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CHAPTER 4300. COUNTY MENTAL HEALTH AND MENTAL RETARDATION FISCAL MANUAL
GENERAL PROVISIONS Sec.
4300.1. Purpose.
4300.2. Applicability.
4300.3. Legal base.
4300.4. Definitions.
GENERAL REQUIREMENTS
4300.11. Waivers.
4300.12. Required licensure, certification or approval.
4300.13. Related parties.
DEPARTMENT GRANTS AND PAYMENTS
4300.21. Departmental powers.
4300.22. Departmental financial participation.
4300.23. Percentage of expenditures reimbursable.
4300.24. Provision of services.
4300.25. Direct provision of services.
4300.26. Unit of service funding
4300.27. Program-funding.
4300.28. Reimbursable costs.
COUNTY AND COUNTY JOINDER ALLOWABLE COST
STANDARDS
4300.41. Applicability.
4300.42. Personnel expenses.
4300.43. Compensation.
4300.44. Employe benefits.
4300.45. Staff development.
4300.46. Purchased personnel services.
4300.47. Advisory and incorporated boards.
4300.48. Occupancy.
4300.49. Supplies.
4300.50. Communications.
4300.51. Travel.
4300.52. Equipment and furnishings rental.
4300.53. Repairs and maintenance.
4300.54. Bonding.
4300.55. County indirect costs.
4300.56. Library expenses.
4300.57. Membership fees.
4300.58. Moving expenses.
4300.59. Recruitment.
4300.60. Interest expense.
4300.61. Auditing expense.
4300.62. Insurance.
4300.63. Commitment procedures.
4300.64. Real estate.
4300.65. Renovations, improvements, repairs and maintenance.
4300.66. Equipment and furnishings.
4300.67. Motor vehicles.
4300.68. Title to fixed assets.
4300.69. Ownership responsibilities.
CONTRACTED AGENCY ALLOWABLE COST STANDARDS
4300.81. Applicability.
4300.82. Personnel expenses.
4300.83. Compensation.
4300.84. Consultants and contracted personnel.
4300.85. Advisory and incorporated boards.
4300.86. Staff development.
4300.87. Occupancy.
4300.87a. Title to real estatestatement of policy.
4300.88. Supplies.
4300.89. Communications.
4300.90. Travel.
4300.91. Equipment and furnishings rental.
4300.92. Repairs and maintenance.
4300.93. Bonding.
4300.94. Agency indirect costs.
4300.95. Library expenses.
4300.96. Membership fees.
4300.97. Moving expenses.
4300.98. Recruitment.
4300.99. Interest expense.
4300.100. Auditing expense.
4300.101. Insurance.
4300.102. Fixed assets.
4300.103. Equipment and furnishings.
4300.104. Motor vehicles.
4300.105. Depreciation allowances.
4300.106. Title to fixed assets.
4300.107. Ownership responsibilities.
4300.108. Retained revenue.
UNIT OF SERVICE FUNDING
4300.111. Applicability.
4300.112. Department participation.
4300.113. Responsibility of the county.
4300.114. Agency schedule of charges.
4300.115. Department established fees.
4300.116. County negotiated fees.
4300.117. Computation of reimbursement.
4300.118. Special limitations on unit of service funding.
FISCAL MANAGEMENT OF THE COUNTY PROGRAM
4300.131. Responsibility for general fiscal management.
4300.132. Accountability for expenditures of mental health and mental retardation funds for clients.
4300.133. Financial reporting requirements.
4300.134. Apportionment of administrators office costs.
4300.135. Actual costs.
4300.136. Proportion of program costs.
4300.137. County joinder contracts.
4300.138. Purchase of service contracts.
4300.139. Contracting requirements.
4300.140. Conflict of interest.
4300.141. Nonprofit organizations.
4300.142. Profit organizations.
4300.143. Purchase of goods and services for profit and nonprofit organizations.
4300.144. Costs to related parties.
4300.145. Bidding and procurement.
4300.146. General accounting and reporting.
4300.147. Deficits.
4300.148. Uncollected revenue.
4300.149. Encumbrances.
4300.150. Advancements.
4300.151. Unexpended allocation.
4300.152. Invoicing.
4300.153. Fiscal year.
4300.154. Base allocation.
4300.155. Categorical funding.
4300.156. County matching funds.
4300.157. County coverage.
4300.158. Revenue.
4300.159. Restricted receipt account.
4300.160. County and county joinder audits.
4300.161. Contracted agency audits.Authority The provisions of this Chapter 4300 issued under section 201(2) of the Mental Health and Mental Retardation Act of 1966 (50 P. S. § 4201(2)), unless otherwise noted.
Source The provisions of this Chapter 4300 adopted January 2, 1987, effective July 1, 1987, 17 Pa.B. 35, unless otherwise noted.
Cross References This chapter cited in 55 Pa. Code § 4226.11 (relating to financial administration); 55 Pa. Code § 5221.31 (relating to responsibilities of providers); 55 Pa. Code § 5221.41 (relating to recordkeeping); 55 Pa. Code § 6000.783 (relating to condition of Department participation); and 55 Pa. Code § 6000.841 (relating to procedures for funding reserved hospital and leave days under 2176 waiver).
GENERAL PROVISIONS
§ 4300.1. Purpose.
This chapter specifies the fiscal requirements for county mental health and mental retardation programs.
§ 4300.2. Applicability.
This chapter applies to county mental health and mental retardation programs. County mental health and mental retardation programs shall use this chapter to reimburse providers of service.
§ 4300.3. Legal base.
The legal authority for this chapter is section 201(2) of the Mental Health and Mental Retardation Act of 1966 (50 P. S. § 4201(2)).
§ 4300.4. Definitions.
