[Code of Federal Regulations]
[Title 31, Volume 2]
[Revised as of July 1, 2002]
From the U.S. Government Printing Office via GPO Access
[CITE: 31CFR205.18]

[Page 32-33]
 
                  TITLE 31--MONEY AND FINANCE: TREASURY
 
         CHAPTER II--FISCAL SERVICE, DEPARTMENT OF THE TREASURY
 
PART 205--RULES AND PROCEDURES FOR EFFICIENT FEDERAL-STATE FUNDS TRANSFERS--Table of Contents
 
Subpart A--Rules Applicable to Federal Assistance Programs Included in a 
                        Treasury-State Agreement
 
Sec. 205.18  Are administrative costs subject to this part?

    (a) A State and FMS may agree, in a Treasury-State agreement, to the 
following funding conventions for indirect costs and administrative 
costs:
    (1) The State will draw down a prorated amount of administrative 
costs on the date of the State payday. For example, the State would draw 
one-third of its quarterly administrative costs if payroll is monthly, 
or one-sixth of its quarterly administrative costs if payroll is semi-
monthly.
    (2) If an indirect cost rate is applied to a program, the State will 
include a proportionate share of the indirect cost allowance on each 
drawdown by applying the indirect cost rate to the appropriate direct 
costs on each drawdown.
    (3) If costs must be allocated to various programs pursuant to a 
labor distribution or other system under an approved cost allocation 
plan, the State will draw down funds to meet cash outlay requirements 
based on the most recent, certified cost allocations, with

[[Page 33]]

subsequent adjustments made pursuant to the actual allocation of costs.
    (b) Notwithstanding any other provision of this part, no interest 
liabilities will be incurred or calculated for indirect costs and 
administrative costs, provided the funding conventions described in 
paragraph (a) of this section are properly applied.