cost report workshops and omb uniform guidance cost principles

Cost Report Workshops and OMB Uniform Guidance Cost Principles – What you need to know!

October 2, 2015

Agenda9:30 11:00 Detailed FQHC workshop – old format

11:15 12:15 Overview new FQHC format

12:15 1:00 Lunch

1:00 2:00 HSN Update

2:00 2:15 Break

2:15 3:45 Medicaid workshop

3:45 Close Uniform Guidance

For access to the slides & evaluation from to receive CPE credit, visit:

aafcpa.com/MLCHC-costreport

Slides & CPE!

To receive CPE credit: You must fill out the evaluation form at the link above and sign-in & sign-out on the sheet provided

Old FQHC Medicare Report

October 2, 2015

• Old Form “222-92”• Applicable to year ends beginning

September 30, 2015 and earlier• Due 5 months after year end• No extensions unless hardship;

Medicare payments shut off after 30 days of insufficient filing• If the report is filed early and is rejected – a

grace period is instated for the amount of days early the report was filed.

FQHC (Medicare) Cost Report


Purpose of Filing 222-92

1.Helped to set Medicare rate for the subsequent year (prospective payment system)

• The FY15 report will NOT be used to set a rate due to the implementation of the new GCode PPS system

2.Helps to substantiate the rate paid in the prior year (settlement calculated) Still Relevant

FQHC (Medicare) Cost ReportOverview – Total Allowable Costs

FQHC (Medicare) Cost ReportOverview – Total Adjusted Visits

FQHC (Medicare) Cost ReportOverview – Payment Reconciliation

1. If the Adjusted Cost Per Visit is equal to or higher than the reimbursed rate of the reporting period, no amount is due back to CMS. • Amounts may be due to the FQHC for injection

reimbursement• Amounts may be due to the FQHC for billings processed

but not paid at date of filing

FQHC (Medicare) Cost ReportOverview – Payment Reconciliation

2. If the Adjusted Cost Per Visit is less than the reimbursed rate of the reporting period, amounts may be due back to CMS.

• May happen on entities where a significant amount of non-FQHC services are offered

• May happen on entities where there is a large number of unproductive qualified providers


• Name of Main Entity (Main provider number per CMS) Address, Date certified

• Most recent 330 Grant Award number covering the reporting period

• Certification by officer or administrator• Encrypted, signed in blue ink

Preparation - Worksheet S

FQHC (Medicare) Cost ReportPreparation - Worksheet S

Call CMS to check all active provider numbers before filing!Most common rejection!

Complete Worksheet S-III for each

additional location/provider number.

Remember: each location needs a

separate Medicare Number


• 7 Column, 62 Row Worksheet

• A detail schedule is required to support each line on Worksheet A – called “Crosswalk”. It should show each Trial Balance account of the FQHC and how it is categorized on Worksheet A.

• Rows (Lines) separated into Four Main Sections:

1. Medical Services (1 -25) – Medical costs which are FQHC approved

2. Overhead (26 -50) – including salaries and building expenses (eventually allocated)

3. Non-FQHC Services (51 – 57) – Dental, Pharmacy, Optometry, etc.

4. Non-Reimbursable Costs (58 -62) – such as Fundraising and Bad Debt

Preparation - Worksheet A - Expenses


School Based Health Center programs qualify as an FQHC allowable program and should be included in lines 1 – 25 if:

– Patient billing is completed by the Health Center– The Health Center provides medical and mental

health services at the SBHC site– Expenses to operate the program are funded by the

Health Center


FQHC (Medicare) Cost Report1. Column 1 – Compensation

• Must tie to salaries on audited financial statements• If benefits or contracted help were combined with salaries on the audited

financial statements, they must be separated here• Administrative Breakout - Providers who are on lines 1 – 12 should have salaries

split between administration and medical (FQHC) costs. Vacation dollars, supervisory dollars, administrative and training dollars should be shown in administration, while the remaining dollars can be shown on lines 1 – 12. (anytime paid but not spent seeing patients should be reclassified to administration: lines 38 – 50)

