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Statutory Authority: 
Social Services Law, Sections 20, 34, 153

Section 602.1 - Allocation principles.

Section 602.1 Allocation principles. Costs subject to reimbursement from more than one program or activity must be allocated or distributed by social services districts among the various classifications for which reimbursement may be claimed in a manner that reasonably assigns to each appropriate classification that portion of the costs for which reimbursement is sought.

(a) Districts must adhere to the cost allocation principles prescribed by the department.

(b) Except as otherwise directed by the department, social services districts must adhere to the cost allocation principles to which the department is subject as a condition of obtaining reimbursement from entities other than the department.

(c) Cost allocation plans must be utilized when required or applicable.

(d) Except as otherwise required by an established or approved cost allocation plan, costs will be charged to the most specific groups of classifications or pools that are applicable to the allocated cost.

(e) Costs derived from general groups of classifications or pools must be distributed to less general groups or pools before costs are derived and distributed to specific classifications or pools.

(f) Costs may not be derived and distributed from any group of classifications or pools before the charges or adjustments required for correct calculations of derivations are attributed to that pool.

(g) Administrative costs are subject to allocation unless such costs can be charged to a specific classification or can be subdivided directly to more than one specific classification without allocation.

(h) Groups of classifications or functions established by the department for coding of payroll and nonsalary expenditures must be used by a district when distributing costs for the purpose of submitting a claim for reimbursement to the department.

(i) Directions of the department may be countermanded only by a subsequent express direction made by an agent of the department authorized to make such direction for the department. Directions will not be presumed to be subject to revision by any order or direction other than by the department. However, any district which is ordered by a court or a Federal authority to take action in contravention of these regulations must notify the department's general counsel orally as soon as possible of such order and confirm such notification in writing. Such notification and confirmation must recite the obligation under this subdivision which is being fulfilled. The district's notification must include, where necessary and appropriate, a statement of how the district intends to comply with the order. Such compliance will thereafter constitute compliance with department direction unless the general counsel or other authorized officer of the department specifically directs otherwise. The department direction becomes a final determination not subject to administrative review when a claim or a portion of a claim subject to the direction is adjudicated in accordance with the provisions of section 604.1 of this Title.


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Section 602.2 - Cost allocation plans.

602.2 Cost allocation plans. If a cost allocation plan is determined to be the appropriate means of distributing costs among governmental entities or activities and such plan is accepted by the department, all costs subject to the plan must be allocated in accordance with such plan. Approval of a cost allocation plan will not preclude the department from requiring adjustments of any costs derived by means of the methods set forth in the plan.

(a) Intergovernmental unit cost allocation plans. Cost allocation plans which provide a basis for distribution of costs of a county, municipality or other governmental subdivision to a social services district should be established in accordance with Federal, State and department requirements. Such plans may be administered by a fiscal officer not under the direct control of the district, but the district will remain responsible to the department for insuring that the plan adheres to the department's requirements.

(1) Districts are required to submit an annual certification to establish their authority to claim costs pursuant to the plan for that fiscal year.

(2) Plans will not permit direct expenses to be included as indirect expenses when Federal, State or department procedures preclude such inclusions.

(3) Allocated expenditures must be claimed for reimbursement in accordance with the requirements applicable to the district submitting the claim, including any purchase of service contract requirements or other requirements.

(4) Agreements between the district and other governmental agencies pertaining to the allocation of administrative costs, either directly or indirectly, must be made in accordance with department requirements.

(b) Local district cost allocation plans. Administrative costs of a social services district must be distributed and claimed in accordance with Federal, State or department requirements reflected in a cost allocation plan established for the district and approved by the department.

(1) The district must certify annually to the department that a complete organizational review has been conducted and all staff have been assigned appropriate classification or functional codes in accordance with department instructions. If circumstances change within a year which require that a district's allocation procedures be revised, districts will seek revisions to cost allocation plans as such circumstances arise, subject to department approval.

(2) Administrative payrolls must be coded by defined classifications or functions in accordance with department instructions.

(3) Fringe benefit rates must be determined annually and the rates must be applied monthly to determine allocated fringe benefit costs.

