2013 Department of Finance Fiscal Systems and Consulting Unit Full Cost Recovery Policy Central Service Costs Allocation SWCAP Budgeting amp Recoveries Pro Rata Budgeting amp Recoveries ID: 694134
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Slide1
Pro Rata/SWCAP Plan Overview 2013
Department of Finance
Fiscal Systems and Consulting UnitSlide2
Full Cost Recovery Policy
Central Service Costs Allocation
SWCAP Budgeting & Recoveries
Pro Rata Budgeting & RecoveriesReportsTimeline
AGENDASlide3
Full Cost Recovery PolicySlide4
The state policy is for departments to recover full costs whenever goods or services are provided for others. The full cost includes all costs
attributable directly to the activity plus a fair share
of indirect costs. Direct CostsIndirect CostsFull Cost Recovery PolicySlide5
Full Cost Recovery Policy
GC 11010 ~
When billing other entities, state agencies supported by the General Fund are required to include an administrative cost factor.
SAM 8752 ~ Departments providing goods or services to others will recover full costs. This applies to all departments regardless of funding sources and in all cases unless a department is specifically exempted by law. Slide6
Elements of Full CostDirect Costs
$ XXXX
Indirect Costs
a) Departmental $ XXb) Statewide: Pro Rata XX or SWCAP XX XXXXTotal Costs $XXXXXSlide7
Direct Costs– are directly assignable to a program:
Salaries and wages
Equipment
Operating expenses (not included in use allowance calculations)Travel expensesSlide8
Indirect Costs– are not directly assignable to a program:
Departmental (overhead) costs assigned to many programs:
Executive staff
Information technologyAccounting staffBudget staffOtherSlide9
Indirect Costs Statewide:
Fair share of costs incurred by Central Service Agencies (CSAs).
Pro Rata
Recovery of CSA costs from special funds and some nongovernmental cost funds SWCAP Recovery of CSA costs from federal fundsSlide10
Indirect Costs
Indirect Costs
Department’s
Indirect Costs(Budgets, IT, Acctg, etc.)Pro Rata Costs(CSA cost allocationto special funds)SWCAP Costs
(CSA cost allocation to federal funds)
Only 60 departments
have SWCAPSlide11
What is a Central Service Agency (CSA) Cost? Slide12
Central Service Agency Costs State Administrative Manual Section 8753
Central service costs are those amounts expended by central service departments and the Legislature for overall administration of state government and for providing centralized services to state departments.
These functions are necessary for state operations and are centralized to provide efficient and consistent statewide policy and services.Slide13
Central Services
Function CodeCentral Service
Workload Unit
Source
Finance (DOF)
004
Audits
Audit Hours
DOF/OSAE
005
Budgets
Budget Hours
DOF/Admin
010
CALSTARS
State Ops $
DOF/Sch. 10
Department of Technology
105
Department of Technology
State Ops $
DOF/Sch. 10
Financial Information Systems for California
110
Financial Information System for California (SWCAP only)
State Ops $
DOF/Sch. 10
State Controller’s Office (SCO)
201
Accounting
Transactions
SCO
202
Claim Audits
Warrants
SCO
203
Payroll
Warrants
SCO
204
General Disbursements
Warrants
SCOSlide14
Central Services
Function CodeCentral Service
Workload Unit
Source
600
Health Benefits (HB) for Annuitants (Retired)
HB Costs for Active Employees
SCO/PERS/
CalHR
601
Dental Benefits (DB) for Annuitants' (Retired)
DB Costs for Active Employees
SCO/PERS/
CalHR
Department of Justice (DOJ)
605
Legal (SWCAP Only)
Attorney Hours
DOJ
607
Tort Liability (SWCAP Only)
Attorney Hours
DOJ
800
Legislature (Pro Rata Only)
Sum of Past Actual
DOF/FSCU
805
Legislative Counsel Bureau (Pro Rata Only)
Sum of Past Actual
DOF/FSCUSlide15
Central Service Costs AllocationSlide16
Cost Allocation Process
Obtain workload and expenditure data from the CSAs:
Past year (PY) actual workload data
PY actual expenditures (must tie to year-end financial statements)Budget year (BY) estimate expendituresCalculate and distribute CSA costs to state departments based on workloadSlide17
Distribute total departmental allocation
Pro Rata – proportionately to all funds in the department based on each fund’s percentage of total departmental funding.
SWCAP – proportionately to the federal fund based on its percentage of total departmental funding.Slide18
Determine the total allocated to each
fund (Pro Rata Only)
Calculate the total allocation using the departmental allocation for each fund (PY and BY) from Step 3 and the BY estimate from two years ago (PY estimate).
PY PY Roll
-
BY Total
Actual Estimate Forward Estimate Allocation
–
=
+
=Slide19
Classify the allocation by billable or
non-billable funds (
Pro Rata only
)Billable funds: Funded by special revenue sources such as fees, licenses, penalties, assessments, interests, etc.Non-billable funds: General Fund Federal Funds Special Deposit Fund(SWCAP only federal fund is billable)Slide20
Budgeting for SWCAP(Federal Recoveries)Slide21
Budgeting for SWCAPAll departments receiving federal funds must budget and recover SWCAP.
