420 SCSEP Budget Management | HCBS-5300-MANUAL
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Georgia Division of Aging Services |
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Chapter: |
400 |
Effective Date: |
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Section Title: |
SCSEP Budget Management |
Reviewed or Updated in: |
MT 2017-01 |
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Section Number: |
420 |
Previous Update: |
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420.1 Purpose
The Division of Aging Services (DAS) complies with all federal regulations and laws governing budget management of the Senior Community Service Employment Program (SCSEP) as authorized by Title V of the Older Americans Act of 1965, as amended. The Division of Aging Services, as the grantee, is responsible to ensure statewide compliance. Sub recipients are required to comply with applicable policy and law as provided in their contracts.
420.2 Budget Categories
The SCSEP award mandates three budget categories: Enrollee Wages and Benefits (EWB), Administrative Costs, and Other Program Costs (OPC). The percentages allowed for each budget category without written permission from the United States Department of Labor are as follows:
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The maximum percentage allowed statewide for the Administration category is 13.5% (20 CFR Part 641 §641.867)
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The minimum percentage for Other Program Costs – 11.5%
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The minimum percentage allowed statewide for the Enrollee Wages and Benefits category is 75%.
Funding may be transferred from Administrative Costs and Other Program Costs to support additional Enrollee Wages and Benefits. Funding may also be transferred from Administrative Costs to Other Program Costs.
The grantee and sub recipients must obtain funding for administrative costs to the extent practicable from non-Federal sources (20 CFR Part 641 §861(a)).
Complete information about the expenses that are allowable in each of the three budget categories is found in Appendix 420-A SCSEP Allowable Costs with References.
Federal and Matching funds must be allocated to the three budget categories and the corresponding percentages, and reported by category.
420.3 State Budget Preparation
Step One: Calculate Total Project Budget
Divide the federal allocation by 90% to determine the total project budget. For example, if the federal portion is $1,916.572, the calculation is as follows:
$1,916,572 / .9 = $2,129,524.
Step Two: Calculate Project Match
There are two ways to calculate the project match. One method is to subtract the federal allocation from the total project budget calculated in Step One. The other method is to divide the federal portion by 90%, then multiply that amount by .1. The correct formula for the second method is: ($1,916,572 / .9) x .1. Match may be provided in cash or in-kind, and may not be provided from any federal source.
Step Three: Calculate Budget Category Amounts
Multiply the federal portion by the respective percentages for each budget category to determine the amount of federal funds to be distributed per category as follows: EWB (75%), Administrative Costs (13.5%) and Other Program Costs (11.5%). Calculate matching requirement for each category.
For example:
EWB: $1,916.572 x .75 = $1,437,429
Administration: $1,916.572 x .135 = $258,737
Other Program Costs: $1,916.572 x .115 = 220,406
Add the three budget category sub totals to ensure they total to the federal allocation.
Step Four: Determine DAS Budget
Calculate the DAS budget using the following expense categories:
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Personnel – the salary of the State SCSEP Coordinator
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Fringe Benefits – the cost of benefits associated with the State SCSEP Coordinator as a percentage calculation of the salary. Obtain the benefits rates from the DAS Senior Business Operations Manager or the Deputy Director.
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Travel – estimate the costs of mileage, per diem, and lodging associated with the State SCSEP Coordinator providing data validation, monitoring, and technical assistance to sub recipients.
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Equipment – the cost of any equipment costing $5,000 or more and with a useful life of more than one year
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Supplies – estimate small office supplies necessary to perform State SCSEP Coordinator duties such as office supplies and printing
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Other Costs – costs incurred in the managing of the SCSEP program that don’t fit in other budget categories, including telephone, postage, training (including the annual training), etc.
DAS alignment of line items to expense categories follows guidelines outlined in Appendix 420-A SCSEP Allowable Costs with References.
Step Five: Estimate Administrative and Other Program Cost Budgets for Sub Recipients
Subtract the total of DAS Administrative Costs from the Total Administrative Costs to determine the administrative funds available to sub recipients. Likewise, subtract the total of DAS Other Program Costs from the Total Other Program Costs to determine the Other Program Costs available for sub recipients.
