The Policy Committee of the Upper Midwest Regional Interstate Project saw a need to inform the State Education Agencies (SEAs) concerning the implications of federal program indirect costs. The Indirect Cost Workshop was established to develop communication concerning the problems between the United States Office of Education (USOE), SEAs, and several SEAs that have USOE-approved plans for indirect costs. The information gained through the workshop was to assist the SEAs in completing preparations for their Indirect Cost System before the deadline of June 30, 1973. The document begins by reproducing Federal Circular No. A-87 which sets forth principles for determining the allowable costs of programs administered by State and local governments under grants from and contracts with the Federal Government. The Michigan Indirect Cost Plan and the forms used in that plan are considered next. The document concludes by examining the federal view of program Indirect Costs and by considering Indirect Cost problems as viewed by centralized State administrative services and the local education agency. (Author/DN)