WIA Cost Allocation Guidelines

Commonwealth of Kentucky

Workforce Investment Act

Cost Allocation Guidelines for Kentucky’s

One-Stop Service Delivery Centers

Developed by:

Kentucky WIA Implementation Team’s

Cost Allocation Subgroup

Issued and maintained by:

Kentucky Workforce Development Cabinet

Office of Training and ReEmployment

June 2000

TABLE OF CONTENTS

Overview ……………………………………………………….…. 1

Chapter 1

General Administration Requirements …………………………… 2

Chapter 2

Cost Allocation Plan …………………………………………… 5

Chapter 3

Calculating Each Partner’s Estimated Share of Pooled Cost ……..…. 10

Chapter 4

Establishing Payment Agreements ………………………………. 12

Certification (Attachment A)

Mandated Partners (Attachment B)

Partner’s Funding Restrictions / Issues (Attachment C)

Suggested Cost Allocation Bases (Attachment D)

Boundaries of Local Workforce Investment Areas (Attachment E)

One-Stop System Funding Matrix (Attachment F)

Overview

The Workforce Investment Act (WIA) was enacted on August 7, 1998. This new federal legislation is intended to provide a more coordinated, customer-friendly, locally driven workforce development system.

It rewrites current federal statutes governing job training programs, adult education and literacy, and vocational rehabilitation. It codifies the delivery system for 12 mandated partners of federal, state and local program services through a local one-stop system.

The Act establishes a State Workforce Investment Board, appointed by the Governor, with broad authority to guide development of the State’s workforce investment system and to coordinate the plans of federally funded programs in the State.

The Act also establishes Local Workforce Investment Boards within each Workforce Investment Area designated by the Governor. It is the local boards’ responsibility to develop and submit a 5-year local plan; select local One-Stop operators; identify eligible providers of training services, youth activities and intensive services; and oversee the local One-Stop system.

These guidelines are being issued to assist the local boards in the development and completion of a cost allocation plan that delineates each local partner’s financial commitment to the operational funding of the local One-Stop centers.

Chapter 1 – General Administration Requirements

The one stop operator and partners need to identify the total cost of operation of the centers. This should be detailed in a schedule identifying direct costs associated with each partner and costs shared by each partner. The identification of costs and the funding in support of those costs is necessary to make the local one-stop centers sustainable.

The partners must comply with the Federal Cost Principles set forth in OMB Circulars A-21, A-87 and A-122, depending on their type of organization. However, it is the intent of this guidance to maintain compliance, without imposing undue burdens on the local one-stop partners.

Keep it Simple.

Use the simplest and least costly method possible, based on a measure of relative benefit received, that will produce an equitable allocation of costs to programs.

Make it Replicable.

The process that you develop must be replicable at any time.

Consider What is Required.

The required structure and capabilities of your accounting system must be considered in designing an operable cost allocation process.

Make Changes Prudently.

Changes in a partnership’s cost allocation plan that result in a retroactive redistribution of costs to the benefiting cost objective are allowable where the change results in a more equitable distribution of costs. Such changes in allocation methodology should be rare, should receive the necessary prior approvals, and should be justified and well documented.

This guide groups costs into categories for the purpose of discussing cost allocation and cost pooling. Costs are classified as being either direct costs or shared costs. Following is a brief description of each of these categories.

Direct Costs

Those costs that are identified specifically with the cost objective and charged directly to that objective are direct costs. They are costs that can be identified specifically with a final cost objective and do not require any further allocation or breakdown.

Examples of direct costs that are charged to a program include:

Compensation paid to employees whose time is devoted specifically to the fulfillment of a particular program objective;

Costs of pre-approved items such as equipment, consultants, and subcontractors for performance of services specifically for the program; and

Costs of any materials purchased specifically for a particular program.

Shared Costs

Costs that cannot be readily assigned to a final cost objective, but which are directly charged to an intermediate cost objective or cost pool and subsequently allocated to final cost objectives are shared costs. These costs are incurred for a common or joint purpose benefiting more than one funding stream. An example of shared direct costs is the space costs (utilities and janitorial costs) incurred for the one-stop center which is allocated to the participating partners.

Measuring benefit: Measuring benefit is the critical requirement and central task to be performed in allocating costs. Costs are allocable to a particular cost objective on benefits received by that cost objective. When the direct measurement of benefit cannot be done efficiently and effectively, then it is appropriate to pool the costs for later distribution. The allocation base is the mechanism used to allocate the pooled costs to final cost objectives. Care should be taken to ensure that the basis chosen does not distort the results.

Allocability: For a cost to be allocable to a particular cost objective, it must be treated consistently with other costs incurred for the same purpose in like circumstances. Any cost allocable to a particular grant or other cost objective under these principles may not be shifted to other Federal grants to overcome funding deficiencies, to avoid restrictions imposed by law or grant agreement, or for other reasons. Costs that are prohibited by a funding source may not be paid or used as offsets under a pooled cost agreement.

Allowability: To be allowable, a cost must be reasonable and necessary for the proper and efficient administration of the program. To reduce risk of accumulating and being held accountable for disallowed costs, you should carefully review anticipated program expenditures, the terms and conditions of the award, and applicable regulations before any program costs are incurred.

