Transcript Part B Slides and Notes

Treatment of Costs Under the 10%
Administrative Limit for
Ryan White HIV/AIDS
Part B Programs
Lolita Cervera and Tom Hickey
HAB T. A. Consultants
March 20, 2015
1
Overview
 Why
revisit the costs under the
administrative cap?
 What has remained the same?
 What has changed for Part B grantees
and subrecipients?
 What are principles for the proper
allocation of costs applicable to the
10% administrative cap?
2
Why revisit the treatment of costs
under the 10% admin limit?
•
Acknowledge a rapidly changing healthcare environment in
which RWHAP grantees are playing a greater role in
coordinating across multiple payer sources
•
Strengthen the RWHAP comprehensive system of care
•
Provide greater flexibility to grantees so they can meet the
needs of RWHAP clients
•
Increased focus on oversight of subrecipients as required by
the National Monitoring Standards and the HHS implementation
of the new Uniform Guidance at 45 CFR part 75
•
Address the variation in statutory 10% administrative cost cap
that exist for RWHAP Parts A, B, C, D
3
Recipient vs Subrecipient (45 CFR 75)
Recipient (grantee)

The entity that
receives the RWHAP
award directly from
HRSA
Many RWHAP recipients
(grantees) are also “passthrough” entities

Pass-through entity is
an entity that provides
a subaward to a
subrecipient to carry
out part of the RWHAP
activity
Subrecipient

The entity that receives a subaward
from a pass-through entity to carry
out part of the RWHAP programmatic
activity (e.g., RWHAP provider)

Is responsible for adherence to
applicable Federal RWHAP program
requirements

Has its performance measured in
relation to whether objectives of the
RWHAP were met

Uses Federal funds to carry out the
RWHAP program for a public purpose
as specified in authorizing statute 4
What has remained the same for Part B
recipients (grantees)?
2618(b)(4) LIMITATION ON USE OF FUNDS - a State may not use
more than a total of 15 percent of amounts received under a
grant awarded under section 2611 for the purposes described
in paragraphs (2) [Planning and Evaluation] and (3)
[Administration]
Up to 10% for administration 2618(b)(3)(A)
 Up to 10% for planning and evaluation 2618(b)(2)
 Not to exceed 15% of the amount received under this grant
for administration, planning, and evaluation

Awarded $3 million x 15% = $450,000 for
administrative, planning, and evaluation costs
5
What has remained the same for Part B
subrecipients?
Aggregate 10% limit on all subawards for administrative
activities—including ALL indirect costs

$2M grant: $200,000 (10%) = admin, $100,000 (5%) = planning and
evaluation, $100,000 (5%) = Clinical Quality Management (CQM),
and $1.6 million is allocated to contracts for services
Subrecipient
$1.6 M
10%
$160,000
HIC
$400,000
3%
$12,000
BCC
$450,000
7%
$31,500
CHD
$350,000
28%
$98,000
NKHD
$400,000
4.625%
$18,500
6
What has remained the same for Part B
recipients (grantees) and subrecipients?
GRANTEE ADMIN DEFINITION
§2618(b)(3)(C) routine grant monitoring and
administration activities that include routine
grant administration and monitoring
activities.
•
RWHAP Program & Financial Reports
•
Contracting activities – developing
RFP, proposal review, issuing
contracts
•
Subrecipient monitoring-by phone,
site visits, report review
•
Related payroll, audit, and general
legal activities
•
Contracted planning and evaluation
responsibilities
SUBRECIPIENT ADMIN

§2618(b)(3)(D) usual and
recognized overhead
activities, including
established indirect rates
for agencies; (B)
management oversight
(administration and
monitoring); and (C) quality
assurance, quality control,
and related activities.

