Indirect Cost/Cost Allocation Plan
Fiscal Year 2021
July 1, 2021 – June 30, 2022
BRAG History and Purpose
The Bear River Association of Governments (BRAG) is a voluntary association of local governments in Box Elder, Cache, and Rich Counties. The association was formed in 1971 to address problems that extend beyond traditional jurisdictional boundaries and affect the entire tri-county region. BRAG was also designed to eliminate duplication of effort and to provide a stronger role for local government officials in planning, coordinating and administering state and federal programs at the local level.
As stated in the Articles of Association, the organization’s creation document, “The Bear River Association of Governments … shall be a voluntary organization of governments to facilitate inter-governmental cooperation and insure the orderly and harmonious coordination of federal, state, and local programs for the solution of mutual problems of the region.” The overall goal is “to serve as a multipurpose organization, utilizing our combined total resources, to provide a more effective means for planning and development of the physical, economic and human resources of the region.”
BRAG is not intended to become a new layer of government, but rather provide a shared professional staff to local elected officials enabling them to better meet the needs of their constituents. By working together, we can serve better!
BRAG’s total budget for FY 2022 is estimated to be about $11.3 million with about 82% of the funding being from federal sources either directly or through a department of Utah State government.
The following definitions have been used in the preparation of this Indirect Cost/Cost Allocation Plan:
Indirect Expense Definition:
Those expenses that benefit various programs that are not easily identifiable with those programs or the effort to do so is not cost effective.
Indirect Cost Rate:
It is the ratio between total indirect expense and a selected base. This rate is then applied to each program’s base to determine the program allocation.
Methods for distributing central management and various administrative costs among several programs or funding sources.
Cost Allocation for Accounting
BRAG has a centralized accounting system which serves all programs administered by BRAG. Total actual costs are prorated according to direct labor charges and average 10% of direct labor charges for each program. This amount covers the salary, fringe benefits and operation costs for the BRAG controller and the accounting assistant. Because actual costs of the centralized accounting system vary from month to month, the cost allocation rate also varies.
Salaries and Benefits
The salary, fringe benefits and operational costs for each staff member are allocated to the appropriate funding source based upon the time spent in each program activity. The time worked by funding source code is recorded by each staff member on their semi-monthly time sheet.
Some staff members spend all of their working hours in one or two program areas while several staff divide their time among three or more programs. Time sheets are reviewed and signed by the program director and/or executive director.
The centralized BRAG receptionist periodically conducts week-long surveys where all incoming telephone calls and people coming into the office are recorded by program area. Data generated by these surveys are used to allocate salary, fringe benefits and operational costs for that position during the fiscal year.
Travel related expenses are recorded by staff members at the end of each month on either the mileage expense claim form or the travel expense summary form. Travel expenses are charged to the program area or funding source for which the expense is incurred. Supervisory review and signature are required on each form prior to payment.
Regular monthly telephone bills are divided among program funding sources through the rent allocation process.
Postage utilized on BRAG’s single postage meter is coded to the applicable funding code.
Rent is charged to BRAG’s various funding sources based upon the square footage of each office used for the program at a rate of $1.85/sq ft. Costs are first allocated to each department, then proportionally to each fund based on hours worked for each funding source that allows it. If a funding source doesn’t allow indirect costs, those costs are prorated across the remaining funds charged. Executive office space is allocated equally among each department.
Office Supplies and Equipment
Costs for office supplies and equipment are charged to the program where they are to be used. If no program is identifiable the costs are allocated through the rent allocation process.
Costs for the annual external audit are charged to major programs based upon the dollar amount audited for each program.
Printing and Copying
Funding source codes are required to be entered before a document can be sent to the printer or before photocopies of documents can be made.
Bonding & Liability Insurance
Bonding and liability insurance costs are charged to major programs in proportion to the number of employees.
Following is a listing of all BRAG Sources of Funds and funding account codes for Fiscal Year 2022. After contracts from state, federal or other sources are finalized, agreed upon budgets are added to each account code. Limits placed on administrative costs by some funding sources are strictly adhered to.