Independent Office of Audits and Investigations - Updated 02/2021
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Independent Office of Audits and Investigations
LOCAL GOVERNMENT AGENCIES’ (LGA)
INDIRECT COST ALLOCATION PLAN/INDIRECT COST RATE PROPOSAL
(ICAP/ICRP) SUBMISSIONS
FOR ALL SUBMISSIONS: To expedite your request, please be sure your submittal
contains all required documents: checklist, certification, identification of entity
responsible to review and approve a LGA’s indirect rate(s), report of funding source(s),
Comprehensive Annual Financial Report (CAFR) or Single Audit Report (SAR). For
questions and to submit packets, please email ICAP-ICRP@dot.ca.gov.
Please note: Reviews will be performed once all required information is received.
DEFINITION OF LGA:
For ICAP/ICRP purposes, LGAs are the individual operating agency (governmental
department or agency) that proposes an indirect cost rate. A LGA can be a City,
Town, County, Department of a County (e.g. Department of Transportation) or City
(e.g. Department of Public Works), a Metropolitan Planning Organization, a Regional
Transportation Planning Agency, or a Special District.
ENTITY RESPONSIBLE FOR REVIEW/APPROVAL PROCESS:
Title 2 Code of Federal Regulations (CFR) 200 Appendix VII D. 1. b. identifies the
authorized entity to review and approve a LGA’s rate(s) as either the LGA’s federal
cognizant agency (i.e. the federal agency giving the largest direct value of federal
awards to a LGA); OR, where a LGA only receives federal funds as a subrecipient,
the pass-through entity is the responsible entity to review and approve the LGA/
subrecipient’s indirect cost rate(s).
DURATION OF ENTITY RESPONSIBILITY:
Per Title 2 CFR 200 Appendix V F. 1. and 2 CFR 200.513 the entity responsible for
reviewing and accepting indirect cost rate(s) will remain responsible for five years as
follows: FY 2018/19; FY 2023/24; and every fifth year afterwards.
REPORT OF FUNDING SOURCE, CAFR OR SAR:
Each LGA must submit a report of funding source(s) which shows a breakdown of
federal funds by federal agency (ex. CAFR, SAR, revenue reports etc.) for
FY 2018/19. If a LGA did not receive any federal funds, either directly or passed
through in FY 2018/19, then they must submit their most recent report of funding
source(s). For a sample report see ICAP-ICRP_Funding_Source_Example (XLSX).
PREPARE AND SUBMIT ONE OF THE FOLLOWING CHECKLISTS, WHICHEVER
ONE IS APPLICABLE.
(See ICAP/ICRP Submission Processes and Documentation of Proposal (PDF))
Local Government Agencies ICAP/ICRP Checklist - Revised 2/2021 1Independent Office of Audits and Investigations
LOCAL GOVERNMENT AGENCIES’
STREAMLINE REVIEW ICAP/ICRP CHECKLIST
Name Of Agency: Date Completed:
Name Of Preparer: Rate(s) for Fiscal Year:
Title Of Preparer: Cognizant Agency:
Yes No N/A
LGA determined Caltrans is responsible to review and approve ICRP
based on ‘Report of Funding Source’ and attached the report.
[Eligibility Check]
• Has the LGA received more than $35 million in direct federal
funding?
• Has there been a change in the ICAP/ICRP calculation
methodology since the last ICAP/ ICRP acceptance?
• Has the most recent ICAP/ICRP required an indirect cost rate
change due to an improper, inaccurate, or unsupported rate
calculation? If yes, provide report of change.
• Has there been major changes to the financial management
system (i.e. processes or accounting software) since the last
ICAP/ICRP acceptance?
• Is this the first ICAP/ICRP submission?
If all answers above are “No”, then LGA is qualified for the Streamline process.
Please submit the following documents along with this checklist.
• ICRP Certification
• Carry-forward Schedule (if applicable)
Local Government Agencies ICAP/ICRP Checklist - Revised 2/2021 2Independent Office of Audits and Investigations
LOCAL GOVERNMENT AGENCIES’
COMPLETE REVIEW ICAP/ICRP CHECKLIST
Name Of Agency: Date Completed:
Name Of Preparer: Rate(s) for Fiscal Year:
Title Of Preparer: Cognizant Agency:
Yes No N/A
LGA determined Caltrans is responsible to review and approve ICRP
based on ‘Report of Funding Source’ and attached the report.
[Eligibility Check]
• Has the LGA received more than $35 million in direct federal
funding?
• Has there been a change in the ICAP/ICRP calculation
methodology since the last ICAP/ ICRP acceptance? If yes,
include documentation of change.
• Has the most recent ICAP/ICRP required an indirect cost rate
change due to an improper, inaccurate, or unsupported rate
calculation? If yes, provide report of change.
• Has there been major changes to the financial management
system (i.e. processes or accounting software) since the last
ICAP/ICRP acceptance? If yes, explain the changes.
• Is this the first ICAP/ICRP submission?
If any of the answers above are “Yes”, then the LGA must continue completing this checklist.
(if all answers above are “No”, then the LGA is qualified for the Streamline process.)
Please submit the following documents along with this checklist.
Local Government Agencies ICAP/ICRP Checklist - Revised 2/2021 3COMPLETE REVIEW CHECKLIST
Yes No N/A
• Ensure costs included in the rate calculation schedule(s)
(schedule showing component costs used in the calculation of
the rate(s) proposed) are cross-referenced and reconciled to the
financial data mentioned below.