2. Column 2 – Other (everything else)• Contracted help classified with salaries on the audited financial statements would

be shown in this column, and shown as a reconciling item on the crosswalk

3. Column 3 – Total Expenses (Column 1 plus Column 2)• Should tie to total operating expenses on the audited financial statements


FQHC (Medicare) Cost Report4. Column 4 – Reclassifications

• Automatically filled in based on information entered in Worksheet A-1

5. Column 5 – Reclassified TB• Automatically calculates taking Column 3 (Total Expenses) plus or minus

Column 4 (Reclassifications)

6. Column 6 – Adjustments• Automatically filled in based on information entered in Worksheet A-2

7. Column 7 – Net Expenses• Automatically calculates taking Column 5 (Reclassified TB) plus or minus

Column 6 (Adjustments)• Will NOT tie to FS



Use: Worksheet typically used to reclassify expenses combined in one trial balance account that should be separated, or expenses that are not detailed out in the trial balance in accordance with the lines on Worksheet A.

Common entries:• Payroll tax and fringe benefits• Non-FQHC program expenses• Administration or Supervision Time

Other: Requires an attachment detailing the entries and the reasons for the entries to be submitted with the cost report

Preparation - Worksheet A -1 - Reclassifications


1. Offset non-operating revenue against expenses• Medical records revenue• Vending machine revenue• Donated goods and services• Interest income against interest expense• Do NOT include grants/contributions

2. Percentage of dues relating to lobbying• MA League• NACHC• Lobbyist

3. Bad debt expense

Preparation - Worksheet A -2 - Adjustments

Remember:

Desk auditors are

looking for lobbying of some

sort adjusted off!


4. Add back: Amortization of Start Up Costs• If costs are incurred in the reporting year to “start-up” a new facility

or site, those costs cannot be completely expensed on the Form 222-92 in the year incurred.

• These costs must be amortized over a reasonable period (typically 5 years) and the expense added back over time.

• The audited financial statements may expense the entire “start-up” costs in the reporting year so this may be a reconciling item.

Common Errors:1. Basis of A to adjust an expense (bad debt expense)2. Basis of B to adjust an offsetting revenue (medical records income)3. Remember to enter adjustments as negative if applicable!4. Remember to provide an attachment detailing all adjustments

Preparation - Worksheet A -2 - Adjustments


Part I – Include costs paid to a related organization defined below:

Column 1 - Enter the line number on Worksheet A including the expense to the related organizationColumn 4 – Enter the total cost incurred Column 5 - Enter the allowable portion of cost (amount not exceeding amount a prudent buyer would pay)Column 6 - If there is a net adjustment (expense exceeding prudent buyer), amount will flow to Worksheet A-2

Preparation - Worksheet A -2 -1 – Related Organizations


Part II – Define the relationship

Column 1 – Type of relationship



Part II – Define the relationship

Column 2 and 3 – If an individual, the name of the individual and percentage ownership, if applicable (else leave blank)

Column 4 and 5 – If other than an individual, the name of the related entity and percentage ownership, if applicable (else leave blank)

Column 6 - Enter the type of business if Column 4 and 5 are used



5 Columns, 9 Rows (Lines)

Lines (Licensed Providers – billable visit per Medicare):• Physicians, Physician Assistants• Nurse Practitioner, Visiting Nurse• Clinical Psychologist, Clinical Social Worker• Nutritionist (if there are preventative charges on the PS&R, must

be FTE/Visits here or on contracted line)• Physician Services Under Agreement (contracted)

Midwives – may be included on lines 1 – 12 of Worksheet A, however, not held to the productivity standard on Worksheet B Part I

Preparation – Worksheet B Part I – Visits and Productivity


Column 1 - Number of full time equivalents (based on hours worked – not on hours paid)

• Don’t forget to subtract any administrative/supervisory hours• These FTE should tie to the amounts allocated as administrative on

Worksheet A (salary)• FTE should be calculated over total hours expected of a full time

employee at the FQHC (37.5, 40 and etc.)