Reasonableness: For a cost to be reasonable under an award, it will not exceed that which would be incurred by a prudent person under the same or similar circumstances. In determining the reasonableness of a given cost, consideration should be given to:

Whether the cost is of a type generally recognized as ordinary and necessary for the operation of the organization or the performance of the award.
The restraints or requirements imposed by such factors as generally accepted sound business practices, arms-length bargaining, Federal and state laws and regulations, and terms and conditions of the award.
Whether the individuals concerned acted with prudence in the circumstances, considering their responsibilities to the organization, its members, employees, and clients, the public at large, and the government.
Significant deviations from the established practices of the organization that may unjustifiably increase the award’s costs.

Chapter 2 – Cost Allocation Plan

This section provides for general guidance on cost allocation procedures to ensure that costs are properly and equitably distributed to the benefiting cost objective.

The cost allocation plan is a document that identifies, accumulates, and distributes allowable shared costs under grants and contracts, and identifies the allocation methods for distributing costs. A plan for allocating joint costs is required to support the distribution of those costs to the one-stop partners. Formal accounting records to substantiate the propriety of the eventual charges must support all costs included in the plan.

These guidelines are intended to outline the minimum requirements associated with establishing a Cost Allocation Plan.

Contents of a Cost Allocation Plan

Once pooled costs to be shared among partners are identified, a basis of allocation must be agreed upon that is fair to benefiting programs, measurable, consistent, and supported by ongoing data collection. Different bases may allocate different pools. A cost allocation plan is required to document the allocation process and is to include the following elements:

Organization chart that identifies all partners, types of services provided, and staff functions.
A description of the types of services and programs provided at the center(s).
A copy of the official budget that includes, at a minimum, the shared operational costs of the center(s). The direct costs of each partner agency may be included in the budget at the discretion of the LWIA.
The methods used in allocating the expenses to benefiting cost objectives. This requires identifying the basis for allocating each type of pooled cost, and the documentation supporting each basis for allocation.
Certification by the local Workforce Investment Board that the plan has been prepared in accordance with these guidelines. (See Attachment A).

Cost Allocation Parameters

Fiscal Parameters

Each partner must pay or offset its portion of pooled costs in addition to paying its own direct costs.

The local Workforce Investment Board cannot deviate from pertinent federal, state, and local regulations. Costs that are prohibited by a funding source (federal, state, or local) may not be paid or used as offsets under a pooled cost agreement. For example, if a partner’s funding source prohibits entertainment costs, the partner may not pay entertainment costs or use them as an offset under a pooled cost agreement.

The preference is the use of non-pooled costs over the use of pooled costs whenever possible. In other words, direct costing is preferable whenever possible. Contributions to pooled costs are limited to costs incurred during the period of operation, e.g., purchases made during the period of the agreement. Intrinsic values, like the value of a building that has been fully paid for, may not be included in reimbursable or offsetting cost calculations.

Offsets are based on costs. In the case of staff, use actual salary and benefit costs in calculations, not number of staff and function performed. If different individuals will perform the function, then an average of their actual salaries and benefits may be used. Square footage will generally become the allocation basis for space. The cost per square foot becomes a pooled cost that is a direct charge to the partners.

Operations Parameters

A Cost Allocation Plan assigns shared operation costs accumulated in cost pools to each benefiting partner.

It is recommended that the plan and its allocation process be reviewed at least quarterly to determine if the partners are being allocated shared costs comparable to the amounts projected in the plan. Partners who realize material variances in projected versus actual amounts of shared costs being charged to them may need to implement budget modifications to accommodate the variances.

The plan will also need to be revised each time that a new partner begins to deliver services and agrees to fund its portion of the One-Stop center's shared costs. The plan will also require revision when a partner discontinues service delivery in a center and will no longer be allocated a portion of the center’s projected shared costs.

Development of the Cost Allocation Plan

Step 1 – Classify Costs

Cost classification is the process of labeling direct and shared costs relative to the cost allocation process. The two categories are pooled and non-pooled.

Step 2 – Pool Costs

Cost pooling is the process of accumulating costs into pools pending allocation to benefiting programs/partners. Similar allocable costs, which may be combined to simplify the allocation process, should be pooled.

In cost pooling, the time and expense to isolate a cost and allocate by usage may outweigh the benefits derived from the process, e.g., telephone charges. In this case the cost should be combined and allocated with other costs in a consolidated larger pool.

The partners may decide the level of cost allocation within the pool. Cost items may be allocated individually or all cost items in the pool can be totaled and the total allocated. The decision will depend on the level of budget control required and program reporting requirements.

Types of Cost Pools

Facility Cost Pools:

A cost pool may be broad enough to benefit all co-located programs and integrated service cost centers. An example would be a pool where utilities, janitorial, phone and other facility overhead costs would be recorded.

NOTE: Lease costs can not be pooled and allocated due to limitations imposed through KRS 56.800 (See Attachment C).

Categorical Cost Pools:

Some cost pools may contain only specific costs (telephone line charges) or type of costs (copier maintenance agreements, copy paper, toner, copier repair) because the benefits from the costs require a special allocation method due to unequal use or benefit across programs or cost centers. Examples may be computer information sharing, copier costs or telephone.

Organization Cost Pools:

Some expenditures may benefit only parts of a partnership. Examples are one integrated service area cost center as a pool for all the programs in that cost center or a pool for a sub-set of the programs within the integrated service area centers.

Step 3 – Allocation

To determine the allocation process, you must first understand the nature of the costs and how the benefits will be received.

There are four major requirements for a cost to be allocable.

