Download - 1 Cost Report By: Kristi Klein, Management Analyst & Sacha Wise, Provider Reimbursement & Grants Manager Department of Human Services Office of Budget.

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Page 1: 1 Cost Report By: Kristi Klein, Management Analyst & Sacha Wise, Provider Reimbursement & Grants Manager Department of Human Services Office of Budget.

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Cost ReportCost Report

By: Kristi Klein, Management Analyst & By: Kristi Klein, Management Analyst & Sacha Wise, Provider Reimbursement & Grants Sacha Wise, Provider Reimbursement & Grants

Manager Manager

Department of Human ServicesDepartment of Human ServicesOffice of Budget & FinanceOffice of Budget & Finance

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Cost Report Cost Report InformationInformation

General Overview of Cost ReportGeneral Overview of Cost Report UpdatesUpdates Things to RememberThings to Remember Use of Cost Report in Rate SettingUse of Cost Report in Rate Setting Per Unit Cost Per Unit Cost

We’re on the web at:http://www.state.sd.us/dhs/BF/Cost

%20Report.htm

*You can find changes to the FY05 cost report, frequently asked questions, examples, guidelines, and forms for the cost report.

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Overview of Cost Report Overview of Cost Report GuidelinesGuidelines

Who is required to submit a cost report?Who is required to submit a cost report? As required by contract, a cost report should be As required by contract, a cost report should be

submitted by agencies receiving funding from the submitted by agencies receiving funding from the Division of Alcohol and Drug Abuse and should Division of Alcohol and Drug Abuse and should coincide with the provider’s fiscal year, unless coincide with the provider’s fiscal year, unless waived by the Department of Human Services. waived by the Department of Human Services.

When is the cost report due to When is the cost report due to the Department of Human the Department of Human Services?Services? The deadline for returning the The deadline for returning the

required annual cost report to the required annual cost report to the Department is four months after the Department is four months after the reporting period. All incomplete or reporting period. All incomplete or incorrect reports will be returned to incorrect reports will be returned to the provider for corrections. the provider for corrections.

If your reporting period ends June 30, If your reporting period ends June 30, your cost report is due November 1.your cost report is due November 1.

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Overview of Cost Report Overview of Cost Report GuidelinesGuidelines

What is the purpose of the cost report?What is the purpose of the cost report? The purpose of the cost report is to define The purpose of the cost report is to define

the cost of each service by service center. the cost of each service by service center.

What are the 3 components of the cost What are the 3 components of the cost report?report? The cost report is The cost report is

comprised of Schedule A – comprised of Schedule A – Expenses, Schedule B - Expenses, Schedule B - Revenues, and Revenues, and Attachment 1-Personnel.Attachment 1-Personnel.

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Overview of Cost Report Overview of Cost Report GuidelinesGuidelines

The cost report must be completed The cost report must be completed on an accrual basis of accounting. on an accrual basis of accounting.

Information to complete the cost report may Information to complete the cost report may come from various sources depending on come from various sources depending on each agency's method of tracking costs. each agency's method of tracking costs. Personnel, payroll, provider expense records, Personnel, payroll, provider expense records, and activity logs are examples of tools that and activity logs are examples of tools that may be used to compile information to may be used to compile information to complete the cost report.complete the cost report.

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Overview of Cost Report Overview of Cost Report GuidelinesGuidelines

Funded Depreciation AccountsFunded Depreciation Accounts A funded depreciation account can be established for the A funded depreciation account can be established for the

replacement of capital assets and can be funded at a replacement of capital assets and can be funded at a rate not greater than current annual depreciation.rate not greater than current annual depreciation.

The establishment of the fund and the procedures The establishment of the fund and the procedures governing the fund must be specifically approved by the governing the fund must be specifically approved by the agency’s board of directors.agency’s board of directors.

The approved procedures must stipulate the rate by The approved procedures must stipulate the rate by which the account will be funded and shall delineate the which the account will be funded and shall delineate the items to be purchased with the fund.items to be purchased with the fund.

