HomeMy WebLinkAbout2022 Indirect Cost Allocation Plan
Kittitas County
Central Services Simplified Indirect Cost Allocation Plan
Effective January 1, 2022
SUMMARY
The following Central Services Indirect Cost Allocation Plan (“Plan”) memorializes a cost rate for
the provision of indirect services, i.e. services provided by certain County Departments to other County
departments. The Plan is compiled pursuant to Federal regulations, is revised and formally adopted
annually, and establishes a reasonable and consistent basis to account for internal-service costs. The
rate is established and certified by the County Auditor, and formally adopted via Resolution by the
County Commissioners.
The primary application of the indirect cost rate is for grants-accounting and reporting, though it
can also be used to establish costs for contracted county services, or for internal budgeting and
accounting.
The cost rate reflects the countywide indirect services costs as a percentage of direct service
(i.e. services provided to County citizens) personnel costs. The rate is calculated based on 2020
audited figures, and is adjusted to reflect allowable and excluded costs and an error-margin. The 2022
indirect cost rate is calculated according to the federal Office of Management and Budget simplified
method as follows:
Central Service Department Costs 2,810,104
Other Indirect Costs 689,859
Total Indirect Service Costs 3,499,963
Total Direct-Cost Personnel 20,724,493
Indirect Cost Rate 16.9%
Auditor-Recommended Rate 15.0%
This plan distinguishes Indirect Service departments (those that primarily provide services to
other County departments) from Direct Service departments (those that primarily provide services to
County citizens).
The accounting, information technology, communications, and human resources departments
are the identified indirect service departments, and are the primary providers of central services. Their
operations are 90% dedicated to internal customers, and their central services costs comprise 80% of
countywide central services costs. There are four other departments (Auditor/Administration,
Courhouse, non-Departmental, Treasurer) that provide indirect services, though not as their primary
function.
DEFINITIONS
Additional Costs – Additional expenses not accounted for at the department level, including
depreciation.
All Other Direct Costs – the amount remaining from total costs less additional expenses, unallowable
costs, indirect costs, and direct salaries & wages.
Capitalized Assets – Purchases of Asset that has a value $5,000 or above and has a life longer than
one year. These assets are depreciated. The Capitalized Asset is removed as an unallowable cost.
Central Services – services that are provided to the organization, the customers of the Central Services
are the internal departments, which include Auditor Accounting, Information Technology,
Communications, and Human Resource.
Central Service Cost allocation plan – means the documentation identifying, accumulating, and
allocating or developing rates based on the allowable costs of services provided by a governmental unit
on a centralized basis to its departments and agencies. The costs of these services may be allocated
or billed to users.
Department – all County Departments and/or County Funds.
Depreciation – Allocating the costs of a Capitalized Asset to periods benefiting the assets use.
Direct Salaries & Wages – the 2019 fiscal year end salaries & wages for each department
Excluded Costs - Certain items of cost are classified by Uniform Guidance as extraordinary or
distorting expenditures and are excluded from the computation of the indirect cost rate i.e. capitalized
equipment.
Indirect Costs – costs incurred for a common or joint purpose benefiting more than one cost objective
Indirect Cost Rate – a devise for determining in a reasonable manner the proportion of indirect costs
each program should bear. It is the ratio of the indirect coast to a direct cost base.
Sub Department – additional breakdown of a department expenses for accounting purposes
Total Costs – the 2019 fiscal year end actual expenses
Unallowable Costs – Certain items of cost are classified by Uniform Guidance as unallowable, which
means that federal funds cannot be used for those items of cost. For indirect cost rate calculation,
however, these unallowed costs are included in the base along with the direct costs. Some examples
for unallowed costs are: Governance, promotional advertising, entertainment, and fines & penalties.
Uniform Guidance – United States Office of Management & Budget, 2CFR Part 200, Uniform
Administration Requirements, Cost Principles and Audit Requirements for Federal Awards establishing
principles and standards for determining costs for Federal awards carried out through grants, cost
reimbursement contracts, and other agreements with governmental units.
FINANCIAL INFORMATION
Accounting
Governmental fund financial statements are reported using the current financial resources
measurement focus and the modified accrual basis of accounting. Revenues are recognized as soon
as they are both measurable and available. Revenues are considered to be available when they are
collectible within the current period or soon enough thereafter to pay liabilities of the current period.
