CA Health & Safety Code Section 25206.3

The department shall take all of the following actions with regard to the tracking of indirect costs:

(a)

Ensure that pro rata costs are allocated appropriately to all departmental activities, so that the department’s program will only bear those pro rata costs in proportion to the benefits received by those persons subject to the reimbursement requirements specified in Section 25206.2.

(b)

Routinely include operating expenses in the indirect costs and allocate those expenses using processes that ensure that the department’s program only bears indirect costs in proportion to the benefits received by those persons subject to the reimbursement requirements specified in Section 25206.2.

(c)

Exclude from indirect costs, the costs of grant development and administration, fee administration, contract development and administration, and public and governmental inquiries.