Employee fringe benefit and indirect costs are permissible charges to federal grants.

At the beginning of each fiscal year, the Division of Budget will enter the new fringe benefit and indirect cost standard rates into the State Financial System. In some cases, the federal government may request the negotiation of a separate rate for distinctive programs instead of using the standard rate determined by the Division of Budget. For example, a special rate can be developed for a state-administered program or an organizational unit supported with federal funds. For programs or funds that require a rate other than the standard rate, or require a waiver, agencies should enter a new waiver request in SFS which, once approved at the agency level, will be routed to DOB for further review and final approval.

An automated process was implemented as of July 1, 2018 that will no longer use quarterly agency billings and AP vouchers to record FBIC transactions. Instead, the new process generates journal entries to the General Ledger in the Statewide Financial System (SFS) on a more real-time basis that is better aligned with the timing of payroll charges. To avoid confusion and a compilation of errors, agencies are reminded that all errors should be addressed within 3 business days.

See Chapter VII, Section 9.A – Fringe Benefits and Indirect Costs Automation of this Guide for more information.

Guide to Financial Operations

REV. 02/01/2022