Audited Data
Kittitas County is audited annually by the State Auditor’s office. The audits consist of Financial
and Single Audit and the Accountability Audit. The Financial and Single Audit was issued on March 31,
2022, Report #1030224. The report states:
.
Depreciation
Capital assets, which includes property, plant, equipment, and infrastructure assets, (e.g.,
roads, bridges, sidewalks, and similar items), are reported in the applicable governmental or business-
type columns in the government-wide financial statements. Capital assets are defined by the county as
assets with an initial, individual cost of more than $5,000 and an estimated useful life more than one
year. Such assets are recorded at historical cost or estimated historical cost if purchased or
constructed. Donated capital assets are recorded at estimated fair market value at the date of donation.
Kittitas County has elected to use the modified approach to account for the infrastructure account;
Gravel Roads, which eliminates the need to report depreciation expense.
Computer Software is reported as Intangible Assets with a capitalization limit of $5,000 and is
not depreciated.
Capital Leases are defined as long term debt to the county. The asset is tracked but there is
not value placed in the Capital Assets. Capital Leases are determined by one of the following four
criteria; 1) The lease transfers ownership of the property to the lessee by, or at, the end of the lease
term; 2) The lease contains an option to purchase the leased property at a bargain price; 3) The lease
is equal to or greater than 75% of the estimated economic life of the leased property; 4) The present
value of rental and other minimum lease payments, excluding that portion representing executory costs
to be paid by the lessor, equals or exceeds 90% of the fair value of the lease property.
The cost of normal maintenance and repairs that do not add to the value of the asset or
materially extend assets lives are not capitalized.
Major outlays for capital assets and improvements are capitalized as projects are constructed.
Interest incurred during the construction phase of the capital assets of business-type activities is
included as part of the capitalized value of the assets constructed.
Property, plant, and equipment of the primary government are depreciated using the straight-
line method over the following estimated useful lives:
Assets Years
Buildings & Improvements 5-60
Improvements other than Buildings 5-50
Machinery & Equipment 3-20
Roads, Guardrails & Traffic Signals 20
Bridges 51
Time and Attendance
Kittitas County uses an electronic time and attendance system to track employee’s time.
Employees who allocate their time are required to post their time by project or by project time
distribution. This allows the time costs to be charged to the specific project.
Travel Reimbursements
Kittitas County’s travel policy for 2020 followed the Federal Guidelines for employee
reimbursement of travel costs. Kittitas County uses the High-Low cost of travel reimbursement.
INDIRECT FUNCTIONS
Auditor – Accounting
The Accounting Division is responsible for the Budgeting, Auditing and Accounting for the
county. The total Auditor’s Accounting Division 2020 actual expenses were $781,313. The accounting
division audits the vouchers and payrolls and processes the warrants for the junior taxing districts. The
allocation for the amount of time the accounting division spends on the other districts is 4.12% of the
total hours. The amount of salaries, benefits and supplies allocated, $751.464, as an indirect cost is
96%. All other operating expenses were allocated at 100% except for penalties and fines which are not
allowed. The amounts of excludable and unallowable costs are $32,661, which includes salaries
reimbursed by other funding sources.
Department Costs 781,313
Depreciation Expense 2,812
Excluded Costs (25,035)
Unallowable Costs (7,626)
Total Indirect Costs 751,464
Information Technology (Services)
Information Technology is responsible for maintaining the county computer equipment and
software for all departments. Total 2020 actual expenses for Information Technology were $1,987,459
plus depreciation of $82,634. Capital outlay costs of $352,566 are excluded.
Department Costs 1,987,459
Depreciation Expense 82,634
Excluded Costs (352,566)
Unallowable Costs -
Total Indirect Costs 1,717,527
Communications
The Communications Department is responsible for the County’s postage machine; the county’s
phone system and the copier, which is in the auditor’s office. Total 2020 actual expenses for
Communications were $4,413, plus depreciation of $239. Excluded costs total $1,038.
