Additional Webinar
- August 25, 2020: Update on Indirect Funding Initiative
- August 20, 2020: Invitation to Webinar
- August 18, 2020: Update on Indirect Funding Initiative
- August 11, 2020: Update on Indirect Funding Initiative
- June 16, 2020: 3 Days Left for FY20 Entryway Selection
- June 9, 2020: 10 Days Left for FY20 Entryway Selection
- June 2, 2020: FY21 Announcements and Revised Cost Manual
- May 26, 2020: June Deadlines for FY20 ICR Processing
- May 19, 2020: May 22nd Deadline for FY20 Retroactive Funding
- May 15, 2020: Initiative Reminders
- May 6, 2020: New! Delta Template Video
- April 28, 2020: Initiative Reminders
- April 22, 2020: Delta Template Revisions
- April 15, 2020: Initiative Reminders
- April 8, 2020: Initiative Reminders
- March 31, 2020: Message from the CIT
- March 10, 2020: Initiative Reminders
- March 3, 2020: Initiative Reminders
- February 25, 2020: Delta Templates
- February 18, 2020: Cost Manual Additions
- February 11, 2020: Investment Timeline
- February 4, 2020: Entryway Submission
- January 28, 2020: 4 Days Remaining for FY20-Only Conditional ICR Election
- January 21, 2020: Reminder For FY 20-Only Conditional ICR
- January 14, 2020: Additional Job Aids Now Available
- January 7, 2020: Deadline for Conditional ICR Approaching
- December 31, 2019: New Year's Reminders
- December 24, 2019: Holiday Reminders
- December 16, 2019: Delta Templates
- December 9, 2019: Deadline for Conditional Rate
- December 3, 2019: Entryway Resources Available
- November 26, 2019: Revised Cost Manual and Provider Checklist
- November 18, 2019: Claiming Starts Today
- November 12, 2019: Revised Cost Manual and FAQs
- October 28, 2019: Independent Accountant’s Report
- October 18, 2019: October 7 Briefing Video
- October 8, 2019: Follow-Up to October 7th Briefing
- September 12, 2019: Indirect Information Survey
- September 6, 2019: Invitation to October 7th Briefing