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.