A cost is allocable to a particular cost objective if the goods and services involved are chargeable or assignable to such cost objective in accordance with relative benefits received.
All activities which benefit from the partner’s direct cost will receive an appropriate allocation of shared costs.
Any cost allocable to a particular federal award or cost objective under the principles provided for in these guidelines may not be charged to other federal awards to overcome fund deficiencies, to avoid restriction imposed by law or terms of the federal award, or for other reasons. However, this prohibition would not preclude partners from shifting costs that are allowable under two or more awards in accordance with existing program requirements.
Where an accumulation of shared costs will ultimately result in charges to a federal award, a cost allocation plan will be required.

Step 4 – Select Allocation Bases

Allocation Bases

When costs are pooled instead of directly assigned to a final cost objective, the ability to directly assign benefit for each item of cost is lost. Instead, the pool contains a group of common costs to be allocated by using an indirect or approximate measure of benefit. The approximate measure of benefit is the allocation base. An allocation base is the method of documentation used to measure the extent of benefits received when allocating joint costs among multiple partners.

Minimal Distortion

The base should be distributing costs in a fair and equitable manner without distorting the results. This requires that the base be as causally related as possible to the types of costs being allocated so that benefit can be measured as accurately as possible.

General Acceptability

The base should be generally accepted and in accordance with GAAP. For example, it should be applied consistently over time. The base should also be drawn from the same period in which the costs to be allocated have been incurred.

Represents Actual Costs or Effort Expended

The base should be a measure of actual cost or actual effort expended. It should not be based solely on a plan, budget, job description, or other estimates of planned activity.

Timely Management Control

The base should be within management’s ability to control on a timely basis. The base should produce reliable and fairly predictable results. If the base is erratic and unpredictable, beyond management’s control, or not timely, it is likely to produce unacceptable results.

Consistency with Variations in Funding

The base must be able to accommodate and withstand changes in funding during the year and from year to year. If the base excludes factors that are affected by variations in funding, it will produce distorted results.

Materiality of Costs Involved

The complexity of the base should be commensurate with the materiality of the cost to be allocated. The base should be sufficiently detailed to provide the most equitable and accurate allocation possible. At the same time, the base should be simple enough to be efficient while still attaining a fair distribution of costs.

Practicality and Cost of Using the Base

The base should be as efficient as possible in terms of the costs or effort in developing it. Thus, wherever possible, use a database that already exists in the financial or participant record keeping and reporting systems rather that create a separate database to be used only for allocating costs.

Cost allocation methods vary, just as cost types do. The objective of the method used is to ensure reasonableness and equity. Your organization is likely to use several different bases for allocating different types of costs. Once your organization establishes a method of allocation, that method should be used consistently over time and be described in your cost allocation plan. The following are examples of various cost allocation bases options to be used in the cost allocation process.

Space Allocation (See limitation regarding lease costs in Attachment C)

Fits facility wide costs such as utilities and janitorial. Programs or service area cost centers benefit from those costs in proportion to the work area (square feet), and, in some cases, usage. Other costs that benefit all occupants of the facility, such as copier maintenance, may also be allocated using this basis. This assumes a correlation between square feet allotted to a partner and number of staff benefiting from those costs.

Personnel Allocation

Can be used to allocate any cost where partners benefit from costs in proportion to the staff time worked on them. To use this process, there must be a documented time distribution system. With a time distribution system, costs flow to the area of work emphasis, which normally correlates to funding. This system works well with budget because it creates a cost per position relation for expenditures.

Allowable Survey Methods

Equipment costs, such as copiers, computers, etc., may be used disproportionately by some programs and require allocation methods other than work area or time. This would require some usage logs, such as number of copies.

Attachment D to these guidelines lists other "Suggested Bases for Allocation" that may be used by the one-stop system.

IV. Cost Allocation Plan Approval

The determination of which entity is responsible for having the cost allocation plan approved depends on which entity serves as the "One-Stop Operator" that incurs the shared cost and allocates the costs to the various partners for reimbursement.

The entity responsible for allocating a center’s shared costs to participating partners shall have the cost allocation plan approved using the process mandated by the OMB Circulars applicable to that entity. See 20 CFR 667.200 (c).

Where a Local Workforce Investment Board has contracted with a separate entity to act as the "One-Stop Operator", the contracted entity shall have the cost allocation plan approved using the provisions of the OMB Circulars applicable to it.

Where a Local Workforce Investment Board has established a consortium to serve as the One-Stop Operator, the plan must be approved using the provisions of the OMB Circulars applicable to the Local Workforce Investment Board's fiscal agent due to the Board and the consortium being related parties.

A partner which reimburses the One-Stop operator for its share of allocated costs does not have to modify its own cost allocation plan/indirect cost rate as approved by its federal cognizant agency. The partners are simply reimbursing the One-Stop operator for shared costs through a contractual arrangement the same as with other entities with which the partner contracts.

Chapter 3 – Calculating Each Partner’s Estimated Share of Pooled Costs

It is critical that each partner’s estimated and actual shares of pooled costs, contributions, and related calculations be documented and attached to the written agreement. This data will form the audit trail. Actual costs and numbers of participants served must be reviewed at least quarterly. Changes to reimbursement arrangements may be needed due to unexpected variations in costs or in the percentage of participants served.

The following provides examples of calculating partners’ shares. These are examples only and do not reflect calculation or payment methods mandated by the Workforce Investment Act or its implementing regulations.

Once you have selected one or more allocation bases, you are ready to estimate each partner’s share of pooled costs. The following example illustrates cost estimates based on square footage for pooled facility costs and number of projected participants for pooled office supplies.