Agencies must use the account for the purchase of Agencies must use the account for the purchase of capital items as defined by their internal procedures. capital items as defined by their internal procedures. Transfers from the funded depreciation reserve account Transfers from the funded depreciation reserve account will be allowed for necessary cash flow purposes as long will be allowed for necessary cash flow purposes as long as the transfer does not cause the agency to exceed as the transfer does not cause the agency to exceed operating reserve standards set forth in the Cost Report operating reserve standards set forth in the Cost Report Preparation Guidelines. (See Reserve Funds policy, page Preparation Guidelines. (See Reserve Funds policy, page 7).7).

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Overview of Cost Report Overview of Cost Report GuidelinesGuidelines

Funded Depreciation Accounts Funded Depreciation Accounts cont.cont. Agencies with funded depreciation accounts Agencies with funded depreciation accounts

shall use the account heading “Designated for shall use the account heading “Designated for Capital Asset Replacement” and identify the Capital Asset Replacement” and identify the composition of any Funded Depreciation composition of any Funded Depreciation account in their annual audited financial account in their annual audited financial statement. statement.

See page 4 of the guidelines for additional See page 4 of the guidelines for additional detailsdetails

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Reserve Funds Reserve Funds PolicyPolicy

The reserve funds should not exceed what?The reserve funds should not exceed what? Reserve funds shall not exceed 90 days total operating Reserve funds shall not exceed 90 days total operating

expenses. Please refer to the memorandum sent to all expenses. Please refer to the memorandum sent to all providers September 6, 2005 for additional information. providers September 6, 2005 for additional information.

What is the formula for calculating reserves?What is the formula for calculating reserves? Reserves = (Unrestricted Funds – Funded Depreciation and Reserves = (Unrestricted Funds – Funded Depreciation and

Endowments)Endowments)

If reserves exceed the 90 day total operating If reserves exceed the 90 day total operating expense, what must the provider do?expense, what must the provider do? If reserves exceed 90 days total operating expenses, the If reserves exceed 90 days total operating expenses, the

provider must submit a plan to the Department for provider must submit a plan to the Department for reinvesting the excess into the program. The Department reinvesting the excess into the program. The Department will notify the provider of approval or disapproval within 30 will notify the provider of approval or disapproval within 30 days. days.

Overview of Cost Report Overview of Cost Report GuidelinesGuidelines

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Independent Independent AuditAudit

Who should test Schedules A & B included Who should test Schedules A & B included in the audit report?in the audit report?

An independent auditor

The provider shall have an annual entity-wide The provider shall have an annual entity-wide independent audit. To ensure the consistency independent audit. To ensure the consistency and validity of the cost report data, we require and validity of the cost report data, we require Schedules A and B to be included in the paper Schedules A and B to be included in the paper audit report and to be tested by the audit report and to be tested by the independent auditor. independent auditor.

This requirement became effective SFY04. This requirement became effective SFY04.

Overview of Cost Report Overview of Cost Report GuidelinesGuidelines

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Overview of Cost Report Overview of Cost Report GuidelinesGuidelines Non- Allowable CostsNon- Allowable Costs

Report in adjustments column on Schedule AReport in adjustments column on Schedule A Governed by Title XIX unless further limited by cost report Governed by Title XIX unless further limited by cost report

guidelines or Purchase of Service Agreementguidelines or Purchase of Service Agreement Examples of Non-Allowable CostsExamples of Non-Allowable Costs

Advertising, public relations, and clothing expenses as identified by Advertising, public relations, and clothing expenses as identified by Provider Reimbursement Manual Part II provided by CMS (formerly HCFA-Provider Reimbursement Manual Part II provided by CMS (formerly HCFA-15)15)

Costs which have not been incurred by the agency, including the value of Costs which have not been incurred by the agency, including the value of donated goods and servicesdonated goods and services

Depreciation costs for idle facilities except when such facilities are Depreciation costs for idle facilities except when such facilities are necessary to meet caseload fluctuationsnecessary to meet caseload fluctuations

Fines and penalties resulting from failure to comply with Federal, State Fines and penalties resulting from failure to comply with Federal, State and local lawsand local laws

Telephone costs attributed to personal usage by employees and Telephone costs attributed to personal usage by employees and consumersconsumers

Any expenses incurred by the provider for the sale of goods or services Any expenses incurred by the provider for the sale of goods or services (example: production)(example: production)

Entertainment costs for activities including staff only (i.e. holiday parties Entertainment costs for activities including staff only (i.e. holiday parties not involving consumers, flowers or other gifts for staff)not involving consumers, flowers or other gifts for staff)

All dues and costs associated with individual or agency memberships to All dues and costs associated with individual or agency memberships to fraternal organizations, country clubs, etc.fraternal organizations, country clubs, etc.

