HomeMy WebLinkAboutAgenda Statement - Indirect Cost Allocation PlanKittitas County Auditor - Agenda Staff Report
Prepared by: Brian Carlson, Budget and Finance Director
Agenda Date: May 3, 2022
Topic: 2022 Indirect Cost Allocation Plan
Action Requested:
Approve Resolution adopting the 2022 Central Services Indirect Cost Allocation Plan
Summary:
• Pursuant to Federal regulations, and as a recipient of Federal grant awards, the County must annually
prepare and adopt an indirect cost allocation plan.
• This agenda item consists of a Resolution to authorize the plan for 2022.
Background:
• Indirect Cost Allocation refers to the cost of certain county departments to provide services to other
County Departments. This enables a quantifiable, reasonable and consistent way to offset the County’s
costs to administer grants.
• Indirect Cost Allocation is also applicable to certain County contracts, and for internal accounting and
budgeting, e.g. Departments and/or Funds pay one another for the provision of services.
• A cost allocation plan is required for most Fed grant recipients. A plan’s threshold requirements are
established by the Federal Office of Management and Budget.
• The rate calculation is formula-driven, and uses the most-recent audited financial data. Therefore, there
is commonly a two-year lag for implementation of a given rate. E.g. 2020 data is used to establish a rate
for operations in 2022.
• The rate calculation is forwarded to the County Auditor, who then commonly applies a margin of error
to arrive at a final “certified” rate. The Certified rate is forwarded to BOCC for review/approval.
• The current plan and recent history are shown below:
Effective Year 2019 2020 2021 2022
Actual Rate 13.01%14.44%13.36%16.89%
Adopted Rate 12.75%12.75%12.75%15.00%
Variance 0.26%1.69%0.61%1.89%
• The 2022 “actual” rate increase is driven by likely one-time expense increases in 2020, primarily in the IT
Department.
• Additional plan information and calculations are contained in the attached 2022 Indirect Cost Allocation
Plan
• Attachments (2):
o Resolution 2022 Indirect Cost Allocation
o 2022 Indirect Cost Allocation Plan