Florida Regulations 15A-10.014: Cost Standards and Allocations
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(1) Reasonable Costs. A cost shall be deemed to be a reasonable expenditure for a DUI program if it does not exceed that which would be incurred by a prudent person under the circumstances prevailing at the time the decision was made to incur the cost. In determining the reasonableness of a given cost, consideration shall be given to:
(a) Whether the cost is of a type generally recognized as ordinary and necessary for the operation of an organization in the public sector which performs similar functions or which is staffed with similarly classified personnel.
(b) The restraints or requirements imposed by such factors as generally accepted sound business practices, arms length bargaining, and federal and state laws and regulations.
(c) Whether the individuals concerned acted with prudence in the circumstances, considering their responsibilities to the organization, its employees, its clients, and the public at large.
(2) Personnel Salaries and Benefits.
(a) The Board of Directors or advisory committee shall not receive direct compensation for their services on the board or as an employee or consultant for the corporation.
(b) Management – The total compensation of the executive director, president, or other senior managers which is charged to the DUI program shall be based on the number of clients served, staffing, size of budget relative to other organizations offering similar services, and other relevant factors. In addition, such factors as tenure with the organization may be considered.
(c) The total compensation of each employee which is charged to the DUI program, other than those identified in paragraph (2)(b) above, shall approximate that paid by other employers in the same general geographic area to positions requiring similar skills and experience.
(d) Contributions to retirement cannot exceed the percentage of gross compensation contributed by the employer of members of the Regular Class of the Florida Retirement System pursuant to Florida Statutes § 121.071
(e) Benefits such as club dues, tuition plans for employees’ children, and automobiles primarily for personal use are not allowable costs.
(3) Expenses.
(a) Contributions and donations to others are not allowable costs.
(b) Accelerated depreciation is not allowable.
(c) The costs of an individual’s dues, memberships, and subscriptions are not allowable unless the organization does not permit corporate memberships. Individual membership for the purpose of professional liability coverage is allowable.
(d) Expenditures for entertainment are not allowable.
(e) Discretionary bonuses shall not be paid from or charged to the DUI program either as direct or indirect costs. Discretionary or extraordinary bonuses are sums paid to employees in recognition of services performed during a given period when the payment is not made pursuant to any prior written agreement causing the employees to expect such payments regularly, or as part of amounts budgeted by the program for such purposes.
(f) Usage and occupancy fees charged to the DUI program by an affiliated organization or other program within the same organization are limited to the DUI programs share of the total operating cost plus depreciation.
(4) Cost Allocation.
The identification of direct and indirect costs and the allocation of indirect costs is required for multi-function organizations. Single function organizations will not be required to provide this degree of cost accounting.
(a) Direct costs are those costs which can be reasonably identified as benefiting a particular program, function, or cost center.
1. All costs should be charged directly to a program or function unless identified as an indirect cost as defined below.
2. Joint costs are costs incurred by the organization which benefits two or more programs or functions, and which can be readily allocated to the DUI program receiving such benefits, using an appropriate base. This would include such items as depreciation, rental costs, operation and maintenance of facilities, telephone expenses, and employees salaries. A step-down allocation methodology is preferred and any other method must be justified as being more equitable.
(b) Indirect costs are those that have been incurred for common or joint objectives and cannot be readily identified with a particular final cost objective.
1. Direct costs of minor amounts may be treated as indirect costs where it is not economically feasible to identify and allocate them as direct costs.
2. Indirect costs are those costs remaining after all direct costs have been determined and assigned directly to programs, functions, or cost centers, as appropriate.
3. Indirect costs shall be assigned to one or more indirect costs pools and allocated to programs or functions using a logical, supportable, and equitable distribution base. Different distribution bases may be used for different indirect cost pools.
(5) Cost Limitations. The amount of any cost charged to a DUI program, subject to the maximum cost limitations imposed by these rules, shall be limited to the proportion of benefit received by the program.
Rulemaking Authority 322.02, 322.292, 322.293 FS. Law Implemented 322.292, 322.293 FS. History-New 1-4-95, Amended 3-4-97.