All costs associated with payment to registered lobbyistsAll costs associated with payment to registered lobbyists Additional Non-Allowable costs can be found on page 8 & 9 of guidelines.Additional Non-Allowable costs can be found on page 8 & 9 of guidelines.

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Schedule A (Expenses)Schedule A (Expenses) Contains the Total, Adjustments, Administration Contains the Total, Adjustments, Administration

and Support and Fund Raising columns as well and Support and Fund Raising columns as well as the program services unique to each provider as the program services unique to each provider group.group.

Cost allocated by assignment to Administration Cost allocated by assignment to Administration and Support or to the benefiting service center and Support or to the benefiting service center based on time study or activity logging unless based on time study or activity logging unless otherwise indicated.otherwise indicated.

Total Column - Represents the total expenses Total Column - Represents the total expenses from the operating statement of the from the operating statement of the organization for the reporting period. The total organization for the reporting period. The total of the expenses must reconcile to the of the expenses must reconcile to the independently audited financial statements.independently audited financial statements.

Overview of Cost Report Overview of Cost Report GuidelinesGuidelines

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Schedule A (Expenses)Schedule A (Expenses)

Overview of Cost Report Overview of Cost Report GuidelinesGuidelines

Chart of AccountsChart of Accounts Personnel Services (1000)Personnel Services (1000) Personnel Benefits and Taxes Personnel Benefits and Taxes

(1100)(1100) Professional Fees & Contractual Professional Fees & Contractual

Services (1200)Services (1200) Travel/Transportation (1300)Travel/Transportation (1300) Supplies (1400)Supplies (1400) Occupancy (1500)Occupancy (1500) Equipment (1600)Equipment (1600) Depreciation (1700)Depreciation (1700) Miscellaneous (1800)Miscellaneous (1800)

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Schedule A (Expenses)Schedule A (Expenses) This only shows a portion of Schedule AThis only shows a portion of Schedule A

Overview of Cost Report Overview of Cost Report GuidelinesGuidelines

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Schedule B (Revenues)Schedule B (Revenues) Contains the Total, Adjustments, Administration Contains the Total, Adjustments, Administration

and Support and Fund Raising columns as well as and Support and Fund Raising columns as well as the program services unique to each provider the program services unique to each provider group.group.

Overview of Cost Report Overview of Cost Report GuidelinesGuidelines

AccountsAccounts Fees (2000)Fees (2000) Grants (2100)Grants (2100) Contributions (2200)Contributions (2200) Other Income (2300)Other Income (2300)

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Schedule B (Revenues)Schedule B (Revenues)

Overview of Cost Report Overview of Cost Report GuidelinesGuidelines

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Attachment 1Attachment 1 Contains hours and wages for all personnel whose Contains hours and wages for all personnel whose

costs were reported in accounts 1010, 1020 and costs were reported in accounts 1010, 1020 and 1040 on Schedule A1040 on Schedule A

Overview of Cost Report Overview of Cost Report GuidelinesGuidelines

Information ReportedInformation Reported Staff CredentialsStaff Credentials Position NumbersPosition Numbers Position TitlesPosition Titles Staff NamesStaff Names Start/End DatesStart/End Dates Total Hours PaidTotal Hours Paid SalarySalary Hourly/Salary WageHourly/Salary Wage BonusBonus # of Hours Worked in a Service # of Hours Worked in a Service

CenterCenter Total Hours WorkedTotal Hours Worked

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Attachment 1 Attachment 1 This only shows a portion of Attachment1This only shows a portion of Attachment1

Overview of Cost Report Overview of Cost Report GuidelinesGuidelines

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Notes for Schedules A & BNotes for Schedules A & B Notes for Schedule ANotes for Schedule A