The following words and terms, when used in this chapter, have the following meanings, unless the context clearly indicates otherwise:
ActThe Mental Health and Mental Retardation Act of 1966 (50 P. S. § § 41014704).
CountyA county or a first class city.
County authorityThe county official responsible for certain functions related to the administration of the county program. The responsibility and authority may be established by statute or the delegation of duties by the county commissioners, county executive, county councils or the city councils of first class cities or two or more of these acting in concert.
County programA mental health and mental retardation program established by a county, or two or more counties acting in concert. The term includes a program which contains a variety of services and provides a continuum of care in the community for the mentally disabled.
DepartmentThe Department of Public Welfare of the Commonwealth.
Direct costsCosts that can be identified and immediately charged to a specific cost or service category.
ExpensingPayment for an item in full at the time of acquisition or within the fiscal period in which it was acquired.
FacilityAn establishment, hospital, clinic, institution, center, day care center or other organizational unit, or part thereof, which is devoted primarily to the diagnosis and treatment of mentally disabled persons.
Fixed assetsajor items, excluding real estate, which can be expected to have a useful life of more than 1 year, or which can be used repeatedly without materially changing or impairing their physical condition by normal repair, maintenance or replacement of components with a purchase price of $500 or more.
Indirect costsCosts incurred for a common or joint purpose and not readily assignable to a specific cost or service category.
JoinderTwo or more counties acting in concert to establish a county program.
Modified Classification Review (MCR)A personnel classification system whereby the county authority has the authority to crosswalk positions in contracted agencies into a structure of categorical position definitions developed by the Department.
Mortgaged real estateA conveyance of real property subject to certain financial conditions or obligations which are satisfied by payment according to stipulated terms. The conveyance of real property through bonded indebtedness shall be considered as mortgaged real estate.
New programA program initiated and approved by the Department that is not a mandated service identified in section 301 of the act (50 P. S. § 4301).
Personnel Action Plan (PAP)A personnel classification system whereby the county authority has the authority to crosswalk positions in contracted agencies into a structure of categorical positions developed by the county within a broad structure developed by the Department.
Prevailing county practice for agencies funded by multiple countiesPolicies agreed upon by the involved county programs, when two or more county programs fund an agency.
Prevailing county practice for joindersA policy agreed upon by the counties in the joinder.
Related partyA party who meets the tests of common ownership or control.
SecretaryThe Secretary of the Department.
GENERAL REQUIREMENTS
§ 4300.11. Waivers.
(a) The Secretary or a designee has the authority to waive this chapter. The Department may grant a waiver if the county program can demonstrate to the Department that a specific section of this chapter imposes an excessive financial burden on the county program, significantly interferes with the effective delivery of services or results in a situation where compliance is beyond the control of the county authority.
(b) Waiver requests shall be submitted in writing by the county to the Secretary or a designee. The request shall identify the specific section, subsection, paragraph or subparagraph to be waived, the period of time for which the waiver is requested, the justification for the waiver, and available documentation that may substantiate the need for the waiver.
(c) Waiver requests shall be submitted by the county and, if approved, waivers shall be granted to the county. Contract agencies may initiate the waiver process by submitting a request for review by the county and, with its endorsement, subsequent submission by the county to the Department.
Cross References This section cited in 55 Pa. Code § 4300.83 (relating to compensation); and 55 Pa. Code § 4300.87 (relating to occupancy).
§ 4300.12. Required licensure, certification or approval.
Facilities and agencies that are subject to licensing, certification or approval by a State or local authority shall be in compliance with applicable regulations in order for the Department to financially participate in their costs.
§ 4300.13. Related parties.
(a) The provider is associated with or affiliated with and has control of or is controlled by the organization furnishing the services, facilities or supplies. A related party is treated as if it were part of the provider for the determination and reimbursement of costs.
(b) Common ownership exists when an individual possesses significant ownership or equity in the provider and the institution or organization serving the provider. Control exists where an individual or an organization has the power, directly or indirectly, to significantly influence or direct the actions or policies of an organization or institution.
DEPARTMENT GRANTS AND PAYMENTS
§ 4300.21. Departmental powers.
The Department has the power to make grants, pay subsidies, purchase service and provide reimbursement for mental health and mental retardation services under the act.
§ 4300.22. Departmental financial participation.
A service shall qualify for Departmental financial participation if it is authorized by the act and is specifically provided for in this chapter or approved by the Department in advance of its incorporation in the county plan as training, research or another service or program designed to prevent mental disability or the necessity of admitting or committing the mentally disabled to a facility.
§ 4300.23. Percentage of expenditures reimbursable.
(a) Subject to the appropriation of funds and under the act and this chapter, the Department will participate at 100% of the approved expenditures for the following:
(1) Diagnosis, evaluation and care in Commonwealth-operated facilities, or in a facility with which the Commonwealth may contract.
(2) Payments for inpatient care and partial hospitalization for persons financially ineligible for care under public assistance law.
(3) Licensed community mental retardation residential programs for the mentally retarded.
(4) Other obligations that may arise under a new program established by the Department.
(b) The Department will participate at 90% of the approved expenditures for other services or activities qualifying for financial support under the county program. The remaining 10% is the county obligation or the local match of the county program.
Notes of Decision Funding
The Commonwealth is responsible for 100% of the treatment, care and costs of residents at State psychiatric facilities, and for 90% of the same at community-based mental health services. Frederick L. v. Department of Public Welfare, 157 F. Supp. 2d 509 (E.D. Pa. 2001).
§ 4300.24. Provision of services.
Services may be provided by the county or county joinder either directly or by purchase of service. Purchase of service may occur by unit of service funding, program funding or another funding method having the prior written approval of the Secretary.
§ 4300.25. Direct provision of services.