For example: DAS Administrative costs are $86,620. Therefore, $258,737 (from Step Three above) - $86,620 = $172,117 (the estimate of Administrative funds to be distributed to sub recipients). DAS Other Program Costs are $7,465. Therefore, $220,406 (from Step Three above) - $7,465 = $212,941 (the amount of Administrative funds to be distributed to sub recipients).
Step Six: Estimate Total Distribution to Sub Recipients
The EWB and Other Program Costs calculated in Step Three are added to the Administrative Costs calculated in Step Five to determine the total amount distributed to sub recipients. This is also the total that is listed in the state budget submitted to DOL on the SF 424 form under the category “Contractual”.
For example:
EWB: $1,437,427
Administrative Costs: $172,117
Other Program Costs: $212,941
Total Distribution: $1,822,487
Add the total distribution to sub recipients to the total budgeted for DAS to ensure this total equals the total federal allocation.
Step Seven: Estimate the Costs Per Slot
To estimate the total cost per slot, divide the total amount distributed to sub recipients from Step Six by the number of approved slots.
For example: $1,822,487 / 198 = $9,204 per slot
Then, divide each budget category by the total number of slots to determine the cost per slot for each category.
For example:
EWB: $1,437,427 / 198 = $7,259.74
Administrative Costs: $172,117 / 198 = $869.28
Other Program Costs: $212,941 / 198 = $1,075.46
Add the cost per slot from each budget category to make sure it balances to the total cost per slot.
Step Eight: Estimate the Percentage for Each Budget Category
Divide the per slot cost of each budget category by the total cost per slot to determine the percentage of each budget category. The amount will be used to guide the allocation to each sub recipient in the corresponding budget categories.
For example:
EWB: $7,259.74 / $9,204 = 78.87%
Administrative Costs: $869.28 / $9,204 = 9.44%
Other Program Costs: $1,075.46 / $9,204 = 11.68%
Add the percentages for the budget categories to ensure that total 100%.
These percentages will not equal the 75/13.5/11.5 split required by the Department of Labor because DAS costs are not included in this part of the calculation. SCSEP program staff will review the estimates with the DAS Senior Business Operations Manager and staff from the DHS Office of Budget Administration to review the estimates, consider the impact of other budget issues, potential changes to benefits, travel or other rates, and any other applicable regulations to establish the final sub recipient percentages for Enrollee Wages and Benefits, Administration, and Other Costs.
Step Nine: Determine Total Allocations for Each Sub Recipient
Multiply the total cost per slot by the number of slots assigned to each sub recipient.
For example: $9,204 x 48 slots = $441,815
Add the total allocation for each sub recipient to ensure they balance to the total sub recipient allocation.
Step Ten: Determine Allocation by Budget Category for Each Sub Recipient
Multiply the total allocation for each sub recipient by the percentage for each budget category determined in Step Eight.
For example:
EWB: $441,815 x 78.87% = $348,468
Administrative Costs: $441,815 x 9.44% = $41,725
Other Program Costs: $441,815 x 11.68% = $51,622
Add the sum of each budget category to be sure it matches the total allocation for that grantee.
Step Eleven: Calculate Match for Each Budget Category
Follow Steps Six through Ten above using the match calculated for each sub recipient using the amount from Step Nine and the formula described in Step Two.
For example:
Total for sub recipient: ($441,815/.9) x .1 = $49,091 match funds
EWB: $49,091 x 78.87% = $38,718.63
Administrative Costs: $49,091 x 9.44% = $4,636.15
Other Program Costs: $49,091 x 11.68% = $5,735.78
Add the match calculated for each budget category to ensure it matches to the total match for the sub recipient calculated above.
Step Twelve: Verify Budget Compliance
Verify that the total statewide budget meets DOL guidelines for each budget category.
Divide the EWB total distributed to sub recipients by the federal allocation to be sure it meets or exceeds 75%.
Add the total Administrative Costs distributed to sub recipients to the DAS state administrative costs and divide that total by the federal allocation to be sure it does not exceed 13.5%.