Example Facility Pool Costs

Janitorial Service	$25,000
Utilities	$35,000
Total	$60,000

Example Allocation Basis - Facility Pool

	Square Footage		Percent	Planned Share

Partner 1	625	625/2500	25%	$15,000
Partner 2	875	875/2500	35%	$21,000
Partner 3	1000	1000/2500	40%	$24,000
Total	2500		100%	$60,000

Example Office Supplies Costs

Copier Supplies	$7,500
Fax Supplies	$2,500
Total	$10,000

Example Allocation Basis – Office Supplies Pool

	Expected Participants		Percent	Planned Share

Partner 1	400	400/2000	20%	$2,000
Partner 2	600	600/2000	30%	$3,000
Partner 3	1,000	1000/2000	50%	$5,000
Total	2,000		100%	$10,000

Adding the results of the two charts together gives the total each partner plans to pay or contribute as its share of pooled costs.

	Partner 1	Partner 2	Partner 3
Share of Facility Pool	$15,000	$21,000	$24,000
Share of Office Supplies Pool	$2,000	$3,000	$5,000
Total Share of Pool Costs	$17,000	$24,000	$29,000

Payment of Facility Costs -Janitorial Services -Utilities	$0 $0	$25,000 $0	$0 $35,000
Payment of Office Supplies Costs -Copier Supplies -Fax Supplies	$7,500 $2,500	$0 $0	$0 $0
Contributions to/(from) Partners*	$7,000	($1,000)	($6,000)
Total Payment of Pool Costs	$17,000	$24,000	$29,000

*Contributions to partners are limited to costs incurred during the period of operation, e.g., purchases made during the period of the agreement. Intrinsic values, like the value of a building that has been fully paid for, may not be included in reimbursable or offsetting cost calculations.

Chapter 4 – Establishing Payment Agreements

Each partner will pay its share of pooled costs determined to be allocable.

A decision must be made about who pays the bills. The decision should be based on the following options:

The Local Workforce Investment Board will determine through the use of Memorandums of Understanding (MOU’s)* who acts as fiscal agent to pay bills and maintain related records.

The Local Workforce Investment Board will determine through the use of Memorandums of Understanding (MOU’s)* who maintains records and each partner pays designated bills.

The Local Workforce Investment Board will determine through the use of Memorandums of Understanding (MOU’s)* who pays designated bills and maintains related records.

The Local Workforce Investment Board will determine through the use of Memorandums of Understanding (MOU’s)* who maintains records and some of the partners pay all the bills.

The Local Workforce Investment Board will determine through the use of Memorandums of Understanding (MOU’s)* which of the partners pay all the bills and maintain related records.

In addition to determining who pays the bills, you should decide how the bills would be paid. There are two methods by which partners can pay; actual exchange of money, and costs offsets. These two methods may be combined. Whatever option is adopted may result in use of staff time that benefits all partners and should be allocated to all partners.

*The Memorandums of Understanding (MOU’s) addressed above are those required in the Workforce Investment Act (WIA), Section 121(c).

Attachment A

Certification

Cost Allocation Plan Certification

______________________________

Workforce Investment Board

This is to certify that I have reviewed this Cost Allocation Plan and to the best of my knowledge:

All costs included in this proposal are properly allocable to Federal awards on the basis of a beneficial or causal relationship between the expenses incurred and the awards to which they are allocated in accordance with applicable requirements. Further, the same costs that have been treated as shared costs have not been claimed as direct costs. Similar types of costs have been accounted for consistently throughout the Cost Allocation Plan.

I declare that the foregoing is true and correct.

______________________

Authorized Signature

______________________

Official Title

_______________

Date

Attachment B

Mandated Partners

One-Stop System Mandated Partners

Title I of WIA: serving Adults, Dislocated Workers, Youth, Job Corps, Native American Programs, Migrant and Seasonal Farmworkers

Wagner-Peyser

Adult Education and Literacy

Vocational Rehabilitation under Parts A & B of Title I of the Rehabilitation Act.

Welfare-to-Work

Senior Community Services

Postsecondary Vocational Education

Trade Adjustment Assistance

Veteran’s Employment Representatives and Disabled Veterans Outreach Programs

Community Services Block Grant Employment and Training Activities

Housing and Urban Development Employment and Training Activities

Unemployment Insurance

Attachment C

Barriers to Establishing One-Stop Centers

& Partners Funding Restrictions

Barriers to Leasing Space for One-Stop Centers when the Co-location of

State Employees and Non-State Personnel is Planned

Due to limitations imposed on state agencies regarding the lease of space for use by state personnel (KRS 56.800 through 56.823), each state agency must negotiate and enter into a separate lease for the specific space for which they will occupy within a One-Stop center. Therefore, each partner will be expected to enter into a separate sublease in each comprehensive and satellite one-stop center.

The procurement of space for state personnel and the process for co-housing non-state personnel in state-leased facilities may take from nine months to a year in some cases and involves approval from the Finance and Administration Cabinet.

To expedite the approval process, it is suggested that once LWIB’s make their selection on the location of the One-Stop centers in their area, they should contact the Workforce Development Cabinet, Facilities Management Branch to discuss the leasing and co-housing arrangements needed for state personnel.

The Finance and Administration Cabinet has the sole responsibility for the lease of all property for state government agencies. The Finance Cabinet’s authority and responsibility for the lease of property for state agencies is promulgated at KRS 56.800 through 56.823.

