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Title: 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.



VOLUME C (Title 18)