Indirect Cost Rate Initiative
NYC's Indirect Cost Rate Initiative supports human services providers by acknowledging and funding critical indirect
costs and standardizing cost allocation practices.
In February 2019, the City of New York adopted the Health and Human
Services (HHS) Cost Policies and Procedures Manual (Cost Manual) to standardize cost allocation
practices for HHS contracts and Indirect Cost Rate (ICR) calculations. The Cost Manual is intended to be a
living document that is updated from time to time.
The Fiscal Year (FY) 2020 Adopted Budget established an ICR Funding Initiative based on the Cost Manual, managed
by the Office of Management and Budget and Mayor's Office of Contract Services through the City
Implementation Team (CIT). The initiative is intended to make it easier for nonprofits to do
business with the City, as it acknowledges and pays for critical indirect costs to deliver human services.
Please see the Background section below for a history of the Initiative. The CIT kept
the sector informed of Initiative updates through regular communications, which are contained in the Archive of Email Communications section. The Archive of Resources
also contains information and job aids that the CIT shared with the sector for assistance in completing
important milestones.
ICR Application for FY27
New update! The FY 2027 ICR Application Process to establish a City Accepted ICR valid FY27-29
will tentatively
open September 2025 for eligible providers through December 2025. This earlier timeline serves to better align
with provider audit and budget schedules, allowing your organization to work with contracting agencies to
incorporate new rates for the budget readiness period in spring.
FY 2027 eligible providers will be organizations that either:
- have an FY24 Accepted ICR that will be expiring on June 30, 2026, or
- do not yet have an Accepted ICR because the organization entered City human services contracting after the
last open application period
If your organization falls under condition (i), has an expiring FY24 ICR, you will receive an email from the CIT
providing next steps and more information. If your organization does not have an Accepted ICR and falls under
condition (ii), you may email the CIT at CIT@mocs.nyc.gov
during the application period to confirm eligibility and next steps. Please note that this inbox is not
monitored outside of application periods.
Organizations have three possible entryways:
- Independent Accountant's Report: Organizations choosing to pursue a rate higher than 10%
through an Independent
Accountant's Report should provide their Certified Public Accountant (CPA) with a
Schedule of ICR based on their most recent available schedule of functional expenses. The City offers an ICR worksheet to
support providers in the development of a Schedule of ICR (see final tab in the linked worksheet). The City
of New York wishes to acknowledge The New York State Society of Certified Public Accountants' Not-for-Profit
Organizations Committee for its feedback on the Independent Accountant's Report.
- Negotiated Indirect Cost Rate Agreement (NICRA): Subject to additional review, the rate
listed on the submitted NICRA will be the organization's City Accepted ICR for the three-year validity
period. If you anticipate that your organization's NICRA will deviate significantly from the active or
provisional rate after application, consider applying with a recent Independent Accountant's Report.
- 10% de minimis
If your organization was eligible to apply for a City Accepted ICR during an open application window and did not
apply or receive one by the deadline, it will have defaulted to a 10% De Minimis ICR.
The FY 2026 ICR Application Process was available from February through April 2025 and established City Accepted
ICRs valid FY26-28.
The City will regularly roll out the ICR application process for expiring ICRs and new providers.
Viewing Accepted ICRs in PASSPort
Upon application approval, the CIT will upload confirmation of the Accepted ICR to your organization's PASSPort
profile. Providers can see their Accepted ICR in PASSPort by visiting their Vendor Profile and
clicking Documentation, then scrolling down to Miscellaneous Documents. The
"document type" label will reflect your organization's ICR entryway. Clicking the document will allow your
organization to see your Accepted ICR, your verification documentation, and the ICR validity date. Please note
that if your organization defaulted to a 10% De Minimis ICR, there will be no available documentation.
Submit an inquiry to the MOCS Service Desk for
questions about PASSPort.
Using an Accepted ICR in PASSPort Budgets
We have received a number of questions regarding the use of budget modifications to fund Accepted ICRs. We offer
the following tips and information:
- A provider may use its Accepted ICR to develop its PASSPort contract budget(s) pursuant to the Accepted ICR
validity dates.
- Purchase Orders in PASSPort now feature an Indirect Cost tab, which includes a table displaying the
budgeted ICR. This table will automatically refresh as new budget lines are added. Budget preparers
should ensure appropriate selection of Item Category per line and compare the budgeted ICR to their
organization's Accepted ICR.