KRS 56.800 states:

"The Finance and Administration Cabinet shall be responsible for the lease of all real property rentals required for use by all departments, agencies, and administrative bodies of the state government listed in KRS Chapter 12, and no lease of real property shall be binding against the Commonwealth or any agency unless made and entered into as provided in KRS 56.800 to 56.823 and KRS 43.050, 48.111, and 48.190."

The process that must be followed by the Workforce Development Cabinet when requesting leased space is found at KRS 56.803, Procedure when agency requests space.

According to the Workforce Development Cabinet’s Facilities Management Branch, state agencies usually encounter the following timeline for property leasing:

Week 1

Project proposal sent to Finance and Administration Cabinet

Week 4

Project is reviewed by Finance and bids are placed for space.

NOTE: Bids for leased space are not required when the space is being subleased from a governmental unit (state, city or county).

Week 8

Project cuts off and bids are opened in Frankfort for prospective locations

Week 14

Drawings are sent to the owner for bid purposes after having been reviewed by both the Workforce Development Cabinet and the Finance and Administration Cabinet

Week 18

Bids are received and opened in Frankfort of "Best and Final" offers for lease of space

Week 19-20

Final decision is made on which property is to be leased

Week 21-24

Contract is executed and signed by all parties including Lessor, Workforce Development Cabinet and Finance and Administration Cabinet

Week 25-36

Property is renovated according to specifications of lease contract and State Fire Marshall’s office

Total Time Elapsed

Approximately 9 months later the building is ready for occupancy

Barriers to the Co-location of State Employees and
Non-State Personnel in a State-Owned Facility

While the process for obtaining a lease for space to co-house state and non-state personnel may take up to nine months, the co-location of state and non-state personnel in a state-owned facility is much easier and a more expedient process. Once the LWIB’s make their selection on the location of the One-Stop centers in their area, they should contact the Workforce Development Cabinet, Facilities Management Branch to discuss any co-housing arrangements needed for non-state personnel in a state-owned facility. Each partner that is not currently housed in the state-owned facility will be expected to enter into a separate sublease in each comprehensive and satellite one-stop center within which they desire space.

Anticipated problems associated with the renovation of State Owned Facilities:

The biggest problem arises with the amount of renovation dollars that may be available for any one facility. If the renovation project exceeds $20,000.00, the Finance Cabinet must become involved. Their involvement ranges from overseeing the bid process, to suggesting or encouraging that an outside consultant be hired to oversee the project. The Workforce Development Cabinet must receive three quotes for labor and material for each individual facility with the accepted low bid being under $20,000 (see Attachment A).

In large projects (over $20,000.00) the Finance Cabinet reviews suggested facility renovations to ensure the respective agency hasn't created additional problems. Potential problems may include, but are not limited to: (1) overloading electrical systems; (2) creating barriers for individuals with disabilities; (3) encountering asbestos material; and (4) renovating areas that can conflict with the current mechanical systems.

Workforce Development Cabinet, Fiscal Services would like to take this opportunity to comment on some of the problems which arose during the development of the existing One Stop Offices in which renovation dollars were available, as well as to comment on past renovation projects.

1. During the networking (installation of computer and telephone cabling of the facilities several offices did not incorporate network printers into their plans. Each office should provide a plan that outlines the location of every personal computer and network printer. The locations of the equipment room(s) and network printer(s) should also be included in the plan..

2. Precautions should be taken when ordering new furniture to ensure compatibility with existing work spaces (i.e., electrical outlets, power poles, cabling and general office size limitations).

3. Funding sources and the party responsible for the moving of furniture and equipment (during the renovation and after) needs to be identified. In several cases the Finance Cabinet was needed to secure bids, normally when the Cabinet has exceeded their purchasing limit (see Attachment A).

4. Most of the Department for Employment Services offices have new interior and new exterior signage. Does the WIA board/areas anticipate the need to change the existing signs?

5. If the renovation exceeds $20,000.00, would the WIA partners be able to transfer dollars into a Capital project?

Brian Easton or Bryan Coleman with the Workforce Development Cabinet has copies of all floor plans for the State Owned facilities. You may contact either of them at (502) 564-7346 with any questions.

Department of Vocational Rehabilitation

Department for the Blind

One Stop Career Center-Cost Allocation Issues

Goal: Consistent allocation of cost associated with the operation of a one-stop career center. The allocations of either direct or indirect cost should be based upon methods that are reasonable and which result in an equitable distribution of cost based upon the benefit received.

Core Services

Vocational Rehabilitation (VR) is a mandatory partner in one-stop career centers. Therefore VR must:

Make available through the One-stop system core services that apply to the VR program.

Participate in the operation of the one stop system.

Enter into MOU’s

Pay VR’s share of operating the one stop center consistent with the requirements of the Rehabilitation Act

In order for VR to participate in the cost of an applicable core service (other than those authorized under the Rehabilitation Act), the core service must not be a customary or typical service generally available to all customers of the system and must be a new service that has a VR focus. The rule of thumb is the degree to which the core services exceed those services traditionally available under the Wagner-Peyser program and the extent they are applicable to the VR program. VR funds cannot be used to supplant the funding responsibility of any other federal program.

Restrictions on use of VR Funds

Any core service listed under section 131-(d)(2) of the WIA that was previously provided through the Wagner-Peyser program, including any cost item associated with providing the core service.

Cost of a One-Stop Center that does not house VR staff.

Any other cost that is identified as the legal responsibility of another one stop partner.