Column 2 - Total Visits per type of practitioner

• Billable and non-billable (trying to show productivity)• A provider who is split between FQHC and Non-FQHC services should

split their FTE and Visits between those services



Column 3 – Productivity Standards• Standard per CMS (has not changed in at least 10 years)

Column 4 – Minimum Visits• Multiply FTE in column 1 by Column 3 Standard

Column 5 – Greater of Column 2 or Column 4• Remember that it is the total of the column, not by individual lines• Typically see Physicians and Physician Assistants below standard

with Nurse Practitioners hitting the standard or slightly below



Worksheet automatically calculated using Worksheet A:

Preparation – Worksheet B Part II – Determination of Allowable Cost


• Worksheet is NOT required (bonus money!)• Highest rate of correction during desk audit

Line 1 – flows from Worksheet A, line 12, Column 7 Line 2 – should be calculated by the FQHC• Calculate total minutes worked by all staff listed on lines 1 – 12 per Worksheet A• Estimate amount of time spent on each injection (typically no more than 5 minutes)• Calculate total minutes spent giving injections to determine ratio

Note: Some salaries are capped for the calculation. An adjustment to average salaries per the bureau of labor statistics is recommended in order to ensure accuracy of calculation

Preparation – Worksheet B-1 – Vaccine Analysis


Line 4 – Enter medical supplies cost (cotton balls, band aids, cost of vaccines and etc.)Line 11 – Total number of injections doneLine 13 – Total number of MEDICARE injections done (should be a part of line 11)Line 16 – Calculates total expense of injections–Cost carries to Schedule C as reduction of allowable expenses (reimbursed separately)–Cost carries to Schedule C as an increase in settlement (reimbursed separately)

Preparation – Worksheet B-1 – Vaccine Analysis


Line 1 – Total allowable costs from Worksheet B Part II, Line 16Line 2 - Subtract total cost of vaccine administration from Worksheet B – 1, Line 16Line 3 – Total adjusted allowable costsLines 4 -6 - Total adjusted visits from Worksheet B, Part I, Lines 8 and 9

Line 7 – Adjusted Cost Per Visit

Preparation – Worksheet C Part I – Determination of Rate and Payment


•Ideally prepared using the PS&R - Most accurate reporting•Use Form 770 of the PS&R and add together for each provider number OR download a consolidated PS&R•Use Form 77S of the PS&R to report preventative charges and visits•If claiming Medicare bad debts, enter on line 24 •Note sequestration (2%) on line 24.11•Settlements paid within 60 days of filing; desk audit within a year of filing could adjust settlement at a later date

Preparation – Worksheet C Part II – Determination of Rate and Payment

FQHC (Medicare) Cost Report2014 FQHC Adjusted Rates Per Visit


Hard Copy:Encrypted and signed in blue ink Worksheet SForm CMS-339 signed in blue inkCost Report ChecklistFull copy of the cost report with all required attachments

Electronic (DVD or CD accepted):Encrypted cost report fileCopy of the Trial BalanceCopy of the Audited Financial Statements

Filing - Requirements

New FQHC Medicare Report

Form 224-14

October 2, 2015

New FQHC (Medicare) Cost Report

• New Cost report form for year ends beginning on and after October 1, 2014

• Form 224-14• Significant changes to reporting requiring shifts in how data is

tracked internally• Estimated to be an additional 58 hours of preparation per

facility


Multiple new reporting questions including information on:1.Residency programs and grants2.Teaching programs and grants3.Malpractice4.Capital Related Costs5.Questions from CMS regarding PS&R data moves to these worksheets

