Loading...
HomeMy WebLinkAbout2023 Cost Allocation Plan FINAL Kittitas County Central Services Simplified Indirect Cost Allocation Plan Effective January 1, 2023 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: 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 Service Department Costs 2,351,886 Other Indirect Costs 711,104 Total Indirect Service Costs 3,062,990 Total Direct-Cost Personnel 22,340,162 Indirect Cost Rate 13.7% Auditor-Recommended Rate 13.7% Central Services – services that are provided to the organization, the customers of the Central Service s 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 2021 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 2021 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 February 27, 2023, Report #1032086. 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 2021 actual expenses were $951,998. 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, $913,918, 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 $38,030, which includes salaries reimbursed by other funding sources. Information Technology (Services) Information Technology is responsible for maintaining the county computer equipment and software for all departments. Total 2021 actual expenses for Information Technology were $1,443,628 plus depreciation of $156,427. Capital outlay and software/subscription costs of $533,723 are excluded. Human Resource The Human Resource Department administers various programs involving recruitment, compensation, benefits, collective bargaining, and personnel policy. The 2021 actual expenses are $371,636. 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 2021 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 $30,000 are reflected as additional indirect costs. Facilities Maintenance The facilities maintenance 2020 expenses for the Courthouse were $470,395, 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 $40,000. Non-Departmental This department’s expense for 2020 is $1,449,286. Included costs from this department include payments for the state auditor and dues for a total of $108,566. The 2021 state auditor costs were $83,027. 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 $25,539. Department Costs 951,998 Depreciation Expense - Excluded Costs (38,080) Unallowable Costs - Total Indirect Costs 913,918 Department Costs 1,443,628 Depreciation Expense 156,427 Excluded Costs (533,723) Unallowable Costs - Total Indirect Costs 1,066,332 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 2021, 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 $158,817. The total expenses for 2021 were $588,190. The total amount of allowable included costs for the Treasurer is $429,373. 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 (3) • Indirect Cost Allocation (Simplified Method) work papers • Resolution Adopting Central Services Simplified Indirect Cost Allocation Plan for Budget Year 2023 • Cost Allocation Certificate Kittitas County Central Services Indirect Cost Allocation (Simplified Method) Effective January 1, 2023 Indirect Cost Rate Computation: Indirect Costs divided by 3,062,990 13.71% Direct Salaries & Wages 22,340,162 TBD a b c d e f Indirect Functions that Provide Total Costs Additional Costs Excluded Costs Unallowable Indirect Direct All Other Services to the Service Providing Units 12-31-2021 ie Depr, Rev Costs Costs Salaries/Wages Direct Costs a+b+c+d 0011 Auditor Accounting 951,998 (38,080) - 913,918 0017 Information Technology Information Technology 1,443,628 156,427 (533,723) - 1,066,332 0020 Communications Postage Machine/Cle Elum Line 0 0 0 0 0 0038 Human Resource Human Resources 371,636 - - - 371,636 Total Indirect Services 2,767,262 156,427 (571,803) 0 2,351,886 - - Indirect Cost Rate = Adopted Rate = See Accompanying Narrative 1 of 4 Kittitas County Central Services Indirect Cost Allocation (Simplified Method) Effective January 1, 2023 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 12-31-2021 ie Depr, Rev Costs Costs Salaries/Wages Direct Costs a+b-f 0010 Assessor Assessor 1,369,214 - - - - 922,941 446,273 0011 Auditor Auditor (excl accounting) 865,823 - (692,658) 173,165 450,708 415,115 0012 Board Equalization Board Equalization 27,606 - - - - 21,529 6,077 0013 Fire Marshal Fire Marshal 276,821 - - - - 179,684 97,137 0015 County Clerk County Clerk 508,154 - - - - 338,562 169,592 0016 Commissioners Commissioners 766,370 - - - - 476,703 289,667 0018 Cooperative Extension WSU Extension 201,242 - - - - 108,935 92,307 0019 Disability Board Disability Board 22,755 - - - - 16,296 6,459 0021 Judge - Superior Court Judge - Superior Court 963,888 - - - - 340,764 623,123 0022 Juvenile Juvenile 596,816 - - - - 373,738 223,078 0023 Law Library Law Library 9,552 - - - - 3,790 5,762 0024 Lower District Court Lower District Court 1,124,473 - - - - 675,327 449,146 0025 Facilitites Maintenance Facilities Maintenance Admin 1,183,630 - - 328,708 854,922 See Accompanying Narrative 2 of 4 Kittitas County Central Services Indirect Cost Allocation (Simplified Method) Effective January 1, 2023 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 12-31-2021 ie Depr, Rev Costs Costs Salaries/Wages Direct Costs a+b-f 0026 Non-Departmental Non-Departmental 1,449,286 - - - 108,566 124,661 1,324,625 0027 Coroner Coroner 505,447 - - - - 203,856 301,591 0029 Prosecutor Prosecutor Admin 2,046,100 - - - - 1,426,921 619,179 0030 Sheriff Sheriff 10,055,220 - - - - 5,604,214 4,451,006 