Same as grantee but
includes all indirect costs
7
What has remained the same for Part B?
CONSORTIA
FIDUCIARY AGENTS
Consortia receives $3M
$450,000 = 15% for planning,
evaluation, and admin (this
counts against the state’s
15% admin, P&E limit)
$150,000 = CQM
$2,400,000 = subawards
• $240,000 = aggregate
10% for administration
(includes all indirect
costs)
Fiduciary agent receives $3M
$300,000 for administration
(this counts against the
state’s 10% admin limit)
$150,000 = CQM
$2,550,000 = subawards
•
$255,000 = aggregate 10%
for administration
(includes all indirect
costs)
8
What has changed for Part B recipients
(grantees) and subrecipients?

The treatment of the portion of expenses allocated to administration
vs. program. The following costs are no longer required to count
against the 10% admin limit :





Facilities expenses such as rent, maintenance,
utilities, etc. related to core medical or support
services provided to RWHAP clients
Malpractice insurance related to RWHAP clinical care
Electronic Medical Records: maintenance, licensure,
annual updates, data entry related to RWHAP clinical
care
Receptionist’s time providing direct RWHAP patient
services
Third party billing (Medicare, Medicaid, insurance,
etc.) costs related to RWHAP
9
What else has changed for Part B
recipients (grantees) and subrecipients?

The treatment of the portion of expenses allocated to
administration vs. program. The following costs are no
longer required to count against the 10% admin limit:
Medical waste removal and linen services related to
RWHAP
 ACA Outreach and Enrollment for RWHAP clients
 Activities related to the bi-annual RWHAP client recertification
 Supervisor’s time devoted to providing professional
oversight and direction regarding RWHAP-funded
core medical or support service activities

10
Principles for the
proper allocation of
administration vs
program costs
The cost must be
allowable—to be allowable
a cost must be authorized
by statute and must meet
the federal criteria of
being necessary, reasonable
allocable and awarded
consistent treatment.
45 CFR 75 Uniform Guidance
• Subpart E – Cost Principles
Which cost are allowable?














Mental Health Clinic rent
Utilities
Nurse practitioner
Lead Pharmacist ADAP Pharmacy
Non ADAP Formulary medications
Personnel or contract for the
payment of insurance premiums
Cash payment to clients
Part B Service Coordinator
Office supplies
Surveillance staff
Copier
Printing
Purchase of vehicles
11
Lobbying activities
Principles for the
proper allocation
administration vs
program costs
Easy to Direct or
trace Indirect
Rent
N
I
Utilities
N
I
Nurse practitioner
Y
D
Postage
N
I
Office supplies
N
I
Ins Asst. Coordinator
Y
D
Indirect (F&A) cost— A cost
that is not directly traceable to
a program/service activity
Copier
N
I
Printing
Y
D
Audit
Y
D
Indirect cost rate – Is a
device/methodology for
determining fairly and
conveniently how much of the
common (hard to trace) cost
each program should bear
File clerk
Y
D
Receptionist
Y
D
Internet
N
I
MCM supervisor
Y
D
Direct cost—A cost that can be
accurately traced to a
program/service activity with
little effort.
12
45 CFR 75 changes to indirect costs

Per 45 CFR §75.414(f), any non-Federal entity that has never
received a Federal negotiated indirect cost rate may charge
a de minimis rate of 10% of modified total direct costs.


Governmental departments or agency units receiving more than
$35M in federal funds MUST have a negotiated rate—they may not
charge the flat 10%.
As described in §75.403, costs must be consistently charged
as either indirect or direct costs, but may not be double
charged or inconsistently charged as both. If chosen, this
methodology once elected must be used consistently for all
Federal awards until such time as a non-Federal entity
chooses to negotiate for a rate, which the non-Federal
entity may apply to do at any time.
13
Principles for the proper allocation of
indirect costs

Part B Recipients (Grantees)
 The
portion of direct and indirect facilities expenses
related to core medical and support services
provided to RWHAP clients would not count toward
the 10% administrative limit.

