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KIVA Advisory Memorandum – Indirect Cost Rates Affecting Federal Emergency Relief Funds (CARES Act, ARPA, Infrastructure Investment & Jobs Act)

A Crucial Reminder to Tribal Nations from KIVA

The Office of Management & Budget (OMB), on November 2, 2021, issued a new policy that provides an exception to 2 CFR § 200.405(b) concerning the application of Indirect Cost Rates to CARES Act funds (Coronavirus Relief Funds).  This is an important and positive policy change that addresses tribal questions on whether they can apply their negotiated Indirect Cost Rates to the CARES Act funds (FY2020 and forward); and provides instruction to the preparation of future Indirect Costs Rate Agreement proposals.

The attached KIVA Advisory Memorandum is intended to provide guidance on Indirect Costs as they apply to CARES Act and other Federal Emergency Relief Funds (ARPA, Infrastructure Investment & Jobs).  Concern has been raised on the potential and future impacts on future tribal Indirect Cost Rates if tribal Indirect Cost Rates are applied to Federal Emergency Relief Funds.  The OMB exception provides a partial answer to the question as it applies to CARES Act, but the OMB policy currently does not apply to subsequent Federal Emergency Relief Funds (ARPA and Infrastructure Investment and Jobs Act).

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