If a department believes that Method A is not an equitable way to calculate the Budgeted SWCAP amount, they have the option of using one of the Method B calculations listed below. Departments must show the alternative computation (Method B) and provide justification as to why they are using Method B. The Finance budget analyst and FSCU must concur with this computation and approve this alternative method.
Acceptable Method B Calculations
1. Specific legislation or grant language which prohibits the recovery of general administrative costs or explicitly states a funding CAP
*Departments must provide a copy of the legislation/statutes or grant language for Fiscal Systems and Consulting Unit (FSCU) review. A recommended alternative Method B calculation (assuming the CAP is on administrative costs only):
|CAP Amount||x SWCAP Apportionment = Budgeted SWCAP Amount|
2. Pass-thru funding or funding which functions like local assistance
Only the amount of federal funding used as pass-thru funding would be excluded from both the numerator (federal funding) and denominator (state operations) of the federal funding ratio. An example is funding that benefits local assistance but which currently resides within the state operations portion of the department’s budget.
*Documentation must include a calculation sheet identifying the amounts to be excluded (by program) for the pass-thru or local assistance funds, and the corresponding pages from the Governor’s Budget (GB) verifying those amounts
3. Amounts in the GB are overstated or understated
The cost allocation process begins in January after the release of current GB which we use the mid-column (CY) GB amounts. When actual program expenditures do not materialize or come in higher than expected, the GB amounts are overstated/understated. Any change to the ratio must be applied to both the numerator (federal funding) and denominator (state operations) components.
*Documentation must include actual amounts (from Hyperion expenditure reports or financial reports).
4. Base the SWCAP federal funding ratio consistent with how the department prepares their ICRP
If a department’s direct costs are based on total personal services rather than total department expenditures, then the Method B calculation would look like the following:
|Federal Personal Services||x SWCAP Apportionment = Budgeted SWCAP Amount|
|Total Personal Services|
*The department’s calculation must be consistent with their Indirect Cost Rate Proposal.