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Minnesota Legislature

Office of the Revisor of Statutes

16A.127 INDIRECT COSTS.
    Subdivision 1. Statewide and agency indirect costs. (a) As used in this section, "statewide
indirect costs" means all general fund expenditures made by any state agency attributable to
providing general support services to any other state agency.
(b) As used in this section, "agency indirect costs" means all general support costs within
any agency that cannot be directly charged to any agency program.
(c) For purposes of this section, "agency" means any entity receiving general support
services.
    Subd. 2. Statewide plan. The commissioner shall annually prepare a plan identifying the
sources and amounts of each agency's statewide indirect costs for the current fiscal year. The
commissioner shall submit the plan to the cognizant federal agency for approval, and provide
copies to the governor and the legislature.
    Subd. 3. General reimbursement. (a) Unless indirect cost recoveries are specifically
appropriated in law, agencies are obligated to reimburse the general fund for all statewide
indirect costs, and that portion of agency indirect costs attributable to recoveries of general fund
expenditures. However, the commissioner may, for reasons of sound financial management, waive
the reimbursement under this subdivision for certain nongeneral fund activities.
(b) The commissioner shall record the reimbursement to the general fund of the statewide
and agency indirect costs attributable to an agency's nongeneral fund activities for the fiscal year.
All nonfederal agency indirect cost receipts are appropriated to the agency to pay administrative
expenses, unless they are determined to be a reimbursement of general fund expenditures.
    Subd. 3a. Appropriation. There is annually appropriated from all direct appropriated
nongeneral funds an amount sufficient to reimburse the general fund for both statewide indirect
costs, and any agency indirect costs attributable to general fund expenditures.
    Subd. 4. Federal proposals. Agency applications for federal money shall include necessary
submissions to recover both statewide and agency indirect costs. A copy of the indirect cost
submission must be submitted to the commissioner for review. An agency indirect cost plan is
unnecessary if the commissioner determines that the costs incurred in preparing and maintaining
it exceed the benefit received by the state. If less than the entire agency proposal is federally
approved, the commissioner may accept reimbursement of less than all of the federal receipts.
If no federal funds are approved for indirect costs, the agency must document that fact to the
commissioner.
    Subd. 5. Federal reimbursement. Agencies shall reimburse the general fund for all federal
money received as a recovery of statewide indirect costs. All federal agency indirect cost receipts
are appropriated to the agency to pay administrative expenses, unless they are determined to be a
reimbursement of general fund expenditures.
    Subd. 6. Required information. Agencies must supply the information required by the
commissioner, as needed, to carry out the provisions of this section.
    Subd. 7. Audit fees. The legislative auditor may recommend waiver, and the Legislative
Audit Commission may waive all or part of a fee for an audit. A state audited agency whose funds
are not administered by the commissioner of finance must transfer to the general fund the amount
of the cost of the audit attributable to the agency's nongeneral fund receipts.
    Subd. 8. Exemptions. (a) No statewide or agency indirect cost liability shall be accrued to
any program, appropriation, or account that is specifically exempted from the liability in federal or
state law, or if the commissioner determines the funds to be held in trust, or to be a pass-through,
workshop, or seminar account. Accounts receiving proceeds from bond issues and general fund
accounts are also exempt from this section.
(b) Except for the costs of the legislative auditor to conduct financial audits of federal
funds, this section does not apply to the Board of Trustees of the Minnesota State Colleges and
Universities. Receipts attributable to financial audits conducted by the legislative auditor of
federal funds administered by the board shall be deposited in the general fund.
    Subd. 9. Provision for natural resources. (a) The Department of Natural Resources is
exempt from recovering agency indirect costs except where federal funds are involved.
(b) The commissioner of natural resources need not bill the federal government, other states,
or Canadian provinces for the indirect costs of providing emergency fire fighting services, and
need not reimburse the general fund for those indirect costs if the waiver is reciprocated.
History: 1976 c 231 s 6; 1983 c 301 s 89,90; 1984 c 628 art 2 s 1; art 6 s 1; 1984 c 654 art
2 s 57; 1Sp1985 c 13 s 97-100; 1987 c 264 s 1; 1987 c 275 s 4; 1987 c 404 s 76; 1990 c 375 s
3; 1Sp1993 c 2 art 3 s 2; 1994 c 632 art 3 s 26; 1995 c 254 art 1 s 46; 1996 c 395 s 18; 2003
c 112 art 1 s 5; art 2 s 50