Presentation to: County of Riverside

1. Presentation to:County of Riverside COST ALLOCATION PLAN PROCESS

2. PRESENTATION TOPICS • OMB COST PLAN PROCESS • IMPROVEMENTS TO THE PROCESS • “HOW TO READ A COST PLAN” • FULL COST PLANS • USER FEE CALCULATIONS

3. OMB A-87 COST PLAN PROCESS • Distribution of County-wide administrative (central service) indirect cost to all departments that benefit from them. • Concept developed 30 yrs ago by federal govt. • Direct operating departments benefit by receiving services from the county structure…therefore the county should be reimbursed for that support… • History in federal grant reimbursement • Costs are spread & distributed based on benefit/use • Broad number of uses • Fed/State grants reimbursement • SB 90 Claiming • Calculation GF support to non GF operations • Indirect cost of providing user fee related services to the public

4. COST PLAN PROCESS

5. STEP BY STEP PROCESS • Allocations based on most recent actual expenditures • Each central service dept is interviewed • Functions are discussed/developed • Expenditures are spread by function • AB’s are developed for each function • CAP is reviewed by the AC office • CAP is submitted and audited by the State

6. RIVERSIDE CAP T.O.C. • Central Service Depts Allocated • Functions Developed • Allocation Bases Used (See Example on Next Page)

8. PROCESS IMPROVEMENTS • With the AC office “improvements” are ID’ed each year • Last year: • Facilities - Costs, definitions, occupancy, documentation • Thorough interviews • Work with OASIS to obtain reports centrally vs. from department

9. PROCESS IMPROVEMENTS • This Year: • Continue Facilities Emphasis • Ensure accuracy of the CAP – PRM MGT Schedule • PRM New Management Schedule • Concern over data entry errors • Concern over accuracy of AB data • Concern from the State regarding material changes from year to year

10. PRM MANAGEMENT SCHEDULE • Cost Plan Processed – Allocations UP or Down – Why? • Previously a manual process - “10 key Audit” • 1,000’s of numbers, 100’s of pages • Assumptions • Data entry errors? • Functions come and go • Expenditures go up or down • AB change, usage changes

11. Concerned Stakeholders: • PRM • County Auditor Controller’s Office • County Operating Departments • State Controller’s Office • PRM Management Schedule (Software) • Compares total allocation to each receiving dept, year to year. • For each receiving department, compares each individual central service dept allocation

12. Identifies why the allocations changed: • Cent Svc Dept Expenditures go up or down? • Allocation base change? • Allocation base share change?

13. STEP 1 – GLOBAL COMPARISON –Total Allocated Year to Year

14. STEP 2 – WHERE IS THE CHANGE?COMPARE EACH CENTRAL SVC DEPT

15. STEP 3 – WHAT CAUSED THE CHANGE?FOR EACH CENTRAL SVC DEPT Change in expenditures? Change in functions, allocations, bases?

17. SUMMARY MANAGEMENT SCHEDULE • Software Does the Desk Audit Automatically • Produces More Accurate/Reliable Results • Reduces input error • Explains material allocation changes year to year • Provides first step in the “desk audit” • Saves time for management analysis

18. HOW TO READ A COST PLAN • Table of Contents • Summary Schedule • Central Service Department Chapters: • Personnel Analysis Schedule • A) Departmental Cost • B) Incoming Cost • C) Total Cost • Functional Allocations • Department Summary Schedule

19. TABLE OF CONTENTS

20. SUMMARY SCHEDULE

21. PSA SCHEDULE

22. A. CENT SVC DEPT COST

23. B. CENT SVC INCOMING COSTS

24. FUNCTIONAL ALLOCATIONS

25. CENT SVC DEPT SUMMARY

26. FULL COST PLAN VS. OMB

29. FULL COST OF SERVICE CALCULATIONS

31. LAYERS OF FULL COST

32. FEE DECISION – FLOW CHART