Divide the Other Program Costs distributed to sub recipients by the federal allocation to be sure it does not exceed 11.5%.
Step Thirteen: Prepare Deliverables for Contracting
Prepare a summary of sub recipient funding for allocation to sub recipients, review scope of work and any other deliverables for inclusion in sub recipient contracts, and complete contract initiation forms for sub recipients other than AAAs. Forward all documents to the DAS Senior Business Operations Manager, the DAS Contracts Manager, and the DAS Contracts Specialists assigned to prepare contract documents.
420.4 Matching Funds
For the SCSEP program, the Department of Labor will pay no more than 90% of the total cost of activities carried out under a SCSEP grant. DAS must ensure that at least 10% of the total costs of the activities carried out under the SCSEP grant consist of allowable costs paid for with non-Federal funds, meaning that match (whether cash or in-kind) may not be supplied from federal funds. (20 CFR Part 641 §641.809)
The non-Federal share of costs may be provided in cash, or in-kind, or a combination of the two. (OAA §502(c) (2).
420.5 Sub Recipient Budget and Monitoring
Expenditures must be based on actual work. Functions such as recruitment, assessment, eligibility determination, host agency development, counseling, job development and placement, and costs associated with those functions are appropriately charged to Other Program Costs.
Details in Appendix A should help sub recipients prepare local budgets. DAS will provide each sub recipient with the percentages for each of the three sub categories. Sub recipients may request to transfer funds from the Administration category to Enrollee Wages and Benefits and/or Other Program Costs categories. This request must be made in writing and must be approved/declined in writing prior to implementation.
Sub recipients should prepare and monitor budgets with the core performance measures in mind. Sub recipients may choose to follow the steps outlined in §420.4 above in budget preparation, substituting the sub category percentages provided by DAS.
Sub recipients will complete the budget section of the Sub recipient Tracking Sheet each month and will submit it to the State SCSEP Coordinator on a quarterly basis, within 15 business days following the end of each quarter. This report will be reviewed by DAS and will provide a basis for quarterly technical assistance.
420.6 Indirect Costs
Sub recipients may request payment for indirect costs only within the Administration or Other Program Costs budget categories. Indirect costs can only be charged to Other Program Costs if personnel and non-personnel costs of staff who perform both administrative and programmatic functions are documented based on actual time worked or other equitable cost allocation methods.
Indirect costs may not exceed 10% of the total funds allocated to the Administration budget category and/or the Other Program Costs category. Further, a sub recipient may not seek reimbursement for a line item that is also included in its indirect allocation. DAS must have on file an approved indirect cost allocation plan in order for indirect costs to be evaluated for approval as part of the sub recipient budget.
420.7 Reimbursement to Sub Recipients
The Department of Labor requires that at least 75% of grant funds to be expended on enrollee wages and benefits and no more than 13.5% of grant funds to be expended on administration (20 CFR Part 641 §873). Each sub recipient will submit to DAS a report of expenses incurred for the SCSEP program on a monthly basis. This report will identify funds spent in each of the three allowable budget categories.
DAS will review these reports monthly and will reconcile them quarterly to ensure that the three allowable budget categories are expended in equal proportions. This reconciliation will provide a basis for quarterly technical assistance.
At the end of each fiscal year, DAS will not reimburse the percentages spent in the Administration category and Other Program Costs categories in a greater proportion than the percentage spent in the Enrollee Wages and Benefits category. Administration and Other Costs are earned in proportion to expenditures for Enrollee Wages and Benefits. DAS reserves the right to correct reimbursements more frequently if the parity of percentages varies too significantly.
420.8 DAS Fiscal Monitoring
The State SCSEP Coordinator will review the quarterly Sub recipient Tracking Sheet for purposes of monitoring compliance with federal guidelines, monitoring compliance with DAS contract guidelines with the sub recipient, and to provide technical assistance in both fiscal and programmatic issues.
The State SCSEP Coordinator will meet monthly with DAS Fiscal staff to review monthly expenditures and reconcile expenditures on a quarterly basis to ensure compliance with federal guidelines.
Results from this review will also be included in technical assistance provided to the sub recipients.