1. August 20021 State’s Full Cost Recovery Policy

2. August 20022 State’s Full Cost Recovery Policy State of California’s full cost recovery policy is defined in: – Government Code (GC) – State Administrative Manual (SAM) Each State department will comply with the requirements.

3. August 20023 State’s Full Cost Recovery Policy - continued Government Code (GC) Section 11010: Authorizes full cost recovery and sharing of central service costs by special fund. And...

4. August 20024 State’s Full Cost Recovery Policy - continued State Administrative Manual (SAM) Sections: – 8752 - Explains the full cost recovery policy. – 8752.1 - Identifies the cost elements to include.

5. August 20025 State’s Full Cost Recovery Policy - continued State departments will... – Recover full costs when goods or services are provided to others. – Include all costs attributable directly to the activity plus a fair share of indirect costs. And...

6. August 20026 State’s Full Cost Recovery Policy - continued State departments will: – Apply the State’s full cost recovery policy to all funding sources. – Follow this policy, except where statutes prohibit full cost recovery.

7. August 20027 State’s Full Cost Recovery Policy - continued Additionally, for federal reimbursements follow: – Federal circular A-87 – ASMB C-10

8. August 20028 Elements of Full Cost Cost elements recovered under the full cost recovery policy are... – Direct costs – Indirect costs

9. August 20029 Elements of Full Cost - continued Direct costs include the actual cost of running the program... – Personal Services – Operating Expenses and Equipment

10. August 200210 Elements of Full Cost - continued Indirect costs include the State departments own overhead, which often are... – Executive Staff – Information Technology (IT) Staff – Accounting Staff – Budget Staff – Other (administrative units) Staff Plus...

11. August 200211 Elements of Full Cost - continued Central service costs are: – Known as the other indirect costs. – Incurred by central service agencies for the benefit of all State departments. – Known as: - Pro Rata - SWCAP

12. August 200212 Elements of Full Cost - continued Total direct costs plus the indirect costs should equal the full cost of running the programs of a State department. Direct costs$ X,XXX Indirect costs State department $ XXX Statewide : Pro Rata$ XX SWCAP$ XX Total costs$XX,XXX

13. August 200213 Elements of Full Cost - continued – Costs included in an Indirect Cost Rate Proposal (ICRP) must be adjusted for unallowable costs. – Unallowable cost information is discussed in various training classes.

14. August 200214 Elements of Full Cost - continued State department billings to other entities or the federal government must include an ICRP rate, which includes: – State department indirect amount. – Either: - Pro Rata ICRP rate. - SWCAP ICRP rate. SWCAP amount recovered will be transferred to the General Fund.

15. August 200215 We hoped this helped. Please view our other presentations.