• Include subsidiary worksheets that show the following:
For ICAP/ICRPs based on actual costs: A schedule(s) of actual
direct, indirect, and unallowable costs incurred by cost category
type (i.e. rent, utilities, depreciation, etc.) and by departmental
unit with total costs reconciled to audited financial statements.
For ICAP/ICRPs based on budgeted or estimated costs: A
schedule(s) of budgeted or estimated direct, indirect, and
unallowable costs by cost category type and by department unit
supported by Board-approved budget or prior year’s actual costs.
FY 19/20(17/18)
• When a fixed rate is used, include a schedule showing the
calculation of the over/under carry forward amount with
component costs cross-referenced to ledger reports that cross-
reference to audited financial statements. (Include the carry-
forward calculation worksheet.)
• Include a copy of the financial data (audited financial statements,
comprehensive annual financial reports, single audit reports and
management letters, including notes, if applicable, etc.) on which
the rate(s) is based.
• If applicable, include fringe benefit rate computations. If not
including, please explain why.
Note: A fringe benefit rate computation and plan is only required if
the LGA bills using a fringe benefit rate. If the LGA bills based on
actuals, no calculation or plan is required.
• Include an organizational chart identifying the agency’s structure
during the period for which the proposal applies along with a
functional statement noting the duties and/or responsibilities of all
departments/divisions included.
Local Government Agencies ICAP/ICRP Checklist - Revised 2/2021 4COMPLETE REVIEW CHECKLIST
Yes No N/A
• Include the applicable Certification, dated and signed by
an appropriate official. (See IOAI’s website for Certification
Template)
Central Service Cost Allocation Plan Checklist (if applicable):
• Submit the LGA’s approved central service cost allocation plan
(only if approved by LGA’s cognizant agency.
• Submit the allocation schedule showing the central service costs
allocated to the LGA.
Additional Information:
• If the ICAP/ICRP includes significant changes from procedures
as reported in the previous year cost plan, include an explanation
of the significant changes.
• If the ICAP/ICRP was audited for compliance with 2 CFR 200 in
accordance with Government Auditing Standards, please provide
a copy of the audit report.
• For Other Post-Employment Benefits (OPEB) Governmental
Accounting Standards Board (GASB) 45 Compliance:
Note: In accordance with Federal Highway Administration
(FHWA) Policy, the amortization period for compliance with
GASB 45 must be a minimum of 20 years to ensure equitable,
consistent, and reasonable OPEB reimbursement rates for all
local agencies within the state of California receiving Federal
funding from the FHWA. Therefore, only an amortization period
of between 20 to 30 years will be allowed to calculate the
reimbursement rate for OPEB benefits.
• If applicable, include a Certificate of Actuarial Assumption, dated
and signed by a responsible official, that identifies the OPEB
liability and amortization schedule.
Local Government Agencies ICAP/ICRP Checklist - Revised 2/2021 5Independent Office of Audits and Investigations
LOCAL GOVERNMENT AGENCIES’
PREDETERMINED RATE & EXTENSION ICAP/ICRP CHECKLIST
Name Of Agency: Date Completed:
Name Of Preparer: Rate(s) for Fiscal Year:
Title Of Preparer: Cognizant Agency:
Yes No N/A
LGA determined Caltrans is responsible to review and approve ICRP
based on ‘Report of Funding Source’ and attached the report.
[Eligibility Check]
• Has there been a change in the ICAP/ICRP calculation
methodology since the last ICAP/ ICRP acceptance?
• Has there been major changes to the financial management
system (i.e. processes or accounting software) since the last
ICAP/ICRP acceptance?
• Is this the first ICAP/ICRP submission?
If any answer above is “Yes”, then LGA is not qualified for the Predetermined Rate Process.
Please submit the following documents along with this checklist.
• Submit copy of any audit report with outstanding audit
finding(s) that would impact the indirect cost rate(s).
• If there were any substantial changes to your structure
for the period of the predetermined rate(s), submit a new
organizational chart.
Local Government Agencies ICAP/ICRP Checklist - Revised 2/2021 6PREDETERMINED RATE & EXTENSION CHECKLIST
Yes No N/A
• Submit a summary schedule showing the accepted ICAP/ICRP
rate(s) for the last five consecutive years.
(If rates were audited, the audited rates should be included)
• If the last five consecutive submissions accepted by our office
were fixed rate(s), include a schedule of the rate(s) recalculated
based on actual costs.
• Proposed predetermined rate(s) based on the lower of either:
The lowest of the last five year’s accepted/audited fixed rate(s),
or the lowest of the last five year’s actual rate(s) reduced by
fifteen percent of the rate(s)?
• For Metropolitan Planning Organizations and Regional
Transportation Planning Agencies only - include the current
year’s approved Budget.
• If the LGA used a fixed rate for prior year(s), include a schedule
showing the calculation of the over/under carry forward
amount(s) with component costs cross-referenced to ledger
reports that cross- reference to audited financial statements.
Prepare a schedule to resolve the carry-forward for the last two approved fixed rate
year(s) by providing one of the following:
• Evidence that Caltrans was reimbursed for projects over-billed,
or evidence that an invoice was adjusted to compensate Caltrans
for the over- billed, or
• Dividing the over-recovery amount by the number of years in the
predetermined period and reduce the total indirect costs used in
the proposed predetermined rate by this amount.
Local Government Agencies ICAP/ICRP Checklist - Revised 2/2021 7You can also read
