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Office of Mental Health

New York State Consolidated Budget and Claiming Manual Subject: Appendix I Agency Administration Section: 33
For the Periods:
January 1, 2009 to December 31, 2009
July 1, 2009 to June 30, 2010
Issued: September 9, 2009

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Agency Administration Defined:

Agency administration costs include all the administrative costs that are not directly related to specific programs/sites but are attributable to the overall operation of the agency such as:

which may include but are not limited to the following:

Agency administration costs do not include fundraising costs and special events costs. Fundraising and special events costs are reported on Schedule 2 in column 7 under “Other Programs”.

Agency administration costs do not include program/site specific costs or program administration costs. Program/site costs are costs directly associated with the provision of services and are included on the appropriate line of expense on Schedules CFR-1 (lines 16 through 63), DMH-1 (lines 6 through 11) and DMH-2 (lines 5 through 10). Program administration costs are administrative costs which are directly attributable to a specific program/site (i. e., personal services and fringe benefits of Billing Personnel, Program Director, Program Coordinator, etc.) and are to be included on the appropriate line of expense on CFR-1 (lines 16 through 63), DMH-1 (lines 6 through 11) and DMH-2 (lines 5 through 10). The program administration level of administration may not be applicable to all service providers. However, all service providers must report agency administration.

County operated service providers should note that Local Governmental Unit (LGU) Administration costs are reported as a shared program using program code 0890 on the applicable Schedules CFR-1 through CFR-6 and DMH-1. (Refer to Appendix K.)

Service Providers should note that all attempts should be made to directly charge an expense to the appropriate cost center (agency administration or program/site and program administration). If you are unable to direct charge expenses to agency administration or program/site(s) and program administration, the following includes examples of recommended allocation methods:

Expense Item Recommended Allocation Method
Repairs and Maintenance Square Footage
Utilities Square Footage
Staff Travel Full-Time-Equivalents
Telephone Number of Lines
Building Depreciation Square Footage
Building Lease Costs Square Footage
Mortgage Interest Square Footage

Property Costs Relating to Agency Administrative Offices:

If agency administrative offices and program offices are located in the same building, property related costs must be allocated using square footage as the statistical basis. These costs include expenses such as utilities, repairs and maintenance, depreciation, leases or mortgage interest. Square footage cost allocations must be calculated using the following procedure (square footage should be the interior square footage):

  1. Determine the number of square feet which is used exclusively by agency administrative offices and each program or program/site, not shared in common.
  2. Determine the number of square feet which is shared in common, i. e., lobby, restrooms, conference areas, etc.
  3. Calculate an allocation ratio by dividing each exclusive square footage amount by the total amount less the commonly shared amount
  4. Multiply each respective cost by the allocation ratios to determine the allocated dollar amount.

Example: Program A and Agency Administrative Offices occupy the same building. Utility expenses of $5,000 must be allocated to Program A and to the Agency Administrative Offices as follows:

Step 1 - Exclusive square feet - Program A = 500 sq. ft.
Exclusive square feet - Agency Administrative Offices = 300 sq. ft.
Step 2 - Common Square feet - 1,000 sq. ft.
Total Square Feet - 1,800 sq. ft.
Step 3 - Program A = 500/(1,800-1,000) = .625
Agency Administrative Offices = 300/(1,800-1,000) = .375
Step 4 - Utility Expenses for this particular building total $5,000

Utility expenses allocated to Program A = $5,000 X .625 = $3,125
Utility expenses allocated to Agency Admin. Offices = $5,000 X .375 = $1,875

Property related expenses and revenues that do not pertain to your agency's DMH programs, SED programs and agency administration must be reported in the “Other Programs” column (column 7) of Schedule CFR-2.