Describe line item expensesDescribe line item expenses Adjustment column itemsAdjustment column items Reconcile between Audited Financial Statement and Schedule AReconcile between Audited Financial Statement and Schedule A Breakdown of the expenses by type and cost in the “other” Breakdown of the expenses by type and cost in the “other”

accounts (1190, 1290, 1390, etc) if the account equals or accounts (1190, 1290, 1390, etc) if the account equals or exceeds the % (listed in the guidelines) of the agency’s total exceeds the % (listed in the guidelines) of the agency’s total expensesexpenses

Any other notes you may want to provideAny other notes you may want to provide

Overview of Cost Report Overview of Cost Report GuidelinesGuidelines

Notes for Schedule BNotes for Schedule B Describe line item revenuesDescribe line item revenues

Adjustment column itemsAdjustment column items Reconciliation between Audited Reconciliation between Audited

Financial Statement and Schedule BFinancial Statement and Schedule B Any other notes you may want to Any other notes you may want to

provideprovide

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APPENDIX A, B, & CAPPENDIX A, B, & C

Provides information about program services Provides information about program services of each Divisionof each Division

Overview of Cost Report Overview of Cost Report GuidelinesGuidelines

APPENDIX AAPPENDIX A Division of Developmental DisabilitiesDivision of Developmental Disabilities

APPENDIX BAPPENDIX B Division of Mental HealthDivision of Mental Health

APPENDIX CAPPENDIX C Division of Alcohol & Drug AbuseDivision of Alcohol & Drug Abuse

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Updates: GeneralUpdates: General Some cells have been protected (you will not be able to click Some cells have been protected (you will not be able to click

the cell) so that changes the cell) so that changes can notcan not be made to the formulas. be made to the formulas. Some cells will automatically calculate and be displayed.Some cells will automatically calculate and be displayed.

Schedule A, Schedule B, Notes for Schedule A and Notes for Schedule A, Schedule B, Notes for Schedule A and Notes for Schedule B have all been included in one excel work book.Schedule B have all been included in one excel work book.

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Updates: GeneralUpdates: General Please use the following naming conventions when submitting Please use the following naming conventions when submitting

the files: the files: AgencyName_Schedules.xlsAgencyName_Schedules.xls and and AgencyName_Attachment1.xlsAgencyName_Attachment1.xls. .

AgencyNameAgencyName should be the full or abbreviated name of your should be the full or abbreviated name of your agency.agency.

Examples:Examples:BMS_Schedules.xls (Behavior Management Systems)BMS_Schedules.xls (Behavior Management Systems)SHAD_Attachment1.xls (Southern Hills Alcohol and Drug)SHAD_Attachment1.xls (Southern Hills Alcohol and Drug)

Cost reports should be emailed to Kristi Klein or Sacha Wise at Cost reports should be emailed to Kristi Klein or Sacha Wise at [email protected] or [email protected]

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Updates: Updates: Attachment 1Attachment 1 If you are a combination provider, all of the service centers have been If you are a combination provider, all of the service centers have been

included in one spreadsheet. Therefore, if you are a MH and ADA included in one spreadsheet. Therefore, if you are a MH and ADA provider, you will complete one Attachment 1 for the whole agency. provider, you will complete one Attachment 1 for the whole agency.

If you are a combination If you are a combination provider, please make provider, please make sure administrative time sure administrative time is broken out into each is broken out into each area.area.

Please make sure to fill Please make sure to fill staff in the proper tabs of staff in the proper tabs of 1010, 1020, 1040. 1010, 1020, 1040. Do notDo not include all staff in one tab. include all staff in one tab.

This is a sample of the cost report that shows where to break out the administrative time if you are a combination provider (Provide MH, DD, and ADA services).

When in the Excel spreadsheet, click on the correct tab for the staff you

are inputting.

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Updates: Schedule AUpdates: Schedule A Under 1200 Professional Fees & Contract Services, Under 1200 Professional Fees & Contract Services,

accounts 1211, 1212,1213, 1214, 1215 and 1216 have accounts 1211, 1212,1213, 1214, 1215 and 1216 have been combined into one account. The new account is 1210 been combined into one account. The new account is 1210 Administrative/Financial.Administrative/Financial.

Under 1300 Travel/Transportation, the accounts of 1310 Under 1300 Travel/Transportation, the accounts of 1310 and 1390 have been combined into one account. The and 1390 have been combined into one account. The account name is now 1390 Other.account name is now 1390 Other.