Terms Used In Florida Regulations 15A-10.014
- Corporation: A legal entity owned by the holders of shares of stock that have been issued, and that can own, receive, and transfer property, and carry on business in its own name.
- Equitable: Pertaining to civil suits in "equity" rather than in "law." In English legal history, the courts of "law" could order the payment of damages and could afford no other remedy. See damages. A separate court of "equity" could order someone to do something or to cease to do something. See, e.g., injunction. In American jurisprudence, the federal courts have both legal and equitable power, but the distinction is still an important one. For example, a trial by jury is normally available in "law" cases but not in "equity" cases. Source: U.S. Courts
(b) The restraints or requirements imposed by such factors as generally accepted sound business practices, arms length bargaining, and federal and state laws and regulations.
(c) Whether the individuals concerned acted with prudence in the circumstances, considering their responsibilities to the organization, its employees, its clients, and the public at large.
(2) Personnel Salaries and Benefits.
(a) The Board of Directors or advisory committee shall not receive direct compensation for their services on the board or as an employee or consultant for the corporation.
(b) Management – The total compensation of the executive director, president, or other senior managers which is charged to the DUI program shall be based on the number of clients served, staffing, size of budget relative to other organizations offering similar services, and other relevant factors. In addition, such factors as tenure with the organization may be considered.
(c) The total compensation of each employee which is charged to the DUI program, other than those identified in paragraph (2)(b) above, shall approximate that paid by other employers in the same general geographic area to positions requiring similar skills and experience.
(d) Contributions to retirement cannot exceed the percentage of gross compensation contributed by the employer of members of the Regular Class of the Florida Retirement System pursuant to Florida Statutes § 121.071
(e) Benefits such as club dues, tuition plans for employees’ children, and automobiles primarily for personal use are not allowable costs.
(3) Expenses.
(a) Contributions and donations to others are not allowable costs.
(b) Accelerated depreciation is not allowable.
(c) The costs of an individual’s dues, memberships, and subscriptions are not allowable unless the organization does not permit corporate memberships. Individual membership for the purpose of professional liability coverage is allowable.
(d) Expenditures for entertainment are not allowable.
(e) Discretionary bonuses shall not be paid from or charged to the DUI program either as direct or indirect costs. Discretionary or extraordinary bonuses are sums paid to employees in recognition of services performed during a given period when the payment is not made pursuant to any prior written agreement causing the employees to expect such payments regularly, or as part of amounts budgeted by the program for such purposes.
(f) Usage and occupancy fees charged to the DUI program by an affiliated organization or other program within the same organization are limited to the DUI programs share of the total operating cost plus depreciation.
(4) Cost Allocation.
The identification of direct and indirect costs and the allocation of indirect costs is required for multi-function organizations. Single function organizations will not be required to provide this degree of cost accounting.
(a) Direct costs are those costs which can be reasonably identified as benefiting a particular program, function, or cost center.
1. All costs should be charged directly to a program or function unless identified as an indirect cost as defined below.
2. Joint costs are costs incurred by the organization which benefits two or more programs or functions, and which can be readily allocated to the DUI program receiving such benefits, using an appropriate base. This would include such items as depreciation, rental costs, operation and maintenance of facilities, telephone expenses, and employees salaries. A step-down allocation methodology is preferred and any other method must be justified as being more equitable.
(b) Indirect costs are those that have been incurred for common or joint objectives and cannot be readily identified with a particular final cost objective.
1. Direct costs of minor amounts may be treated as indirect costs where it is not economically feasible to identify and allocate them as direct costs.
2. Indirect costs are those costs remaining after all direct costs have been determined and assigned directly to programs, functions, or cost centers, as appropriate.
3. Indirect costs shall be assigned to one or more indirect costs pools and allocated to programs or functions using a logical, supportable, and equitable distribution base. Different distribution bases may be used for different indirect cost pools.
(5) Cost Limitations. The amount of any cost charged to a DUI program, subject to the maximum cost limitations imposed by these rules, shall be limited to the proportion of benefit received by the program.
Rulemaking Authority 322.02, 322.292, 322.293 FS. Law Implemented 322.292, 322.293 FS. History-New 1-4-95, Amended 3-4-97.