In situations where eligibility workers determine eligibility for multiple programs, all costs must be distributed to the appropriate programs and governing FFP rates (90/75/50) based on approved time study methodologies and/or cost allocation plans consistent with OMB Circular A-87 cost allocation principles. These costs must also clearly differentiate between resources needed for direct data and systems-related activities and resources needed for MMIS and eligibility determination systems versus program management and oversight activities, which are only eligible for 50 percent FFP. State agencies performing eligibility determination currently develop and maintain methodologies for allocating costs among different health and human services programs. CMS does not anticipate the additional reporting required to obtain 75 percent FFP will add a significant amount of time to that process. From 45 CFR section 95.507, Plan requirements, the cost allocation support should include the following:
- A description of the procedures used to identify, measure, and allocate all costs to each of the programs
- Conform to the accounting principles and standards prescribed in Office of Management and Budget Circular A-87, and other pertinent Department regulations and instructions;
- Contain sufficient information in such detail to make an informed judgment on the correctness and fairness of the state's procedures for identifying, measuring, and allocating the costs
- The cost allocation plan shall contain the following information:
- An organizational chart showing the placement of each unit whose costs are charged to the programs operated by the state agency
- A listing of all federal and all non-federal programs performed, administered, or serviced by these organizational units.
- A description of the activities performed by each organizational unit and, where not self-explanatory an explanation of the benefits provided to federal programs.
- The procedures used to identify, measure, and allocate all costs to each benefiting program and activity (including activities subject to different rates of FFP).
States should consult with their CMS cost allocation leads to determine whether any change to their approved cost allocation plan is needed and work with their counterparts at human services agencies as necessary. The methods of cost allocation should be documented in the state operations APD update submission to support the proposed budget.
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