1. 1 Department of Finance Fiscal Systems and Consulting Unit Pro Rata/SWCAP Training for Central Service Agencies 2016-17 Plan

2. 2 Agenda Central Service Agency/Functions Central Service Costs Allocation Definition of Workload Definition of Expenditures Workload and Expenditure Spreadsheets Data Analysis Transmittal Instructions

3. 3 Course Objectives To understand: Cost Allocation Plan Development How to complete workload and expenditure spreadsheets CSA/FSCU analysis Due dates

4. What is a Central Service Agency (CSA) Cost? 4

5. Central Service Agency Costs State Administrative Manual Section 8753 Central service costs are those amounts expended by central service departments and the Legislature for overall administration of state government and for providing centralized services to state departments. These functions are necessary for state operations and are centralized to provide efficient and consistent statewide policy and services. 5

6. Central Services Function Code Central ServiceWorkload UnitSource Finance (DOF) 004 AuditsAudit HoursDOF/OSAE 005 BudgetsBudget HoursDOF/Admin 011 Fiscal Systems & Consulting Unit State Ops $DOF/Sch. 10 California Technology Agency 105 CA Dept of TechnologyState Ops $DOF/Sch. 10 Financial Information Systems for California 110 Financial Information System for California (SWCAP only) State Ops $DOF/Sch. 10 State Controller’s Office (SCO) 201 Accounting & ReportingTransactionsSCO 202 Claim AuditsWarrantsSCO 203 PayrollWarrantsSCO 204 General DisbursementsWarrantsSCO

7. Central Services Function Code Central ServiceWorkload UnitSource State Controller’s Office (SCO) 205 Field AuditsAudit HoursSCO 211 Personnel/Payroll Services Division and Information Systems Division PositionsSCO State Treasurer’s Office (STO) 301 Investment (Pro Rata Only)Interest EarnedSCO 302 Item ProcessingWarrantsSCO 303 Treasury/Security Mgmt and Public Finance Division State Ops $DOF/Sch. 10 400 State Personnel Board (SPB)PositionsSCO 410 California Human Resources (CalHR) formerly DPA Positions SCO 510 Office of Admin Law (OAL)Review HoursOAL 520 CA State Library (CSL)State Ops $DOF/Sch.10

8. Central Services Function Code Central ServiceWorkload UnitSource 600 Health Benefits (HB) for Annuitants (Retired Employees) HB Costs for Active Employees SCO/PERS/ CalHR 601 Dental Benefits (DB) for Annuitants' (Retired Employees) DB Costs for Active Employees SCO/PERS/ CalHR 602 Health Benefits (HB) for CA State Universities (Retired Employees) HB Costs for Active Employees SCO/PERS/ CalHR Department of Justice (DOJ) 605 Legal (SWCAP Only)Attorney HoursDOJ 607 Tort Liability (SWCAP Only)Attorney HoursDOJ 700 Secretary for CA Health & Human Services Agency (Weighted avg of State Ops for depts within the Agency) State Ops/Sch.10 799 California State Auditor Audit Hours CA State Auditor 8

9. Central Services Function Code Central ServiceWorkload UnitSource 800 Legislature (Pro Rata Only) Sum of Past Actual Costs for Functions 004-799 DOF/FSCU 805 Legislative Counsel Bureau (Pro Rata Only) Sum of Past Actual Costs for Functions 004-799 DOF/FSCU 810 Governor’s Office (Pro Rata Only) Sum of Past Actual Costs for Functions 004-799 DOF/FSCU 815 Office of Planning & Research (Pro Rata Only) Sum of Past Actual Costs for Functions 004-799 DOF/FSCU 9

10. Central Service Costs Allocation 10

11. The Pro Rata Plan & the SWCAP Plan Central service costs are allocated through Pro Rata for special funds and through SWCAP for federal funds. We refer to this allocation process as the Pro Rata Plan and the SWCAP Plan. 11

12. The Pro Rata Plan & the SWCAP Plan -- continued The Plan distributes CSA costs to each state department based on workload. The total allocation for each department is calculated using the formula below. PY is prior year and BY is budget year. PY PY Roll - BY Total Actual Estimate Forward Estimate Allocation – = + = 12

13. The Pro Rata Plan & the SWCAP Plan -- continued In Pro Rata, a department’s allocation is then further allocated to each fund within the department. In SWCAP, since only Federal funds are billable, the Federal portion is calculated using the department’s ratio of Federal funding to their total State Operations amount. 13

14. The Pro Rata Plan & the SWCAP Plan -- continued Funds are classified as billable or nonbillable For Pro Rata: Billable funds: Funded by special revenue sources such as fees, licenses, penalties, assessments, interests, etc. Nonbillable funds: General Fund Federal Funds Special Deposit Fund For SWCAP, only federal funds are billable. 14

15. Pro Rata /SWCAP Reports CSA Reported Workload Data PY Actual SWCAP Reports CSA Cost Allocation CSA Reported Expenditure Data PY Actual and BY Estimate Budget Data (Schedule 10 download) Miscellaneous Agencies Reported Data Pro Rata Reports

16. 16 What is Workload?

