[Code of Federal Regulations]
[Title 45, Volume 1]
[Revised as of October 1, 2007]
From the U.S. Government Printing Office via GPO Access
[CITE: 45CFR95.507]

[Page 474-475]
 
                        TITLE 45--PUBLIC WELFARE
 
                           AND HUMAN SERVICES
 
PART 95_GENERAL ADMINISTRATION_GRANT PROGRAMS (PUBLIC ASSISTANCE,
MEDICAL ASSISTANCE AND STATE CHILDREN'S HEALTH
 
                     Subpart E_Cost Allocation Plans
 
Sec. 95.507  Plan requirements.

    (a) The State shall submit a cost allocation plan for the State 
agency as required below to the Director, Division of Cost Allocation 
(DCA), in the approporiate HHS Regional Office. The plan shall:
    (1) Describe the procedures used to identify, measure, and allocate 
all costs to each of the programs operated by the State agency;
    (2) Conform to the accounting principles and standards prescribed in 
Office of Management and Budget Circular A-87, and other pertinent 
Department regulations and instructions;
    (3) Be compatible with the State plan for public assistance programs 
described in 45 CFR Chapter II, III and XIII, and 42 CFR Chapter IV 
Subchapters C and D; and
    (4) Contain sufficient information in such detail to permit the 
Director, Division of Cost Allocation, after consulting with the 
Operating Divisions, to make an informed judgment on the correctness and 
fairness of the State's procedures for identifying, measuring, and 
allocating all costs to each of the programs operated by the State 
agency.
    (b) The cost allocation plan shall contain the following 
information:
    (1) An organizational chart showing the placement of each unit whose 
costs are charged to the programs operated by the State agency.
    (2) A listing of all Federal and all non-Federal programs performed, 
administered, or serviced by these organizational units.
    (3) A description of the activities performed by each organizational 
unit and, where not self-explanatory an explanation of the benefits 
provided to Federal programs.
    (4) The procedures used to identify, measure, and allocate all costs 
to each benefiting program and activity (including activities subject to 
different rates of FFP).
    (5) The estimated cost impact resulting from the proposed changes to 
a previously approved plan. These estimated costs are required solely to 
permit an evaluation of the procedures used for identifying, measuring, 
and allocating costs. Therefore, approval of the cost allocation plan 
shall not constitute approval of these estimated costs for use in 
calculating claims for FFP. Where it is impractical to obtain this data, 
an alternative approach should then be negotiated with the Director, 
DCA, prior to submission of the cost allocation plan.
    (6) A statement stipulating that wherever costs are claimed for 
services provided by a governmental agency outside the State agency, 
that they will be supported by a written agreement that includes, at a 
minimum (i) the specific service(s) being purchased, (ii) the basis upon 
which the billing will be made by the provider agency (e.g. time 
reports, number of homes inspected, etc.) and (iii) a stipulation that 
the billing will be based on the actual cost incurred. This statement 
would not be required if the costs involved are specifically addressed 
in a State-wide cost allocation plan, local-wide cost allocation plan, 
or an umbrella/department cost allocation plan.
    (7) If the public assistance programs are administered by local 
government agencies under a State supervised system, the overall State 
agency cost allocation plan shall also include a cost allocation plan 
for the local agencies. It shall be developed in accordance with the 
requirements set forth above. More than one local agency plan shall be 
submitted if the accounting systems or other conditions at the local 
agencies preclude an equitable allocation of costs by the submission of 
a single plan for all local agencies. Prior to submitting multiple plans 
for local agencies, the State should consult with the Director, DCA. 
Where more than one local agency plan is submitted, the State shall 
identify the specific local agencies covered by each plan.
    (8) A certification by a duly authorized official of the State 
stating:
    (i) That the information contained in the proposed cost allocation 
plan was prepared in conformance with Office of Management and Budget 
Circular A-87.

[[Page 475]]

    (ii) That the costs are accorded consistent treatment through the 
application of generally accepted accounting principles appropriate to 
the circumstances.
    (iii) That an adequate accounting and statistical system exists to 
support claims that will be made under the cost allocation plan; and
    (iv) That the information provided in support of the proposed cost 
allocation plan is accurate.
    (9) Other information as is necessary to establish the validity of 
the procedures used to identify, measure, and allocate costs to all 
programs being operated by the State agency.

[47 FR 17509, Apr. 23, 1982, as amended at 65 FR 33633, May 24, 2000]