A Timely Reminder: Nonprofits Should Examine Their Indirect Cost Reimbursements From NYCBy Matthew Estersohn | January 16, 2020
With the advent of the New Year, it is a good time for all nonprofits with New York City contracts to take advantage of the newly announced procedures for funding indirect costs. As many will recall, earlier in 2019, New York City responded to efforts made by the nonprofit industry to increase the funding available for indirect costs. Last July, my Marks Paneth colleague Joseph Kanjamala wrote an in-depth article on the higher indirect cost rate introduced by New York City for city contracts. Joe’s article provides excellent details about the new guidelines and the steps non-profits should be prepared to take. We now have more clarity around the City’s process.
The City is offering nonprofits three options for indirect cost rates: 1) a de minimis 10% rate, 2) if the nonprofit has a federally negotiated indirect cost rate agreement (“NICRA”), the City will honor that rate, and 3) an indirect cost rate based on the methodology within the City’s Cost Policies and Procedures Manual, which must be accompanied by a report from a CPA firm.
The City will apply these rates retroactive to July 1, 2019, but in order to receive this retroactive rate, organizations must submit all paperwork to the City before June 30, 2020.
For our Marks Paneth clients and friends, I’d like to encourage you to contact your advisor at your next opportunity. Regardless of which option your organization chooses, there is some legwork that needs to be done. It is best to get an early start so as not to be rushed against the June 30 deadline. Let us know if Marks Paneth’s Nonprofit, Government & Healthcare Group can help!
About Matthew Estersohn
Matthew Estersohn, CPA, is a Partner in the Nonprofit, Government & Healthcare Group at Marks Paneth with nearly 15 years of experience in providing accounting, auditing, tax and consulting services for the nonprofit industry. He has planned, coordinated and conducted audits for a wide range of nonprofits, including human service organizations, educational and cultural institutions, membership organizations and private foundations. He also specializes in Single Audits for organizations that receive federal funding. Mr. Estersohn has... READ MORE +