- City contracting agencies will use allowance
funding to cover increases in Accepted ICRs. Where appropriate, agencies will process a budget
modification in lieu of a contract amendment to move this unallocated funding into the budget for invoicing.
- For budgets where providers have surplus funding in their direct costs, providers may request a budget
modification to reallocate funds to their indirect costs, up to their Accepted ICR.
- In exercising a budget modification request, providers may use the PASSPort Financials automatic budget
modification, which allows for expedited budget modifications up to 10% (cumulative) of the total fiscal
year budgeted amount without preapprovals or delays in invoicing. Please note that adding new budget line(s)
or changing
line-item categorization will trigger agency review regardless of percentage allocation.
- As budget modifications do not allow for invoice submission, the CIT recommends that providers and agencies
coordinate modifications that entail allowance allocation at fiscal year budget approval or as a
reconciliation activity at the end of the fiscal year.
- Providers should not expect allowance allocation for indirect costs if their actual allowable expenses are
less than their Accepted ICR, or there are surplus direct costs. Any request to reallocate surplus indirect
costs to direct costs is at the discretion of the contracting agency.
- Questions related to budget modification guidance and reviews should be directed to contracting agencies.
Please see the following instructional materials on budget modifications:
Using an Accepted ICR in RFP Proposals
Providers with an Accepted ICR, as defined by the Cost Manual, should use their Accepted ICRs in RFP proposals.
The following language will be standard in eligible Health and Human Services RFPs. If an RFP is missing this
language, please reach out to the designated agency contact to confirm contract eligibility under the Cost
Manual.
"All price and budget proposals should be prepared in accordance with The City of New York's
Health and Human Service Cost Policies and Procedures Manual (Cost Manual). To respond to this
solicitation, proposers shall budget at their City Accepted Indirect Cost Rate (ICR) or shall use the de minimis
rate of 10% if they did not previously establish a rate with the City through the ICR Application Process."
Please contact the solicitation's issuing agency with questions about content included in the RFP or your
organization's proposal.
Need help or have a question about PASSPort? Submit an inquiry to the MOCS Service Desk!
Background
New York City was the first big city in the country to make this investment.
The CIT established a Provider Work Group, with participation from City Council Finance, to advise on the rollout
and implementation of the Funding Initiative. The details of the ICR Funding Initiative were announced on
October 7, 2019, with claiming for indirect cost rates and funding opening on November 18, 2019, and closing on
December 31, 2020. To provide greater access for smaller nonprofits, the Provider Work Group set forth a
Conditional ICR option that offered organizations with ICRs greater than 10% more time to work towards an
established ICR on the condition that they submit their documentation by the Initiative closing date.
Among implementation resources was the Delta Template, which served as a basis for providers to calculate the
additional ICR funding for each of their contracts. In total, 361 organizations successfully completed
the
process for ICR funding to receive Accepted ICRs and annual baselined funding of $94 million. For
providers with
Delta Templates approved in Fiscal Years 2020 or 2021, the City issued ICR amendments through
PASSPort, the
City's Procurement and Sourcing Solutions Portal.
Archive of Resources
- FY23 ICR Application Process
Video Webinar for existing providers with ICR rates that expire June 30, 2022 that provides
information about the FY23 application process, eligibility, doors of entry, and timeline, with an
interactive Q&A session.
- ICR
Investment Timeline This timeline documents key milestones for the ICR Funding Initiative.
- ICR Funding Initiative FY20
Policy Video Webinar that provides more information about the implementation of the FY21
Adopted Budget and revisions to FY20 amendments. Providers may refer to this Technical
Update FAQ that answers questions received during the webinar sessions.
- ICR Funding Initiative Video An
overview of an October 7th Sector and City Agency Briefings, providing timelines and process for
organizations to establish and claim their ICR and request funding. The Briefing Powerpoint is
available here.
- FY20 ICR Amendment
Calculator Excel worksheet that providers can use to calculate their FY20 ICR Amendments.
- Delta Template Job Aids Instructional materials to assist with the process of
receiving, completing, and submitting the Delta Template.
- ICR Funding
Initiative Provider Checklist Tool providers can use to track the completion of the steps
needed to receive the ICR funding.
- Registration
Tip Sheet List of tips providers can consult to support timely contract and amendment
registration.
- Budget Modification Job Aids
Archive of Email Communications
- March 29,
2023: FY24 ICR Application Process is now open for eligible providers!
