As an applicant builds its proposed budgets, it should be aware that all costs must conform to requirements in the program statute, the Notice Inviting Applications for New Awards for FY 2006, EDGAR, and the applicable cost principles in Office of Management and Budget Circulars: A-21 for institutions of higher education, A-87 for State and local agencies, and A-122 for nonprofit organizations. Among other things, these cost principles contain basic rules that all costs charged to federal grants must be "necessary and reasonable" for the purposes of carrying out authorized grant activities.

Yes. Indirect costs may not exceed the amount determined on the basis of the applicant's approved negotiated indirect cost rate. However, an applicant may wish to consider whether its overall application will be stronger if it maximizes the amount of direct program services that its project will be able to provide by voluntarily limiting the amount of indirect costs charged to federal Congressional Academies for Students of American History and Civics Education program funds.

If your organization does not have an established indirect cost rate, you may negotiate one with your "cognizant" Federal agency. Your cognizant Federal agency is usually the agency that provides the majority of Federal funds received by your organization. If your organization currently does not have any Federal grants and you are awarded a grant under this competition, you may request the U.S. Department of Education to negotiate an indirect cost rate for you. To find out more about indirect costs, you may wish to visit the U.S. Department of Education website for an overview: http://www.ed.gov/about/offices/list/ocfo/fipao/icgindex.html. Please note that the Department will not be able to negotiate an indirect cost rate for you unless you have a grant from the U.S. Department of Education.