Direct provision of services is the provision of mental health and mental retardation services by county employes under the supervision of the county authority. Costs associated with the direct provision of services, subject to the limitations contained in this chapter, are eligible for Departmental participation.
§ 4300.26. Unit of service funding.
Unit of service funding is the procedure used to fund facilities based on a charge per unit of service. Unit of service funding applies to facilities which are administered separately from the county or county joinder and which receive reimbursement by a contracted per diem or fee rate. Funding is based on a charge per service.
(1) The following services shall be purchased only by the unit of service:
(i) Inpatient care.
(ii) Partial hospitalization.
(iii) Laboratory services.
(iv) Drugs.
(v) Respite care.
(vi) Interim care.
(vii) Services where the provision of the service is not limited to the mentally disabled, such as a workshop service or day care.
(2) An exception to paragraph (1) will be allowed when a regional mental health official authorizes, in writing, the initiation of a new partial hospitalization program and determines that it is necessary to expend funds to staff and equip the program prior to providing services to clients. The Department will then authorize program-funding of this particular partial hospitalization program for a period not to exceed 1 year from the initial date of funding.
(3) Domiciliary care placement agencies shall be funded only by unit of service funding after the initial year of operation. During the initial full year of operation, domiciliary care may be purchased by unit of service funding or program-funding.
(4) During the first year, the county or county joinder may program-fund a share of the cost of operating the domiciliary care placement agency. After the first year, these services shall be purchased on a unit of service basis. Payment may be made either by cash or inkind contribution.
§ 4300.27. Program-funding.
Program-funding is the procedure used to fund the total eligible expenditures for a publicly or privately administered and staffed facility as predetermined by the county authority. The funding may apply to the total agency operation or to a portion thereof.
§ 4300.28. Reimbursable costs.
(a) The Department will financially participate only in expenditures which are necessary and proper for the operation of the program and the provision of services. Expenditures shall be reasonable to the extent that they are of the same nature as expenditures which would be made by a cost-conscious and prudent buyer in the market place. The lowest possible rate shall be negotiated, consistent with good program quality.
(b) This chapter defines the maximum allowable expenditures for Departmental participation and may not be construed as mandated rates of expenditures. The Department will participate in actual expenditures not to exceed the allowable cost standards. Expenditures beyond these approved levels are the responsibility of the county authorities.
(c) The allowable cost standards in this chapter identify costs eligible for reimbursement. Costs which have not been included are considered ineligible for Departmental financial participation unless necessary to provide services to clients.
(d) The Department will not financially participate in county program costs associated with hiring attorneys, consultants or expert witnesses for the purpose of appealing Departmental decisions or policies arising from interpretations of this chapter, unless the county program wins the appeal.
COUNTY AND COUNTY JOINDER ALLOWABLE COST
STANDARDS
§ 4300.41. Applicability.
The allowable cost standards for claiming Departmental participation in county administration expenses and services provided directly by the county are specified in § § 4300.424300.69.
§ 4300.42. Personnel expenses.
The Department will participate in the cost of personnel, including salaries, benefits and other related expenses as defined in this chapter. The Department will only participate in the cost of personnel hired in under merit system procedures.
Cross References This section cited in 55 Pa. Code § 4300.41 (relating to applicability).
§ 4300.47. Advisory and incorporated boards.
(a) The Department will not participate in compensation for members of boards, other than reimbursement for actual expenses incurred in connection with meetings and authorized work of the board.
(b) Allowable expenses for board members include meals, lodging and transportation. The rates and requirements for Departmental participation in reimbursement for board members will be published annually as a Departmental bulletin.
(c) The Department will participate in the cost of providing liability insurance coverage for claims against board members resulting from their official duties.
Cross References This section cited in 55 Pa. Code § 4300.41 (relating to applicability); 55 Pa. Code § 4300.64 (relating to real estate); and 55 Pa. Code § 4300.87 (relating to occupancy).
§ 4300.49. Supplies.
The Department will participate in the cost of office and program supplies, including medical drugs, food and clothing, related to the delivery of a service or the administration of a program.
Cross References This section cited in 55 Pa. Code § 4300.41 (relating to applicability).
§ 4300.50. Communications.
The Department will participate in the costs of services and supplies for communications including, but not limited to, telephones, postage, stationery, public communications and printing.
Cross References This section cited in 55 Pa. Code § 4300.41 (relating to applicability); and 55 Pa. Code § 4300.59 (relating to recruitment).
§ 4300.52. Equipment and furnishings rental.
The Department will participate in the rental cost of equipment and furnishings when normal usage does not warrant its purchase or when renting is a cheaper option.
Cross References This section cited in 55 Pa. Code § 4300.41 (relating to applicability).
§ 4300.53. Repairs and maintenance.
The Department will participate in the cost of necessary repairs and maintenance.
Cross References This section cited in 55 Pa. Code § 4300.41 (relating to applicability).
§ 4300.54. Bonding.
The Department will participate in the cost of surety and fidelity bonds for staff and incorporated board members engaged in the financial affairs of the county.
Cross References This section cited in 55 Pa. Code § 4300.41 (relating to applicability); and 55 Pa. Code § 4300.62 (relating to insurance).
§ 4300.55. County indirect costs.
(a) The Department will participate in indirect costs for counties. These costs are for supportive activities which are necessary to maintain the direct effort involved in providing the services.
(b) The Department will participate in county indirect costs which are identified and claimed under the Departments published guidelines for cost allocation plans and indirect costs.
(c) Departmental participation in county indirect costs will not exceed 2.0% of the amount reimbursed by the Department for the county program. Counties/joinders requesting reimbursement of indirect costs which exceed 2.0% shall submit their cost allocation plan to the Department for review and approval prior to claiming these costs.