If there are caps/restrictions in the grant language for recovering administrative costs, departments should try to work with their federal cognizant agency to see if it can be eliminated. If this cannot be done, the SWCAP budget may need to be modified by using Method B.
Federal Funding
State OperationsX
Department’s Total SWCAP Allocation
=
Department’s Budgeted SWCAPSlide22Slide23
Budgeting for SWCAP Finance budget analyst receives SWCAP apportionment sheet (pink).
Department budget analyst, in collaboration with Finance budget analyst, determine if the Method A calculation results in an equitable budgeted amount, or if a Method B should be used.
Department certification and Finance approval is required.Slide24
SWCAP RecoveriesSlide25
SWCAP RecoveriesSWCAP Plan submitted/approved to the federal government.
Methods of SWCAP Cost Recovery:ICRP’s (Indirect Cost Rate Proposal)
CAP (Cost Allocation Plan)
PACAP (Public Assistance Cost Allocation Plan)Direct billingSlide26
SWCAP RecoveriesAs a general rule ICRP’s and CAP’s are to be filed with the department’s cognizant federal agency at least six months prior to the fiscal year that applies. ICRP’s and CAP’s must be submitted to the Department of Finance for approval before filing with the cognizant federal agency.Slide27
SWCAP RecoveriesState departments must bill the federal government for direct and indirect costs. Departments are responsible for complying with federal and state requirements to ensure that SWCAP costs can be recovered from the federal government.Slide28
SWCAP Recovery Process(Department’s Responsibility)
Bill
Federal Fund
for Direct Plus IndirectCostsReceipt of FederalFundsTransferSWCAP portion toGeneral FundSlide29
SWCAP TransferEach federally funded state department must initiate the transfer process using the Transaction Request, TR form CA 504. (Transfers do not occur automatically.)
SAM section 8755.2 states “Government Code Sections 13332.01–13332.02, require departments to recover SWCAP costs from the federal government and to transfer the SWCAP recoveries to the General Fund within
30 days
after the end of each quarter.” Slide30
Transaction RequestSlide31
SWCAP TransferDepartments submit Transaction Request to SCO and send copies to:
FSCU
Department’s Finance Budget analyst
SWCAP transfer(s) are due within 30 days after the end of a quarter where a recovery occurs. Slide32
SWCAP Journal EntrySlide33
Control Section 8.54As of the 2010-11 Budget Act, Control Section 8.54 was added to provide Finance the authority to reduce a department’s support appropriation when required transfers are past due or not sufficient. Control section is cited on the pink sheet certification.
FSCU monitors and reports SWCAP recoveries. State departments will be contacted for discrepancies.Slide34
Budgeting for Pro RataSlide35
BudgetingPro Rata
Similar to SWCAP’s calculation
Department’s Total ProRata AllocationBillable Fund State OperationsX
=
Fund’s
ProRata
AssessmentSlide36
Budgeting Pro Rata Assessment Sheet
(green sheet)Does not include amounts less than $1,000 or negative
amounts.
Finance budget analysts forward assessment sheet(s) to the departments for certification.Slide37Slide38
Pro Rata RecoveriesSlide39
Pro Rata RecoveriesPro Rata Certification
In June Finance certifies Pro Rata billable assessments to the SCO.
SCO notifies state entities of their Pro Rata assessments.
SCO will set-up the transfers to occur automatically on a quarterly basis.Slide40
Pro Rata Journal EntrySlide41
ReportsSlide42
ReportsPro
Rata Detail by Functions
Pro
Rata Detail by FundsSWCAP Detail by AgencySWCAP RecoveriesSlide43
TimelineJune – August
FSCU provides training for Central Service Agency (CSA) staff
CSAs receive Workload, Expenditure and Misc spreadsheets from FSCU
FSCU reviews and processes central services data Departments to complete final prior year SWCAP recoveriesSeptemberFSCU runs Pro Rata and SWCAP cost allocation (pink and green sheets prepared)Finance Budget Letter release to departmentsFinance budget analysts distribute the pinks and greens to departments’ budget officeOctoberDepartments turn in signed/certified pinks and greens to Finance budget analysts
FSCU finalizes Pro Rata and SWCAP amounts for the January 10 Governor’s Budget
October – December
SWCAP departments turn in their ICRP/CAP to FSCU for review before submitting to the feds by December 31
February – April
FSCU notifies departments of the final negotiated SWCAP amounts (DHHS Rerun)
June
SCO notifies departments on the new fiscal year Pro Rata assessmentsSlide44
ReferencesPro Rata/SWCAP:Variety of information:
http://www.dof.ca.gov/accounting/fscu/pro_rata-swcap/
Federal information:
Federal Circular A-87:http://www.whitehouse.gov/omb/circulars/a087/a87_2004.htmlCost Principles and Procedures (ASMB C-10):http://www.hhs.gov/grantsnet/stateSlide45
ContactsPhone: (916) 445-3434Lead Analyst – Jerome Tribble (
ext 2140)Pro Rata Analyst – Monica Medina (ext 2145)
SWCAP Analyst – Corrine Lim (ext 2166)
E-mail: FIPROSWP@dof.ca.govDOF Website: http://www.dof.ca.gov