State

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States Full Cost Recovery Policy
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States Full Cost Recovery Policy

• State of Californias full cost recovery policy
  is defined in
• Government Code (GC)
• State Administrative Manual (SAM)
• Each State department will comply with the
  requirements.

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States Full Cost Recovery Policy - continued

• Government Code (GC) Section 11010
• Authorizes full cost recovery and sharing of
  central service costs by special fund.
• And . . .

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States Full Cost Recovery Policy - continued

• State Administrative Manual (SAM) Sections
• 8752
• Explains the full cost recovery policy.
• 8752.1
• Identifies the cost elements to include.

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States Full Cost Recovery Policy - continued

• State departments will . . .
• Recover full costs when goods or services are
  provided to others.
• Include all costs attributable directly to the
  activity plus a fair share of indirect costs.
• And . . .

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States Full Cost Recovery Policy - continued

• State departments will
• Apply the States full cost recovery policy to
  all funding sources.
• Follow this policy, except where statutes
  prohibit full cost recovery.

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States Full Cost Recovery Policy - continued

• Additionally, for federal reimbursements
  follow
• Federal circular A-87
• ASMB C-10

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Elements of Full Cost

• Cost elements recovered under the full cost
  recovery policy are . . .
• Direct costs
• Indirect costs

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Elements of Full Cost - continued

• Direct costs include the actual cost of running
  the program . . .
• Personal Services
• Operating Expenses and Equipment

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Elements of Full Cost - continued

• Indirect costs include the State departments own
  overhead, which often are . . .
• Executive Staff
• Information Technology (IT) Staff
• Accounting Staff
• Budget Staff
• Other (administrative units) Staff
• Plus . . .

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Elements of Full Cost - continued

• Central service costs are
• Known as the other indirect costs.
• Incurred by central service agencies for the
  benefit of all State departments.
• Known as
• Pro Rata
• SWCAP

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Elements of Full Cost - continued

• Total direct costs plus the indirect costs should
  equal the full cost of running the programs of a
  State department.
• Direct costs X,XXX
• Indirect costs
• State department XXX
• Statewide
• Pro Rata XX
• SWCAP XX
• Total costs XX,XXX

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Elements of Full Cost - continued

• Costs included in an Indirect Cost Rate Proposal
  (ICRP) must be adjusted for unallowable costs.
• Unallowable cost information is discussed in
  various training classes.

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Elements of Full Cost - continued

• State department billings to other entities or
  the federal government must include an ICRP rate,
  which includes
• State department indirect amount.
• Either
• Pro Rata ICRP rate.
• SWCAP ICRP rate. SWCAP amount recovered will be
  transferred to the General Fund.

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