Under 1500 Occupancy, the accounts of 1520 and 1530 Under 1500 Occupancy, the accounts of 1520 and 1530 have been combined into one account. The account name have been combined into one account. The account name is now 1520 Utilities & Telephone.is now 1520 Utilities & Telephone.

The “other” accounts (1190, 1290, 1390, etc.) have The “other” accounts (1190, 1290, 1390, etc.) have increases in their percentages in relation to total increases in their percentages in relation to total expenditures. Please refer to the guidelines to double expenditures. Please refer to the guidelines to double check the percentages for those accounts as you may not check the percentages for those accounts as you may not have to list the expenses on the Notes Page.have to list the expenses on the Notes Page.

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Updates: Schedule AUpdates: Schedule A T or F: Temporary employees need to be included in T or F: Temporary employees need to be included in

attachment 1?attachment 1? False. 1060 Temporary Staff 1060 Temporary Staff do notdo not need to be included in need to be included in

Attachment 1. On Schedule A under 1000 Personnel Services, Attachment 1. On Schedule A under 1000 Personnel Services, a new account of 1060 Temporary Staff has been created. a new account of 1060 Temporary Staff has been created. The costs for temporary staff should only be included on The costs for temporary staff should only be included on Schedule A.Schedule A.

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Updates: Schedule AUpdates: Schedule A Examples of Temporary Staff:Examples of Temporary Staff:

Staff hired staff to fill-in or cover for administration or Staff hired staff to fill-in or cover for administration or support staff on maternity leave, FMLA, extended support staff on maternity leave, FMLA, extended disability, etc. disability, etc.

Staff hired for a short-term project. These staff are Staff hired for a short-term project. These staff are supplements to existing staff and do not provide direct supplements to existing staff and do not provide direct care (i.e. staff hired to do production work along side care (i.e. staff hired to do production work along side people served in a workshop to meet production people served in a workshop to meet production deadlines, staff hired for a grant position that is short deadlines, staff hired for a grant position that is short lived and will not continue, or staff hired to provide lived and will not continue, or staff hired to provide summer maintenance/yard work). summer maintenance/yard work).

Staff hired as on-call or relief direct care staff. These staff Staff hired as on-call or relief direct care staff. These staff fill-in when a full-time direct care staff uses vacation or fill-in when a full-time direct care staff uses vacation or sick leave or other times as needed (i.e. additional staff sick leave or other times as needed (i.e. additional staff needed due to illness or behavior of people served). The needed due to illness or behavior of people served). The number of on-call staff and the hours available for them to number of on-call staff and the hours available for them to work varies at any point in time.  work varies at any point in time.  

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Update - Schedule BUpdate - Schedule B Under 2100 Grants, the accounts of Under 2100 Grants, the accounts of

2140, 2150, 2160, 2170 and 2190 have 2140, 2150, 2160, 2170 and 2190 have been combined into one account. The been combined into one account. The account name is now 2100 Grants.account name is now 2100 Grants.

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Attachment 1Attachment 1 The total hours paid column should match what The total hours paid column should match what

column?column? The total hours paid should match the total hours. If they do The total hours paid should match the total hours. If they do

not match, check the service centers to make sure the hour not match, check the service centers to make sure the hour information is entered correctly.information is entered correctly.

If you are a combination provider (MH & ADA), please If you are a combination provider (MH & ADA), please break out the administrative time spent in each area.break out the administrative time spent in each area.

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Attachment 1Attachment 1 If the administrative staff manage/direct the If the administrative staff manage/direct the

overall or specific programs of the agency but overall or specific programs of the agency but spend more than 10% of their time doing direct spend more than 10% of their time doing direct service which tab should they be included in on service which tab should they be included in on Attachment1?Attachment1?

They should be included in the They should be included in the 1020 (Professional/Program 1020 (Professional/Program Staff) rather than the 1010 Staff) rather than the 1010 (Administrative). Their pay (Administrative). Their pay should also be included in the should also be included in the 1020 account on Schedule A.1020 account on Schedule A.

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Total Hours PaidTotal Hours Paid In the total hours paid, please put the number of hours In the total hours paid, please put the number of hours

that the employee was paid during that time period that the employee was paid during that time period and not the number of hours they could have worked.and not the number of hours they could have worked.

