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JEFFERSON COUNTY
BOARD OF COUNTY COMMISSIONERS
AGENDA REQUEST
TO: Philip Morley, County Administrator
FROM: Rose Ann Carroll, Auditor
DATE: December 3, 2019
RE: Adoption of the Jefferson County Cost Allocation Plan for 2020
STATEMENT OF ISSUE:
The Jefferson County Cost Allocation Plan for Indirect Cost for the fiscal year ending December
31, 2020 has been completed and is being presented for approval.
FISCAL IMPACT:
The proposed Jefferson County Cost Allocation Plan will allow Public Works to pay the General
Fund $193,507 for their indirect cost allocation.
RECOMMENDATION:
Approve proposed Jefferson County Cost Allocation Plan and sign attached resolution.
REVIEWED BY:
e i„
Philip Morley,,Coun. Administrator Date
STATE OF WASHINGTON
County of Jefferson
In the Matter of Adopting the
Simplified Indirect Cost Allocation Plan
for Year Ending December 31, 2020 RESOLUTION NO
WHEREAS,the General Fund provides services to various funds, departments,
agencies, districts and municipal organizations in Jefferson County; and,
WHEREAS, Jefferson County, through its various departments and offices
receives monies through grants from State and Federal sources; and,
WHEREAS, Jefferson County has developed a cost allocation plan to identify
indirect General Fund costs allocable to various County departments, agencies, districts and
municipal corporations;
NOW, THEREFORE, BE IT RESOLVED, the "Jefferson County Simplified
Indirect Cost Allocation Plan for Year Ending December 31, 2020"be adopted with
Countywide Indirect Services allocated per the attached Cost Allocation Plan.
BE IT FURTHER RESOLVED,that each department shall use the Plan as the
basis for determining overhead costs for State and Federal grant reimbursements, and services
provided to other agencies, districts and municipal corporations.
APPROVED AND ADOPTED this day of ,2019.
JEFFERSON COUNTY
BOARD OF COMMISSIONERS
SEAL:
Kate Dean, Chair
Greg Brotherton, Member
ATTEST:
Carolyn Gallaway, CMC David Sullivan, Member
Deputy Clerk of the Board
Certification
JEFFERSON COUNTY
SIMPLIFIED INDIRECT COST ALLOCATION PLAN
FOR YEAR ENDING DECEMBER 31,2020
PORT TOWNSEND, WASHINGTON
I hereby certify that the information contained in the attached Jefferson County Simplified
Indirect Cost Allocation Plan and Indirect Cost Proposal, to be used during the fiscal year
ending December 31, 2020, complies with the Office of Management and Budget and 2
CFR 200, Subpart E, "Cost Principles" and uses the implementing instructions contained
in the Guide ASMB C-10 published by the U.S. Department of Health and Human
Services. It was prepared using actual costs for fiscal year 2018.
I further certify: (1) that no costs other than those incurred by the grantee/contractor or
allocated to the grantee/contractor via an approved central service cost allocation plan were
included in its indirect cost pool as finally accepted, and that such incurred costs are legal
obligations of the grantee/contractor and allowable under the governing cost principles,(2)
that the same costs that have been treated as indirect costs have not been claimed as direct
costs, (3) that similar types of costs have been accorded consistent accounting treatment,
and (4) that the information provided by the grantee/contractor which was used as a basis
for acceptance of the rate(s) agreed to herein is not subsequently found to be materially
inaccurate.
Kate Dean, Chair Date
Jefferson County Commissioners
Rose Ann Carroll Date
Jefferson County Auditor
20_°8 e°
Jefferson County
Simplified Indirect Cost Allocation Plan
For Year Ending December 31, 2020
Jefferson County is required to adopt an Indirect Cost Allocation Plan per federal regulations,
Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administration Requirements,
Cost Principles and Audit Requirement for Federal Awards (Uniform Guidance).
The Jefferson County Auditor's Simplified Indirect Cost Allocation Plan allocates costs for
accounting, payroll, county administration,treasurer, and building depreciation. The simplified
format provides an allocation plan that is easy to comprehend, transparent and allocates costs
in a fair and equitable manner.
The costs shown for each county fund/department is the total of 2018 actual expenditures and
2018 direct salaries. The calculation for the indirect cost rate is the total indirect cost divided
by direct salaries. This is a general accounting principle when calculating indirect because
direct salaries are consistent throughout the funds/departments.
There are two sections of the Simplified Indirect Cost Allocation Plan:
1) Countywide Indirect Services—these are activities in the county that serve the
county government.
2) Indirect Costs Associated with Direct Services—these are direct services in the
county that serve the citizens of the county and identifiable indirect costs serving
the county government.
Column Definitions:
Total Costs—total costs in the general ledger financial statements.
Excluded Costs—specific costs that are already recovered by billing or other means.
Unallowable—specific costs that are defined by the Uniform Guidance for which federal
funds cannot be used.
Additional Costs—specific costs that are not identified in general ledger accounting
because the County uses the cash basis of accounting.
Indirect Cost—costs that have been identified as serving county government.
Direct Salaries—salaries and wages identified as serving the citizens of the county.
Benefits/Other Direct Costs—costs associated with personnel benefits and operating
costs serving the citizens of the county.
Audited Financial Statements
Jefferson County is audited annually by the State Auditor's Office. On September 19, 2019, in
report no. 1024583, the State Auditor stated that for the audits of financial statements and
federal awards,there are "no significant deficiencies in the design or operation of internal
control over the financial reporting" and "identified no deficiencies that we consider to be
material weaknesses." They reported "no findings that are required to be disclosed in
accordance with 2 CFR 200.516(a)."
The full financial report and federal single audit report is available on the State Auditor's
website, www.sao.gov.
Indirect Cost Rate Calculation
Identifiable Indirect Cost = $2,160,926
Direct Salaries&Wages = $14,293,142
Countywide Indirect Cost Rate 15.12%
Recommendation 14.62%
Historically, the County opted to utilize a step-down method of cost allocation. Although this
method is tried and true in the financial arena, it is primarily used by large government entities.
Jefferson County is considered a small, rural county based on population.
The Auditor's Office reviewed several allocations that other counties have published and
reached out to the Cost Allocation Advisor to the State of Washington, Larry Lufkin.
The 2020 Cost Allocation Plan based on 2018 Actual Costs has been prepared using the
simplified method for cost allocations.
The Countywide Indirect Cost Rate is lower than previous years due to new guidance on the
OMB 2CFR Part 200, Uniform Guidance. In addition, this cost allocation considers the
recovered amounts received from Public Works, Solid Waste and ER&R as "Excluded Costs",
reducing the amount of the indirect costs available for allocation.
It is recommended that a .5% reduction in the indirect rate be used as the adopted Countywide
Indirect Rate. This allows for the possibility of a Grantor not approving the use of a calculation
as part of the indirect rate. This alleviates possible minor refunds back to a Grantor for revenue
received. Therefore, the calculated 15.12% indirect rate is recommended to be adopted as
14.62%for the Countywide Indirect Rate.
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