Cross References This section cited in 55 Pa. Code § 4300.41 (relating to applicability).
§ 4300.56. Library expenses.
The Department will participate in the purchase of books, documents and subscriptions to journals pertaining to mental health, mental retardation and other relevant topics.
Cross References This section cited in 55 Pa. Code § 4300.41 (relating to applicability).
§ 4300.57. Membership fees.
Costs of agency membership in organizations serving the county program are allowable for Departmental participation if the membership is in a nonprofit organization and the services provided are related to the county program. The Department will not participate in the cost of individual/personal membership or in memberships to an organization defined as a lobbying group under the Lobbying Registration and Regulation Act (46 P. S. § § 148.1148.9).
Cross References This section cited in 55 Pa. Code § 4300.41 (relating to applicability).
§ 4300.58. Moving expenses.
The Department will participate in the costs associated with the relocation of a facility. The Department will not participate in the payment of moving expenses for employes.
Cross References This section cited in 55 Pa. Code § 4300.41 (relating to applicability).
§ 4300.59. Recruitment.
(a) The Department will participate in the costs incurred in recruitment activities such as help wanted advertising or the use of employment agencies.
(b) The Department will participate in the travel expenses of job applicants if it is the prevailing county practice. Departmental participation will be at the prevailing county rate but will not exceed the allowable costs identified in § 4300.51 (relating to travel).
Cross References This section cited in 55 Pa. Code § 4300.41 (relating to applicability).
§ 4300.60. Interest expense.
Interest paid for funds borrowed from a lending institution is an allowable expense in the case where funds are borrowed to meet the actual cash flow requirements of ongoing programs, and it can be documented that the actual cash flow requirements are such that obligations could not be met without borrowing funds.
Cross References This section cited in 55 Pa. Code § 4300.41 (relating to applicability).
§ 4300.61. Auditing expense.
The Department will participate in the costs of independent audits.
Cross References This section cited in 55 Pa. Code § 4300.41 (relating to applicability).
§ 4300.64. Real estate.
The cost of land or buildings or the construction of buildings may not be expensed using Departmental funds. Mortgaged real estate which is owned by a county and used for the county program may be charged as an expense until it is debt free as outlined in § 4300.48(d)(f) (relating to occupancy).
Cross References This section cited in 55 Pa. Code § 4300.41 (relating to applicability); and 55 Pa. Code § 4300.48 (relating to occupancy).
§ 4300.66. Equipment and furnishings.
The Department will participate in the cost of equipment and furnishings through expensing or the amortization of loans for their purchase. Only items which are essential to the operation of the county program are allowable. The purchase of equipment and furnishings shall be in accordance with the bidding and procurement requirements as contained in § 4300.145 (relating to bidding and procurement). When approved government rates are used by the county for the purchase of equipment and furnishings, the county may purchase at those rates in lieu of the procedure in § 4300.145.
Cross References This section cited in 55 Pa. Code § 4300.41 (relating to applicability).
CONTRACTED AGENCY ALLOWABLE COST STANDARDS
§ 4300.81. Applicability.
The allowable cost standards for claiming Departmental participation in expenditures of contracted agencies are specified in § § 4300.824300.108. Sections 4300.824300.108 apply to services purchased on a unit of service and program-funded basis.
§ 4300.82. Personnel expenses.
The Department will participate in personnel costs for full-time, part-time, temporary employes and contracted personnel. This includes salaries, benefits, one-time payments under formally established and consistently applied agency policies and other related personnel expenses as defined in this chapter and included in the contract.
Cross References This section cited in 55 Pa. Code § 4300.81 (relating to applicability); 55 Pa. Code § 4300.111 (relating to applicability); 55 Pa. Code § 4300.114 (relating to agency schedule of charges); 55 Pa. Code § 4300.115 (relating to Department established fees); and 55 Pa. Code § 4300.116 (relating to county negotiated fees).
§ 4300.84. Consultants and contracted personnel.
The Department will participate in the cost of consultants and contracted personnel when justifiable for programmatic or administrative reasons. Consultants and personnel obtained through contracts are considered independent contractors engaged for specified services on a fee-for-service or contractual basis. A written agreement shall state the services to be provided, the rate of compensation and the method of payment. Consultant fees shall be determined in accordance with prevailing rates.
Cross References This section cited in 55 Pa. Code § 4300.81 (relating to applicability); 55 Pa. Code § 4300.111 (relating to applicability); 55 Pa. Code § 4300.114 (relating to agency schedule of charges); 55 Pa. Code § 4300.115 (relating to Department established fees); and 55 Pa. Code § 4300.116 (relating to county negotiated fees).
§ 4300.85. Advisory and incorporated boards.
(a) The Department will not participate in compensation for members of boards, other than reimbursement for actual expenses incurred in connection with meetings and authorized work of the board.
(b) Allowable expenses for board members include meals, lodging and transportation. The rates and requirements for Departmental participation in reimbursement for board member expenses will be published periodically.
(c) The Department will participate in the cost of providing liability insurance coverage for claims against board members resulting from their official duties.
Cross References This section cited in 55 Pa. Code § 4300.81 (relating to applicability); 55 Pa. Code § 4300.111 (relating to applicability); 55 Pa. Code § 4300.114 (relating to agency schedule of charges); 55 Pa. Code § 4300.115 (relating to Department established fees); and 55 Pa. Code § 4300.116 (relating to county negotiated fees).
§ 4300.86. Staff development.
(a) The Department will participate in the cost of training of staff to the extent that the training is essential for the continuation or improvement of the program.
(b) Training for staff shall be in or directly related to the fields of mental health and mental retardation, or the administration of these programs.
