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

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

3. 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. 4 COST PLAN PROCESS

5. 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. 6 RIVERSIDE CAP T.O.C. Central Service Depts Allocated Functions Developed Allocation Bases Used (See Example on Next Page)

7. 7 11001 CO EXEC OFFICEFUNCTIONS USED:72 Admin SvcsDirect Hours77 Gen AdminRelative Budget Size79 Coral AcctingDirect Hours83 Direct CSADirect Identified84 Allocation Summary85 13001 AUDITOR/CONTROLLERFUNCTIONS USED:89 Audit Services# of Audit Hrs108 Payroll ServicesTotal Fund Position by Org109 Budget Prep/CAP PrepRelative Budget Size112 Claims & Disb# of B Warrants116 Fixed Assets# of Items118 Cost AnalysisDirect Hours120 General Accounting# of Journal Lines121 OASISDirect Cost125 Single AuditDirect Identified126 Courts DirectDirect Identified127 Allocation Summary128

8. 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. 9 This Year: –Ensure accuracy of the CAP – PRM MGT Schedule –Arrange to meet with departments early Aug – interviewed dept’s Aug – gathered data Aug/Sep – organize data, prepare cost plan Result: draft done early, more time for county review, better plan. PRM New Management Schedule –Concern over data entry errors –Concern from the State regarding material changes from year to year PROCESS IMPROVEMENTS

10. 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. 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. 12 –Identifies why the allocations changed: 1.Cent Svc Dept Expenditures go up or down? 2.Allocation base change? 3.Allocation base share change?

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

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

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

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17. 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. 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. 19 TABLE OF CONTENTS

20. 20 SUMMARY SCHEDULE

21. 21 PSA SCHEDULE

22. 22 A. CENT SVC DEPT COST

23. 23 B. CENT SVC INCOMING COSTS

24. 24 FUNCTIONAL ALLOCATIONS

25. 25 CENT SVC DEPT SUMMARY

26. 26 FULL COST PLAN VS. OMB

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28. 28

29. 29 FULL COST OF SERVICE CALCULATIONS

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31. 31 LAYERS OF FULL COST

32. 32 FEE DECISION – FLOW CHART