- March 15,
2022: FY23 ICR Application Process is now open for eligible providers!
- April 23,
2021: Important Update on ICR Funding Initiative
- March 17, 2021: FY21
ICR Funding Policy Update
- January
22, 2021: Indirect Cost Rate Amendments in PASSPort
- December 29, 2020:
TODAY 5 PM! Submit Delta Templates
- December 22, 2020:
December 15 Recommended Milestone Has Passed, Submit Delta Templates ASAP
- December 17, 2020:
December 15 Recommended Milestone Has Passed, Submit Delta Templates ASAP
- December 15,
2020: Today! December 15 Milestone for Outstanding Templates
- December 10, 2020:
Upcoming December 15 Milestone for Delta Templates
- December
8, 2020: December 15 Milestone for Outstanding Templates
- December
4, 2020: Deadline Has Passed
- December
1, 2020: Final Deadline Today for Indirect Entryways
- November
30, 2020: Deadline Is Here
- November
25, 2020: Deadline Approaching
- November
24, 2020: December 1st Final Deadline for Indirect Entryways
- November
19, 2020: Deadline Approaching (targeted outreach – providers that have not entered
Initiative)
- November
18, 2020: Accepted ICR FAQ (targeted outreach – providers with Accepted ICRs)
- November
17, 2020: December 1st Final Deadline for Indirect Entryways
- November
12, 2020: Deadline Approaching (targeted outreach – providers that have not entered
Initiative)
- November
10, 2020: December 1st Final Deadline for Indirect Entryways
- November
5, 2020: Deadline Approaching (targeted outreach – providers that have not entered
Initiative)
- November
4, 2020: December 1st Final Deadline for Indirect Entryways
- October
29, 2020: 3 Days Left to November 1st Deadline for Entryways
- October 20,
2020: Upcoming Deadline and Reminders
- October 15, 2020:
Upcoming Deadline and Reminders
- October 6, 2020:
Upcoming Deadline and Reminders
- September 29, 2020:
Upcoming Deadline and Reminders
- September 22, 2020:
FAQ on Initiative Updates
- September 15, 2020:
FY20 ICR Amendment Calculator
- September 8,
2020: Technical Update Video
- September 1,
2020: Revised Cost Manual and Additional Webinar
- August 25,
2020: Update on Indirect Funding Initiative
- August 20,
2020: Invitation to Webinar
- August 18,
2020: Update on Indirect Funding Initiative
- August 11,
2020: Update on Indirect Funding Initiative
- June 16,
2020: 3 Days Left for FY20 Entryway Selection
- June 9,
2020: 10 Days Left for FY20 Entryway Selection
- June 2,
2020: FY21 Announcements and Revised Cost Manual
- May 26,
2020: June Deadlines for FY20 ICR Processing
- May 19,
2020: May 22nd Deadline for FY20 Retroactive Funding
- May 15,
2020: Initiative Reminders
- May 6,
2020: New! Delta Template Video
- April 28,
2020: Initiative Reminders
- April 22, 2020:
Delta Template Revisions
- April 15, 2020:
Initiative Reminders
- April 8, 2020:
Initiative Reminders
- March 31, 2020:
Message from the CIT
- March 10, 2020:
Initiative Reminders
- March 3, 2020:
Initiative Reminders
- February 25,
2020: Delta Templates
- February 18,
2020: Cost Manual Additions
- February 11,
2020: Investment Timeline
- February 4, 2020:
Entryway Submission
- January 28, 2020:
4 Days Remaining for FY20-Only Conditional ICR Election
- January 21, 2020:
Reminder For FY 20-Only Conditional ICR
- January 14, 2020:
Additional Job Aids Now Available
- January 7, 2020:
Deadline for Conditional ICR Approaching
- December 31,
2019: New Year's Reminders
- December 24,
2019: Holiday Reminders
- December 16,
2019: Delta Templates
- December 9, 2019:
Deadline for Conditional Rate
- December 3, 2019:
Entryway Resources Available
- November 26,
2019: Revised Cost Manual and Provider Checklist
- November 18,
2019: Claiming Starts Today
- November 12,
2019: Revised Cost Manual and FAQs
- October 28, 2019:
Independent Accountant's Report
- October 18, 2019:
October 7 Briefing Video
- October 8, 2019:
Follow-Up to October 7th Briefing
- September 12,
2019: Indirect Information Survey
- September 6,
2019: Invitation to October 7th Briefing