Cross References This section cited in 55 Pa. Code § 4300.81 (relating to applicability); 55 Pa. Code § 4300.111 (relating to applicability); 55 Pa. Code § 4300.114 (relating to agency schedule of charges); 55 Pa. Code § 4300.115 (relating to Department established fees); and 55 Pa. Code § 4300.116 (relating to county negotiated fees).
§ 4300.87a. Title to real estatestatement of policy.
Title to real estate, in which services are provided, whether under the waiver or nonwaiver program, must provide that title to real estate is to remain with the provider. The providers withdrawal or termination from the program is not to affect title.
Source The provisions of this § 4300.87a adopted June 29, 2007, effective July 1, 2007, 37 Pa.B. 2979.
§ 4300.88. Supplies.
The Department will participate in the cost of office and program supplies, including medical drugs, food and clothing, related to the delivery of a service or the administration of a program.
Cross References This section cited in 55 Pa. Code § 4300.81 (relating to applicability); 55 Pa. Code § 4300.111 (relating to applicability); 55 Pa. Code § 4300.114 (relating to agency schedule of charges); 55 Pa. Code § 4300.115 (relating to Department established fees); and 55 Pa. Code § 4300.116 (relating to county negotiated fees).
§ 4300.89. Communications.
The Department will participate in the costs of services and supplies for communications including, but not limited to, telephones, postage, stationery, public communications and printing.
Cross References This section cited in 55 Pa. Code § 4300.81 (relating to applicability); 55 Pa. Code § 4300.111 (relating to applicability); 55 Pa. Code § 4300.114 (relating to agency schedule of charges); 55 Pa. Code § 4300.115 (relating to Department established fees); and 55 Pa. Code § 4300.116 (relating to county negotiated fees).
§ 4300.90. Travel.
(a) The Department will participate in travel expenses for the purpose of conducting official business of programs operated under contract with the county. Allowable expenses include transportation, lodging and subsistence.
(b) Transportation costs on common carriers are allowable with the limitation that travel may not be authorized as first class unless accommodations are not available. Mileage reimbursement for use of personal vehicles and motor vehicle pools may not exceed the Internal Revenue Service allowance for business deductions for mileage.
(c) Department participation for lodging will be at the prevailing county rate.
(d) Department participation in subsistence will be at the prevailing county rate not to exceed the rates paid by the Commonwealth for its employes. The Commonwealth rate and limitations will be published periodically.
Cross References This section cited in 55 Pa. Code § 4300.81 (relating to applicability); 55 Pa. Code § 4300.98 (relating to recruitment); 55 Pa. Code § 4300.111 (relating to applicability); 55 Pa. Code § 4300.114 (relating to agency schedule of charges); 55 Pa. Code § 4300.115 (relating to Department established fees); and 55 Pa. Code § 4300.116 (relating to negotiated fees).
§ 4300.91. Equipment and furnishings rental.
The Department will participate in the rental cost of equipment and furnishings when normal usage does not warrant its purchase or when renting is a cheaper option.
Cross References This section cited in 55 Pa. Code § 4300.81 (relating to applicability); 55 Pa. Code § 4300.111 (relating to applicability); 55 Pa. Code § 4300.114 (relating to agency schedule of charges); 55 Pa. Code § 4300.115 (relating to Department established fees); and 55 Pa. Code § 4300.116 (relating to county negotiated fees).
§ 4300.92. Repairs and maintenance.
The Department will participate in the cost of necessary repairs and maintenance.
Cross References This section cited in 55 Pa. Code § 4300.81 (relating to applicability); 55 Pa. Code § 4300.111 (relating to applicability); 55 Pa. Code § 4300.114 (relating to agency schedule of charges); 55 Pa. Code § 4300.115 (relating to Department established fees); and 55 Pa. Code § 4300.116 (relating to county negotiated fees).
§ 4300.93. Bonding.
The Department will participate in the cost of surety and fidelity bonds for staff and incorporated board members engaged in the financial affairs of the agency.
Cross References This section cited in 55 Pa. Code § 4300.81 (relating to applicability); 55 Pa. Code § 4300.101 (relating to insurance); 55 Pa. Code § 4300.111 (relating to applicability); 55 Pa. Code § 4300.114 (relating to agency schedule of charges); 55 Pa. Code § 4300.115 (relating to Department established fees); and 55 Pa. Code § 4300.116 (relating to county negotiated fees).
§ 4300.94. Agency indirect costs.
(a) Indirect costs are costs for supportive activities which are necessary to maintain the direct effort involved in providing services. The Department will participate in indirect costs if the agency has a cost allocation plan and indirect costs are an approved component of the contract.
(b) There is no general rule for classifying costs as either direct or indirect. A cost may be direct with respect to a specific service or organization, but indirect with respect to another. Once classified, each item of cost shall be treated consistently either as a direct or indirect cost.
(c) The overall objective of the allocation process is to distribute the indirect costs of the agency to its various services or cost categories in reasonable proportion with the benefits provided to these services or cost categories.
(d) The cost allocation plan is the document for identifying, accumulating and distributing costs to consuming levels or cost categories within the agency and for identifying the allocation methods used. The agency shall maintain a complete file regarding the cost allocation plan and supporting documentation.
(e) The apportionment of indirect costs may be treated in two ways:
(1) Indirect costs may be specifically identified and apportioned into the direct cost of services provided. These costs become a direct cost when properly identified, documented and allocated.
(2) Indirect cost pools or centers may be established to accumulate expenditures. These costs may be distributed to service or cost categories based on a rate identified in the cost allocation plan. A line item may be identified for indirect costs for each service or cost category.
(f) Distributing indirect costs to the appropriate services requires the development of an allocation methodology. This methodology shall logically apportion these costs among services receiving a benefit. The methodology is at the discretion of the agency; however, it shall result in a fair and equitable distribution of costs, and shall be in direct relation to actual benefits accruing to the services to which costs are charged. The agency shall obtain an opinion from a public accounting firm on the equitableness of its cost allocation plan.