Pursuant to Federal Regulations Part 361, Section 361.13 (3)(b)(iii) – At least 90% of employed full time staff of the Department of Vocational Rehabilitation and the Department for the Blind must work on rehabilitation work of the organizational unit. Rehabilitation work is defined as work directly associated with providing Vocational Rehabilitation services to eligible customers. Fiscal staff from both departments will monitor the commitment of staff time in order to ensure regulatory compliance.

Cabinet for Families and Children

One Stop Career Center - Funding Issues

Goal: Whenever feasible, the Cabinet for Families and Children (CFC) intends to be a partner in One Stop career centers. It is essential that this Cabinet enter into agreements at the local level with full understanding of the federally approved cost allocation plan and allowable federal expenditures. To achieve this goal, it is critical for Jeanne Baldwin, Director of the Division of Financial Management, or her designee, to provide technical assistance for all financial agreements involving this Cabinet and obligating CFC funds before approval and signature. This will prevent disallowances and federal audit exceptions.

CFC staff can direct charge to CFC programs that would include the Temporary Assistance to Needy Families (TANF), Welfare to Work, Food Stamps, Medicaid, Child Support, Child Care, Energy, and Protective and Permanency activities. All indirect costs, such as shared costs of the center for lease, utilities, supplies, etc., would be paid for through the cost allocation plan. CFC's cost allocation plan pays for all such expenditures with 100% state funds then allocates those expenditures to program based on the allocation plan, i.e., direct charge of salary by program each month.

No direct program expenditures can be paid to the One Stop center through a financial agreement unless they are specific to that program. Therefore, we project that the Cabinet will enter into financial agreements with the One Stop center's obligating 100% state funds (until those expenditures are spread allocated to the appropriate federal programs).

All federal funds that are received in CFC are restrictive in that they can only pay for expenditures directly associated with those programs.

In addition, there are specific restrictions for TANF federal funds. They cannot be used to fund capital building items, building renovations, medical services, convicted felons and must meet requirements of OMB Circulars.

For Welfare to Work, please see Attachment #1.

Summary of Cost Items

NT
=
Not treated in circular

A
=
Allowable

AC
=
Allowable with conditions

AP
=
Allowable with prior approval of either the Grant Officer or Governor

U
=
Unallowable

A/U
=
Some categories within the particular activity are allowable, while some are not. Please consult respective circular for precise explanations.

UW
=
Unallowable by the WtW regulations (grantees should note that these costs could be allowable by the circulars)

Activities
Circular

A-21
Circular

A-122
Circular

A-87

48 CFR Part 31

Accounting systems
NT

NT

A

NT

Advertising and public relations
AC

AC/U

AC/U

AC

Advisory councils
NT

NT

A

NT

Alcoholic beverages
U

U

U

U

Alumni/ae activities
U

NT

NT

NT

Asset valuations resulting from business combinations
NT

NT

NT

A

Audit services
See A-133

See A-133

A

NT

Automatic electronic data processing
NT

NT

AC

NT

Bad debts
U

U

U

U

Bid and proposal costs (see also Item 65)
Item 65

Reserved

Item 65

Item 65

Bonding costs
NT

A

A

NT

Budgeting
NT

NT

A

NT

Civil defense costs
A

NT

NT

A/U

Commencement and convocation costs
U

NT

NT

NT

Communication costs
A

A

A

NT

Compensation for personal services
A/U

A/U

A/U

A/U

Contingency provisions
U

U

U

U

Cost of money (see also Item 40)
U

U

U

AC

Deans of faculty and graduate schools
A

NT

NT

NT

Defense and prosecution of criminal and civil proceedings, claims, appeals, and patent infringement
U

U

A/U

U

Deferred research and development costs
NT

NT

NT

AC/U

Activities
Circular

A-21
Circular

A-122
Circular

A-87

48 CFR Part 31

Depreciation and use allowances
AC

AC

AC

AC

Disbursing service
NT

NT

A

NT

Donations and contributions
U

U

U

U

Economic planning costs
UW

UW

UW

UW

Employee morale, health, and welfare costs and credits
A

A

A

U

Entertainment costs
U

U

U

U

Equipment and other capital expenditures
A/U

AP

AP

AP

Executive lobbying costs
U

U

U

U

Fines and penalties
U

U

U

U

Fund raising and investment management costs (see also Item 40)
NT

NT

U

U

Gains and losses on disposition of depreciable property and other capital assets and substantial relocation of Federal programs (see also Item 64)
NT

