County presents cost allocation plan; auditors and departments to reconcile two‑year lag and carry‑forwards

San Benito County staff explained May 12 how the county prepares its cost allocation plan, why charges can shift between departments and the role of the two‑year lag in billing state and federal programs.

Assistant Auditor-Controller Lianne Govines told the board the cost allocation plan distributes allowable indirect costs from central service departments—buildings and grounds, county administration, auditor‑controller, county counsel, human resources, IT, risk management and depreciation—using allocation factors such as time studies, FTE counts, department expenditures, number of devices and square footage. She said the plan follows federal OMB uniform guidance (2 CFR Part 200) and is reviewed by the California State Controller’s Office.

Govines explained that the county prepares the plan using actuals from two fiscal years prior (for example, FY23–24 data is used to produce the FY25–26 plan). That lag produces a carry‑forward “true up” each plan year reflecting final actuals when two years of data are fixed. Govines said changes between the FY24–25 and FY25–26 cost plans were driven by factors including the October 2023 7% COLA, a $274,000 increase in risk management premiums and a $3,038,000 combined decrease in county counsel’s salaries and services; those shifts mean some departments’ shares rose while others fell.

She said the cost allocation plan allows benefiting departments to see their full operating cost picture and that state and federal programs billed for indirect costs reimburse the general fund for central services used by subvention projects. The board did not take action on the informational presentation but asked clarifying questions about methodology and the two‑year lag.