0031 Treasurer Treasurer 588,190 - (158,817) - 429,373 326,340 261,850 0032 Upper District Court Upper District Court 647,969 - - - - 408,535 239,434 0033 Pest Control Pest Control 47,938 - - - - - 47,938 0034 Conference of Government Conference of Government 0 - - - - - - 0036 Library Advisory Board Library Advisory Board 163,500 - - - - - 163,500 0037 Emergency Management Emergency Management 212,540 - - - - 41,307 171,233 0040 Criminal Justice Criminal Justice 47,244 - - - - - 47,244 0039 Admissions Tax Admissions Tax 0 - - - - - - 0043 Declaration of Emergency Declaration of Emergency 783,700 - - - - 284,573 499,127 0044 Post Employment Benefits Post Employment Benefits 79,819 - - - - - 79,819 0045 Historical Document ProgramHistorical Document Program 16,389 - - - - 13,608 2,781 0046 Current Use Current Use 518 - - - - - 518 0047 North Mobile Home Park North Mobile Home Park 182,941 - - - - 11,583 171,358 0060 Computer Replacement Computer Replacement 0 - - - - - - 109 Event Center Event Center 2,097,297 - - - - 459,464 1,637,833 101 Airport Airport 848,093 - - - - 145,500 702,593 103 Youth Amatuer Sports ActivityYouth Amatuer Sports Activity 5,500 - - - - - 5,500 105 Community Services Mental Health 1,497,430 - - - - 26,622 1,470,808 106 County Road County Road 15,191,714 - - - - 3,124,868 12,066,846 107 Flood Control Flood Control 3,975,407 - - - - 116,445 3,858,962 108 Public Facilities Public Facilities 637,965 - - - - - 637,965 110 EIS Trust EIS Trust 97 - - - - - 97 112 Low Income Housing Low Income Housing 46 - - - - - 46 113 Recreation Recreation 16,271 - - - - - 16,271 114 Homelessness Housing Homelessness Housing 490,599 - - - - - 490,599 115 Trial Court Improvements Trial Court Improvements 56,454 - - - - - 56,454 116 Public Health Public Health 2,440,201 - - - - 1,411,132 1,029,069 See Accompanying Narrative 3 of 4 Kittitas County Central Services Indirect Cost Allocation (Simplified Method) Effective January 1, 2023 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 12-31-2021 ie Depr, Rev Costs Costs Salaries/Wages Direct Costs a+b-f 117 Construction Performance BondsConstruction Performance Bonds 0 118 Veterans Assistance Veterans Assistance 23,344 - - - - 160 23,184 119 911 Excise 911 Excise 687,526 - - - - - 687,526 120 3/10ths 3/10ths 2,005,758 - - - - 1,180,594 825,164 122 Treasurers Investment Rev Treasurers Investment Rev 57,301 - - - - 35,956 21,345 122 Treasurers M&O Treasurers M&O 83,034 - - - - 53,658 29,376 123 Noxious Weed Noxious Weed 414,230 - - - - 216,772 197,458 125 Auditor Centenial Doc Auditor Centenial Doc 0 - - - - - - 127 Misdemeanant Probation Misdemeanant Probation 692,139 - - - - 457,600 234,539 130 Prosecutor Victim Witness Prosecutor Victim Witness 161,995 - - - - 102,472 59,523 131 Drug Enforcement Drug Enforcement 10,000 - - - - - 10,000 134 Public Defense Public Defense 88,654 - - - - - 88,654 135 Forfeited Drug Proceeds Forfeited Drug Proceeds 4,372 - - - - - 4,372 140 Hotel Motel Hotel Motel 707,396 - - - - 959 706,437 142 Real Estate Excise Tax TechReal Estate Excise Tax Tech 0 - - - - - - 202 Debt Funds Debt Funds 1,757,616 - - - - - 1,757,616 301 Capital Improvements Capital Improvements 0 - - - - - - 309 Rodeo Grounds Capital ImproveRodeo Grounds Capital Improve - - - - - - - 401 Solid Waste Solid Waste 5,246,408 - - - - 639,929 4,606,479 402 Community Development ServicesCommunity Development Services 2,235,564 - - - - 1,094,600 1,140,964 403 Water Mitigation Water Mitigation (2,263,589) - - - - 90,589 (2,354,178) 501 ER&R ER&R 2,257,772 - - - - 499,558 1,758,214 504 Dental Self Insurance ProgramDental Self Insurance Program 0 - - - - - 511 Unemployment Unemployment 34,399 - - - - - 34,399 517 Computer Replacement Internal Service FundCRIS 156,427 - - - - 156,427 601 Jerry Williams Library Trust Jerry Williams Library Trust 0 - - - - - - 622 Private Water Trust Private Water Trust 0 - - - - - - Total Direct Services 66,360,564 - (851,475) 0 711,104 22,340,162 44,020,402 TOTAL 69,127,826 156,427 (1,423,278) 0 3,062,990 22,340,162 44,020,402 See Accompanying Narrative 4 of 4 KITTITAS COUNTY CERTIFICATE OF COST ALLOCATION PLAN This is to certify that I have reviewed the cost allocation plan submitted herewith and to the best of my knowledge and belief: (1) All costs included in this proposal for the period ended December 31, 2021 are to establish cost allocations or billings starting January 1, 2023 are allowable in accordance with the requirements of the Part; 2 CFR Part 200, “Uniform Administration Requirements, Cost Principles and Audit Requirements for Federal Awards” and the Federal award(s) to which they apply. Unallowable costs have been adjusted for in allocating costs as indicated in the cost allocation plan. (2) All costs included in this proposal are properly allocable to Federal awards on the basis of a beneficial or causal relationship between the expenses incurred and the Federal awards to which they are allocated in accordance with applicable requirements. Further, the same costs that have been treated as indirect costs have not been claimed as direct costs. Similar types of costs have been accounted for consiste ntly. I declare that the foregoing is true and correct. Governmental Unit: Kittitas County Central Services The 2020 rate approved is 13.3% Signature: ____________________________ Name of Official: Bryan Elliott Title: Kittitas County Auditor Effective Date: January 1, 2023