Section 75-03-20-07 - Cost allocation1. Direct costing of allowable costs will be used whenever possible. If direct costing is not possible and the center has more than one license or has services which are jointly used for administration, education, maintenance, rehabilitation, or nonclient activities, the following allocation methods will be used: a. Salaries which cannot be reported based on direct costs are to be allocated using time studies. Time studies must be conducted at least semiannually for a two-week period or quarterly for a one-week period. The time study must represent a typical period of time when employees are performing normal work activities in each of their assigned areas of responsibility. Allocation percentages based on the time studies are to be used starting with the next pay period following completion of the time study or averaged for the report year. The methodology used by the center may not be changed without approval by the department. b. Salaries of direct care supervisory personnel may be allocated based on full-time equivalents of the employees supervised or on a ratio of salaries. c. Fringe benefits must be allocated based on the ratio of salaries to total salaries. d. Plant operation expenses must be allocated based on square footage. e. Property costs must be allocated based on square footage. f. Administration cost must be allocated on the basis of the percentage of total costs, excluding administration and property costs, in each cost center. g. Dietary costs and food must be allocated based on meals served. h. Vehicle expenses must be allocated based on mileage logs. Mileage logs must include documentation for all miles driven and purpose of travel. If sufficient documentation is not available to determine which cost category vehicle expenses are to be allocated to, vehicle expenses will be allocated in total to administration. i. Costs not direct costed or allocable using methods identified in subdivisions a through h must be included as administration costs. 2. If any of the above allocation methods cannot be used by the center, a waiver request may be submitted to the division of mental health services. The request must include an adequate explanation as to why the referenced allocation method cannot be used by the center. The center must also provide a rationale for the proposed allocation method. Based on the information provided, the department will determine the allocation method that will be used to report costs. N.D. Admin Code 75-03-20-07
Effective December 1, 1991.General Authority: NDCC 25-03.2-10, 50-06-16
Law Implemented: NDCC 25-03.2