For Part B Subrecipients
The portion of direct facilities expenses related to
core medical and support services provided to
RWHAP clients would not count toward the 10%
administrative limit.
 All indirect cost would count toward the 10%
administrative limit.

14
Audience Participation
Indirect (F&A) or Direct?
Does it count toward the 10% administrative limit?


Rent associated with the ADAP
pharmacy
Service contract for eligibility
screening and recertification

Rental copier

CAREWare/ARIES/Other
data entry

Clerical Support

Utilities

Facility Maintenance

NASTAD training related
travel

Depreciation

Postage

Telephone

Office supplies

Clinic receptionist

Insurance

Indirect cost certificate Texas OMB

Pharmacy Benefits Manager
15
Principles for the proper allocation of
administrative cost

Effort Reporting
Confirms that the budget estimates used to charge labor cost to
the different funding sources or program categories is allowable.

When allocating salaries between administration and program
categories the recipient (grantee) or subrecipient must have a
system of internal controls over the records that:
 Justify
the cost of salaries
 Reasonable
 Enter
over the long term
into the record on a timely manner
 Consistent
 Auditable
16
Principles for the proper allocation of
administrative cost
Allocations

Permits expenses to be appropriately charged to cost centers,
object classes, funding sources and multiple sites.

For allocations to be valid there should be written methodology
that can be replicated and auditable
Most common methodology:
 Payroll-------------direct
or time and effort
 Facility------------direct
or square footage
 Occupancy—------direct
or program/cost center
 Administration—-direct
or total dollar amount
 Communication--program/cost
center
17
Example—Part B Grantee Budget $20,756,411
Categories
Admin, P & E
CQM
Services
PD & Dep (.75 admin; .25 P&E); ADAP Coord,
Deputy & Insurance Coord (.8 ADAP admin; .2
ADAP QM); 5 Eligibility Specialists; QM; Program
Coord (NMS oversight- .8 admin; .2 P&E), 2
Contract Mgrs; MAI Coord (.75 admin; .25 P&E), 2
Data Analysts, admin assistant (.6 admin; .4 CDC)
Fiscal officer, staff (2 @ .5 FTE; .5 State GR) and
support – HRSA budgets, mods, reports; draw $$;
data entry
ADAP Medications
ADAP Health Insurance Cost-share
MAI Contract
Direct Services Contracts (22)
HHS NICRA = 26% base = salaries/fringe
($2,041,600 x .26 = $)
18
ADAP
Example—Part B Grantee Budget $20,756,411
Categories
PD & Dep (.75 admin; .25 P&E); ADAP Coord,
Deputy & Insurance Coord (.8 ADAP admin; .2
ADAP QM); 5 Eligibility Specialists; QM; Program
Coord (NMS oversight- .8 admin; .2 P&E), 2
Contract Mgrs; MAI Coord (.75 admin; .25 P&E), 2
Data Analysts, admin assistant (.6 admin; .4 CDC)
Fiscal officer, staff (2 @ .5 FTE; .5 State GR) and
support – HRSA budgets, mods, reports; draw $$;
data entry
Admin, P & E
CQM
Services
ADAP
587,550 Admin
$151,750 P&E
Total: $739,300
$111,000
$85,000
$367,000
ADAP Medications
$10M
ADAP Health Insurance Cost-share
$3M
MAI Contract
$200,000
Direct Services Contracts (22)
HHS NICRA = 26% base = salaries/fringe
($2,041,600 x .26 = $)
$5,723,325
$152,763 admin,
$39,455 P&E
$28,860
Costs that count toward grantee’s 10% admin limit = $740,313
Costs subject to the aggregate 10% admin limit for subrecipients = $592,332
$22,100
19
$95,420
ALLOCATION
EXAMPLE

