A.
General. Federally-financed programs administered by State
public assistance agencies are funded predominately by the Department
of Health and Human Services (HHS). In support of its stewardship requirements,
HHS has published requirements for the development, documentation, submission,
negotiation, and approval of public assistance cost allocation plans in
Subpart E of 45 CFR Part 95. All administrative costs (direct and indirect)
are normally charged to Federal awards by implementing the public assistance
cost allocation plan. This Attachment extends these requirements to all
Federal agencies whose programs are administered by a State public assistance
agency. Major federally-financed programs typically administered by State
public assistance agencies include: Aid to Families with Dependent Children,
Medicaid, Food Stamps, Child Support Enforcement, Adoption Assistance
and Foster Care, and Social Services Block Grant.
"State public
assistance agency" means a State agency administering or supervising
the administration of one or more public assistance programs operated
by the State as identified in Subpart E of 45 CFR Part 95. For the purpose
of this Attachment, these programs include all programs administered
by the State public assistance agency.
"State public
assistance agency costs" means all costs incurred by, or allocable to,
the State public assistance agency, except expenditures for financial
assistance, medical vendor payments, food stamps, and payments for services
and goods provided directly to program recipients.
C. Policy.
State public assistance agencies will develop, document and implement,
and the Federal Government will review, negotiate, and approve, public
assistance cost allocation plans in accordance with Subpart E of 45 CFR
Part 95. The plan will include all programs administered by the State
public assistance agency. Where a letter of approval or disapproval is
transmitted to a State public assistance agency in accordance with Subpart
E, the letter will apply to all Federal agencies and programs. The remaining
sections of this Attachment (except for the requirement for certification)
summarize the provisions of Subpart E of 45 CFR Part 95.
State public assistance
agencies are required to promptly submit amendments to the cost allocation
plan to HHS for review and approval.
Under the coordination
process outlined in subsection E, affected Federal agencies will review
all new plans and plan amendments and provide comments, as appropriate,
to HHS. The effective date of the plan or plan amendment will be the
first day of the quarter following the submission of the plan or amendment,
unless another date is specifically approved by HHS. HHS, as the cognizant
agency acting on behalf of all affected Federal agencies, will, as necessary,
conduct negotiations with the State public assistance agency and will
inform the State agency of the action taken on the plan or plan amendment.
Since public assistance
cost allocation plans are of a narrative nature, the review during the
plan approval process consists of evaluating the appropriateness of
the proposed groupings of costs (cost centers) and the related allocation
bases. As such, the Federal Government needs some assurance that the
cost allocation plan has been implemented as approved. This is accomplished
by reviews by the funding agencies, single audits, or audits conducted
by the cognizant audit agency.
Where inappropriate
charges affecting more than one funding agency are identified, the cognizant
HHS cost negotiation office will be advised and will take the lead in
resolving the issue(s) as provided for in Subpart E of 45 CFR Part 95.
If a dispute arises
in the negotiation of a plan or from a disallowance involving two or
more funding agencies, the dispute shall be resolved in accordance with
the appeals procedures set out in 45 CFR Part 75. Disputes involving
only one funding agency will be resolved in accordance with the funding
agency's appeal process.
To the extent
that problems are encountered among the Federal agencies and/or governmental
units in connection with the negotiation and approval process, the Office
of Management and Budget will lend assistance, as required, to resolve
such problems in a timely manner.
F. Unallowable
Costs. Claims developed under approved cost allocation plans will
be based on allowable costs as identified in this Circular. Where unallowable
costs have been claimed and reimbursed, they will be refunded to the program
that reimbursed the unallowable cost using one of the following methods:
(a) a cash refund, (b) offset to a subsequent claim, or (c) credits to
the amounts charged to individual awards.