(g) To be allowable for Departmental participation, indirect costs shall meet the following criteria:
(1) Be necessary and reasonable for the proper and efficient operation and administration of the contract.
(2) Be authorized under statutes and regulations.
(3) Conform to limitations, exclusions or allowable cost standards for items of expenditure as included in this chapter if more than 50% of the agencys indirect costs are allocated to mental health or mental retardation programs, or both, funded by a county/joinder or a combination of Commonwealth counties/joinders.
(4) Be accorded consistent treatment as either a direct or indirect cost.
Cross References This section cited in 55 Pa. Code § 4300.81 (relating to applicability); 55 Pa. Code § 4300.111 (relating to applicability); 55 Pa. Code § 4300.114 (relating to agency schedule of charges); 55 Pa. Code § 4300.115 (relating to Department established fees); and 55 Pa. Code § 4300.116 (relating to county negotiated fees).
§ 4300.95. Library expenses.
The Department will participate in the purchase of books, documents and subscriptions to journals pertaining to mental health, mental retardation and other relevant topics.
Cross References This section cited in 55 Pa. Code § 4300.81 (relating to applicability); 55 Pa. Code § 4300.111 (relating to applicability); 55 Pa. Code § 4300.114 (relating to agency schedule of charges); 55 Pa. Code § 4300.115 (relating to Department established fees); and 55 Pa. Code § 4300.116 (relating to county negotiated fees).
§ 4300.96. Membership fees.
Costs of agency membership in organizations serving programs operated under contract with the county are allowable for Departmental participation if the membership is in a nonprofit organization and the services provided are related to the program operated under contract with the county. The Department will not participate in the cost of individual/personal membership or in memberships to any organization defined as a lobbying group under the Lobbying Registration and Regulation Act (46 P. S. § § 148.1148.9).
Cross References This section cited in 55 Pa. Code § 4300.81 (relating to applicability); 55 Pa. Code § 4300.111 (relating to applicability); 55 Pa. Code § 4300.114 (relating to agency schedule of charges); 55 Pa. Code § 4300.115 (relating to Department established fees); and 55 Pa. Code § 4300.116 (relating to county negotiated fees).
§ 4300.97. Moving expenses.
The Department will participate in the costs associated with the relocation of a facility. The Department will participate in the payment of moving expenses for employes only when used as part of a recruitment effort by the agency and when approved by the appropriate county authority. The maximum amount in which the Department will participate is $1,000 per employe being moved.
Cross References This section cited in 55 Pa. Code § 4300.81 (relating to applicability); 55 Pa. Code § 4300.111 (relating to applicability); 55 Pa. Code § 4300.114 (relating to agency schedule of charges); 55 Pa. Code § 4300.115 (relating to Department established fees); and 55 Pa. Code § 4300.116 (relating to county negotiated fees).
§ 4300.98. Recruitment.
(a) The Department will participate in the costs incurred in recruitment activities, such as help wanted advertising or the use of employment agencies.
(b) The Department will participate in the travel expenses of job applicants if it is the prevailing county practice. Departmental participation will be at the prevailing county rate but will not exceed the allowable costs identified in § 4300.90 (relating to travel).
Cross References This section cited in 55 Pa. Code § 4300.81 (relating to applicability); 55 Pa. Code § 4300.111 (relating to applicability); 55 Pa. Code § 4300.114 (relating to agency schedule of charges); 55 Pa. Code § 4300.115 (relating to Department established fees); and 55 Pa. Code § 4300.116 (relating to county negotiated fees).
§ 4300.99. Interest expense.
Interest paid for funds borrowed from a lending institution is an allowable expense in the case where funds are borrowed to meet the actual cash flow requirements of ongoing programs, and it can be documented that the actual cash flow requirements are such that obligations could not be met with the advance for the specific contract program. Where no advance is given, interest is reimbursable.
Cross References This section cited in 55 Pa. Code § 4300.81 (relating to applicability); 55 Pa. Code § 4300.111 (relating to applicability); 55 Pa. Code § 4300.114 (relating to agency schedule of charges); 55 Pa. Code § 4300.115 (relating to Department established fees); and 55 Pa. Code § 4300.116 (relating to county negotiated fees).
§ 4300.100. Auditing expense.
The Department will participate in the costs of annual independent audits.
Cross References This section cited in 55 Pa. Code § 4300.81 (relating to applicability); 55 Pa. Code § 4300.111 (relating to applicability); 55 Pa. Code § 4300.114 (relating to agency schedule of charges); 55 Pa. Code § 4300.115 (relating to Department established fees); and 55 Pa. Code § 4300.116 (relating to county negotiated fees).
§ 4300.101. Insurance.
(a) The Department will participate in the cost of life insurance, payable to the corporation, where the death of a principal or key person may threaten the continuation of the service.
(b) The Department will participate in the cost of insurance premiums to protect against casualty losses, theft losses and liability.
(c) The Department will participate in the cost of insurance to protect against casualty losses. Casualty losses are damage to or the destruction of property resulting from an identifiable event of a sudden, unexpected or unusual nature. Examples of the events include a storm, hurricane, tornado, flood, fire, earthquake and vandalism.
(d) The Department will participate in the cost of burglary insurance. Burglary insurance protects against losses from theft not involving employes. For thefts by employes or corporate officers, the Department will participate in the cost of fidelity bonds as identified in § 4300.93 (relating to bonding).
(e) The Department will participate in the cost of liability insurance to cover claims arising out of official duties and to protect items which are used in the performance of this duty.