Rent allocated to admin or services
$50,000 rent a year
Space 10,000 sq ft
Assign costs no longer
required to be applied
to the 10%
administrative limit to
the appropriate service
category
Space
Sq ft
%
Total
Case mgt offices
6,000
60
$30,000
Food Bank
1,000
10
$5,000
ADAP Pharmacy
1,000
10
$5,000
Reception area
800
.08
$4,000
Accounting/
Administration
1,200
12
$6,000
Totals 10,000
100
$50,000
20
ALLOCATION
EXAMPLE
Assign costs no longer
required to be
applied to the 10%
administrative limit
to the appropriate
service category
The latest effort reporting shows that the
agency full time receptionist is now
working at the clinic answering agency
phone, making medical appointments,
entering data for billing and entering the
labs in the medical records. Salary
$25,000
Activity
HRS
FTE
Adm
HCI receptionist
15
37.5
9,375
Appointments
7
17.5
Billing
5
12.5
Labs
13
32.5
Total
40
100%
Out
Patient
Medical
4,375
3,125
8,125
$12,500
$12,500
21

ALLOCATION
EXAMPLE
Examples of data
entry expenses (kind
of data and reports
being produced that
support services vs
those that support
finance and
administration)

Administration
•
Any data entry reports for the
grantor FFR, Expenditure and
Allocation reports, RSR, MAI, single
audit
•
CAREWare data entry when
associated with the RSR
Services
•
CAREWare data entry for case
managers notes, or medical
information for quality
•
Eligibility information on CAREWare
or another electronic or manual
system
•
Clinical Quality Management reports,
performance measures
•
Client registration/intake
22
Unit Cost Example
Category
SALARIES
employee benefits
Payroll taxes
Contract/Consultant
Physician on site
Nutrition
Contracted Fee
Supplies
Equipment expensed
Program Supplies
Travel
Conference Meetings
Insurance
Other expense
Total
$ 322,050
$
54,038
$
25,777
% allocation
21%-31%-48%
21%-31%-48%
21%-31%-48%
Physician
$ 67,630
$ 11,348
$
5,413
NP
99,836
16,752
7,991
RN
154,584
25,938
12,373
$
$
$
49,350
4,400
10,045
24%-28%-48%
24%-28%-48%
24%-28%-48%
$
$
$
11,844
1,056
2,411
13,818
1,232
2,813
23,688
2,112
4,822
$
$
$
$
$
$
$
11,487
14,002
3,252
4,793
2,065
1,278
502,537
24%-28%-48%
24%-28%-48%
24%-28%-48%
24%-28%-48%
24%-28%-48%
24%-28%-48%
$
$
$
$
$
$
$
2,757
3,360
780
1,150
496
307
108,552
0.26
28,224
149
189.42
3,216
3,921
911
1,342
578
358
152,768
0.29
44,303
164
270.14
5,514
6,721
1,561
2,301
991
613
241,218
0.28
67,541
23
251
269.08
Billable RWHAP/MAI
$
Visit/units
cost per unit
$
Summary – properly allocate and report costs
Recipient (grantee)

Up to 10% of the award may be used for
routine grant administration and monitoring

Portion of direct and indirect costs of
facilities utilized to provide RWHAP services
are no longer subject to the 10% admin
limit—charge to relevant service category

Supervisor’s time devoted to providing
professional oversight and direction
regarding RWHAP-funded core medical or
support service activities

Fiduciary agent/Consortia—all admin costs,
exclusive of subawards, count toward the
grantee’s 10% admin limit
Subrecipient

Up to 10% of the
aggregate amount
allocated for all
subrecipients may
be used for routine
grants
administration

Includes all
indirect costs
24
Summary – properly allocate and report costs
See Policy Clarification Notice 15-01

Effective for RWHAP awards issued on or after
January 1, 2015
 New
Awards
 Competing
Continuations
 Non-competing

Continuations
Statutory 10% Administrative Limit varies by
 Part
A, B, C, and D
 Recipient
vs subrecipient
25
Treatment of Costs Under the 10%
Administrative Limit for
Ryan White HIV/AIDS
Part B Programs
Questions and Answers
26