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Attachment 1 & Attachment 1 & Schedule ASchedule A

Double check to make sure that Attachment 1 matches Double check to make sure that Attachment 1 matches Schedule A. In this example, there are hours reported in Schedule A. In this example, there are hours reported in Attachment 1 for Day Treatment but there are no personnel Attachment 1 for Day Treatment but there are no personnel costs reported in Schedule A. If hours are reported in costs reported in Schedule A. If hours are reported in Attachment 1 there should be costs reported in Schedule A. Attachment 1 there should be costs reported in Schedule A. The same should be true if there are costs reported in Schedule The same should be true if there are costs reported in Schedule A, Attachment 1 should reflect hours spent in that service A, Attachment 1 should reflect hours spent in that service center.center.

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Start/End DateStart/End Date T or F: Start and end dates need to be included on T or F: Start and end dates need to be included on

the cost report.the cost report. True

Enter the date that the Enter the date that the individual began individual began employment with your employment with your agency.agency.

If the individual has If the individual has been employed for been employed for more than a year, use more than a year, use the first day of the the first day of the current fiscal year as current fiscal year as the start date.the start date. Example: Jane Doe Example: Jane Doe

started 8/14/1999. For started 8/14/1999. For the reporting period on the reporting period on the cost report for FY04, the cost report for FY04, you would enter you would enter 7/1/2004 as the start 7/1/2004 as the start date.date.

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Start/End DateStart/End Date Please include an end date for everyone. Please include an end date for everyone. Enter the date the individual terminated Enter the date the individual terminated

employment with your agency.employment with your agency. If the individual is currently employed with your If the individual is currently employed with your

agency at the end of the fiscal year, enter the last agency at the end of the fiscal year, enter the last day of the current fiscal year. day of the current fiscal year.

For FY04, if the For FY04, if the individual was still individual was still employed at the employed at the end of the fiscal end of the fiscal year, you would year, you would enter 6/30/2005 enter 6/30/2005 as the end date.as the end date.

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Position NumbersPosition Numbers

Position numbers are Position numbers are used to count used to count employees and develop employees and develop a turnover ratio.a turnover ratio.

Please include position Please include position numbers so that numbers so that turnover rates can be turnover rates can be analyzed (refer to analyzed (refer to yellow comment).yellow comment).

If one employee If one employee replaces another replaces another employee, the same employee, the same position number should position number should be used (refer to be used (refer to orange comment).orange comment).

True or False: Position Numbers are not True or False: Position Numbers are not used to analyze data.used to analyze data. False

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Wages and BonusWages and Bonus

Bonuses should not be included in the salary per Bonuses should not be included in the salary per hour or hourly wage.hour or hourly wage.

Do notDo not include the bonus amount in the total include the bonus amount in the total wages paid column. wages paid column.

The bonus and total wages paid added together The bonus and total wages paid added together should match what is reported on Schedule A for should match what is reported on Schedule A for the appropriate account (1010, 1020, 1040).the appropriate account (1010, 1020, 1040).

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Rate SettingRate Setting Cost-Based Rates should include all direct Cost-Based Rates should include all direct

and indirect costs related to the provision of and indirect costs related to the provision of the service by the provider.the service by the provider. Direct Costs: Those costs attributed to a single Direct Costs: Those costs attributed to a single

cost objective. Salary and material costs within a cost objective. Salary and material costs within a unit are directly attributable to services.unit are directly attributable to services.

Indirect Costs: Those costs “incurred for a Indirect Costs: Those costs “incurred for a common or joint purpose benefiting more than common or joint purpose benefiting more than one cost objective.”one cost objective.”

The goal of any effective rate setting The goal of any effective rate setting methodology is to include all allowable costs methodology is to include all allowable costs and allow the public provider to recover the and allow the public provider to recover the full cost incurred for the provision of the full cost incurred for the provision of the service.service.

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Rate SettingRate Setting STEP 1:STEP 1:

Define the ServiceDefine the Service Who delivers the service? (CCDC Level I, II, III, Who delivers the service? (CCDC Level I, II, III,

trainee, etc.)trainee, etc.)