Worksheet Changes


Changes requiring new statistical data-Visits must now be reported as follows:

Worksheet Changes


Changes requiring new statistical data-FTE calculations appears to be the same, however, additional provider data is now required:•RNs, LPN, Midwives, Lab Tech, Interns and Residents

Must now breakout contracted help by type of provider, and include benefits provided as well as cost

Worksheet Changes


Worksheets are materially the same – 4 types of costs, 7 columnsDifferences:•The order of reported costs (general overhead is first)•Pharmacy costs have moved from non-FQHC to Overhead

Worksheet Changes


Changes requiring new statistical data-•Must track Medical versus Mental Health visits for all direct care providers (including RN and Midwife and LPN)•Must separate Title XVIII visits from all visits•Does not appear to require reporting of modifiers (new patient, annual visits and etc.)

Worksheet Changes


•Worksheet BI appears to be the same•Worksheet C was replaced by Worksheets E and E-I, but required data is substantially the same•Settlement determined based upon substantiated costs compared to payments during the year

Worksheet Changes


•Worksheet F-I is new and requires a reconciliation of revenues and expenses to the audited financial statements

Worksheet Changes


•Significant new requirements in tracking of visits by Title V, Title XIX and Title XVIII•Significant new requirements in tracking of visits by provider type (including new required providers) and the split of mental health versus medical•Requirements such as CMS-339, Cost Report Checklist, attachments and signature requirements remain the same•Due date is the same•Late reports will assessed as potential overpayments and may be taken back

Summary

LUNCH AND NETWORKING BREAK

October 2, 2015



Slides & CPE!


Community Health Center Cost Report - Medicaid

October 2, 2015

• Filed on State’s website – iNet– Revert to IE 7

• Due 5 months after year end; typical 1 month extensions allowed

• Uses a significant amount of data from the Medicare cost report

• Includes revenue including tracking of “restricted” grants

Community Health Center Cost Report

Purpose of Filing

1.Helps to set Medicare rate for the subsequent year

2.Helps to identify trends in other costs such as:• Support Social Services• Dental costs• Pharmacy costs

Note: Rate is not calculated as part of the cost report schedules. Rate must be calculated offline.


Overview – Total Allowable Costs


Overview – Total Adjusted Visits



General information of the Health Center• Address• Fiscal Year• Additional Cost Centers (HIV, Substance Abuse…)

o Centers that are significant, but not already broken out on the reporto If more than 3 additional cost centers, use 2 biggest and combine remaining

• Contact Information

Information links to other schedules• Cells which link cannot be typed into

Preparation – Schedule N


Staffing Categories (Y axis), Cost Centers (X axis)•Employee Count and FTE

• FTE is based on hours PAID (not hours worked)

•Salaries• Should tie in total to the audited financial statements• Contracted direct care expenses are recorded on Schedule A therefore total

Schedule A costs may NOT tie to the audited financial statements. This can be documented in the expense reconciliation completed at the end of the report.

• Check directions for detailed instructions on placement of staff

•Encounters• Should be ALL visits (billable and non-billable)

Preparation – Schedule A FTE will differ from Medicare Report!

Remember to re-class administrative FTE and Salaries to Administration


• Administration• Medical• Urgent Care (Extended Hours - Emergency)• Residency

– Medical and Urgent Care• School Based Health Centers• Laboratory• X-Ray• Pharmacy

– If contract pharmacy only, enter total prescriptions processed to line 27

Preparation – Schedule A - Cost Centers


• Dental• Mental Health• Support Social Services

– Social counseling activities which assist primary care in meeting family and community needs related to health care

• Wellness– Nutrition therapy, diabetes self-management, tobacco cessation

• Support Other – Patient transportation, translation and etc.