NT

A

A

General government expenses
NT

NT

U

NT

Goods/services for personal use
U

U

NT

NT

Goodwill
NT

NT

NT

U

Housing and personal living expenses
U

AC/U

NT

NT

Idle facilities and capacity
NT

AC/U

AC/U

AC/U

Independent research and development
NT

Reserved

NT

AC

Insurance and indemnification
A

A

A

A

Interest, fund raising, and investment management costs
A/U

A/U

A/U

U

Labor relations costs
AC

AC

NT

AC

Lobbying
U

U

U

U

Losses on other sponsored agreements/contracts
U

U

U

U

Maintenance and repair costs
A

A

A

A

Manufacturing and repair costs
NT

NT

NT

A

Manufacturing and product engineering costs
NT

NT

NT

A

Material costs
A

A

A

A

Activities
Circular

A-21
Circular

A-122
Circular

A-87

48 CFR Part 31

Meetings and conferences
NT

A

See Item 2

See Item 2

Memberships, subscriptions, and professional activity costs
A/U

A/U

See also Item 2

A/U

See also Item 2

NT

Motor pools
NT

NT

A

NT

Organization costs
NT

AP

NT

U

Other business expense
NT

NT

NT

A

Overtime, extra-pay shift, and multi-shift premiums
NT

AC

AC

See also Item 16

Page charges in professional journals
NT

A

NT

NT

Participant support costs
NT

A

NT

NT

Patent costs
A

A/U

NT

A/U

Plant protection costs
NT

NT

NT

A

Plant reconversion costs (see also Item 68)
NT

NT

NT

U

Plant security costs
U

A

NT

NT

Preagreement costs (see also Item 61)
U

NT

NT

NT

Pre-award costs
NT

AP

UW (formula)/AP

NT

Precontract costs (see also Item 61)
NT

NT

NT

AP

Professional services costs
A

A

A

A

Profits and losses on disposition of plant equipment/other capital assets
A

A

See Item 32

See Item 32

Proposal costs (see also Item 10)
AP

Reserved

AP

AP

Publication and printing costs
NT

A/U

A

NT

Rearrangement and alteration costs
A

A

A

NT

Reconversion costs (see also Item 58)
A

A

A

NT

Recruiting costs
A/U

A/U

See Item 2

A

Relocation costs
NT

A

NT

A/U

Rental costs of buildings and equipment
AC

AC

AC

AC

Royalties and other costs for use of patents
A

A

NT

A

Sabbatical leave costs
A

NT

NT

NT

Scholarships and student aid costs
A

NT

NT

NT

Selling and marketing
U

U

NT

A/U

Activities
Circular

A-21
Circular

A-122
Circular

A-87

48 CFR Part 31

Service and warranty costs
NT

NT

NT

A

Severance pay
AC

AC

AC

AC

Special tooling and special test equipment costs
NT

NT

NT

A

Specialized service facilities
A

A

NT

NT

Student activity costs
U

NT

NT

NT

Taxes
AC

AC

AC

AC

Termination costs
NT

A

NT

A/U

Trade, business, technical, and professional activity costs
AC

AC

AC

AC

Training and education costs
AC

AC

AC

AC

Transportation
AC

AC

NT

AC

Travel costs
AC

AC

AC

AC

Termination costs applicable to sponsored agreement (see also Item 82)
A

NT

NT

NT

Trustees
A

A

NT

NT

Under recovery of costs under Federal agreements
U

U

U

U

Attachment D

Suggested Cost Allocation Basis

Suggested Basis For Allocation

Accounting No. transactions; Direct labor hrs.; Allowable survey methods

Auditing Direct audit hours; Expenditures audited

Budgeting Direct labor hours

Consumable Supplies Total direct costs; Direct labor hours

Counselor Direct labor hours; No. of participants counseled

Data Processing System usage; Direct labor hours

Disbursing Service No. of checks issued; Direct labor hours

Fidelity Bond No. of bonded employees

Freight No. of items shipped; Cost of goods

Health Services No. of employees

Intake No. of eligibles; Current period enrollments

Legal Services Direct hours

Motor Pool Costs Miles driven; Days used

Office Machines and Equipment Maintenance Direct machine hours; Direct labor hours

Office Space Sq. Ft. of space occupied; staff salary distribution

Payroll Services No. of employees

Personnel Services No. of employees

Postage Direct usage; Acceptable survey methods

Printing/Reproduction Direct labor hours; Job basis; Pages printed

Procurement service No. transactions processed; Direct hrs. purchasing agent’s time

Retirement System Admin. Payroll; Number of employees contributing

Telephone Number of instruments; Staff salary distribution

Travel Mileage; Actual expenses; Direct labor hours

Utilities Square feet of space occupied; Staff salary distribution

Attachment E

Boundaries of Local Workforce

Investment Areas

Attachment F

One-Stop System Funding Matrix

One-Stop System Funding Matrix

Core Services

Eligibility Determination

Outreach, Intake and Orientation

Initial Assess-ment

Job Search, Placement, Career Counseling
Employment Statistics Information (Job Vacancies, Job skills, demand occupations) Provision of program performance and cost information (eligible providers of training) Local Area performance information relating to performance measures

Availability of supportive services and referral to such services

Title I of WIA: serving Adults, Dislocated Workers, Youth

Job Corps

Native American Programs

Migrant and Seasonal Farmworkers

Wagner-Peyser

Adult Education and Literacy

Vocational Rehabilitation

Welfare-to-Work

Senior Community Services

Vocational Education

Trade Adjustment Assistance

Veteran’s Employment Representatives and Disabled Veterans Outreach Programs

Community Services Block Grant Employment and Training Activities

Housing and Urban Development Employment and Training Activities

Unemployment Insurance

TOTAL

One-Stop System Funding Matrix

Core Services
Provision of information regarding filing claims for Unemployment Compensation Assistance in establishing eligibility for: Welfare-to-Work and financial aid assistance

Followup Services including counseling

Other Services

Shared Costs

Total Costs

Title I of WIA: serving Adults, Dislocated Workers, Youth

Job Corps

Native American Programs

Migrant and Seasonal Farmworkers

Wagner-Peyser

Adult Education and Literacy

Vocational Rehabilitation

Welfare-to-Work

Senior Community Services

Vocational Education

Trade Adjustment Assistance

Veteran’s Employment Representatives and Disabled Veterans Outreach Programs

Community Services Block Grant Employment and Training Activities

Housing and Urban Development Employment and Training Activities

Unemployment Insurance

TOTAL

Week 1	Project proposal sent to Finance and Administration Cabinet
Week 4	Project is reviewed by Finance and bids are placed for space. NOTE: Bids for leased space are not required when the space is being subleased from a governmental unit (state, city or county).

