State of Connecticut

Attachment to MEMORANDUM NO. 2004-24

COST ALLOCATION AGREEMENT
STATE AND LOCAL GOVERNMENTS

STATE/LOCALITY:     DATE: May 12, 2004
State of Connecticut  FILING REF.: The preceding
Office of the Comptroller  Agreement was dated 6/18/03
55 Elm Street
Hartford, CT 06106

SECTION I: ALLOCATED COSTS


The central service costs listed in Exhibit A, attached, are approved on a FIXED basis and may be included as part of the costs of the State/local departments and agencies indicated during the fiscal year ended 06/30/04 for further allocation to Federal grants, contracts and other agreements performed at those departments and agencies.


SECTION II: BILLED COSTS


In addition to Section I, which provides for services furnished but not billed, the services listed below are furnished and billed to State/local departments and agencies.

Fringe Benefits (See Special Remarks)

  1. Workers' Compensation
  2. Telephone
  3. DAS/ISF - Central Printing and Electronic Publishing
  4. DAS/ISF - Fleet Operations
  5. DOIT/ISF - Data Processing
  6. Correctional Industries Revolving Fund
  7. Bank Charges

SECTION III: CONDITIONS


The amounts approved in Section I and the billings for the services listed in Section II are subject to the following conditions:

A. LIMITATIONS: (1) Charges resulting from this Agreement are subject to any statutory or administrative limitation and apply to a given grant, contract or other agreement only to the extent that funds are available. (2) Such charges represent costs incurred by the State/locality which are legal obligations of the State/locality and are allowable under OMB Circular A-87. (3) The same costs that are treated as indirect costs are not claimed as direct costs. (4) Similar types of costs are accorded consistent accounting treatment. (5) The information provided by the State/locality which was used to establish this Agreement is not later found to be materially incomplete or inaccurate. 

B. ACCOUNTING CHANGES: This Agreement is based on the accounting system purported by the State/locality to be in effect during the Agreement period. Changes to the method of accounting for costs which affect the amount of reimbursement resulting from the use of this Agreement require prior approval of the authorized representative of the Cognizant Agency. Such changes include, but are not limited to, changes in the charging of a particular type of cost from an allocated cost to a billed cost. Failure to obtain approval may result in cost disallowance.

C. FIXED AMOUNTS: If fixed amounts are approved in Section I of this Agreement, they are based on an estimate of the costs for the period covered by the Agreement. When the actual costs for this period are determined, adjustments will be made to the amounts of a future year to compensate for the difference between the costs used to establish the fixed amounts and actual costs.

D. BILLED COSTS: Charges for the services listed in Section II will be billed in accordance with rates established by the State/locality. These rates will be based on the estimated costs of providing the services. Adjustments for variances between billed costs and the actual allowable costs of providing the services, as defined by OMB Circular A-87, will be made in accordance with procedures agreed to between the State/locality and the Cognizant Agency.

E. USE BY OTHER FEDERAL AGENCIES: This Agreement was executed in accordance with the authority in OMB Circular A-87, and should be applied to grants, contracts and other agreements covered by that Circular, subject to any limitations in Paragraph A above. The State/locality may provide copies of the Agreement to other Federal Agencies to give them early notification of the Agreement.

F. SPECIAL REMARKS: 

TYPE FROM TO RATE** LOCATION APPLICABLE TO
Fixed 7/1/03 6/30/04 * All All Programs

* In lieu of an overall fringe benefit rate, individual rate components are negotiated as shown below. These rate components are used to compute composite rates which are applicable to specific employee groups.

Rate Components FYE 6/30/04
SERS Regular Employees 25.59%
SERS Hazardous Duty Employees 25.12%
Alternate Retirement Plan (ARP) 9.43%
Teachers Retirement 16.49%
Unemployment Compensation .15%
Group Life Insurance *** .18%
FICA - Social Security *** 5.69%
FICA - Medicare *** 1.39%
Medical Insurance *** 12.82%

**Base: Salaries and wages of covered employees (See comments below, Notes 1 & 2).

***Methodology Change (see comments below, Note 3). 

Treatment of Fringe Benefits: Fringe benefits applicable to direct salaries and wages are treated as direct costs. 

NOTE 1

Fringe Benefit Rate: Separate fringe benefit rates are determined for each salary and wage character/object code in the accounting system using a combination of the above fringe benefit rate components. These rates are maintained on file by the State of Connecticut.

NOTE 2

Treatment of Paid Absences: Vacation, holiday, sick leave pay and other absences are included in salaries and wages and are claimed on grants, contracts and other agreements as a part of the normal costs for salaries and wages. Separate claims for the costs of these paid absences are not made.

NOTE 3

The State of Connecticut proposed change in treatment of a select group of fringe benefit components (Medical Insurance, Group Life Insurance, FICA-Medicare and Social Security). The negotiated rates will be used for all payrolls paid between July 1, 2003 to October 31, 2003. Starting with the payroll paid on November 14, 2003, the actual cost for the Medical Insurance, Group Life Insurance, FICA-Medicare and Social Security components will be used along with the negotiated rates for Unemployment Compensation and the retirement plan.

BY THE STATE/LOCALITY: BY THE COGNIZANT AGENCY ON
BEHALF OF THE FEDERAL GOVERNMENT:
State of Connecticut Department of Health and Human Services
_______________________ _______________________________________
(State/Locality) (Agency)
Nancy Wyman Robert I. Aaronson
______________________ _______________________________________
(Name) (Name)
State Comptroller Director/Div. Of Cost Allocation
______________________ _______________________________________
(Title) (Title)
June 7, 2004 May 12, 2004
_______________________ _______________________________________
(Date) (Date)
HHS Representative: Wing Mak
Telephone: 212-264-0991

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