Another beautiful day in the Truckee Meadows!
Another beautiful day in the Truckee Meadows!


1.      What is the County Cost Allocation Plan?

The report is prepared annually to establish and budget for allocations of allowable indirect costs to programs, departments and funds benefiting from the services received.

2.      What is a Fixed Indirect Cost Rate?

An indirect rate is the ratio of indirect costs to direct costs. That ratio can then be utilized to calculate an amount of indirect costs to include in the development of fees or charges for services; to build indirect costs into grant and other funding applications; and to charge grants and other programs for indirect costs associated with providing products or services. The County Fixed Indirect Cost Rate is calculated annually in the Cost Allocation Plan report.

3.      What is the easiest way to read the County Cost Allocation Plan report?

Pages 5 through 17 of the report summarize all the detail contained on pages 21 through 151. A review of the summary will provide the reader with questions that can then be answered by reviewing the detailed pages. Further back-up detail is available upon request. The County Wide Fixed Indirect Rate is calculated and presented on pages 18 and 19. The allocation bases used to spread the indirect central services costs are detailed on pages 3 and 4.

4.      Why are there different bases used for certain central service cost allocations?

The general allocation basis utilized for allocating central service costs is a percentage of gross salaries and wages. However, when a more definitive basis exists for determining a more precise allocation methodology, such as numbers of requisitions and purchase orders by unit, or square footage utilized by unit, or work orders produced by unit, those more precise figures are utilized to determine the allocation percentages.

5.      What are indirect costs?

Indirect costs are typically central service costs, incurred for a “common” or “joint purpose” and are costs that benefit multiple departments or programs. Examples of indirect costs include technology services; human resources services; legal counsel; tax billing and collection; accounting, purchasing and budget financial services; Other Post Employment (retiree medical) Benefits (OPEB); facilities maintenance and preservation; utilities; etc.

6.      What is the OMB Circular A-87 and A-87 Guidance?

The Federal Office of Management and Budget publishes Circular OMB A-87 and the A-87 Implementation Guide to provide direction to local governments in the preparation of indirect cost allocations and indirect rates. Utilizing the Federal guidance in the preparation of the County Cost Allocation Plan ensures that we can use our allocations and indirect rate for capturing indirect costs on Federal funding, where allowable.

7.    Why use a cost allocation plan and indirect rate?

Indirect costs benefit all programs, departments and services provided by local government operations. Indirect costs are a bona fide cost of providing services, and as such need to be accounted for when determining fees, charges for services, or determining the cost of providing grant or other funded programs or activities. Indirect costs are just as tangible as direct costs when accounting for the total costs of providing services.

8.    Do all grants award indirect cost reimbursement?

No. Many grants do award indirect costs or limit the amount of indirect costs that are allowed, and many grants do not allow indirect cost reimbursement.  However, maximizing indirect reimbursement, when allowed, contributes toward covering the costs of providing the service. This leaves additional resources for additional services.

9.  What happens with indirect cost reimbursements?

Indirect revenue reimbursed will be recorded as indirect revenue in the appropriate department and/or fund.

10.  How is the Indirect Cost Rate applied to grant applications or reimbursement requests?

The County Fixed Indirect Cost Rate is applied against direct salary and wages only. The rate would be multiplied toward the allowable salary and wages for a specified period, exclusive of benefits and operating costs.

11.  Has the Federal Government certified the Washoe County Cost Allocation Plan?

No. Washoe County is classified by the Federal Government as a non-major local government, and as such, is NOT required to have the Cost Allocation Plan certified by a Federal Cognizant Agency. Per Federal Government guidance in OMB Circular A-87, “These (non-major) local governments are not required to submit their plans for Federal approval unless they are specifically requested to do so by the cognizant agency.” To date, Washoe County has not been requested to submit our plan. Our plan is reviewed annually by our Finance Department and is reviewed by our Independent Auditors as part of their fiscal year end Comprehensive Annual Financial Report (CAFR) audit, and is available for submission to a Federal agency at any time. The full report is also available on our website, and is public record.

If you have additional questions regarding the Washoe County Cost Allocation Plan report, please email Darlene Delany at