• Family Planning– Certified family planning programs only

• WIC• Other Programs

– Substance Abuse, HIV and etc.– Summarize services on Schedule N



Common Issues:1.Using billable visits instead of all visits2.Incorporating all the following support service costs in one cost center instead of allocating:

– Housekeeping– IT/Technical support– Translation/Front desk– Billing/Medical Records

3.RNs and LPNs who support provider and provide no visits should be included in “Support Other” instead of Medical column4.Dental procedures AND visits are required

Preparation – Schedule A


• For restricted grants only– Restricted grants are those that are meant to fund a cost (offsetting

revenue) and therefore should be netted with the cost.– May or may not tie to temporarily restricted per the audit.– A time restricted grant to be used for general operations would NOT go

on this schedule even though it would be considered temporarily restricted assets on the audited financial statements.

– A cost reimbursable contract to fund a particular program would be listed on this schedule, but not as restricted per the audited financial statements.

Key is: Is revenue offsetting a specific cost?

Preparation – Schedule BRG


• Restricted grant categories (drop down)– Federal– State Unit Cost (reimbursed at a unit cost per units billed if based upon a

negotiated budget)– State Cost Reimbursable (reimburse all costs within predetermined

ceiling)– Local– Private – Donated

• Allocate restricted grants are required to be allocated to the applicable cost centers for which they fund costs. This allocation should be consistent with the way expenses are allocated on Schedule D.

Preparation – Schedule BRG


• For unrestricted grants only (all other grants not shown on Schedule BRG)

• Unrestricted grant categories (drop down)– Federal– State

Preparation – Schedule BUG


• Summary of Schedule B RG & B UG amounts

• Links over to Schedule B2 (Revenue Summary)

• Should review total amounts and amounts by program to the prior year for reasonableness given the changes in restricted grants between years

Preparation – Schedule BS

Community Health Center Cost ReportPreparation – Schedule B1


• Should be billable visits only• Medical only in column F, all in column G• For example: Mental health and dental visits would only be

reflected in column G


Section A. Enter Net Patient Service Revenue by payor; the revenues should match the visits just entered on Schedule B1

Section B.Federal and State grants will flow from Schedule BUG. Enter Local and Private unrestricted grants in total.

Section C. Flows directly from Schedule BRG; no data entry required


Section D.Enter various other revenues per the audited financial statements and in order to tie revenue in total

• Bad debts are included on this schedule and will become a reconciling item to the audited financial statements (on reconciliation schedules)

• Include capital grants here• Include non-operating revenues and expenses here

Community Health Center Cost ReportPreparation – Schedule Allocate

•This schedule flows all data to Schedule D

•The schedule was designed to allow for allocation of costs by statistical data (square footage, visits or direct), however, it is typically not robust enough to properly allocate and capture costs by department.

•Major expense line items are broken out; if the FQHC has additional material expenses, lines should be added to capture those costs

Community Health Center Cost ReportPreparation – Schedule Allocate

Common Issues:1.Incorporating all the following support service costs in one cost center instead of allocating:

• Housekeeping• IT/Technical support• Translation/Front desk• Billing/Medical Records

2.Allocating occupancy and rent to administration• Occupancy costs can be directly allocated to each cost center for

which they are related


•Links directly to Schedule A for Salaries and Contracted Services

•Links directly to Schedule Allocate for other expenses

•Remember to enter fringe benefits and payroll taxes on this schedule (only item entered on Schedule D). These should tie to the audited financial statements.

Preparation – Schedule D

Community Health Center Cost ReportPreparation – Schedule D

Check Your Work!

•Once Schedule D is complete, review line 41 by Cost Center to ensure no cost centers are negative. If a cost center is negative, it is likely that restricted funding is not properly offsetting costs. •Do Admin costs appear appropriate?•Do program cost centers generally align with the audited financial statements?

