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Pro Rata/SWCAP Plan Overview Pro Rata/SWCAP Plan Overview

Pro Rata/SWCAP Plan Overview - PowerPoint Presentation

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Pro Rata/SWCAP Plan Overview - PPT Presentation

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

costs swcap pro rata swcap costs rata pro federal state departments cost budget allocation finance sco central fund fscu

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Presentation Transcript

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 SWCAPSlide22
Slide23

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.Slide37
Slide38

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