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Ask Questions Anytime Federal Indirect Cost Rate Update Special Ed MOE Process Other Topics

Federal Indirect Cost Rate, MOE & Other Process Changes. Ask Questions Anytime Federal Indirect Cost Rate Update Special Ed MOE Process Other Topics. Indirect Cost Rates 101. Question: Which program(s) represents your districts’ indirect cost pool for federal rates purposes? a) 01

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Ask Questions Anytime Federal Indirect Cost Rate Update Special Ed MOE Process Other Topics

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  1. Federal Indirect Cost Rate, MOE & Other Process Changes • Ask Questions Anytime • Federal Indirect Cost Rate Update • Special Ed MOE Process • Other Topics

  2. Indirect Cost Rates 101 Question: Which program(s) represents your districts’ indirect cost pool for federal rates purposes? a) 01 b) 01 and 97 c) 97 d) 01, 21, 31, 45 and 97

  3. Indirect Cost Rates 101 Answer: c) 97 – District-wide Support

  4. Federal Indirect Cost Rates • What’s changing When, Why and Where? • What does this mean to districts? • How will this change the calculation on the F-196?

  5. What’s Changing When, Why and Where? What’s changing… More Exclusions (these are good!) Food, Sub-grants, etc. More Indirect Cost Pool Items (these are good!) Board of Directors Audit, Legal costs Superintendents Office Public Relation costs Space and Occupancy Costs (these are good!) For “organization-wide” activities When– change is effective with FY 04-05 F-196 for FY 06-07 rates Why– because we like you! (Renew 5 yr. agreement; & A-87, A-21, A-122) Where – Instructions and guidance in ABFR & SD accounting manual

  6. What does this mean to districts? Hopefully, higher indirect cost rates for federal programs - without - a lot of extra effort!

  7. How will this change the calculation on the F-196? The overall calculation will be very similar, however, the information reported will change somewhat…

  8. The Calculation(In Federal Terminology) Restricted Indirect Cost Rate equals General Management Costs + Fixed Costs (Pool) (numerator) divided by Other Expenditures (Base) (denominator)

  9. Definitions and Terms Due to non-supplant provisions… • Restricted Indirect Cost Rate (includes fixed with carry-forward adjustment = FWCF) • Excluded Costs (Removed from Pool and Base) • General Management Costs (Pool) • Fixed Costs (Pool) • Other Expenditures (Base) • Unallowable Costs (included in Base)

  10. F-196 Schedule for Determining School District Federal Restricted Indirect Cost Rate Including FWCF(Handout) • Part A Calculation • (ID Exclusions, Base & Pool Costs) plus • Part B Calculation (FWCF) equals • District Restricted Indirect Cost Rate

  11. Part A Calculation • Programs 01-89, 98 & 99 • Program 97 by Activity Column 1 - Total Program Expenditures The system will display total expenditures for all programs and by activity for Program 97.

  12. Exclusions in Columns 2-4 Column 2 - Capital Outlay (Excluded) The system will display total Object 9 Capital Outlay expenditures for all programs and by activity for Program 97.

  13. Column 3 - Debt Service (Excluded) The system will display the total of Activities 83 thru 85 for Program 97.

  14. Column 4 - Distorting Items (Excluded) 1) For Programs 01-89, 98 and 99, enter amount for sub-grants (flow-thru) to other entities in item # 3301. 2) Program 98, Activity 42 (Food) will be combined with item # 3301 above.

  15. Column 4 - Distorting Items (Excluded) (cont.) 3) For Activities in Program 97, enter amounts for sub-grants, contingencies, election expenses, alterations, renovations, penalties and fines in item #’s 3311 to 3461. 4) Document!

  16. Column 6 - Indirect Expenditures (Pool) for Allowable Indirect Activities An amount entered in this column will include costs of general administration “organization-wide” activities for: Activity 11 Board of Directors 1) Include audit costs and those legal costs not specifically related to the board of directors in item # 3471. 2) Do not include Capital Outlay (Object 9) or other distorting items already reported in Columns 2 or 4.

  17. Activity 12 Superintendents Office Include in item # 3481 costs for the following: 1) Salary and benefit costs for any position of Superintendent, Deputy Superintendent, Assistant Superintendent, and their secretary which are allocable to indirect cost activities 13, 14, and 72 thru 75. These positions are required to maintain documentation supporting their allocation if they report time to indirect cost activities.

  18. Activity 12 Superintendents Office (cont.) 2) Any other expenditure directly related to the operation of the immediate offices for staff reported above. Expenditures directly related may include office supplies, travel, printing, warehousing, motor pool and information systems.

  19. Activity 12 Superintendents Office (cont.) 3) Include any Public Relation costs necessary to conduct general liaison or those specifically required by a federal award with news media and government public relations officers. Do not include costs where the district’s sole purpose is to promote the governmental unit.