Cross References This section cited in 55 Pa. Code § 4300.81 (relating to applicability); 55 Pa. Code § 4300.111 (relating to applicability); 55 Pa. Code § 4300.114 (relating to agency schedule of charges); 55 Pa. Code § 4300.115 (relating to Department established fees); and 55 Pa. Code § 4300.116 (relating to county negotiated fees).
§ 4300.102. Fixed assets.
The Department will participate in the costs of fixed assets as specified in § § 4300.1034300.107 (relating to equipment and furnishings; motor vehicles; depreciation allowances; title to fixed assets; and ownership responsibilities).
Cross References This section cited in 55 Pa. Code § 4300.81 (relating to applicability); 55 Pa. Code § 4300.111 (relating to applicability); 55 Pa. Code § 4300.114 (relating to agency schedule of charges); 55 Pa. Code § 4300.115 (relating to Department established fees); and 55 Pa. Code § 4300.116 (relating to county negotiated fees).
§ 4300.103. Equipment and furnishings.
The Department will participate in the cost of equipment and furnishings through depreciation, expensing or amortization of loans for their purchase. Only items which are essential to the operation of the programs operated under contract with the county are allowable. The purchase of equipment and furnishings shall be in accordance with the bidding and procurement requirements as contained in § 4300.145 (relating to bidding and procurement).
Cross References This section cited in 55 Pa. Code § 4300.81 (relating to applicability); 55 Pa. Code § 4300.102 (relating to fixed assets); 55 Pa. Code § 4300.111 (relating to applicability); 55 Pa. Code § 4300.114 (relating to agency schedule of charges); 55 Pa. Code § 4300.115 (relating to Department established fees); and 55 Pa. Code § 4300.116 (relating to county negotiated fees).
§ 4300.104. Motor vehicles.
(a) The Department will participate in the purchase or lease of motor vehicles and the operating costs of the vehicles. The Department encourages the utilization of general transportation resources.
(b) The following guidelines shall apply in the purchase or lease of vehicles:
(1) The purchase of motor vehicles shall be in accordance with the bidding and procurement requirements as contained in § 4300.145 (relating to bidding and procurement).
(2) The Department will participate in the cost of vehicles through depreciation, expensing or amortization of loans for their purchase.
(3) The personal use of motor vehicles by employes is prohibited unless a procedure for pay-back is established and the employe reimburses the program for the use of the vehicle.
(4) A daily log detailing the use of vehicles, as well as maintenance or service activities, shall be maintained.
(5) Cost differentials between leasing and purchase of vehicles shall be explored and the most feasible economic alternative selected. Documentation showing the options that were explored shall be maintained.
Cross References This section cited in 55 Pa. Code § 4300.81 (relating to applicability); 55 Pa. Code § 4300.102 (relating to fixed assets); 55 Pa. Code § 4300.111 (relating to applicability); 55 Pa. Code § 4300.114 (relating to agency schedule of charges); 55 Pa. Code § 4300.115 (relating to Department established fees); and 55 Pa. Code § 4300.116 (relating to county negotiated fees).
§ 4300.105. Depreciation allowances.
The Department will participate in a usage payment for fixed assets which were not expensed to the Department or paid for with Departmental funds. To claim a depreciation allowance, the following conditions shall be met:
(1) The straight-line method of depreciation shall be used. The amount of annual depreciation shall be determined by first reducing the cost of the asset by a salvage value and then dividing by the number of years of useful life of the asset. The useful life may be shorter than the physical life depending upon the usefulness of the particular asset to the provider. A useful life may not be less than the relevant useful life published by the Internal Revenue Service or the Uniform Chart of Accounts and Definitions for Hospitals published by the American Hospital Association for the particular asset on which the depreciation is claimed. Once the agency selects using the information published by the Internal Revenue Service or the Uniform Chart of Accounts and Definitions for Hospitals, it shall be consistently applied for assets.
(2) For the year of acquisition and the year of disposal, the number of months of depreciation may not exceed the number of months that the asset was in service.
(3) The method and procedure, including the assigned useful lives, for computing depreciation shall be applied from year-to-year on a consistent basis and may not be changed, even if the agency is purchased as an ongoing operation.
(4) Assets shall be recorded at cost. Donated assets shall be recorded at the current appraisal value. If an asset is acquired by a trade-in, the cost of the new asset is the sum of the book value of the old asset and cash or issuance of debt as consideration paid.
(5) Agencies that previously did not maintain fixed asset records and did not record depreciation in prior years may be reimbursed for straight-line depreciation of the remaining useful life of the asset. The depreciation shall be based on the cost of the asset at the time of original purchase. No depreciation may be taken on an asset that would have been fully depreciated if it had been properly recorded at the time of acquisition.
(6) Gains on the sale of assets are considered to be equal to the salvage value which shall be established prior to the sale of the item. Gains on the sale of assets shall offset the agencys total depreciation expense for the last 12 months prior to the date the asset was sold or retired from service. Losses incurred on the sale or disposal of assets may be reimbursed.
(7) The cost basis for depreciable assets is determined as follows:
(i) The cost basis for assets acquired as used shall be computed as follows:
(A) The lower of the purchase price or the fair market value shall be established at the time of sale based on the lowest of two or more bona fide appraisals at the time of sale.
(B) Depreciation that was taken or could have been taken by prior owners shall be subtracted.
(ii) The cost basis for assets of an agency transferred between related parties shall be the net book value of the seller at the date of transfer.
(iii) The cost basis for assets of an agency acquired through stock purchase will remain unchanged from the cost basis of the previous owner.
Cross References This section cited in 55 Pa. Code § 4300.81 (relating to applicability); 55 Pa. Code § 4300.102 (relating to fixed asset); 55 Pa. Code § 4300.106 (relating to title to fixed assets); 55 Pa. Code § 4300.111 (relating to applicability); 55 Pa. Code § 4300.114 (relating to agency schedule of charges); 55 Pa. Code § 4300.115 (relating to Department established fees); and 55 Pa. Code § 4300.116 (relating to county negotiated fees).
