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Consultant outlines county indirect cost allocation; consultant says plan could return roughly $190,000 to county
Summary
Jeff Loran of Cost Advisory Services described an indirect cost allocation plan that identifies about $579,000 in general‑fund costs allocable to local HHS functions and estimated the federal financial participation would return about $190,000 to the county; consultant fee is $8,220.
Jeff Loran presented the county’s indirect cost allocation plan and explained how the plan captures general‑fund administrative costs and allocates them across departments.
Loran said the plan identifies roughly $579,000 in general‑fund indirect costs in fiscal 2024 that were expended on behalf of local health and human services operations. Using an estimated federal financial participation (FFP) rate of about 33 percent, Loran said that would translate to roughly $190,000 flowing back to the county through the state’s reimbursement process. Loran explained the FFP rate fluctuates quarterly and has been lower than in prior decades; he said recent quarters had been near 35 percent.
Loran described common cost pools the plan uses: building and equipment depreciation, audit fees, HR and IT costs, payroll and accounting functions in the auditor’s office, and insurance expenses not directly charged to departments. He gave a concrete example for an enterprise fund: the Hill at Hitchcock ski area had about $146,630 of indirect costs allocated to it in FY 2024, reflecting insurance and auditor payroll/accounting support borne by the county.
Loran said his firm’s fee for the county’s cost plan this year was $8,220; he estimated the county’s reimbursement for indirect costs was far larger than that fee. He described the usual timing: costs from a fiscal year are used to compute reimbursements two years later, with reconciliations and carry‑forwards.
Why it matters: an updated indirect cost plan lets the county reclaim federal share of locally borne administrative costs for state‑administered programs and can materially affect county revenues and budgeting.
Provenance: the presentation and Q&A are in the meeting transcript under the cost recovery services agenda item.