  20. Activity 12 Superintendents Office (cont.) 4) Costs not reported in 1, 2 or 3 above are unallowable and reported in Column 5. 5) Do not include Capital Outlay (Object 9) or other distorting items already reported in Columns 2 or 4.

  21. The system will calculate and display the total costs for “organization-wideActivities” 13, 14, and 72 thru 75 For Activities 61-68, include in item #’s 3491 to 3551 space and occupancy costs for Activities 12, 13 or 14 if a space allocation plan supports the charge. Do not include Capital Outlay (Object 9) or other distorting items already reported in Columns 2 or 4 for the Activities above.

  22. Column 6, Activity 14 – (Optional) Termination Leave Staff termination leave costs cannot be charged to a federal award, but may be considered an indirect expenditure and be coded to Program 97 (Activity 14). (Annual program for Sick Leave buyback is ok to charge to federal award)

  23. Column 5 - Program 97 (Unallowable) Activities 11, 12, 25 and 60 Series The system will calculate and enter an amount for each of these Activities.

  24. Column 5 - Total Unallowable Costs Costs in Program 97 (item # 3591) these costs which generate or benefit from the school districts indirect costs are added to item # 6111 Direct Expenditures (Base) in Column 7 to arrive at Total Direct Expenditures (item # 6121).

  25. To summarize Part A …… Column 7 - Direct Expenditures (Base) Direct expenditures (Column 7) equals total program expenditures (Column 1) less exclusions (Columns 2-4) and indirect expenditures (Column 6) plus unallowable (Column 5)

  26. Part B - The FWCF Calculation 1. Indirect rate used for FY 04-05 (from 2 year prior actual FY 02-03) 2. Current Year (FY 04-05) Indirect Expenditures from Column 6 3. Current Year (FY 04-05) Direct Expenditures from Column 7 4. Indirect rate * Direct Expenditures (line 1 * line 3) 5. Net Indirect Expenditure pool adjusted amount (line 4 - line 2) 6. a) If line 5 is a positive number: 1) Subtract from Indirect Expenditures (line 2 - line 5), or b) If line 5 is a negative number: 1) Change to a positive number, and 2) Add to Indirect Expenditures (line 6b(1) + line 2) (line 6a(1) or line 6b(2) is your new Indirect Expenditure pool) 7. Divide the new Indirect Expenditure pool by Direct Expenditures (column 6a/column 7) 8. The indirect cost rate calculated is used for FY 06-07

  27. The Calculation Example!-Sample District- (Line 1) .053 (rate used in 04-05 from 02-03) (Line 2) $1,107,165 (indirects for 04-05) (Line 3) $29,099,474 (directs for 04-05) (Line 4) $1,542,272 (line 1 * line 3) (Line 5) $435,107 (line 4 minus line 2) (Line 6a1) $672,058 (if positive=line 2-line 5) (Line 7) .023 (divide line 6a1 by line 3)

  28. To summarize Part B …… Column 7 - Restricted Indirect Cost Rate equals Indirect Expenditure Pool (Column 6a1) divided by Direct Expenditure Base (Column 7)

  29. SpEd Maintenance of Effort Update • Notices were sent on January 7, 2005 to 14 districts that failed 03-04 SY SpEd MOE tests. • 11 of the districts have already had their exceptions approved. • The other 3 districts are working toward resolution or appeal. • It appears 2 or 3 may result in a recovery.

  30. 03-04 Exceptions Requested & Allowed • The voluntary departure, by retirement or otherwise of special education or related services personnel, who are replaced by qualified lower-salaried staff. • Scenario: SLP with 15 years experience leaves district and is replaced with a first year SLP.

  31. 03-04 Exceptions Requested & Allowed • Termination of an obligation of the school district to provide services for an exceptional high cost child. • Ex: Student moved from district. • Ex: District was able to provide a comparable IEP required program in-district as opposed to contracting with a neighboring district for $42,000 a year. Exception allowed was the difference in cost of the two programs.

  32. 03-04 Exceptions Requested & Allowed • District had modified its accounting for special education to the 1077 excess cost methodology. • This particular district was very slow in implementing the excess cost methodology but eventually they did! • (Perhaps at the coaxing of their friendly neighborhood auditor?)

  33. Exceptions not allowed • The voluntary departure, by retirement or otherwise, of special education or related services personnel who were not replaced. • The district must continue to provide IEP specified services even if it is necessary to contract with an outside provider.

  34. Exceptions not allowed • Exception was not considered an obligation of the school district to provide services for an exceptional high cost student. • Reason: The services were not specified in the student’s IEP.

  35. 04-05 Sp Ed MOE Template • The 0405 Sp Ed MOE Template can be found at http://www.k12.wa.us/safs/TT/SpEdMOE_PossibleSupplant%20Template.xls • Districts are encouraged to use this as a planning tool.

  36. Other Topics? Comments - Feedback! Questions?

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