The LDA+DMFT (local density approximation combined with dynamical mean-field theory) computation scheme has been used to study spectral and magnetic properties of FeSi and Fe$_{1-x}$Co$_{x}$Si. Having compared different models we conclude that a correlated band insulator scenario in contrast to Kondo insulator model agrees with FeSi band structure as well as experimental data. Coulomb correlation effects lead to band narrowing of the states near the Fermi level with mass renormalization parameter $m^*approx 2$ in agreement with the results of angle-resolved photoemission spectroscopy (ARPES). Temperature dependence of spectral functions and magnetic susceptibility calculated in DMFT reproduces transition from nonmagnetic semiconductor to metal with local magnetic moments observed experimentally. Cobalt doping leads to ferromagnetism that has itinerant nature and can be successfully described by LDA+DMFT method.
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