Audit - Indirect Cost Rate Training

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View our Indirect Cost Rate Schedule Training Videos.

These videos are provided in six small modules and we recommend that you watch the modules in order.  Please print the sample, Indirect Cost Rate schedule (xls, 44kb) prior to viewing as reference to follow along.

What is an ICR schedule? 
Module 1: In this module, you will see an overview of the Indirect Cost Rate schedule and the components that make up a schedule. The columns, sections, and where the numbers come from are explained. We also discuss the timetables involved with Indirect Cost Rates (when to adjust the rates and how long rates last). We have created handouts for this module. Module 1 handouts. (pdf, 1.5mb)

Process to create an ICR schedule
Module 2: This module offers a general overview of the steps and processes involved in developing the Indirect Cost Rate schedule. This module discusses the ICR source documents including examples of labor distribution reports. We also discuss possible adjusting entries to reconcile labor if the end of the fiscal year does not land on a payroll date. We have created handouts for this module. Module 2 handouts. (pdf, 1.9mb)

Labor Components of the ICR
Module 3: This module describes the different labor components of the ICR schedule: direct labor, fringe benefits, and indirect labor. Direct labor is the basis for the indirect cost rate and includes all time worked on a specific project. This module explains the components of fringe benefits and describes the various categories of indirect labor. This module also discusses the importance of tracking all hours worked. We have created handouts for this module. Module 3 handouts. (pdf, 3.4mb)

Where do the ICR numbers come from? 
Module 4: This module explains how you arrive at the numbers on the ICR schedule and how the ICR schedule should represent your general ledger accounts. The module discusses how labor dollars on the ICR schedule should reconcile with the payroll system, income statement, and Labor Distribution Report. We have created handouts for this module. Module 4 handouts. (pdf, 2mb)

Labor Reconciliation
Module 5: This module covers the labor reconciliation process. The module addresses the importance of performing monthly labor reconciliations; the components of labor reconciliations; and demonstrates how and when to perform labor reconciliations. We have created handouts for this module. Module 5 handouts. (pdf, 1mb)

Common Adjustments to the ICR schedule
Module 6: This module covers some common expressly unallowable expenses per the Federal Acquisition Regulation Cost Principles, 48 CFR Part 31. The module addresses the regulation associated with the unallowable expense and any directly associated costs. The module provides contact information and links to additional guidance from various government entities. We have created handouts for this module. Module 6 handouts. (pdf, 2.7mb)


The following examples are incorporated in the timekeeping training.

We hope that you find this training helpful, and we welcome your feedback.

Please let us know if you have suggestions for future training.