C.M.R. 10, 144, ch. 502, app 144-502-C

Current through 2024-51, December 18, 2024

Appendix 144-502-C - FINANCIAL GLOSSARY

PROGRAM INCOME: The funds received by a program from a particular funding source is considered to be program income. Such funds may be either restricted or unrestricted. For greater clarity, the following definitions are offered:

Restricted Funds funds received by the provider which are required by the funding source to be used to purchase certain goods or services or to pay for certain expenses. Restricted funds may be in the form of grants or donations. The Community Health Program grant award settlement will be based on net allowable expenses.

Restricted funds must be applied against expenditures to which the-funds are restricted. Those expenditures are not subject to payment by Community Health Program (CHP) funds- Thus, if a provider has received a specific purpose grant to pay the salaries of certain positions, the salary cost of those positions must be deducted from total allowable costs to determine net allowable costs. CHP grant award will be based on net allowable expenses.

Unrestricted Funds funds received by the provider which may be used as the provider deems appropriate, so long as:

(a) The funds are not previously described in this section,

(b) CHP does not participate in the costs, including indirect costs, of producing such funds, and

(c) The agency Board of Directors has established how funds will be used.

Major sources of funding are:

1 STATE/FEDERAL Funding This includes but is not limited to income from the federal and state government.

2 LOCAL Funding This includes income from county or municipal governments.

3 PRIVATE FUNDING This includes endowment funds, and awards/funds from private agencies, United Way service or organizations available to the program.

4 PROGRAM INCOME includes:

a Client Fees (including third Party reimbursement)

b Sales of Goods and Services

c Donations

d Earned Interest

e other Income: from sale of property, equipment or supplies. Workshop income and usage or rental fees in which CHP participated in the costs thereof.

AUDITING STANDARDS

Grants to applicants made pursuant to these rules will be audited according to the standards set forth below. The Department shall recover funds that fail to meet those standards.

The Department shall utilize the cost principles and administrative requirements contained in the following US office of Management and Budget (OMB) circulars as applicable to the type of community agency entity being audited (unless there is a conflict between the applicable circular and the allowable and non-allowable expenses set forth below in which case the latter shall apply).

(a) Public Entity

i OMB Circular A-102, Uniform Administrative Requirements for Grants and Cooperative Agreements to State and Local Governments

ii OMB Circular A-87, Cost Principles for State and local Governments

(b) Nonprofit Entity

i OMB Circular A-110, Uniform Administrative Requirements for Grants and Agreements with Institutions of Higher Education, Hospitals, and Other Nonprofit Organization

ii OMB Circular A-122, Cost Principles for Nonprofit Organizations

(c) Educational Entity

i OMB Circular A-110, Uniform Administrative Requirements for Grants and Agreements with Institutions of Higher Education, Hospitals, and Other Nonprofit Organizations

ii OMB Circular A-21, Cost Principles for Educational Institutions

iii OMB Circular A-88, Indirect Cost Rates, Audit, and Audit Follow-up at Educational Institutions

(d) For Profit Entity

i OMB Circular A-102, Uniform Administrative Requirements for Grants and Cooperative Agreements to State and Local Governments

ii OMB Circular A-87, Cost Principles for State and Local Governments.

ALLOWABLE EXPENSES

The following are allowable expenses under the Community Health Program grant award:

(1) ACCOUNTING EXPENSES those costs which include establishing and maintaining accounting and other information systems required for the management of grant programs. Agency audits are an allowable administrative expense.

(2) ADMINISTRATIVE COSTS general expenses necessary for the total operation of the agency of which the program is a part.

(3) ADVERTISING COSTS - ONLY FOR:

a recruitment of personnel required for the performance of obligations arising under the grant by the provider when considered in conjunction with all other recruitment costs;

b to fulfill specific requirements of the CHP grant.

These costs consist of the costs of advertising media including magazines, newspapers, radio and television pro-grams, direct mailing, trade Papers, outdoor advertising, dealer cards, window displays, convention exhibits, free goods and samples, and the like.

(4) BONDING COSTS costs necessary to assure against financial loss of CHP funds. Included are such bonds as bid, performance, payments, advance payments, infringement, and fidelity bonds.

(5) CAPITAL EQUIPMENT/BUILDING COSTS Purchase and/or rental of movable equipment or of building is allowable only with approval of the Division of Program Analysis and Development (DPAD). Capital equipment costs of $500 or more for equipment, buildings, and/or repairs which materially increase the value or useful life of equipment or buildings.