How is the Cost Report used?How is the Cost Report used? Credentials and salary information from Credentials and salary information from

Attachment 1Attachment 1

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STEP 1STEP 1 Cont.Cont.:: Staff Salaries: Average WageStaff Salaries: Average Wage

Rate SettingRate Setting

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Rate SettingRate Setting STEP 2:STEP 2:

Identify Cost Components (Numerator)Identify Cost Components (Numerator) Staff Salaries + Staff Benefits and Taxes + Staff Salaries + Staff Benefits and Taxes +

Operating Expenses (including supplies, occupancy, Operating Expenses (including supplies, occupancy, contractual services, etc) = Total Costcontractual services, etc) = Total Cost

How is the Cost Report used? How is the Cost Report used? Attachment 1 - SalariesAttachment 1 - Salaries Schedule A - Total Personnel Services and Total Schedule A - Total Personnel Services and Total

Benefits and TaxesBenefits and Taxes Schedule A - Operating ExpensesSchedule A - Operating Expenses

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Rate SettingRate Setting STEP 2STEP 2 Cont.Cont.::

DetermininDetermining Benefits g Benefits PercentagePercentage

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Rate SettingRate Setting STEP 2STEP 2 Cont. Cont. ::

Determining Determining Operating Operating CostsCosts

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Rate SettingRate Setting STEP 3 STEP 3

Determine Billable Contacts (Denominator)Determine Billable Contacts (Denominator) Often requires conducting surveys and/or time Often requires conducting surveys and/or time

studies to obtain accurate datastudies to obtain accurate data

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Rate SettingRate Setting

How is the Cost Report used? How is the Cost Report used? Per unit cost taken from Schedule A- Total Per unit cost taken from Schedule A- Total

Expenditures divided by MMIS/STARS units as Expenditures divided by MMIS/STARS units as reported by agency.reported by agency.

Validating the ModelValidating the Model Compare the modeled cost Compare the modeled cost

to the per unit costto the per unit cost Do they match or is there a Do they match or is there a

large gap between the large gap between the modeled rate and the per modeled rate and the per unit cost?unit cost?

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Per Unit CostPer Unit Cost How do you check your How do you check your

per unit cost?per unit cost? Use Schedule A to check Use Schedule A to check

to see what the total to see what the total expense was for a service expense was for a service center. center.

Use the number of units Use the number of units reported by the agency reported by the agency to the Division per to the Division per MMIS/STARS (Include MMIS/STARS (Include contract, non-contract, contract, non-contract, and Title XIX units).and Title XIX units).

Take the expenses Take the expenses divided by the number of divided by the number of units to get the per unit units to get the per unit cost.cost.

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Per Unit Cost Per Unit Cost VariationsVariations

There are variations on the per unit There are variations on the per unit costs.costs. Group, IOPGroup, IOP

Per Unit Cost range for FY04 from $13.78 to Per Unit Cost range for FY04 from $13.78 to $54.98$54.98

FY04 rate was $17.00FY04 rate was $17.00 Clinically Managed Low Clinically Managed Low Intensity ResidentialIntensity Residential

Per Unit Cost ranges for FY04 Per Unit Cost ranges for FY04 from $34.83 to $167.02from $34.83 to $167.02

FY04 rate was $32.00FY04 rate was $32.00

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Per Unit Cost: Standard Per Unit Cost: Standard DeviationDeviation

Page 46: 1 Cost Report By: Kristi Klein, Management Analyst & Sacha Wise, Provider Reimbursement & Grants Manager Department of Human Services Office of Budget.

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Per Unit Cost: Standard Per Unit Cost: Standard DeviationDeviation

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ReminderReminder Due to this training, we have extended Due to this training, we have extended

the FY05 Cost Report due date for ADA the FY05 Cost Report due date for ADA providers from November 1, 2005 to providers from November 1, 2005 to November 15, 2005.November 15, 2005.

Please understand that the cost reports Please understand that the cost reports need to be submitted in a timely manner in need to be submitted in a timely manner in order for us to ensure adequate time for order for us to ensure adequate time for analysis and preparation of information analysis and preparation of information prior to the Legislative session.prior to the Legislative session.

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Any Questions?Any Questions?

If you have any questions or If you have any questions or concerns, please feel free to concerns, please feel free to

contact us.contact us.