ICR for CNP
Application of Indirect Cost Rate for the Federal
Child Nutrition Programs – Part 1I
Presented by Mila Makal
IC and Food Service Fund
School Nutrition Association: Summary of
Questions, Concerns and Possibilities.
 How much can the business manager
take?
 ADE overview of the ICR calculation
(Part 1) and proper application of the rate
to the food service operations (Part 2).

OMT! Direct and indirect costs?
Payroll, Data Processing and Utilities are
examples of __________ costs.
 If there is separate electric meter with a
separate bill paid from food service
account, costs are considered ________
costs.
 Indirect Cost/Direct Cost = ____ .

To Restrict or Not to Restrict?

____________ rates are designed to
implement “Supplement-not-Supplant”
legislation.

Plant maintenance is not used in ____
ICR.

Food Service uses ________ ICR.
Do I need to be an expert on ICR?
Yes or No?
 Can district always charge ICR to food
service?
 Is there a limit on how much a district
can charge?
 Food Service Manager should be an
expert on ___________.

IC for Food Service Directors
Computation of Indirect Cost amount.
 How “ICR” affects Indirect Cost?
 Am I alone? Are all districts charging “IC”
to Food Service?
 What Happens to My Food Service
Money?
 Planning for the future…

Computation of Indirect Cost amount

Step (1)
Request ______.

Step (2)
Calculate Base Amount for
Indirect Cost.

Step (3)
Calculate Allowable
Indirect Cost.
How is Base Amount for Indirect
Cost calculated?

Indirect Cost Base (ICB)
ICB = AE – VOC
AE = Allowable Expenditures
VOC = Value of _________

Allowable Indirect Costs (AIC)
AIC = ICB x (ICR x 0.01)
ICB = Indirect Cost Base
ICR = Indirect Cost Rate (e.g., 12.72%)
What is Indirect Cost Base (ICB)
ADD allowable expenditures…
(Handout #1)
– OR –
 TOTAL the expenditures for food
service fund and DEDUCT expenditures
for Other Food, VOC and Equipment
Depreciation.

How to calculate Allowable Indirect
Cost?
Compare the net expenditures to the
f_______ __________.
 Select lesser amount and multiply by the
approved ___ ________ ______ ____
____ (ICR).

Indirect Costs in the School
Nutrition.

Why SFA’s Business Office seeks to
recover indirect cost?

Examples of district’s costs.

More/Less schools districts are
considering billing the programs.
I feel so alone? IC breakdown.
NFSMI Financial Management Benchmarks
study found that __ % of SNPs paid
indirect costs to the school district.
___ % paid the entire allowable amount.
 Arizona 2009 District Food Service
Report indicates:
48 Districts charged IC (25%)
143 Districts – no IC (75%)

Where is MY money transferred?
Indirect Costs Fund (570)
 Expenditure Object Code 6910 used for
transfer.
 Revenue Object Code 5200 Interfund
Transfers-In should in IC fund (570).
 The amount transferred may not exceed
________________.

What is affected by ICR?
IC amount that can be transferred from
Food Service.
 Per Meal Costs.
 Including expenditure object code 6910 in
your budget.
 Know your ICR percentage.
 Monitor Excess Cash requirement.
 Prevent debt.

Contact Info

Mila Makal
ARIZONA DEPARTMENT OF
EDUCATION
1535 W JEFFERSON ST
BIN# 7
PHOENIX, AZ 85007
(602) 542-8714
 mila.makal@azed.gov