(6) COMPENSATION FOR PERSONAL SERVICES Immediate or deferred compensation for personal services rendered by employees of the provider agency during the grant period. It includes, but is not limited to salary, wages, and management-employee incentive compensation plans.

(7) CONSUMABLE SUPPLIES include linens, paper, and other materials necessary to carry out the objectives of the grant.

(8) CONSULTANTS the cost of purchasing expert service advice or services for both direct service and program administration. This may include expense of travel ( see 'Travel Costs') as well as reasonable consultant fees.

(9) DEPRECIATION AND USE ALLOWANCE depreciation is a charge to-current operations which distributes the cost of the tangible capital asset, less estimated residual value, over the estimated useful life of the asset in a systematic and logical manner. It does not involve current market value of the asset. Useful life refers to the prospective period of economic usefulness life. Use allowances are the means of allowing compensation when depreciation or other equivalent costs are not considered. Any asset purchased with non-CHP funds but depreciated in a CHP grant is the Property of the provider organization. A depreciation schedule must be submitted if depreciation expense is charged to the program.

(10) FRINGE BENEFITS services provided by the provider to its employees as compensation in addition to regular wages and salaries. They include such costs as contributions to employee insurance, pensions and annuities.

(11) INSURANCE AND INDEMNIFICATION includes all insurance which the Provider is required to carry or which is approved under the terms of the grant (and any other insurance which the provider maintains in connection with the general conduct of its business). Indemnification includes securing the provider against liabilities to third persons and any other loss or damage not compensated by insurance or otherwise-

(12) LEGAL EXPENSES expenses incurred in administering a grant program.

(13) MAINTENANCE AND REPAIR COSTS costs necessary for the upkeep of property and equipment which neither add to the permanent value of the property nor appreciably Prolong its intended life, but keep it in an efficient operating condition.

(14) OTHER OCCUPANCY COSTS includes such costs as heat, electricity, water, gas, telephone, sewage and garbage disposal, and snow removal.

(15) PROFESSIONAL ACTIVITY COSTS these costs are allowable under the following conditions:

a These costs are allowable insofar as their primary purpose is the dissemination of technical information or the stimulation of production.

b These costs must be reasonable and necessary and commensurate with both the size and structure of the provider.

This category includes the costs of subscriptions, meetings, conferences and agency memberships.

i. Subscription costs are the cost of subscriptions to trade, business, professional, or technical periodicals

ii. Meetings and conferences costs include meals, transportation, rental of facilities for meetings, costs incidental thereto. Attendance at out-of-state meetings and conferences requires prior written notification of the (DPAD).

iii. Agency membership costs are the costs of fees (dues) to appropriate professional organizations and associations.

(16) PUBLIC INFORMATION SERVICES COSTS these costs are allowable under the following conditions:

a To interest individuals or groups in participating in a service program of the provider.

b Provide stewardship reports to state and local government agencies, benefactor foundations and associations.

These costs include the costs associated with promotions, public relations, pamphlets, news releases, and other forms of information services.

(17) RELATED PARTY COSTS these costs are allowable under the following conditions:

a Costs applicable to services, facilities, and supplies furnished to the agency by organizations related to the agency by common ownership or control are includable in the allowable costs of the agency at the cost to the related organization . However, such costs must not exceed the price of comparable services, facilities, or supplies that could be purchased elsewhere. Related to the agency means that the agency to a significant extent is associated or affiliated with or has control of or is controlled by the organization furnishing the services, facilities, and supplies. Common Ownership exists when an individual possesses significant ownership or equity in the agency and the institution or organization serving the agency. Control exists where an individual or an organization has the power, directly or indirectly, to significantly influence or direct the actions or policies of an organization or institution.

b Administrative fees paid to a related organization are allowable only to the actual expenses incurred in administering the Program, the total administrative costs of the related organization must be allocated to the various provider agencies based on acceptable cost allocation methods. The Division of Program Analysis and Development agrees to assume only that share of the indirect costs which are fairly attributable to its own grants.

These costs are paid to individuals or organizations related to the provider. Related to the provider means that the provider to a significant extent is associated or affiliated with, or has control of, or is controlled by the individual or organization furnishing the facilities, services, or supplies.

