Indirect Cost Rate Proposal (ICRP) Rates and Information

State policy requires departments to recover full costs whenever goods or services are provided for others. The full cost of goods or services includes all costs attributable directly to the activity plus a fair share of indirect costs, which can be ascribed reasonably to the goods or services provided. The annual preparation and approval of an Indirect Cost Rate Proposal (ICRP) is a requirement of the Department of Finance and the means for justifying the reasonableness of that "fair share". The ICRP rate applied to reimbursed funding (costs paid by Local Funds such as measure money, developer fees, special assessments, etc.) consists of both the Program Functional Rate and the Administrative Rate components.

Additionally, SB 45 requires that the Department include indirect costs as part of project costs on all non-reimbursement capital outlay support projects. The ICRP rate applied to non-reimbursed capital outlay support funding (e.g.: State funds, Federal funds, Bond Funds) consists of only the Program Functional Rate component.

Indirect cost rates are applied to the direct labor costs of work performed. All ICRP rates are submitted to the Department of Finance and the Federal Highway Administration for review and approval. No exemption is permitted for application of ICRP except as specified in law.