17. Workload Each function code represents a specific type of workload. Workload is obtained from a variety of sources and can be from more than one CSA. 17

18. 18 Workload - continued Hours Transactions Warrants Positions State Operations Interest earned Other

19. What are Expenditures? 19

20. Expenditure Data Actual Expenditures (only State Ops): –General Fund (GF) –Central Service Cost Recovery Fund (CSCRF) Expenditures excluded in plan development: –Reimbursements –Non-CSA Expenditures/Other Funds –Unallowable costs (Title 2 Code of Federal Regulations, Part 200 ) 20

21. 21 Reimbursed CSA expenditures are excluded because they represent services the CSA provided and which they received reimbursement. Expenditure Data – continued Unallowable CSA expenditures are identified in federal regulation (Title 2 Code of Federal Regulations, Part 200) Some examples: Fines, Penalties Cost of Assets $5,000 and up Lawsuits against the federal government

22. Expenditure Data - continued Actual Expenditures$ XXXX Less: Reimbursements $ XX Non-CSA Expenditures/Other Funds XX Unallowable Costs* XX -XXX Adjusted Actual Expenditures** $ XXXX * SWCAP only ** Distributed in CSA cost allocation plans 22

23. 23 Workload Spreadsheets

24. 24 Workload Requirements What you need: Workload Data Checklist Workload spreadsheet Crossover table

25. Workload Data Checklist 25

26. Workload 26

27. Comparison Non-Reimbursed 27 Pre-populated by FSCU Autofill from prior worksheet

28. Comparison Reimbursed 28 Pre-populated by FSCU Autofill from prior worksheet

29. Department Hours 29

30. Uniform Codes Manual (UCM) 30

31. 31 Crossover Table Workload is summarized into approximately 180 primary departments for budgeting purposes. The crossover table is used to consolidate the workload into the primary organization code.

32. Crossover 32

33. 33 Crossover Example Orig AgcyOriginal Agency Name Pro RataPro Rata Agency 1110Consumer Affairs - Regulatory Boards, Department of1110Consumer Affairs - Regulatory Boards, Department of 1111Dept. of Consumer Affairs - Bureaus, Prog. Div.1110Consumer Affairs - Regulatory Boards, Department of 1120California Board of Accountancy1110Consumer Affairs - Regulatory Boards, Department of 1130California Board of Architectural Examiners1110Consumer Affairs - Regulatory Boards, Department of 1140State Athletic Commission1110Consumer Affairs - Regulatory Boards, Department of 1150Bureau of Automotive Repair (Moved to 1111)1110Consumer Affairs - Regulatory Boards, Department of 1160Board of Barber Examiners (Moved to 1111)1110Consumer Affairs - Regulatory Boards, Department of 1165Board of Barbering and Cosmetology, State (Moved to 1111)1110Consumer Affairs - Regulatory Boards, Department of 1170Board of Behavioral Sciences1110Consumer Affairs - Regulatory Boards, Department of 1180Cemetery Board (Moved to 1111)1110Consumer Affairs - Regulatory Boards, Department of 1190Bureau of Security & Investigative Serv. (Moved to 1111)1110Consumer Affairs - Regulatory Boards, Department of 1200Bureau of Security & Investigative Serv.( Moved to 1111)1110Consumer Affairs - Regulatory Boards, Department of

34. 34 Crossover to 0000 Orig. Pro RataUCM Title 38800000 Payment of Interest on PMIA Loans – Resources - DOF USE ONLY 38820000 General Obligation Bonds – Resources - DOF USE ONLY 38840000 State Mandated Local Costs – Resources - DOF USE ONLY 38860000 Miscellaneous Adjustments – Resources - DOF USE ONLY 39450000Payment of Interest on PMIA Loans - DO NOT USE

35. 35 Crossover Table If an agency is not listed on the crossover table or workload spreadsheet: – Check input – Research organization code – Call us – Place in “other entity”

36. Description Verification Along with your workload spreadsheets you will receive a Description Verification document. Function descriptions are required in the SWCAP package that is submitted annually to the federal government. 36

37. Description Verification - continued 37

38. Description Verification - continued We ask that you verify the descriptions are correct. If necessary, make any required changes to the document. Complete reviewer’s name and date, and save your changes. Email the document back to us along with the Workload file. 38

39. Expenditures Spreadsheets 39

40. What You Need Expenditure Data Checklist Expenditure spreadsheets (actual and estimated) Expenditure supporting schedules (only some departments) 40

41. Expenditure Spreadsheets Expenditure Data Checklist Actual Expenditures* (must agree with the year-end financial statements) Estimated Expenditures* Comparison tab *enter data in white cells only 41

42. Expenditure Data Checklist 42

43. 43 Actual Expenditures

44. 44 Estimated Expenditures

45. Comparison Tab The comparison tab compares expenditure data from the prior year. Ten percent or less is an acceptable growth rate. Please provide explanation for changes (+/-) beyond 10 percent for both actual and estimated expenditures. 45

46. Comparison 46

47. Federal Requirement (Support Schedule) Certain CSAs must complete additional financial statements to support actual expenditures. Expenditure schedules provide a breakdown of cost items reported in the SWCAP plan. 47

48. Adjustments for Assets Tangible and intangible assets of at least $5,000 are treated as an Unallowable Cost subtracted from CSA expenditures Straight-line depreciation method applied to assets at least $5,000 and added to CSA expenditures. 48

49. 49 Your Responsibility Check for accuracy/post correctly Explain any variances ► Workload explanation is needed only if total workload changed by more than plus or minus 10 percent. ► Expenditure explanation is needed for any change of more than plus or minus 10 percent. Send support documentation if required Call us immediately if workload or expenditure data submitted needs to be changed

50. 50 Transmittal Instructions The workload and expenditure worksheets must be reviewed and approved by the departmental budget officer. Departmental budget officer must email completed workload spreadsheet(s) by and expenditure spreadsheet(s) by the specified deadlines. –To: fiproswp@dof.ca.govfiproswp@dof.ca.gov –Email subject line must include: Function code, “Workload” or “Expenditure”, and 4 digit department/agency code e.g., F204 – Workload – 0840 (SCO)

51. 51 References and Contact ProRata/SWCAP website address: –Variety of information: http://www.dof.ca.gov/accounting/fscu/pro_rata-swcap/ E-mail address: –Send questions to: fiproswp@dof.ca.gov