Interagency Agreement HCA and KCPHD for CPWI

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COSTS ALLOWABLE WITH PRIOR APPROVAL Costs described in this section are allowable only if they are approved in advance by the Department. Approval shall be deemed given if the cost is specifically identified in the contract budget or other clause or attachment to the contract. Approval of costs not specifically identified in the contract shall be made by letter or other document which sets forth the nature and amount of the approved cost and the contract for which it is allowed. (1) Client cash payments: Any direct cash payments to departmental clients are allowable only with prior written approval of the Department. (2) Capital expenditures: Cost of acquiring by purchase or capitalized lease land, buildings, or equipment and cost of repair, remodeling, renovation, or improvements which would materially increase the value or useful life of buildings are allowable only with the prior written approval of the Department. (3) Training and education: Cost of training which requires staff to be relieved of regular duties for more than ten working days per training event is allowable only upon prior written approval of the Department. (4) Purchase of equipment must be approved in advance by the contract manager. Title to equipment shall vest in the Department of Social and Health Services unless otherwise determined by the contract manager at the time of purchase. INTEREST EXPENSE (1) Interest on borrowed funds is treated differently depending on the source of funds reimbursing the cost. (a) Costs incurred for interest on borrowed capital or temporary use of endowment funds, however represented, are unallowable as reimbursable costs against a federal grant. (b) Interest on borrowed funds is allowable against state funding if the interest expense meets the applicable requirements of this section. (2) Interest on borrowed funds used to purchase equipment or real property is allowable against state funding with the prior written approval of the Department. (3) Interest on borrowed funds used to create, replenish, or maintain working capital is allowable against state funding, if the following conditions are met: (a) Working capital is depleted due to unusual cash flow, such as abnormally high costs or delays in reimbursement; or working capital has been insufficient for an extended period of time, because the contractor or subcontractor has insufficient eligible income in excess of expenses to accumulate adequate working capital. (b) The borrowed funds are not used to supplant funds which otherwise would be available to finance working capital. Borrowed funds shall be considered to supplant contractor working capital if a decision to deplete working capital is evident, whether the working capital is depleted before or after the arrangements to borrow funds are made. (c) The working capital in aggregate does not exceed ninety days cash flow. (d) The interest expense is approved in advance and in writing by the Department. Washington State Page 82 HCA Contract No. K3924 Health Care Authority