The Indirect calculator for your FY26 grant budgets will allow grantees to claim more indirect expense (Object Code 08) based on your 04MC – Contractual Services (major) expenses, if any. Most districts do not opt to claim Indirect expenses or, if they claim indirect, have no major contracts, so this change will have no effect for those districts.
Due to federal regulatory changes, for FY26 the eligible amount counting toward indirect from Object Code 04MC was raised from the first $25,000 to the first $50,000 for major contracts. We have just completed the adjustments in GEM$ to allow the calculations/validations to reflect this change. At your option, your district may now revise your grant budgets, if you have expenses budgeted in 04MC for contracts exceeding $25,000, to budget additional indirect in Object Code 08 for these contracts per the adjusted Indirect calculator. You will need to decrease other expenses in order to stay within your budgets if you opt to increase indirect. This change, which has been made for federal and state grants allowing indirect costs, will continue for FY27 grants and fiscal years going forward.
A final reminder - indirect, like all grant expenses, must be drawn on a reimbursement basis.