Allocation of Total Agency Administration Costs to Program/sites:

To ensure equity of distribution and to provide uniformity in allocation of agency administration, OASAS, OMH, OMRDD, and SED require the ratio value (R/V) method of allocation to be used on the core CFR schedules (CFR-1 through CFR-6). The ratio value method uses operating costs as the basis for allocating agency administration expenses. Agency administration expenses must be allocated to programs operated by OASAS, OMH, OMRDD and SED as well as shared programs and "Other Programs" (includes fundraising, all programs funded by non-CFRS participating State agencies, etc.) based upon the ratio of agency administration costs to the service provider's total operating costs.

The calculation of operating costs and the allocation of agency administration to program/sites is determined on page 2 of Schedule CFR-3. The operating costs used to allocate agency administration operating costs are calculated first on an agency-wide basis and then within each state agency. Operating costs include personal services, leave accruals, fringe benefits and OTPS. Operating costs do not include equipment, property and raw materials.

The agency-wide operating costs (CFR-3, lines 43 through 49) do not include the expenses of programs 0190 and 0890. In determining the operating costs within a state agency, the expenses for certain additional programs are deducted from the agency-wide operating costs. The resulting adjusted operating cost totals are entered on CFR-3, lines 60 through 64. Operating expenses for the following programs are to be deducted from agency-wide operating costs (CFR-3, lines 43 through 49):

The following is an example of how to calculate operating costs, the ratio value factor and the amount of agency administration costs that should be allocated to programs using the ratio value method of allocation.

Provider XYZ reports the following program/site and program administration expenses:

Program OASAS OMH OMRDD SED Shared Other Total
From Schedule CFR-1 CFR-1 CFR-1 CFR-1 CFR-1 CFR-2  
Personal Services 154,000 230,500 840,000 450,000 155,000 60,000 $1,889,500
Vacation Accruals -7,700 11,500 4,200 22,500 7,600 3,000 $56,500
Fringe Benefits 38,500 57,700 210,000 112,500 38,700 15,000 $472,400
OTPS 71,000 185,000 425,000 225,000 63,000 35,000 $1,004,000
Equipment 3,200 2,500 7,200 5,900 2,900 1,500 $23,200
Property 23,000 18,000 55,000 30,000 27,000 5,800 $158,800
Total Before Administration Allocation 297,400 505,200 1,541,400 845,900 294,200 120,300 $3,604,400

Provider XYZ reports program/site and program administration expenses for the following OMH programs:

OMH Program 2100 2830 Total
From Schedule* CFR-1 CFR-1  
Personal Services 230,500 0 $230,500
Vacation Accruals 11,500 0 $11,500
Fringe Benefits 57,700 0 $57,700
OTPS 110,000 40,000 $185,000
Operating costs 409,700 40,000 $484,700

For this example, assume page 1 of Schedule CFR-3, Agency Administration, line 42 reflects net agency administration of $650,400. Net agency administration must be allocated to all programs using the ratio value method which is based on operating costs. Operating costs include personal services, vacation accruals, fringe benefits and OTPS (less sub-contract raw materials - CFR-1, line 29). Based on the information reported above, operating costs are calculated as follows:

Program OASAS OMH OMRDD SED Shared Other Total
From Schedule CFR-1 CFR-1 CFR-1 CFR -1 CFR-1 CFR-2  
Personal Services 154,000 230,500 840,000 450,000 155,000 60,000 $1,889,500
Vacation Accruals 7,700 11,500 4,200 22,500 7,600 3,000 $56,500
Fringe Benefits 38,500 57,700 210,000 112,500 38,700 15,000 $472,400
OTPS 71,000 185,000 425,000 225,000 63,000 35,000 $1,004,000
Operating costs 271,200 484,700 1,479,200 810,000 264,300 113,000 $3,422,400

*Abbreviated filers must obtain these amounts from their general ledger.

The Agency-wide Ratio Value Worksheet on the left hand side of page 2 of Schedule CFR-3 should reflect the information shown below. At the Agency-wide level, program expenses for programs coded 0190 and 0890 are excluded from the operating costs. The figure shown on line 44 below is calculated as follows: $484,700 (total operating costs for OMH programs) minus $35,000 (total operating costs for the program coded 0880) = $449,700.