Department Costs 4,413
Depreciation Expense 239
Excluded Costs (1,038)
Unallowable Costs -
Total Indirect Costs 3,614
Human Resource
The Human Resource Department administers various programs involving recruitment,
compensation, benefits, collective bargaining, and personnel policy. The 2020 actual expenses are
$337,499. There were no additional, excluded, or unallowable costs.
DEPARTMENTS THAT PROVIDE DIRECT SERVICES
Auditor- Administration
The Auditor is responsible for five sub-departments (Accounting, Recording, Vehicle Licensing,
Elections and Voter Registration) with a total of thirteen employees:. During 2020 the accounting staff
had six full time employees and one intern. The County Auditor dedicates an estimated 20% of his time
to Accounting functions, and these related costs of $30,582 are reflected as additional indirect costs.
Facilities Maintenance
The facilities maintenance 2020 expenses for the Courthouse were $480,651, plus depreciation
of capitalized expenses on the building and equipment of $77,442. The total included allowable costs
are divided by the square footage of the Courthouse building (73,707) to arrive at a cost per square
foot of $7.57. This cost is then pro-rated to departments based on their occupancy. Costs for Indirect
service departments are calculated as $39,914
Non-Departmental
This department’s expense for 2020 is $2,888,772. Included costs from this department include
payments for the state auditor and dues for a total of $107,666. The 2019 state auditor costs were
$82,583. The audit was for the Single and Financial Audit and the Accountability Audit. The dues that
affect all departments; WSAC, WACO, NACO and state purchasing are $25,083.
Treasurer
The County Treasurer is responsible for the collection of the taxes, receipting of all money from all
departments/funds, investments, and the redemption of all county warrants. As of year-end 2020, 52%
of treasury funds were held on behalf of Special Purpose districts. This percentage is applied to
Treasury Department personnel costs to arrive at excluded costs of $233,210. The total expenses for
2020 were $748,635. The total amount of allowable included costs for the Treasurer is $515,425.
GENERAL COSTS OF GOVERNMENT
Under Paragraph 200.444 of Uniform Administration Requirements, Cost Principles and Audit
Requirements for Federal Awards the general costs of government are unallowable. The following
unallowable costs include:
Salaries and expenses of the Board of County Commissioners,
Cost of the judicial branch of government
Cost of prosecutorial activities unless treated as a direct cost to a specific program if authorized
by statues or regulation
Cost of other general types of government services normally provided to the public such as fire
and police
ATTACHMENTS
Indirect Cost Allocation (Simplified Method) work papers
Kittitas County Central Services Indirect Cost Allocation (Simplified Method)
Effective January 1, 2022
Indirect Cost Rate Computation:
Indirect Costs divided by 3,499,963 16.89%
Direct Salaries & Wages 20,724,493
15.00%
Sub Department
Indirect Functions that Provide
Services to the Service Providing Units a b c d e f
Total Costs Additional Costs Excluded Costs Unallowable Indirect Direct All Other
12-31-2020 ie Depr, Rev Costs Costs Salaries/Wages Direct Costs
a+b+c+d
0011 Auditor Accounting 781,313 2,812 (25,035) (7,626) 751,464
0017 Information Technology Information Technology 1,987,459 82,634 (352,566) - 1,717,527
0020 Communications Postage Machine/Cle Elum Line 4,413 239 (1,038)0 3,614
0038 Human Resource Human Resources 337,499 - - - 337,499
Total Indirect Services 3,110,684 85,685 (378,639)(7,626)2,810,104 - -
