Section 6211.72. Administrative costs

(a) Administrative costs include costs incurred for a common or joint purpose and are associated with supportive activities that are necessary to maintain the direct effort involved in providing the program services.

(b) Administrative costs shall be apportioned as general administration or allocated to other cost centers.

(c) Allowable administrative costs include:

(1) Compensation of the facility’s administrator, controller, purchasing agent, personnel director, and other persons performing general supervision or management duties.

(2) Costs associated with the provision of supporting services such as bookkeeping, data processing, and auditing.

(3) Costs of space used for administrative purposes, including depreciation and interest or rental.

(4) Purchase of supplies and equipment used for administrative purposes.

(5) Operating costs associated with administrative purposes, such as travel and communications.

(d) Administrative costs include costs associated with the owners or operators of the facility in accordance with the following:

(1) The salary or compensation cost of owners, operators or persons other than facility employes may be included only if their time and involvement is documented, and they are required for the management of the facility.

(2) The allowable cost for a person performing necessary duties may not exceed the customary compensation and fringe benefits in accordance with the methodology established by the facility that an employe would normally receive while performing that work.

(e) The following requirements apply for general administrative costs:

(1) General administrative costs include costs that are incurred for a common or joint purpose but are not readily assignable to a specific cost center or program unit.

(2) General administrative costs must include compensation, fringe benefits, and payroll taxes for the facility’s administrator, controller, purchasing agent, personnel director; compensation for owners, officers, or persons other than facility employes; personnel services; procurement; accounting; auditing; office services and supplies; telephone and travel supporting administrative costs specified in subsection (a); licenses; association dues; legal costs, including attorney’s fees if the provider prevails; management fees; and advertising.

(3) Rental costs for all offices used for administrative purposes shall be included as general administrative costs. In programs of 15 beds or less, if an office is located within the program unit, these costs may be allocated to the specific program unit.

(4) General administrative costs are limited to 13% of the total MA eligible costs less general administrative costs and less depreciation and interest on capital indebtedness.

(f) The following requirements apply for other administrative costs:

(1) Costs associated with administrative purposes, not associated with those costs identified in subsection (e) that have a direct and demonstrable impact upon program services, are allocated to specific other cost centers.

(2) Other administrative costs must be specifically documented and supported.

(3) The 13% limitation on general administrative costs does not include these other administrative costs that are allocated to specific units.

Notation

Cross References

This section cited in 55 Pa. Code § 6211.47 (relating to operation of multiple program types).