(4) Nonsalary expenditures must be coded to defined classifications or functions in accordance with department instructions.

(5) Districts must assign the cost of social services workers to specific classifications in accordance with ratios or methods approved by the department.

(6) Districts must use the department calculation of distribution percentages for apportionment of costs related to welfare management systems or for apportionment of any other costs involving data that must be obtained from the department.

(7) Accurate statistics for designated program activities must be maintained for use in distributing functional or other costs to specific classifications.

(8) Appropriate documentation and audit information must be retained and made available for department, State and Federal review.

(9) Districts will be responsible for the preparation and submission of required schedules and supporting documentation to obtain Federal, State or other reimbursement.

(10) Districts must comply with any other requirements that may be imposed by the department.

(c) Other cost allocation plans. A cost allocation plan approved by the department may be used as a means of allocating costs. If a cost allocation plan is prescribed by or for the department or is accepted by the department as a condition of reimbursement from a funding source, such plan must be used by the district until otherwise directed by the department.


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Section 602.3 - Cost allocation process.

602.3 Cost allocation process. Except as otherwise permitted by the department, social services districts must use the cost allocation process prescribed by the department and must use formats and procedures approved by the department to calculate and record cost distributions derived through cost allocation. Social services districts must also, in accordance with department instructions:

(a) codify payroll and nonsalary expenditures by function classifications using local district payroll lists, ledgers or other records;

(b) enter and summarize salary and nonsalary costs and staff counts by function on schedules approved by the department;

(c) disperse expenditures to direct function classifications to obtain total direct costs by function on schedules approved by the department;

(d) allocate function costs to classifications using workload measures or distribution methods or formulas approved by the department;

(e) compute Federal, State, local or other reimbursement percentages on schedules approved by the department and summarize claims using formats accepted by the department; and

(f) perform any other requirements in relation to the cost allocation and claiming process.


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Section 602.4 - Cost allocation bases.

602.4 Cost allocation bases. When costs in groups of classifications or pools must be distributed into subdivided classifications or component pools, the process of allocation must involve the application of workload measures or other bases to which the allocated costs can be reasonably compared. The bases for allocating cost-related factors affecting reimbursement or claiming must satisfy requirements of the department or be in accord with generally accepted accounting principles approved by the department. A basis must be a measure by which comparisons can be made for the purpose of devising a ratio or other means of subdividing or distributing an allocated cost among classifications applicable to the basis and the allocated cost.

(a) Subdivision bases. Subdivisions of costs into component parts must employ a procedure which:

(1) identifies the appropriate organization unit of the district, based upon unit size and any unusual workload of the unit for which a staff count or other normal distribution is not appropriate or accurate;

(2) analyzes the work content of the unit, including type of work performed, variability of the work and applicable workload units;

(3) installs methods for identification of unit salary costs by separate coding of unit components of personnel expenditures;

(4) implements a statistical data collection mechanism for measuring workload by function or other classification;

(5) uses classification and statistical comparison for allocating costs; and

(6) conforms to requirements prescribed by or for the department.

(b) Reference bases. Derivations of cost by reference to statistical data collection mechanisms for measuring workload distribution may involve comparisons to weighted time factors, random-moment observation study statistics or specialized counts of work measures in quantities related to the allocable costs. Reference work measure bases must be comparable to the costs being allocated and may include quantities such as time, money, transactions, space, counts, distance or other reasonably related measurable units.

(c) Actuarial bases. Cost allocation bases derived from random-moment observation studies (RMS), social services reporting requirements (SSRR) or other means of actuarial computation will be used as required by the department. When cost allocation methods prescribed by the department require the use of data developed in conjunction with a district for the purpose of establishing allocation bases, the district will cooperate in assuring the collection of accurate data as instructed by the department.

(1) Formats required by the department for reporting necessary data must be used.

(2) District personnel must participate as necessary in the collection of allocation bases data.

(3) Necessary data must be collected in accordance with instructions of the department.

(4) Standards prescribed by the department must be observed when data must be classified or subdivided.

(5) Classification criteria will conform to department direction when data units cannot be subdivided into discrete components.


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