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Learn about the State of California's Full Cost Recovery Policy as defined in the Government Code and State Administrative Manual. Discover how state departments recover full costs and comply with the policy. Explore the elements of full cost and how it is calculated.
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State’s Full Cost Recovery Policy State of California’s full cost recovery policy is defined in: • Government Code (GC) • State Administrative Manual (SAM) Each State department will comply with the requirements.
State’s Full Cost Recovery Policy- continued Government Code (GC) Section11010: Authorizes full cost recovery and sharing of central service costs by special fund. And . . .
State’s Full Cost Recovery Policy- continued State Administrative Manual (SAM) Sections: • 8752 • Explains the full cost recovery policy. • 8752.1 • Identifies the cost elements to include.
State’s Full Cost Recovery Policy- continued State departments will . . . • Recover full costs when goods or services are provided to others. • Include all costs attributable directly to the activity plus a fair share of indirect costs. And . . .
State’s Full Cost Recovery Policy- continued State departments will: • Apply the State’s full cost recovery policy to all funding sources. • Follow this policy, except where statutes prohibit full cost recovery.
State’s Full Cost Recovery Policy- continued Additionally, for federal reimbursements follow: • Federal circular A-87 • ASMB C-10
Elements of Full Cost Cost elements recovered under the full cost recovery policy are . . . • Direct costs • Indirect costs
Elements of Full Cost- continued Direct costs include the actual cost of running the program . . . • Personal Services • Operating Expenses and Equipment
Elements of Full Cost - continued Indirect costs include the State departments own overhead, which often are . . . • Executive Staff • Information Technology (IT) Staff • Accounting Staff • Budget Staff • Other (administrative units) Staff Plus . . .
Elements of Full Cost - continued Central service costs are: • Known as the other indirect costs. • Incurred by central service agencies for the benefit of all State departments. • Known as: • Pro Rata • SWCAP
Elements of Full Cost- continued Total direct costs plus the indirect costs should equal the full cost of running the programs of a State department. Direct costs $ X,XXX Indirect costs State department$ XXX Statewide: Pro Rata $ XX SWCAP $ XX Total costs $XX,XXX
Elements of Full Cost- continued • Costs included in an Indirect Cost Rate Proposal (ICRP) must be adjusted for unallowable costs. • Unallowable cost information is discussed in various training classes.
Elements of Full Cost- continued State department billings to other entities or the federal government must include an ICRP rate, which includes: • State department indirect amount. • Either: • Pro Rata ICRP rate. • SWCAP ICRP rate. SWCAP amount recovered will be transferred to the General Fund.
