AGENDA DATE: 11/17/2021
TITLE:
Title
The County’s Partner Entities and the Fiscal Year 2020 (FY 20) Cost Allocation Plan
BODY
SUBJECT/PROPOSAL/REQUEST: Update on the County’s partner entities and the FY 20 Cost Allocation Plan
ITEM TYPE: Regular Information Item
STAFF CONTACT(S): Richardson, Birch, Allshouse, Dau
PRESENTER (S): Lori Allshouse
LEGAL REVIEW: Not Required
REVIEWED BY: Jeffrey B. Richardson
BACKGROUND: Over the years, the County has effectively partnered with other jurisdictions to form authorities, commissions, regional partnerships, joint exercises of powers, and shared facilities. The County also has entered into agreements with numerous other entities to provide funding to support critical services to our community. The County’s Fiscal Year 2022 (FY 22) Budget provides $25.8 million to support 70 joint operations, organizations, agencies, and the courts that are not under the direct supervision of the Board of Supervisors. Collectively, these contributions consist of 8% of the General Fund budget. Additionally, the County provides administrative support to a number of these entities. This support ranges from fiscal agent services (such as accounts payable, payroll, and procurement) to services such as human resource administration, information technology support, legal support, and facility maintenance. The County currently collects fees for the County’s fiscal agent services from eight of these partner entities. In-kind assistance provided to other entities vary both in type of service provided and in the formality of the structure that governs the relationship.
In FY 21, the Department of Finance & Budget (DF&B) began a project to clarify all of these relationships, identify the true cost of providing these services, compare it to the contractual obligations, and develop a plan forward, where needed. To provide the County with a greater understanding of the cost to provide administrative support services to partner entities, this year, DF&B contracted with MAXIMUS Consulting, Inc., which prepares more cost allocation plans than any other firm in the nation. The company’s process utilized cost data and allocation statistics to allocate costs to departments, divisions, programs, and partner entities. Their cost allocation development system allocated costs in alignment with the County’s accounting code structure and in accordance with federal cost allocation principles. In addition to providing data about the County’s support for partner entities, the Plan provides administrative cost allocation information for all County departments.
MAXIMUS Consulting, Inc. completed the County’s FY 20 Cost Allocation Plan in October. The results demonstrate that in every case, the County’s cost to provide administrative services exceeds the amount recovered by the County in fees. The Cost Allocation Plan is envisioned to be used to guide the services provided by the County to outside entities, and the cost recovery of those services, going forward.
STRATEGIC PLAN: Mission - To enhance the well-being and quality of life for all community members through the provision of the of the highest level of public service consistent with the prudent use of public funds.
DISCUSSION: The results of the FY 20 Cost Allocation Plan provide beneficial data on the County’s internal services costs that will inform the FY 23 Budget development process.
The results will also increase the County’s understanding of departmental staff capacity, improve business processes, and inform future discussions with partner entities as the County considers the level of services that will be provided to them in-kind going forward, and/or whether there will be administrative fee adjustments to more fully recover the County’s costs.
On November 17, staff will provide the Board with a presentation on staff’s partner entity review, results of the FY 20 Cost Allocation Plan, and next steps.
BUDGET IMPACT: The FY 20 Cost Allocation Plan provides information about the County’s costs to provide administrative support for partner entities. This report provides important data for consideration in the FY 23 Budget Development process.
RECOMMENDATION:
Recommendation
Staff recommends that the Board receive results of the FY 20 Cost Allocation Plan, which will improve departmental business processes and help inform the development of the FY 23 Budget.
ATTACHMENTS:
A - FY 20 Cost Allocation Plan