Line No. State Agency Amount
Calculation of Operating Costs
43 OASAS Subtotal 271,200
44 OMH Subtotal 449,700
45 OMRDD Subtotal 1,479,200
46 SED Subtotal 810,000
47 Shared Programs Subtotal 264,300
48 Other Programs Subtotal 113,000
49 Total Agency Operating Costs 3,387,400
Calculation of Ratio Value Factor
50 Net Agency Administration (CFR-3, line 42) 650,400
51 Total Agency Operating Costs (CFR-3, line 49) 3,387,400
52 Ratio Value Factor (Line 50 divided by line 51) .192006
Allocation of Agency Administration Using Ratio Value
53 OASAS Allocation (line 43 x line 52) 52,072
54 OMH Allocation (line 44 x line 52) 86,345
55 OMRDD Allocation (line 45 x line 52) 284,015
56 SED Allocation (line 46 x line 52) 155,524
57 Shared Programs Allocation (line 47 x line 52) 50,747
58 Other Programs Allocation (line 48 x line 52) 21,697
59 Total Agency Administration (sum lines 53 – 58) 650,400

The Ratio Value Worksheet within State Agency on the right hand side of page 2 of Schedule CFR-3 should reflect the information shown below. To arrive at the adjusted totals, expenses for OMH programs coded 0860, 0870, 1690, 2820, 2830, and programs with an “A” program code index (startup) are deducted from CFR-3, line 44. Also, expenses for OMRDD programs coded 2091, 5091, and 7091 are deducted from CFR-3, line 45 and expenses for SED programs coded 9800-9810 are deducted from CFR-3, line 46. In this example, the only additional program that is exempt from the allocation of agency administration within state agency is the OMH is the program coded 2830. The figure shown on line 61 below is calculated as follows: $449,700 (total operating costs for OMH programs) minus $40,000 (total operating costs for the program coded 2830) = $409,700.

Line No. State Agency Operating Costs
Calculation of Adjusted Operating Costs
60 OASAS Adjusted Subtotal 271,200
61 OMH Adjusted Subtotal 409,700
62 OMRDD Adjusted Subtotal 1,479,200
63 SED Adjusted Subtotal 810,000
64 Shared Programs Adjusted Subtotal 264,300
Calculation of Adjusted Ratio Value Factor (transfer to the item description col. Of line CFR-1, line 65)
65 OASAS Allocation (line 53 divided by line 60) .192006
66 OMH Allocation (line 54 divided by line 61) .210752
67 OMRDD Allocation (line 55 divided by line 62) .192006
68 SED Allocation (line 56 divided by line 63) .192006
69 Shared Programs Allocation (line 57 divided by line 64) .192006

The Adjusted Ratio Value Factor calculated on lines 65 through 69 of CFR-3, is transferred to the item description column of CFR-1, line 65. Please note that the Adjusted Ratio Value Factor may be different for each of the state agencies, depending on whether or not the state agency has programs that are exempt from administration at the state agency level.

To allocate the agency administration expense to program/sites by State agency on CFR-1, line 65, multiply each program/site's total operating costs (reported on line 64 of Schedule CFR-1) by the Adjusted Ratio Value Factor. An amount for agency administration is not entered on CFR-1, line 65, for programs that are exempt from agency administration allocation.

In this example, the three program/sites funded by OMH would be allocated agency administration expenses as follows:

CFR-1 Line # 16 17 20 41 64 65
Expense Personal Services Vacation Accruals Fringe Benefits OTPS Total Operating costs Agency Administration Allocation (line 64 times .210752)
OMH 0880 Program $0 0 0 35,000 35,000 $0
OMH 2100 Program $230,500 11,500 57,700 110,000 409,700 $86,345
OMH 4810 Program $0 0 0 40,000 40,000 $0
Total OMH Programs $230,500 11,500 57,700 185,000 484,700 $86,345

Service providers should refer to Section 20 for more specific instructions for claiming agency administration costs.

Comments or questions about the information on this page can be directed to the Community Budget & Financial Management (CBFM) Group.