Cal. Code Regs. Tit. 17, § 57434 - Required Cost Information

(a) In order for the Department to establish a permanent payment rate, the vendor shall submit information for the following allowable costs for the reporting period, if they are incurred by the vendor and are necessary for the vendored service.

(1) Salary and wage expense which shall include:

(A) The total gross salary and wages, including overtime and staff relief time, for the staff functions specified in Section 56724; and

(B) The average hourly salary and wage and fringe benefit cost for the direct service function specified in section 56724(d).

(2) Fringe benefit costs associated with the salary and wage costs for the staff functions identified in (1)(A) which shall be limited to the following:

(A) Old Age Security Disability Insurance (OASDI) or Federal Insurance Compensation Act (FICA);

(B) Workers' compensation;

(C) Unemployment insurance;

(D) Life insurance;

(E) Health insurance;

(F) Dental insurance;

(G) Retirement;

(H) Vision insurance;

(I) Employee Training Tax, as specified in the California State Unemployment Insurance Code Section 976.6; and

(J) Long-term disability insurance.

(3) Operating expenses which shall not duplicate other allowable costs and shall be limited to the following cost categories:

(A) Accounting fees of the vendor for the establishment and maintenance of accounting records and other information systems required for the fiscal management of the vendored service;

(B) Bank service fees of the vendor;

(C) Communication costs for services including telephone, telegraph, teletype, centrex, telepak, postage, message services, facsimiles and TDD;

(D) Contractual/consultant fees for program operation that do not have a specific cost category;

(E) Depreciation costs, except for vehicles which are covered under (P). The following items shall be depreciated using the straight-line depreciation method and the useful life of the item. The useful life of an item shall be that used for federal tax purposes.

1. Facilities which have been purchased by the vendor;

2. Furniture and equipment which has been purchased by the vendor and has a unit acquisition cost of at least $500 and a normal useful life of at least four years; and

3. Capital improvements that add to the value or useful life of the facility or equipment. Capital improvements shall be treated as a permanent investment to be added to the cost basis of the facility or equipment and charged to depreciation.

(F) General expense costs for the following items only:

1. Furniture and equipment which do not meet the criteria specified in (E)2.;

2. Interest on loans attributable to the vendored service;

3. Subscriptions for periodicals which are used in the operation of the vendored service or for the purpose of staff development;

4. Staff recruitment costs; staff screening costs, such as fingerprinting prospective employees; and staff hiring costs which shall include the costs for physical examinations or other health and safety costs that may be required prior to employment;

5. Fees for licenses, certifications, registrations or permits, if necessary for vendorization or the continued operation of the service subsequent to vendorization;

6. Accreditation fees;

7. Association dues or fees;

8. Costs for providing or preparing information related to the vendored service which is used as general information to the consumers or to the authorized consumer representatives;

9. Local business fees or taxes;

10. Costs related to inoculations or clinical tests of an employee, for the employee's or consumer's health and safety; and

11. Fuel and oil.

(G) Insurance costs;

(H) Janitorial fees;

(I) Legal fees;

(J) Maintenance costs for repair and upkeep of furniture and equipment, vehicles, facilities and grounds which neither adds to the permanent value nor prolongs its useful life, but maintains it in an efficient operating condition;

(K) Office and program supply costs for items which are expendable or consumable and are used by or on behalf of the consumers in the vendored service. Food supply items shall only be included for consumers when used to reinforce positive behaviors, as a necessary item for instruction only when supported by the program design pursuant to Section 56712 or 56762, or as required by the appropriate licensing agency;

(L) Rental and lease costs. On a lease-purchase, while the item is being leased, the cost shall be reported under this category. When the option-to-purchase has been exercised, the residual value of the item shall be depreciated and shall be reported, as applicable, under category (E) or (P). Rental and lease costs shall apply to the following items:

1. Furniture and equipment;

2. Vehicles; and

3. Facilities, including rental costs for vacant apartments which are used for independent living programs.

(M) Staff training costs for in-service training and employee development which meet the requirements specified in Section 56726 or 56744. Staff training costs which were incurred shall be allowable to the extent the vendor implemented the staff training plan specified in Section 56726(a)(1);

(N) Travel costs for consumer or staff travel that is a part of the program curriculum.

1. When the program curriculum is conducted solely in natural environments, only consumer travel which occurs between the first and last training site shall be included, unless the regional center, pursuant to Section 54342(a)(78)(A), also approves inclusion of travel associated with transporting consumers to the first and from the last training site as part of the operating expenses of the vendored service;

2. Consumer travel shall also include travel costs for travel to and from the vendored service site on an emergency basis when the consumer's health or safety is at risk.

(O) Utility costs such as gas, electricity, water, garbage, sewer fees or other utility expenses which occur at the vendored service site;

(P) Vehicle depreciation costs for owned vehicles shall be calculated by using the straight-line depreciation method and the minimum normal service life specified below. Vehicles which have been purchased using a combination of funds obtained through Section 16(b)(2) of the Urban Mass Transportation Act of 1964, 49 United States Code, Section 1612(b), and funds from the vendor, shall only be depreciated for the portion of the costs incurred by the vendor. The minimum normal service life for:

1. Standard size heavy duty (approximately 35'-40') transit busses is at least twelve years of service or an accumulation of at least 500,000 total miles on the vehicle;

2. Medium size heavy duty (approximately 30') transit busses is at least ten years of service or an accumulation of at least 350,000 total miles on the vehicle;

3. Small medium duty (under 30') transit busses is at least seven years of service or an accumulation of at least 200,000 total miles on the vehicle. A 16-passenger bus shall be considered a small medium duty transit bus and not a van; and

4. Other vehicles such as regular and specialized vans and cars is at least four years of service or an accumulation of at least 100,000 total miles on the vehicle.