(18) PUBLICATION AND PRINTING COSTS prior written approval by the DPAD will be required for one-time expenditures greater then $500.00 and not previously approved in the grant. These costs are the costs of printing including the process of composition, platemaking, press work, binding, and the end product produced), distribution, promotion, mailing, and general handling.

(19) RENTAL EXPENSE these costs are allowable if the rates are reasonable in light of such factors as the rental costs of comparable facilities and market conditions in the are, the type, life expectancy, condition and value of the facilities leased, options available and other provision of the rental agreement. These expenses are for the use of land, building, equipment, and other Personal property. Utilities may be included in rent expenses, if they are supplied by the renter.

(20) TRAINING COSTS these costs include such things as tuition, registration fees, books trainer costs, meals and travel costs.

(21) TRAVEL COSTS the maximum travel reimbursement rate will be based upon the provider organization policy and attached to the grant package. Where no policy exists, state rates Shall apply. These costs include the costs of transportation, lodging subsistence, and incidental expenses incurred by provider personnel in a travel status while on official program related business.

NON-ALLOWA8LE EXPENSES

The following are non-allowable expenses under the Community Health program grant award:

1 BAD DEBT these are losses (whether actual or estimated) arising from uncollectable accounts and other claims, related costs, and related legal costs.

2 CONTINGENCIES these are possible future events or conditions arising from presently known or unknown causes, the outcome of which cannot be determined.

3 DEPRECIATION AND USE ALLOWANCE OF GOVERNMENT PROPERTY these are generally items for which a grantee has government furnished equipment, facility or ground, irrespective of title status.

4 DONATED GOODS, SPACE AND SERVICES donated or volunteer services by professional and technical personnel, consultants and other skilled and unskilled labor as well as donated goods, (e.g., expendable personal property/supplies) and donated use of space may be furnished to an organization.

5 ENTERTAINMENT COSTS costs of amusements, diversions, social activities, ceremonial, and incidental costs relating thereto, such as meals, lodging, rentals, transportation and gratuities.

6 FINES AND PENALTIES these are costs resulting from the provider's violations of federal, state and local laws and regulations, or failure of the agency to comply with such laws and regulations.

7 FUND RAISING COSTS these costs include printing, personnel, advertising, etc.-, for the purpose of raising funds.

8 INTEREST the cost on borrowed capital or temporary use of endowment funds.

9 LEGAL EXPENSES these costs include attorney fees, filing fees, etc. for the prosecution of claims against federal government and/or the Department.

10 LOBBYING COSTS these costs are for the salary or expenses of any person engaged in any activity designed to influence legislation or appropriation pending before the Congress or the State Legislature.

11 LOSSES ON OTHER GRANTS OR CONTRACTS these costs include losses on other grants or contracts or any excess of costs over income on a grant or contract.

12 MAJOR REPAIRS AND RENOVATIONS these costs are those of fixed equipment. buildings, major repairs and renovations which materially increase the value or useful life of buildings or equipment. IF THESE COSTS ARE CAPITALIZED OR DEPRECIATED, THEY ARE CONSIDERED TO BE ALLOWABLE.

13 INDIVIDUAL (PERSONAL) MEMBERSHIP COSTS individual membership costs consist of the membership fees of trade, business, technical and professional organizations.

14 MORTGAGE EXPENSE these are the costs of repaying money that was borrowed using property as collateral. The interest is unallowable. The principal is allowable only if capitalized and depreciated.

15 ORGANIZATION COSTS these costs consist of expenditures such as incorporation fees, attorney's fees, accountant's fees, broker's fees, and fees to promoters and organizers in connection with the organization or reorganization of a business or raising capital.

16 VEHICLE PURCHASE these are cost relating to the purchases of vehicles. THESE COSTS MAY BE ALLOWABLE IF CAPITALIZED AND DEPRECIATED.

IN-KIND CONTRIBUTIONS

In-kind contributions shall be valued as follows:

a Volunteer services from individuals shall be valued at rates the recipient organization would ordinarily pay for similar work or, if the recipient does not have any employees performing similar work, at rates other employers in the some labor market would ordinarily-pay for similar work. A reasonable amount may be included for fringe benefits.

b Volunteer services contributed by employees in the employees normal line of work shall be valued at the employees' regular pay rate exclusive of fringe benefits and overhead costs. If the services are in a different line of work they shall be valued in the same manner as individual volunteer services above.

C.M.R. 10, 144, ch. 502, app 144-502-C