Department
Indirect Cost Rate =
Adopted Rate =
See Accompanying Narrative 1 of 4
Kittitas County Central Services Indirect Cost Allocation (Simplified Method)
Effective January 1, 2022
Departments that Provide Direct Services a b c d e f
to the Citizens of the County Total Costs Additional Costs Excluded Costs Unallowable Indirect Direct All Other
12-31-2020 ie Depr, Rev Costs Costs Salaries/Wages Direct Costs
a+b-f
0010 Assessor Assessor 1,293,385 - - - - 863,157 430,228
0011 Auditor Auditor Administration 152,912 - (122,330) 30,582 96,298 56,614
0011 Auditor Recording 134,585 - - - - 94,435 40,150
0011 Auditor Vehicle Licensing 189,815 - - - - 127,958 61,857
0011 Auditor Elections 312,328 - - - - 94,823 217,505
0011 Auditor Voter Registration 49,148 - - - - 25,939 23,209
0012 Board Equalization Board Equalization 15,678 - - - - 11,942 3,736
0013 Fire Marshal Fire Marshal 327,267 - - - - 171,693 155,574
0015 County Clerk County Clerk 468,898 - - - - 320,530 148,368
0016 Commissioners Commissioners 608,341 - - - - 408,934 199,407
0018 Cooperative Extension WSU Extension 176,800 - - - - 111,658 65,142
0019 Disability Board Disability Board 22,814 - - - - 15,536 7,278
0021 Judge - Superior Court Judge - Superior Court 950,123 - - - - 325,388 624,735
0022 Juvenile Juvenile 636,609 - - - - 351,665 284,944
0023 Law Library Law Library 18,619 - - - - 3,715 14,904
0024 Lower District Court Lower District Court 1,131,104 - - - - 656,085 475,019
0025 Facilitites Maintenance Facilities Maintenance Admin 36,406 - - 30,000 6,406
0025 Facilitites Maintenance Courthouse 480,651 77,442 39,914 207,643 350,450
0025 Facilities Maintenance Sorenson Building 65,629 - - - - 22,649 42,980
0025 Facilities Maintenance Upper District Court 130,037 - - - - 2,574 127,463
0025 Facilities Maintenance Permit Center 46,677 - - - - 15,702 30,975
0025 Facilities Maintenance Jail 484,600 - - - - 36,434 448,166
0025 Facilities Maintenance Sheriff Admin 36,697 - - - - 5,396 31,301
0025 Facilities Maintenance Maintenance Vehicles 7,294 - - - - - 7,294
0025 Facilities Maintenance MotorPool 4,919 - - - - 51 4,868
0025 Facilities Maintenance Event Center 1,899 - - - - 1,745 154
0025
See Accompanying Narrative 2 of 4
Kittitas County Central Services Indirect Cost Allocation (Simplified Method)
Effective January 1, 2022
Departments that Provide Direct Services a b c d e f
to the Citizens of the County Total Costs Additional Costs Excluded Costs Unallowable Indirect Direct All Other
12-31-2020 ie Depr, Rev Costs Costs Salaries/Wages Direct Costs
a+b-f
0026 Non-Departmental Non-Departmental 2,888,772 - - - 103,938 93,397 2,795,375.00
0027 Coroner Coroner 352,356 - - - - 171,107 181,249
0029 Prosecutor Prosecutor Admin 1,229,430 - - - - 852,393 377,037
0029 Prosecutor Prosecutor Civil 711,568 - - - - 457,289 254,279
0029 Prosecutor Prosecutor Sexual Assualt Interv 16,805 - - - - 8,844 7,961
0030 Sheriff Sheriff 9,779,958 - - - - 5,179,838 4,600,120
0031 Treasurer Treasurer 748,635 - (233,210) - 515,425 328,683 419,952
0032 Upper District Court Upper District Court 656,620 - - - - 424,023 232,597
0033 Pest Control Pest Control 44,997 - - - - - 44,997
0034 Conference of Government Conference of Government 118 - - - - 76 42
0036 Library Advisory Board Library Advisory Board 163,950 - - - - - 163,950
0037 Emergency Management Emergency Management 121,105 - - - - 35,581 85,524
0040 Criminal Justice Criminal Justice 44,431 - - - - - 44,431
0039 Admissions Tax Admissions Tax 77,160 - - - - - 77,160
0043 Declaration of Emergency Declaration of Emergency 991,099 - - - - 512,840 478,259
0044 Post Employment Benefits Post Employment Benefits 57,601 - - - - - 57,601
