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State’s Full Cost Recovery Policy. 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.
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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.
