SEQUOIA CONSULTING GROUP Public Assistance Cost Allocation Plans and RMS

Sequoia Staff on the Panel Bob Vernon-Consultant with Sequoia Consulting Group Former National Specialist in the area of public assistance cost allocation with the DHHS’ Division of Cost Allocation Provides Federal perspective on RMS, PACAP issues Anita White-Director of Cost Services with Sequoia Consulting Group (formerly with MAXIMUS, David M. Griffith & Associates) PACAP work current and past- States of Alabama, Alaska, Colorado, Connecticut, Delaware, Hawaii, Illinois, Indiana, New Mexico, Pennsylvania, Wisconsin RMS work current and past-LA Unified School District, States of Colorado, Illinois, Indiana, Kansas, Louisiana.

RMS and Cost Allocation Overview Background-Inclusion Of RMS In Cost Allocation Plans 2 CFR Chapter II, Subpart E, Section 200.430 Compensation-Personal Services, Paragraphs (i)(5)(i) and (ii) Include the A-87 Requirements Regarding Substitute Systems Which Use Sampling Methods   RMS Issues Identified In A-133 Audits And Other Reviews What The Public Assistance Agency Cost Allocation Plan Should Include Maintaining, Monitoring, and Updating the RMS and Associated PACAP Common RMS Issues (Juvenile Justice-example)   

Background-Inclusion Of RMS In Cost Allocation Plans Transfer of responsibility for the review and approval of Public Assistance Cost Allocation Plans Study by the Department of Health and Human Services Draft document “A Guide For State And Local Government Public Assistance Agencies/Departments-Procedures For The Preparation And Submission Of Cost Allocation Plans” (November, 1981)  This draft “Guide” was designed to: Provide guidance to State Agencies for plan preparation; Simplify the development and implementation of cost allocation plans;  

Background-Inclusion Of RMS In Cost Allocation Plans (Cont.) Expedite and minimize disagreements/problems in cost allocation plan development and approval; Avoid audit problems; Comply with Federal rules and regulations ;and Result in an equitable allocation of costs. DCA Best Practices Manual for Reviewing Public Assistance Cost Allocation Plans (October 2002, Updated December 2007)

RMS Regulations 2 CFR Chapter II, Subpart E, Section 200.430 Compensation-Personal Services, Paragraphs (i)(5)(i) and (ii) Include The A-87 Requirements Regarding Substitute Systems Which Use Sampling Methods (We do know A-87 has been eliminated) The system must meet acceptable statistical sampling standards including: The sampling universe must include all of the employees whose salaries and wages are to be allocated based on the sample results; The entire time period involved must be covered by the sample; and The results must be statistically valid and applied to the period being sampled.  

RMS Regulations (Cont.) Allocating charges for the sampled employees’ supervisors, clerical, and support staffs, based on the results of the sampled employees, will be acceptable.

Issues Identified in Audits/Reviews Findings Associated With RMS Can Be Classified Into 3 Basic Areas: The sample universe, Cost pool salaries and wages, and Sample administration and training.  The Sample Universe: Did not include all caseworker staff Included positions not identified in the approved cost allocation plan  

Issues Identified in Audits (Cont.) Cost Pool Salaries And Wages: Did not include all eligible caseworker salaries and fringes Sample Administration And Training:  RMS observations were incomplete or not properly completed; Responses to the RMS were not received/not received in a timely manner; The cost allocation/fund matrix in the plan was not updated to include current RMS activity codes;  

Issues Identified in Audits (Cont.) Incomplete sample results were used in the allocation of costs; and Indicated need for RMS training  

What the PACAP Should Include General information identifying the agency components subject To RMS, locations of the workers and a description of what they do  Sample design and operation:   The type of sample used; The sample precision; The job classifications/titles of workers included in the sample universe; The work days and times included in the sample universe to ensure all work time is properly considered;

What the PACAP Should Include (Cont.) The calculation of the sample universe and sample size for the period; The random sample selection process; The method used to contact the sampled worker and obtain the RMS observation, e.g., a paper form, e-mail or web-based observation completed by the worker, observation by an RMS observer, etc.; Information on how access to the selected observation is limited to the worker selected for observation where an e-mail or web-based system is used; A description of how sampling will be continued in the event the e-mail or web-based RMS system is not available due to technical difficulties; The maximum response time allowed to obtain a valid observation; and The plan should provide that no prior notice is given to the worker prior to RMS observation.

What the PACAP Should Include (Cont.) RMS administration and training: The plan should identify the unit(s) responsible for RMS administration and day-to-day operations and include a brief description of their activities and responsibilities. This would include the unit(s) responsible for the following RMS related activities: Update of the sample universe for each quarter; Selection of the quarterly sample and monitoring sample reliability/precision; Obtaining and reviewing RMS observations to assure the response provided is complete and provided in a timely manner;

What the PACAP Should Include (Cont.) Follow-up efforts to obtain valid RMS responses within the specified time limit; Monitoring RMS responses to ensure responses are received in a timely manner; A centralized contact to address RMS questions and problems; Reviewing, analyzing, and summarizing RMS results to ensure that the sample results obtained are complete and accurate; and Additional reviews of quarterly RMS results performed to ensure that they are complete and accurate, e.g., separate validation of RMS results, comparison of current quarter results with prior quarter results, etc., any significant differences should be investigated. Initial and on-going RMS training needed.

What the PACAP Should Include (Cont.) The Cost Allocation Plan should include copies of: Instructions provided to workers conducting or responding to RMS observations; RMS program and activity code definitions used by the worker responding to RMS observations; Any forms used in obtaining the RMS observations. Where an e-mail system or web-based system is used a copy of the notification to the worker of his/her selection for RMS observation and a copy of the screen(s) to be completed; A fund matrix or similar document which identifies the program and program fund source(s) charged for each of the RMS responses. Where an RMS Activity code benefits more than one program the allocation methodology used to distribute those observations/costs to benefiting programs should be identified and described; Any eligibility rate applied in calculating the federal program share(s) should be identified and described and for federal programs the FFP rate applied.

Monitoring and Maintaining RMS Daily, Monthly, and Quarterly Monitoring Valid Combinations Quality Assurance—compare comments with coding Quarterly Reporting and Review Compile, review and analyze results Adjust training materials to assist in reduction of future errors Identify needed changes based upon State Plan revisions/PACAP revisions

Examples of Issues—Juvenile Justice Juvenile Justice and Child Welfare Agencies need to work together on RMS for IV-E claims Child Welfare State Plan needs to recognize juvenile justice agency and their approaches to claiming under IV-E Child Welfare agency needs to recognize juvenile justice agency for PACAP purposes through an MOU or other formal document which defines relationship and required documentation for claiming Child Welfare agency needs to work with juvenile justice agency to determine eligibility (penetration rate) and candidacy Child Welfare agency needs to understand (and probably approve) methods juvenile justice agency uses to claim under IV-E, including how RMS is designed and implemented

Sample RMS Monitoring Documents Sample Monitoring/Maintenance/QA Documents Attached