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Office of Mental Health

New York State Consolidated Budget and Claiming Manual Subject: Appendix J Allocating Expenses for Shared Program/Site Section: 34
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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The following guidelines are to be used only after all attempts have been made to direct charge an expense.

These guidelines are for allocating program costs, exclusive of agency administration, when a program serves more than one State agency, or when more than one program shares the same item of expense. Examples are given utilizing shared staff, capital and general operating costs as the major categories of expense.

Shared Staff

Actual hours of service is the preferred statistical basis upon which to allocate salaries and fringe benefits for staff which are jointly shared between State agencies, or work at multiple program/sites. Providers must maintain appropriate documentation reflecting the hours used in this allocation. Acceptable documentation may include payroll records or time studies. SED providers should use the data compiled on Schedule SED-4 to report CFR-4 and CFR-4A information for direct care related service staff. (Refer to Appendix L to determine what constitutes an acceptable time study).

Example 1: Agency XYZ employs a direct care worker who works at two separate community residences. The standard work week for this person is forty (40) hours. Payroll records indicate 25 hours/week are spent at Site A and 15 hours/week at Site B. This person's salary and fringe benefits are allocated as follows:

Site A - $16,200 (annual salary and fringe) X (25/40) = $10,125
Site B - $16,200 (annual salary and fringe) X (15/40) = $ 6,075

Example 2: Agency XYZ operates a sheltered workshop program which is funded by more than one State agency. They employ a social worker within this program and cannot determine the direct hours of service provided by funding source. The provider can, however, determine the number of units of service provided during the cost report period by funding source. (OMRDD = 7,500 units, OMH = 5,000 units, Other = 2,500 units). This person's salary and fringe are allocated as follows:

OMRDD - $24,000 (annual salary and fringe) X 7,500/15,000 (units/total units) = $12,000

OMH - $24,000 (annual salary and fringe) X 5,000/15,000 (units/total units) = $ 8,000

Other - $24,000 (annual salary and fringe) X 2,500/15,000 (units/total units) = $ 4,000

Example 3: Agency XYZ employs a social worker who works at two clinic treatment programs. The social worker must maintain a time study to properly allocate time to the proper program (See Appendix L). His/her actual hours worked were not maintained.

Social Worker salary: $20,000

Per time study, the social worker spent 20% of his/her time at Site A and 80% at Site B.

Site A - $20,000 (annual salary and fringe) X 20% = $ 4,000
Site B - $20,000 (annual salary and fringe) X 80% = $16,000

Example 4: Agency XYZ has a clinic treatment program which is funded by Aid to Localities and Community Support Services (CSS). The staff members treat both CSS and Local Assistance clients. Only one general ledger account is maintained for the Clinic Program. Therefore, their salary cost will be allocated based on units of service.

Step 1 - Percentage Calculation Units of Service Percentage
Local Assistance 1,000 33. 3%
CSS 2,000 66. 7%
Total Clinic Treatment 3,000 100%
Step 2 - Cost Allocation CSS Local Assistance
Clinic Treatment Personal Service Cost $100,000 $100,000
Percentage 66. 7% 33. 3%
Clinic Treatment Personal Service Cost by Funding Source $66,700 $33,300

Capital and Related Costs

When programs share the same geographic location or more than one State agency is served at the same geographic location, property and 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 each program or State agency, i. e., 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 site amount less the commonly shared amount.
  4. Multiply each respective cost by the allocation ratios to determine the allocated dollar amount.

Example:

Step 1 Exclusive square feet
Exclusive square feet
-
-
Program A = 500 sq. ft.
Program B = 300 sq. ft.
Step 2 Common Square Feet
Total Site Square Feet
-
-
1,000 sq. ft.
1,800 sq. ft.
Step 3 Program A = 500/(1,800-1,000)
Program B = 300/(1,800-1,000)
=
=
.625
.375
Step 4 Program A Allocation = $5,000 X .625
Program B Allocation = $5,000 X .375
=
=
$3,125
$1,875

If all space is shared in common, then the allocation ratio should be calculated based upon the full units of service provided in each program or State agency to the total full units of service provided at the location.

Example: A workshop program serves both OMH and OMRDD participants. The space used is common to both State agencies. Therefore, the following allocation basis is utilized:

OMH Full Units of Service = 50 50/150 = .3333
OMRDD Full Units of Service = 100 100/150 = .6667
Total Full Units of Service = 150 150 = 1. 000
Rent Expense: $10,000
OMH = $10,000 X .3333 = $3,333
OMRDD = $10,000 X .6667 = $6,667

General Operating Expense

Expenses such as food, transportation, supplies and material, staff travel and training, etc. which cannot be directly charged to a specific program or State agency must be allocated across all such entities deriving benefits. If you are unable to direct charge expenses to agency administration or program/site(s), you may use the following recommended allocation methods for each specific OTPS item:

OTPS Item Recommended Allocation Method
Food Meals Served
Repairs and Maintenance Square Feet
Utilities Square Feet
Transportation Related Number of Trips or Mileage
Staff Travel Full-Time-Equivalents
Participant Incidentals Direct Charge Only
Expensed Equipment Units of Service if the item is shared by more than one State agency or program site.
Subcontract Raw Materials Direct Charge Only
Participant Wages Direct Charge Only
Staff Development Full-Time-Equivalents
Supplies and Materials Units of Service
Telephone Number of Lines
Insurance-General Ratio Value
Other Units of Service

If the recommended allocation method does not apply, the provider should determine a more reasonable method of allocation. Example: A service provider needs to allocate supplies and materials costs to several program/sites. The recommended allocation method noted above is units of service. However, all the program/sites do not report units of service. In this case, a more reasonable method of allocating supplies and materials would be to allocate the cost based on usage.

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