§ 4300.106. Title to fixed assets.
(a) Title to fixed assets which are depreciated under § 4300.105 (relating to depreciation allowances) shall remain with the contracted agency.
(b) Title to fixed assets which are expensed or loans amortized using county mental health and mental retardation funds shall remain with the county/joinder or the provider.
(c) If title remains with the county/joinder, contracted agencies may not sell, leave, donate or dispose of county fixed assets without written permission from the appropriate county authority. Upon termination or cancellation of the contract and within a fixed period determined in that contract, the county shall at its discretion:
(1) Retain possession for county use or permit the use of fixed assets by another provider of services.
(2) Dispose of fixed assets purchased with mental health and mental retardation funds upon obtaining an independent appraisal of the fixed assets.
(3) Allow the contracted agency to purchase the fixed assets upon obtaining an independent appraisal of the fixed assets.
(d) If title remains with the provider under subsection (b), the fixed asset shall be made available by the provider for use in the county program for its useful life. If the provider holds title to the asset, the provider may pledge the asset as collateral for loans necessary to the agency.
(e) Income received when disposing of fixed assets, or received by the county in refunds from agencies, shall be used to reduce gross eligible expenditures in determining the amount eligible for Departmental participation.
Cross References This section cited in 55 Pa. Code § 4300.81 (relating to applicability); 55 Pa. Code § 4300.102 (relating to fixed assets); 55 Pa. Code § 4300.111 (relating to applicability); 55 Pa. Code § 4300.114 (relating to agency schedule of charges); 55 Pa. Code § 4300.115 (relating to Department established fees); and 55 Pa. Code § 4300.116 (relating to county negotiated fees).
§ 4300.107. Ownership responsibilities.
In accordance with sound business practice, the person in possession of fixed assets shall do all of the following:
(1) Maintain a fixed assets ledger or equivalent document. A method for separately identifying the ownership of assets shall be maintained.
(2) Maintain and administer a program for the maintenance, protection, repair, preservation and insurance of fixed assets to assure their full availability and usefulness.
(3) Utilize reimbursement for loss, destruction or damage of fixed assets by using the proceeds to repair, renovate or replace the fixed assets involved; and crediting the proceeds as an income source to be applied against the cost of services rendered or forwarding the proceeds to the funding source.
(4) Perform an annual physical inventory at the end of the funding period/fiscal year by sighting and verifying the inventory listings. Discrepancies shall be documented and kept on file with the invoices, inventory reports and other papers which are subject to audits.
Cross References This section cited in 55 Pa. Code § 4300.81 (relating to applicability); 55 Pa. Code § 4300.102 (relating to fixed assets); 55 Pa. Code § 4300.111 (relating to applicability); 55 Pa. Code § 4300.114 (relating to agency schedule of charges); 55 Pa. Code § 4300.115 (relating to Department established fees); and 55 Pa. Code § 4300.116 (relating to county negotiated fees).
§ 4300.108. Retained revenue.
(a) The Department will participate in an allowance for service providers to retain revenues, accruing at the close of the contract period, in excess of eligible expenses realized under the contract.
(b) The Departments participation will be limited to an amount not to exceed 3.0% of the total gross revenues applicable to the contract.
(c) The Department will participate in an allowance for retained revenue only when the county explicitly approves retained revenue by including specific provisions in the contract. Retained revenue may be included in the contract budget, be allowed as an incentive for agencies to operate efficiently and pursue third-party revenues or allowed in combination as a budget item and efficiency incentive.
(d) The contract shall identify the accounting unit or entity for computing revenues in excess of eligible expenditures. It may be an organizational unit, service or activity. It shall include only those expenditures and revenues associated with providing services under the contract and to which the retained revenue allowance applies. The objective is to match revenues and expenses with the accounting entity and the provision of services.
Cross References This section cited in 55 Pa. Code § 4300.81 (relating to applicability); 55 Pa. Code § 4300.111 (relating to applicability); 55 Pa. Code § 4300.114 (relating to agency schedule of charges); 55 Pa. Code § 4300.115 (relating to Department established fees); 55 Pa. Code § 4300.116 (relating to county negotiated fees); and 55 Pa. Code § 4300.139 (relating to contracting requirements).
UNIT OF SERVICE FUNDING
§ 4300.111. Applicability.
Requirements for unit of service funding, in addition to the allowable cost standards included in § § 4300.824300.108, are specified in § § 4300.1124300.118.
§ 4300.112. Department participation.
The Department will participate in the cost of purchasing services on a fee per unit of service basis.
Cross References This section cited in 55 Pa. Code § 4300.111 (relating to applicability).
§ 4300.113. Responsibility of the county.
The county authorities shall be responsible for determining the best possible fee for the purchase of services. The availability of alternative methods for purchasing services may not be construed as mandating the payment of a fee which is higher than necessary and reasonable for the service. The county/joinder shall be responsible for the effective execution of each purchase of service agreement.
Cross References The provisions of this § 4300.115 amended September 30, 1988, effective October 1, 1988, 18 Pa.B. 4418. Immediately preceding text appears at serial page (114674).
Cross References This section cited in 55 Pa. Code § 4300.111 (relating to applicability).
§ 4300.117. Computation of reimbursement.
(a) The Department will participate in the cost of reimbursement to unit of service providers when computed according to the following procedure.
(b) The potential reimbursement by the county is computed as follows:
(1) Multiply each unit of service provided during a given month to a client by one of the following:
(i) The county program rate of reimbursement for that service if the providers client fee schedule rateas defined in §&