Community Health Center Cost ReportPreparation – Schedule F

Target population

Service information

Maximum Capacity and Future Capacity

Unduplicated Users, Male & Female, Medical and Dental

Community Health Center Cost ReportPreparation – Reconciliation Schedules

Revenue and Net Patient Service RevenueDifferences could include:

Capital GrantsBad DebtChanges in Temporarily Restricted Net Assets

Expense and SalariesDifferences could include:

Bad DebtBenefits (if included in salaries on FS)Contracted Salaries

Community Health Center Cost ReportSubmission

Once complete, submit the cost report through iNet. Follow up the submission with an email to [email protected] with:

1.An electronic copy of the audited financial statements2.An electronic copy of the Medicare cost report

mailto:[email protected]

Community Health Center Cost ReportiNet Tips and Tricks

• If you need help gaining access to iNet, please contact Courtney McFarland ([email protected])

• iNet is an excel spreadsheet on the backend. Copy and pasting typically causes calculation issues in the report rendering it un-usable. Hard code all values.

• If values are entered on a schedule, but the schedule does not properly flow to another schedule or do not properly total:1. Find a blank line on the schedule and type any number in the cell2. Hit Save3. Go and delete the value in the cell4. Hit Save5. If this did not fix your issue, call iNet helpdesk

• Save Often!

mailto:[email protected]

OMB Uniform Guidance – Cost Principles

October 2, 2015

Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards - colloquially referred to as the “Supercircular”

http://www.ecfr.gov/cgi-bin/text-idx?SID=704835d27377ef5213a51c149de40cab&node=2:1.1.2.2.1&rgn=div5

Uniform Guidance



The Development of the Reform:

– In December, 2013, OMB issued proposed guidance titled “Uniform Administrative Guidance: Cost Principles, and Administrative Requirements for Federal Awards”

– The Uniform Guidance became fully effective on December 26, 2014

Uniform Guidance

Effective and Applicability Dates– Policies applicable to Federal Agencies (effective

12/26/2013)– Provisions of audit requirements for non-Federal entities

(fiscal years beginning on or after 12/26/2014)

Note: Non-Federal entity means a state, local government, Indian tribe, institution of higher education (IHE) or nonprofit organization that carries out a Federal award as a recipient or subrecipient.

Uniform Guidance

Overview– Streamline 8 existing OMB circulars (A-21, A-50, A-87, A-89, A-102, A-

110, A-122 and A-133) into one consolidated set of guidance– The objectives include streamline guidance for Federal awards to ease

administrative burden and strengthen oversight over Federal Funds to reduce risks of waste, fraud and abuse.

– Significant changes include:• New measures designed to ensure merit-based grant awards and

identify problems early in the process• Introduces more formal requirements for certification of compliance

and disclosure of noncompliant or criminal acts• Attempts to streamline and standardize the cost principles in many

ways, including new options for the recovery of indirect costs

Uniform Guidance

Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards

– Subpart A – Acronyms and Definitions

– Subpart B – General Provisions

– Subpart C – Pre-Federal Award Requirements and Contents of Federal Awards

– Subpart D – Post Federal Award Requirements

– Subpart E – Cost Principles

– Subpart F – Audit Requirements (including 11 Appendix)

Uniform Guidance

Three Main Categories

– Reform to Administrative Requirements (Circulars A-89, A-102 and A110)

– Reform to Cost Principles (Circulars A-21, A-87 and A-122)– Reform to Audit Requirements (Circular A-133)

Uniform Guidance

General Provisions and Direct and Indirect Costs– 200.400 Policy Guide

Include language to make explicit that non-Federal entities are not permitted to earn or keep any profit resulting from Federal awards, unless expressly authorized by the applicable award conditions.

