Indirect costs are those costs incurred for the joint benefit of those activities and other activities and programs of the organization. Accounting, payroll, budgeting and purchasing are examples of services which typically benefit several activities and programs, and for which costs may be attributed by means of an indirect cost allocation plan.
"Restricted Indirect Cost Rates" are used with grant programs that restrict expenditures to those that supplement but do not supplant state or local effort. All No Child Left Behind and IDEA federal programs use the restricted rate.
"Non-Restricted (or Unrestricted) Indirect Cost Rates" apply to federal programs that allow federal funds to supplement and/or supplant local funds. The Child Nutrition Program (school lunch) uses the Non-Restricted rate.