(4) Management organization costs which:

(A) Shall include for staff functions of the management organization, the allowable costs specified in (a)(1) through (3) of this section.

(B) Shall not include:

1. More than 100 percent of the allocated costs of the management organization;

2. Costs applicable to or claimed by other services operated by the vendor;

3. Any non-allowable costs pursuant to Section 57436; and

4. Costs for staff relief time and direct care staff.

(C) Shall be allocated on a basis consistent with the administrative support provided to each separate service, and each vendor shall:

1. Indicate whether the methodology used to allocate the costs of the management organization is based upon:

a. Actual days of attendance if the service is an activity center, adult development center, or behavior management program; or actual hours of attendance if the service is a social recreation program, independent living program, or infant development program; or

b. The total costs of each service.

2. Include the total allowed costs of the management organization for the reporting period.

(b) Cost information submitted pursuant to (a) shall not include salaries and wages and fringe benefits for staff hired to supplement staffing ratios for non-mobile consumers, pursuant to Section 56756(b). These costs shall be reimbursed pursuant to Sections 57530 through 57534.

Notes

Cal. Code Regs. Tit. 17, § 57434

1. New section filed 6-26-90 as an emergency; operative 7-1-90 (Register 90, No. 36). A Certificate of Compliance must be transmitted to OAL by 10-29-90 or emergency language will be repealed by operation of law on the following day.
2. Certificate of Compliance as to 6-26-90 order transmitted to OAL 9-28-90 and filed 10-29-90 (Register 90, No. 46).
3. Amendment of subsection (a)(3)(N) and NOTE filed 11-5-91 as an emergency; operative 11-5-91 (Register 92, No. 21). A Certificate of Compliance must be transmitted to OAL 3-4-92 or emergency language will be repealed by operation of law on the following day.
4. Amendment of subsection (a)(3)(N) and NOTE refiled 3-4-92 as an emergency; operative 3-4-92 (Register 92, No. 25). A Certificate of Compliance must be transmitted to OAL 7-2-92 or emergency language will be repealed by operation of law on the following day.
5. Certificate of Compliance as to 3-4-92 order including amendment of subsections (a)(3)(M) and (a)(3)(N)1. and 2. transmitted to OAL 6-25-92 and filed 8-6-92 (Register 92, No. 33).
6. Amendment of section filed as an emergency 6-17-93; operative 6-17-93. Submitted to OAL for printing only pursuant to SB485 (Chapter 722, Statutes of 1992) Section 147(a) (Register 93, No. 26).
7. Certificate of Compliance as to 6-17-93 order transmitted to OAL 6-20-94 and filed 8-2-94 (Register 94, No. 31).
8. Change without regulatory effect amending section filed 1-17-97 pursuant to section 100, title 1, California Code of Regulations (Register 97, No. 3).
9. Amendment of subsection (a)(3)(F)2. and redesignation of subsection (a)(4)(C)(1) to (a)(4)(C)1. filed 4-25-2000; operative 5-25-2000 (Register 2000, No. 17).

Note: Authority cited: Chapter 722, Statutes of 1992, Section 147; and Sections 4691, 4691.5 and 4791(i), Welfare and Institutions Code. Reference: Sections 4691, 4691.5 and 4791, Welfare and Institutions Code.

1. New section filed 6-26-90 as an emergency; operative 7-1-90 (Register 90, No. 36). A Certificate of Compliance must be transmitted to OAL by 10-29-90 or emergency language will be repealed by operation of law on the following day.
2. Certificate of Compliance as to 6-26-90 order transmitted to OAL 9-28-90 and filed 10-29-90 (Register 90, No. 46).
3. Amendment of subsection (a)(3)(N) and Note filed 11-5-91 as an emergency; operative 11-5-91 (Register 92, No. 21). A Certificate of Compliance must be transmitted to OAL 3-4-92 or emergency language will be repealed by operation of law on the following day.
4. Amendment of subsection (a)(3)(N) and Note refiled 3-4-92 as an emergency; operative 3-4-92 (Register 92, No. 25). A Certificate of Compliance must be transmitted to OAL 7-2-92 or emergency language will be repealed by operation of law on the following day.
5. Certificate of Compliance as to 3-4-92 order including amendment of subsections (a)(3)(M) and (a)(3)(N)1. and 2. transmitted to OAL 6-25-92 and filed 8-6-92 (Register 92, No. 33).
6. Amendment of section filed as an emergency 6-17-93; operative 6-17-93. Submitted to OAL for printing only pursuant to SB485 (Chapter 722, Statutes of 1992) Section 147(a) (Register 93, No. 26).
7. Certificate of Compliance as to 6-17-93 order transmitted to OAL 6-20-94 and filed 8-2-94 (Register 94, No. 31).
8. Change without regulatory effect amending section filed 1-17-97 pursuant to section 100, title 1, California Code of Regulations (Register 97, No. 3).
9. Amendment of subsection (a)(3)(F)2. and redesignation of subsection (a)(4)(C)(1) to (a)(4)(C)1. filed 4-25-2000; operative 5-25-2000 (Register 2000, No. 17).