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purposes may be used to apply for Department approval under subsection (4) of this <br />section. <br />ALLOWABLE COSTS <br />A cost is allowable if: <br />(1) It is authorized or not prohibited by federal, state, or local laws and regulations. <br />(2) It conforms to any limitations or exclusions set forth in the contract terms and approved <br />budget, or in applicable state or federal law or regulation. <br />(3) It is approved in advance and in writing by the Department, if it is a cost requiring approval. <br />(4) It is not an unallowable cost. <br />(5) It is consistent with policies, regulations, directives, and procedures of the contractor. <br />(6) It is accorded consistent treatment through application of generally accepted accounting <br />principles. <br />(7) It is adequately documented in source records such as payroll registers and invoices. <br />(8) It is the net of all applicable credits, such as purchase discounts, rebates, and allowances. <br />COSTS ALLOWABLE WITH PRIOR APPROVAL <br />Costs described in this section are allowable only if they are approved in advance by the <br />Department. Approval shall be deemed given if the cost is specifically identified in the contract <br />budget or other clause or attachment to the contract. Approval of costs not specifically identified <br />in the contract shall be made by letter or other document which sets forth the nature and amount <br />of the approved cost and the contract for which it is allowed. <br />(1) Client cash payments: Any direct cash payments to departmental clients are allowable only <br />with prior written approval of the Department. <br />(2) Capital expenditures: Cost of acquiring by purchase or capitalized lease land, buildings, or <br />equipment and cost of repair, remodeling, renovation, or improvements which would <br />materially increase the value or useful life of buildings are allowable only with the prior <br />written approval of the Department. <br />(3) Training and education: Cost of training which requires staff to be relieved of regular duties <br />for more than ten working days per training event is allowable only upon prior written <br />approval of the Department. <br />(4) Purchase of equipment must be approved in advance by the contract manager. Title to <br />equipment shall vest in the Department of Social and Health Services unless otherwise <br />determined by the contract manager at the time of purchase. <br />INTEREST EXPENSE <br />Washington State <br />Health Care Authority Page 75 of90 HCA Contract No. K3924