As opposed to direct costs, indirect costs can’t be easily identified with a particular activity or grant.
Indirect costs will still need to be allocated and charged to grants, including HOPWA, as appropriate.
Care should be taken by every organization using federal funds to properly allocate and document all indirect costs.
There are a variety of acceptable ways for an organization to allocate direct and indirect costs. But it is important
that an organization choose a single method of cost allocation, that it document this method in a cost allocation plan document,
and that it consistently apply this method to all costs within the organization.
Before discussing the four acceptable methods of cost allocation, let’s take a quick look at how administrative costs should be treated.