Q.  The government pays us with a credit card around $62,000 per month on a GSA contract and we pay around $22,000 per year on those credit card charges.  Most of our charges on the contract are based on scheduled rates for different categories of employees and we also include separate charges for various direct expenses.  Are the credit card charges considered a direct or indirect expense?

A.  Even though credit card purchases may normally be charged indirect, the unusual amount for this contract would likely require a direct charge.  You can probably recover it as an ODC charge to the GSA contract but even if not, government auditors would likely require the direct charge since it is such a material amount compared to your other credit card charges.  

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