Week 8	Project cuts off and bids are opened in Frankfort for prospective locations
Week 14	Drawings are sent to the owner for bid purposes after having been reviewed by both the Workforce Development Cabinet and the Finance and Administration Cabinet
Week 18	Bids are received and opened in Frankfort of "Best and Final" offers for lease of space
Week 19-20	Final decision is made on which property is to be leased
Week 21-24	Contract is executed and signed by all parties including Lessor, Workforce Development Cabinet and Finance and Administration Cabinet
Week 25-36	Property is renovated according to specifications of lease contract and State Fire Marshall’s office
Total Time Elapsed	Approximately 9 months later the building is ready for occupancy

NT	=	Not treated in circular
A	=	Allowable
AC	=	Allowable with conditions
AP	=	Allowable with prior approval of either the Grant Officer or Governor
U	=	Unallowable
A/U	=	Some categories within the particular activity are allowable, while some are not. Please consult respective circular for precise explanations.
UW	=	Unallowable by the WtW regulations (grantees should note that these costs could be allowable by the circulars)

Activities	Circular A-21	Circular A-122	Circular A-87	48 CFR Part 31
Accounting systems	NT	NT	A	NT
Advertising and public relations	AC	AC/U	AC/U	AC
Advisory councils	NT	NT	A	NT
Alcoholic beverages	U	U	U	U
Alumni/ae activities	U	NT	NT	NT
Asset valuations resulting from business combinations	NT	NT	NT	A
Audit services	See A-133	See A-133	A	NT
Automatic electronic data processing	NT	NT	AC	NT
Bad debts	U	U	U	U
Bid and proposal costs (see also Item 65)	Item 65	Reserved	Item 65	Item 65
Bonding costs	NT	A	A	NT
Budgeting	NT	NT	A	NT
Civil defense costs	A	NT	NT	A/U
Commencement and convocation costs	U	NT	NT	NT
Communication costs	A	A	A	NT
Compensation for personal services	A/U	A/U	A/U	A/U
Contingency provisions	U	U	U	U
Cost of money (see also Item 40)	U	U	U	AC
Deans of faculty and graduate schools	A	NT	NT	NT
Defense and prosecution of criminal and civil proceedings, claims, appeals, and patent infringement	U	U	A/U	U
Deferred research and development costs	NT	NT	NT	AC/U

Accounting	No. transactions; Direct labor hrs.; Allowable survey methods
Auditing	Direct audit hours; Expenditures audited
Budgeting	Direct labor hours
Consumable Supplies	Total direct costs; Direct labor hours
Counselor	Direct labor hours; No. of participants counseled
Data Processing	System usage; Direct labor hours
Disbursing Service	No. of checks issued; Direct labor hours
Fidelity Bond	No. of bonded employees
Freight	No. of items shipped; Cost of goods
Health Services	No. of employees
Intake	No. of eligibles; Current period enrollments
Legal Services	Direct hours
Motor Pool Costs	Miles driven; Days used
Office Machines and Equipment Maintenance	Direct machine hours; Direct labor hours
Office Space	Sq. Ft. of space occupied; staff salary distribution
Payroll Services	No. of employees
Personnel Services	No. of employees
Postage	Direct usage; Acceptable survey methods
Printing/Reproduction	Direct labor hours; Job basis; Pages printed
Procurement service	No. transactions processed; Direct hrs. purchasing agent’s time
Retirement System Admin.	Payroll; Number of employees contributing
Telephone	Number of instruments; Staff salary distribution
Travel	Mileage; Actual expenses; Direct labor hours
Utilities	Square feet of space occupied; Staff salary distribution

Core Services	Eligibility Determination	Outreach, Intake and Orientation	Initial Assess-ment	Job Search, Placement, Career Counseling	Employment Statistics Information (Job Vacancies, Job skills, demand occupations)	Provision of program performance and cost information (eligible providers of training)	Local Area performance information relating to performance measures	Availability of supportive services and referral to such services
Title I of WIA: serving Adults, Dislocated Workers, Youth
Job Corps
Native American Programs
Migrant and Seasonal Farmworkers
Wagner-Peyser
Adult Education and Literacy
Vocational Rehabilitation
Welfare-to-Work
Senior Community Services
Vocational Education
Trade Adjustment Assistance
Veteran’s Employment Representatives and Disabled Veterans Outreach Programs
Community Services Block Grant Employment and Training Activities
Housing and Urban Development Employment and Training Activities
Unemployment Insurance
TOTAL

Core Services	Provision of information regarding filing claims for Unemployment Compensation	Assistance in establishing eligibility for: Welfare-to-Work and financial aid assistance	Followup Services including counseling	Other Services	Shared Costs	Total Costs
Title I of WIA: serving Adults, Dislocated Workers, Youth
Job Corps
Native American Programs
Migrant and Seasonal Farmworkers
Wagner-Peyser
Adult Education and Literacy
Vocational Rehabilitation
Welfare-to-Work
Senior Community Services
Vocational Education
Trade Adjustment Assistance
Veteran’s Employment Representatives and Disabled Veterans Outreach Programs
Community Services Block Grant Employment and Training Activities
Housing and Urban Development Employment and Training Activities
Unemployment Insurance
TOTAL