0045 Historical Document Program Historical Document Program 14,639 - - - - 12,077 2,562
0046 Current Use Current Use 828 - - - - - 828
0047 North Mobile Home Park North Mobile Home Park 164,175 - - - - 5,244 158,931
0060 Computer Replacement Computer Replacement 74,909 - - - - - 74,909
109 Event Center Event Center 1,229,661 - - - - 345,820 883,841
101 Airport Airport 996,543 - - - - 87,608 908,935
103 Youth Amatuer Sports Activity Youth Amatuer Sports Activity 3,500 - - - - - 3,500
105 Community Services Mental Health 486,566 - - - - 19,920 466,646
106 County Road County Road 12,397,092 - - - - 2,775,327 9,621,765
107 Flood Control Flood Control 610,212 - - - - 188,938 421,274
108 Public Facilities Public Facilities 1,977,506 - - - - 5,591 1,971,915
110 EIS Trust EIS Trust 0 - - - - - -
112 Low Income Housing Low Income Housing 100,191 - - - - 48 100,143
113 Recreation Recreation 6,531 - - - - 2,481 4,050
114 Homelessness Housing Homelessness Housing 496,435 - - - - 2,696 493,739
115 Trial Court Improvements Trial Court Improvements 56,421 - - - - 3,006 53,415
116 Public Health Public Health 2,296,140 - - - - 982,008 1,314,132
See Accompanying Narrative 3 of 4
Kittitas County Central Services Indirect Cost Allocation (Simplified Method)
Effective January 1, 2022
Departments that Provide Direct Services a b c d e f
to the Citizens of the County Total Costs Additional Costs Excluded Costs Unallowable Indirect Direct All Other
12-31-2020 ie Depr, Rev Costs Costs Salaries/Wages Direct Costs
a+b-f
117 Construction Performance Bonds Construction Performance Bonds 0
118 Veterans Assistance Veterans Assistance 24,125 - - - - 160 23,965
119 911 Excise 911 Excise 691,508 - - - - - 691,508
120 3/10s Clerk 3/10s Clerk 2,124,650 - - - - 1,193,373 931,277
120 3/10s Juvenile 3/10s Juvenile - - - - -
120 3/10s Prosecutor 3/10s Prosecutor - - - - -
120 3/10s Sheriff 3/10s Sheriff - - - - -
122 Treasurers Investment Rev Treasurers Investment Rev 70,118 - - - - 46,051 24,067
122 Treasurers M&O Treasurers M&O 113,953 - - - - 73,844 40,109
123 Noxious Weed Noxious Weed 419,599 - - - - 225,775 193,824
125 Auditor Centenial Doc Auditor Centenial Doc 67,343 - - - - 306 67,037
127 Misdemeanant Probation Misdemeanant Probation 816,272 - - - - 509,060 307,212
130 Prosecutor Victim Witness Prosecutor Victim Witness 157,052 - - - - 68,683 88,369
131 Drug Enforcement Drug Enforcement 10,000 - - - - - 10,000
134 Public Defense Public Defense 50,857 - - - - - 50,857
135 Forfeited Drug Proceeds Forfeited Drug Proceeds 1,212 - - - - - 1,212
140 Hotel Motel Hotel Motel 504,990 - - - - 11,891 493,099
142 Real Estate Excise Tax Tech Real Estate Excise Tax Tech 0 - - - - - -
202 Debt Funds Debt Funds 971,730 - - - - - 971,730
301 Capital Improvements Capital Improvements 489,428 - - - - - 489,428
309 Rodeo Grounds Capital Improve Rodeo Grounds Capital Improve - - - - - - -
401 Solid Waste Solid Waste 4,640,366 - - - - 630,217 4,010,149
402 Community Development ServicesCommunity Development Services 2,039,822 - - - - 1,032,676 1,007,146
403 Water Mitigation Water Mitigation 72 - - - - 72
501 ER&R ER&R 2,124,751 - - - - 435,672 1,689,079
504 Dental Self Insurance Program Dental Self Insurance Program 1,820 - - - - 1,820
511 Unemployment Unemployment 49,217 - - - - - 49,217
517 Computer Replacement Internal Service FundCRIS 106,261 - - - - 106,261
601 Jerry Williams Library Trust Jerry Williams Library Trust 0 - - - - - -
622 Private Water Trust Private Water Trust 154,817 - - - - - 154,817
Total Direct Services 62,209,152 77,442.00 (355,540)0 689,859 20,724,493 41,562,101
TOTAL 65,319,836 163,127 (734,179)(7,626)3,499,963 20,724,493 41,562,101
See Accompanying Narrative 4 of 4