2. “County Cost Allocation Plans: Conducting The Smell Test” Presenters: Carrie Topliffe, Director Santa Barbara County Department of Child Support Services ctopliffe@co.santa-barbara.ca.us Janeene D. DeMartinez, Assistant Director Solano County Department of Child Support Services jddemartinez@SolanoCounty.com Moderator: Jan D’Ambrosio, Administrative/Financial Services Manager Alameda County Department of Child Support Services jan.dambrosio@acgov.org

3. COST ALLOCATION PLANS or the Devil’s in the details!

4. WHY A COST ALLOCATION PLAN?

5. WHAT IS A COST ALLOCATION PLAN? ■“CAP” ■“CoCAP” ■“A-87” ■filed by the County with the State Controller’s Office (SCO) by December 31 of each year. ■desk-audited yearly, field audited periodically by the SCO.

6. RULES Office of Management and Budget Circular A-87

7. TIMING

8. General Services ■Allocation Basis ✷ Square Footage Occupied ■Potential Issues ✷ Mixing Old and New Buildings ✷ Unfinished Basement vs. Penthouse Expense: Rent

9. General Services ■Allocation Basis ✷ Number of Mailed Items ■Potential Issues ✷ Time to Travel to Destination ✷ Biospecimens vs. Postcards Expense: Mail Courier

10. General Services ■Allocation Basis ✷ Number of Documents Processed ■Potential Issues ✷ Recurring Expenses vs. One Time Dollar Value ✷ Need for Competitive Bid Expense: Procurement

11. Auditor ■Allocation Basis ✷ Number of Transaction Lines ■Potential Issues ✷ Complexity of Transactions ✷ New Regulations Expense: Financial Accounting

12. Auditor ■Allocation Basis ✷ Number of Employees ■Potential Issues ✷ Seasonal Swings In Numbers ✷ Number of Pay Codes Processed ✷ Number of Deductions Processed Expense: Payroll

13. Human Resources ■Allocation Basis ✷ Average Number of Enrolled Employees ■Potential Issues ✷ Number of Dependants ✷ Costs of Claims Expense: Dental Insurance

14. Treasurer ■Allocation Basis ✷ Dollars Collected ■Potential Issues ✷ One Big Account vs. Many Small Ones Expense: Collections

15. Treasurer ■Allocation Basis ✷ Number of Banking Transactions ■Potential Issues ✷ Fees Associated with Exotics Expense: Bank Charges

16. Treasurer ■Allocation Basis ✷ Average Number Contributing Employees ■Potential Issues ✷ High Maintenance People Expense: Deferred Compensation

17. County Counsel ■Allocation Basis ✷ Hours of Service ■Potential Issues ✷ General Government vs. Internal Service Expense: Legal

18. SMELL TEST ■The possibility of error ■Do the math!

19. Start Sniffing

25. Year-to-Year Comparison of A-87 Costs

28. ISSUES Local Issues ■Human Error ✷ Understand & check the data! ■Cost Swings ✷ Meet with Auditor-Controller Annually ✷ Direct Costs v. Allocations ■Allocation Basis ✷ Do they meet the “reasonable” test? Statewide Issues ■Allocation Basis ✷ Do they meet the “reasonable” test? ✷ Allow reserves to buffer cost swings?

29. SUMMARY Get a copy of your Local Plan. Study it! Get an interpreter if necessary: Auditor Controller staff Consultant staff Does it work for us? Allocation basis? Appropriate costs? Do the numbers work? Check the math!

30. SUMMARY (continued) How’s what’s new going to affect the Cost Allocation Plan? Keep the Auditor informed about upcoming changes in your business Closing or moving an office Ending/beginning a new service Major staffing changes Opt for direct billing if possible Be Mindful of how your business decisions will impact future Cost Allocations Monitor the data and find experts in the service-providing departments to consult with