– 200.413 Direct CostsAdministrative costs should normally be treated as indirect costs. Allows for direct charging if all of the following conditions are met:•Integral to a project or activity•Individuals can be specifically identified•Such costs are explicitly included in the budget or have the prior written approval of the Federal awarding agency•The costs are not also recovered as indirect costs

Reform to Cost Principles

General Provisions and Direct and Indirect Costs (Cont.)– 200.414 Indirect (F&A) Costs

Negotiated Indirect cost rates accepted by all Federal awarding agencies•A different rate may be used when required by Federal statute/regulation, or when approved by a Federal agency•May apply for a one time extension of up to 4 years•Any non-Federal entity that have never received a negotiated IDC rate may elect to charge a de minimis rate of 10% of modified total direct costs (MTDC) which may be used indefinitely (NEW). Award levels for Federal Awards will be not adjusted throughout the “life” of the award due to changes in negotiated rate•Negotiated rates include final, fixed and predetermined rates


General Provisions for Selected Items of Cost200.425 Audit Services–The costs of a financial statement audit of a non-Federal entity that does not currently have a Federal award may be included in the indirect cost pool for a cost allocation plan or indirect cost proposal–Pass-through entities may charge Federal awards for the cost of agreed-upon-procedures engagements to monitor subrecipients. This cost is allowable only if the agreed-upon-procedures engagements are:

• Conducted in accordance with GAGAS attestation standards;• Paid for and arranged by the pass-through entity; and• Limited in scope to one or more of the following types of

compliance requirements: activities allowed or unallowed; allowable costs/cost principles; eligibility; and reporting.


General Provisions for Selected Items of Cost (Cont.)

– 200.428 Collections of Improper Payments (new)The costs incurred by a non-Federal entity to recover improper payments are allowable as either direct or indirect costs, as appropriate


General Provisions for Selected Items of Cost

– 200.431 Compensation – Fringe Benefits• Measurement of costs of abnormal or mass severance pay by means of an

accrual (Not allowable)• Excessive severance pay (Not allowable)

– 200.436 Depreciation• Use allowance no longer allowed• Donated assets valued at fair market value at the time of donation. Donated

assets may be depreciated or claimed as matching but not both• New: Depreciation over the life of the asset• Charges for depreciation must be supported by adequate property records, and

physical inventories must be taken at least once every two years to ensure that the assets exist and are usable, used, and needed


General Provisions for Selected Items of Cost (Cont.)– 200.438 Entertainment Costs

Unallowable unless•Those costs have a programmatic purpose and are authorized in the approved budget for the Federal award•Have prior written approval from the federal awarding agency

– 200.440 Exchange Rates (new)Allows for cost increases from fluctuations in exchange rates with certain conditions being met and of course, the availability of funds

– 200.441 Fines, penalties, damages and other settlementsUnallowable except when incurred as a result of compliance with specific previsions of the Federal award or with prior approval of the Federal awarding agency.


General Provisions for Selected Items of Cost (Cont.)

–200.455 Organization CostsNow unallowable to all organizations unless specific approval by the awarding federal agency

–200.463 Recruiting CostsSpecial emoluments, fringe benefits, and salary allowances incurred to attract professional personnel that do not meet the test of reasonableness or do not conform with the established practices of the non-Federal entity, are unallowable


General Provisions for Selected Items of Cost (Cont.)– 200.442 Fundraising

• Costs of organized fundraising, including financial campaigns, endowment drives, solicitation of gifts and bequests, and similar expense incurred to raise capital or obtain contributions are unallowable.


General Provisions for Selected Items of Cost (Cont.)– 200.465 Rental Costs of Real Property and Equipment

• Rental costs under “sale and lease back” arrangements are allowable only up to the amount that would be allowed had the non-Federal entity continued to own the property. This amount would include expenses such as depreciation, maintenance, taxes and insurance.

• Rental costs under “less-than-arm's-length” leases are allowable only up to the amount as explained above. For this purpose, a less-than-arm's-length lease is one under which one party to the lease agreement is able to control or substantially influence the actions of the other




Slides & CPE!


Thank You! For slides & CPE credit, visit: aafcpa.com/MLCHC-costreport

cost report workshops and omb uniform guidance cost principles

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