- What is the County Cost Allocation Plan?
Washoe County provides services, such as accounting, purchasing, technology services, etc., to operating departments and agencies on a centralized basis. The central service cost allocation plan provides a process whereby the cost of these services can be identified and assigned to benefiting departments and agencies on a reasonable and consistent basis.
- What is Indirect Cost Rate?
Indirect Cost Rate is a means for determining in a reasonable manner the proportion of indirect costs each program should bear. It is the ratio (expressed as a percentage) of the indirect costs to a direct cost base. That ratio then can be utilized to calculate an amount of indirect costs to include in the development of fees or charges for services; to build indirect costs into grant and other funding applications; and to charge grants and other programs for indirect costs associated with providing products or services.
- What are the various types of indirect rates and which one does the County use?
There are four types of rates:
Predetermined rate is applicable to a specific current or future period, usually the governmental unit’s fiscal year. This rate is based on an estimate of the costs to be incurred during the period. Except under very unusual circumstances, a predetermined rate is not subject to adjustment.
Provisional rate is a temporary indirect cost rate applicable to a specified period which is used for funding, interim reimbursement, and reporting indirect costs on Federal awards pending the establishment of a “final” rate for that period.
Final rate is applicable to a specified past period which is based on the actual allowable costs of the period. A final audited rate is not subject to adjustment.
Fixed rate has the same characteristics as a predetermined rate, except that the difference between the estimated costs and the actual allowable costs of the period covered by the rate is carried forward as an adjustment to the rate computation of a subsequent period.
For federal indirect revenue and/or federal match/in-kind/etc., Washoe County will use a Provisional rate of 12% for the current fiscal year.
Washoe County’s Provisional rate for FY24 is 15.84% as reflected in the Cost Allocation Plan for Fiscal Year Ending June 30, 2022 (pg 7 of 345 in PDF). This rate can be used for purposes such as calculation of user fees.
Washoe County's Provisional rate for FY23 is 15.10% as reflected in the Cost Allocation Plan for Fiscal Year Ending June 30, 2021 (pg 8 of 306 in PDF). This rate can be used for purposes such as calculation of user fees.
Washoe County’s Provisional rate for FY22 is 16.03% as reflected in the Cost Allocation Plan for Fiscal Year Ending June 30, 2020 (pg 8 of 287 in PDF). This rate can be used for purposes such as calculation of user fees.
Washoe County’s Provisional rate for FY21 is 16.28% as reflected in the Cost Allocation Plan for Fiscal Year Ending June 30, 2019 (pg 9 of 280 in PDF). This rate can be used for purposes such as calculation of user fees.
Washoe County’s Provisional rate for FY20 is 16.01% as reflected in the Cost Allocation Plan for Fiscal Year Ending June 30, 2018 (pg 9 of 281 in PDF). This rate can be used for purposes such as calculation of user fees.
- Why are there different bases used for certain central service cost allocations?
The general allocation basis utilized for allocating central service costs is budgeted Full Time Equivalents (FTEs) or Total Expenditures. However, when a more definitive basis exists for determining a more precise allocation methodology, such as numbers of requisitions and purchase orders by unit, or square footage utilized by unit, or work orders produced by unit, those more precise figures are utilized to determine the allocation percentages.
- What is the OMB Uniform Guidance?
2 CFR 200, the Office of Management and Budget’s (OMB) Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (commonly called “Uniform Guidance”) was officially implemented in December 2014 by the Council on Financial Assistance Reform (COFAR – now dissolved). The Uniform Guidance is an authoritative set of rules and requirements for Federal awards that synthesizes and supersedes guidance from earlier OMB circulars.*
*The Guidance was drawn from OMB Circulars A-21, A-87, A-110, and A-122, Circulars A-89, A-102, and A-133; and the guidance in Circular A-50 in Single Audit Act follow up.
2 CFR 200 was implemented by the Department of Health and Human Services (HHS) as 45 CFR Part 75.
Local governments follow this guidance in the preparation of indirect cost allocations and indirect rates. Utilizing the Federal guidance in the preparation of the Cost Allocation Plan ensures that we can use our allocations and indirect rate for capturing indirect costs on Federal funding, where allowable.
- Do all grants award indirect cost reimbursement?
No. Many grants do award indirect costs or limit the amount of indirect costs that are allowed, and many grants do not allow indirect cost reimbursement. However, maximizing indirect reimbursement, when allowed, contributes toward covering the costs of providing the service. This creates additional resources that could be used for additional services.
- Has the Federal Government certified the Washoe County Cost Allocation Plan?
No. Washoe County is classified by the Federal Government as a non-major local government, and as such, is NOT required to have the Cost Allocation Plan certified by a Federal Cognizant Agency. Per Federal Government guidance local government-wide central service cost allocation plans only need to be prepared and maintained on file (including supporting documentation), unless the local government is a major local government. 2 CFR Part 200, Appendix V, Section D defines major local government as “a local government that receives more than $100 million in direct Federal awards (not including awards passed through the State). Our plan is reviewed annually by the Budget Division and certified by the Chief Financial Officer. The full report is also available on our website, and is public record.
- What is the 10% de minimis indirect cost rate?
In accordance with 2 CFR 200.414(f), if a government department or agency has never received a negotiated indirect cost rate, and the department or agency does not receive more than $35 million in direct Federal funding, they can elect the 10% de minimis rate. Once elected, the 10% rate should be used for all Federal awards (subject to any program statutory or regulatory limitations). Washoe County does NOT use the 10% de minimis indirect cost rate.
If you have additional questions regarding the Washoe County Cost Allocation Plan report, please email Patsy Buxton at PBuxton@WashoeCounty.gov.