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RESOLUTION
RE: INDIRECT ADMINISTRATION COSTS OF COUNTY AFFECTED
BY FEDERAL GRANT PROGRAMS.
WHEREAS, it has come to the attention of the Board of County
Commissioners, Weld County, Colorado, that the County has been
incurring many indirect costs in the administration of Federal Grant
Programs in Weld County, and
WHEREAS, it has further come to the attention of the Board
that such indirect costs of administering Federal Grant Programs in
the County are reimbursable by the Federal Government, and
WHEREAS, the Board believes it to be in the best interests
of the County to adopt a Government-Wide Cost Allocation Program
in order to ascertain allowable costs incurred in supporting Federal
Grant Programs.
NOW, THEREFORE, BE IT RESOLVED, by the Board of County
Commissioners, Weld County, Colorado, and it hereby authorizes and
directs Mr. Barton Buss, Chief Accounting Officer and Purchasing Agent
for Weld County, to institute those bookkeeping and accounting services
deemed to be necessary in determining distribution of allocated indirect
costs incurred in supporting Federal Grant Programs in Weld County.
The above and foregoing Resolution was, on motion duly made
and seconded, adopted by the following vote on the 29th day of August,
A. D. , 1973.
BOARD OF COUNTY COMMISSIONERS
W COUNTY, COLORADO
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ATTEST:
County Clerk and Recorder and
Clerk
to the Board
BY an ✓4
Deputy ounty Clerk
��� geetri,j2 Deputy County LYdra
APPROVED AS TO FORM_
CC .County Attorney
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ANDERSON, HUNTER,THOMTE & KURTZ
CERTIFIED PUBLIC ACCOUNTANTS
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724 8TH STREET GREELEY, COLORADO
RUSSELL G.TXOMiE,C.P.A. August 9, 1973
CHARLES M.NURTI,C.P.A.
_ WILLARD W.HUNTER,JR.,G P.A.
DARWIN F.SCHWARTZ,C.P.A.
WILLIAM J.SIEBERT,C.P.A.
ROBERT R.ANOERSON,C.P.A.
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Board of County Commissioners
Weld County, Colorado
Greeley, Colorado 80631
Gentlemen:
At your request, we enclose herewith our proposal to assist
Weld County in establishing cost allocation plans and indirect cost pro-
posals pursuant to U.S. Office of Management and Budget Circular A-87
for county fiscal years 1970-1973.
Very truly yours,
ANDERSON, HUNTER, THOMTE & KU Z
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CONTENTS
SECTION
INTRODUCTION AND OBJECTIVE I
WORKPLAN II
PROJECT PERSONNEL III
PROFESSIONAL FEES AND SCHEDULE IV
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I. INTRODUCTION AND OBJECTIVE
In determining annual grant program appropriations, the federal government
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allows reimbursement for certain indirect costs which are incurred at the local govern-
. ment level in administering the grant programs. Indirect costs are normally accumulated
in central service departments instead of the department having direct responsibility
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for grant administration. Physical facilities, data processing, purchasing, personnel
administration and legal assistance are examples of central supportive services.
Indirect costs incurred by Weld County in support of the welfare assistance
payment and social services grant programs are significant. In order for the county to
receive reimbursement for these indirect costs, the federal government requires formal
preparation of two plans for each local government fiscal year after January 1 , 1970:
a government-wide cost allocation plan and an indirect cost proposal. The government-
wide cost allocation plan allocates central service costs to the Welfare and other
county departments. The indirect cost proposal determines the distribution of allocated
indirect costs and other previously nonreimbursed, but allowable costs incurred in
supporting grant programs. Specific guidelines for plan preparation are contained in
OMB Circular A-87, May 1968. Since Weld County, to date, has not established plans
required to effect federal reimbursement under A-87 provisions, we propose this project
be commenced to comply with necessary requirements.
�- Project objectives will be:
. Prepare cost allocation plans and indirect cost proposals for county fiscal
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years 1970, 1971 , 1972 and 1973.
�— . Establish local procedures and train appropriate county employees to
prepare future plans.
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II. WORKPLAN
_ Before beginning actual plan preparation, the county is required to submit a
letter to the State Department of Social Services announcing intent to establish cost
allocation plans and indirect cost proposals for the years under consideration. We
will assist you in drafting the letter.
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Following the letter of intent, the first requirement is to prepare a county
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government-wide cost allocation plan for each fiscal year. A step by step approach
in preparing the plan is outlined below:
. Identify central services which directly benefit other county departments.
r. . Identify cost of each service rendered.
. Determine equitable bases for allocating service costs.
. Allocate the costs mathematically to the Welfare and other departments
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using bases selected.
. Summarize the amounts allocated into a formal comprehensive country-
wide plan for each fiscal year.
The next requirement is to prepare indirect cost proposals relating to federal
programs administered by the Welfare Department. Following are the steps involved:
. Adjust Welfare Department costs by eliminating capital expenditures and
unallowable costs.
. Classify remaining costs as direct or indirect, including those allocated
by the cost allocation plan from central supportive services.
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. Compute the indirect cost reimbursement rate to federal grant programs
Mit by dividing allowable indirect costs by total allowable direct costs.
. Summarize and formally document the indirect cost proposal rate computa-
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tions for each fiscal year.
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II. WORKPLAN (continued)
The final requirement is to obtain certification of local plans by the county's
chief financial officer and submit information copies of the cost allocation plans and
indirect cost proposals with supporting documentation to the State Department of
Social Services. Master copies are retained on file at the county subject to HEW
audit.
ISM In addition to the above, we plan to provide sufficiently detailed explanation
and training to key county accounting personnel so future year plans can be routinely
established without major reliance on outside assistance.
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III. PERSONNEL
William Siebert, C.P.A. , will be the partner in charge of the engagement
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and be responsible for overall project management and quality control.
L. A. Bengston, C .P .A. , from our management services staff will have
_ responsibility for technical direction and project coordination. Richard Smith, C .P.A. ,
will have responsibility for field work. Other members of our staff will be assigned as
necessary.
We recommend that key county personnel from the Welfare Department
business office and county Finance Department be selected to work closely with our
consultants in preparing the plans. Close involvement will help insure that county
personnel are trained in future plan preparation.
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IV. PROFESSIONAL FEES AND SCHEDULE
We propose to prepare government-wide cost allocation plans and indirect
cost proposals for fiscal years 1970-1973 for a fee estimated from $ 10,000 to $ 12, 000.
Should it become infeasible, after beginning work, to prepare plans for previous years
(1970-72) , we will prepare the current year plan for a reduced fee estimated from
$ 5,000 to $ 7, 500.
We bill our management services engagements monthly on the basis of actual
time spent and out-of-pocket costs incurred. If the aggregate fee thus computed
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amounts to less than estimated, we will bill you the lesser amount. If for any reason
it appears that the aggregate fee will exceed our estimates, we shall immediately
consult with you and furnish an analysis of the reasons therefore together with an
estimate of the additional costs to be incurred. We will conduct periodic progress
report meetings with appropriate county personnel to review project results.
As it is already late in the current year, we recommend that work begin
immediately upon your concurrence and that the project be completed not later than
November 30, 1973.
.. We look forward to working closely with county personnel in acquiring the
information required for project completion and thank you for considering our firm.
A duplicate copy of this proposal is enclosed so that one may be returned for
.. our records.
Approved this 2e?„z4 day of August, 1973.
►- WELD COUNTY
BY:Pal
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