1. July 30, 20031 SWCAP Recoveries

2. July 30, 20032 SWCAP Recoveries Recoveries mean the recovery of indirect costs from the federal government. Indirect cost includes both the State departments indirect cost and the statewide indirect costs, SWCAP.

3. July 30, 20033 SWCAP Recoveries - continued Only the SWCAP is transferred to the General Fund. Process of transferring SWCAP to the General Fund is shown on the flow chart on the next slide.

4. July 30, 20034 SWCAP Recoveries - continued Bill federal fund for direct plus indirect costs Receipt in federal fund Transfer SWCAP to General Fund

5. July 30, 20035 SWCAP Recoveries - continued Federal government reimburses a State department for indirect costs, a portion of the recoveries is attributed to SWCAP. Portion representing SWCAP recoveries must be transferred to the General Fund.

6. July 30, 20036 SWCAP Recoveries - continued Government Code sections 13332.01 13332.02 Authority to recover SWCAP and transfer to the unappropriated surplus of the General Fund are specified in these sections.

7. July 30, 20037 SWCAP Recoveries - continued State Administrative Manual Section 8755.1 et. al specifies the State policy on SWCAP recoveries and transfers.

8. July 30, 20038 SWCAP Recoveries - continued SWCAP is recovered through an Indirect Cost Rate Proposal (ICRP) or a Cost Allocation Plan (CAP) from CALSTARS or non CALSTARS departments.

9. July 30, 20039 SWCAP Recoveries - continued State departments must recover full costs associated with its programs and/or activities. View the presentation, Full Cost Recovery for additional information.

10. July 30, 200310 SWCAP Recoveries - continued Many components are included in an indirect cost rate proposal (ICRP). Attend an ICRP training class for additional information. Following are some of the federal regulations and guidelines.

11. July 30, 200311 SWCAP Recoveries - continued Federal regulations provide guidance for ICRPs and recoveries of indirect costs: Federal Circular A-87 httpwww.whitehouse.gov/OMB/circulars/index.html httpwww.whitehouse.gov/OMB/circulars/index.html

12. July 30, 200312 SWCAP Recoveries - continued Cost Principles and Procedures for Establishing Cost Allocation Plans and Indirect Cost Rates for Agreements with the Federal Government (ASMB C-10). http://www.os.dhhs.gov/progorg/grantsnet/index.html

13. July 30, 200313 SWCAP Recoveries - continued State departments will document any non-recovery of SWCAP budgeted amounts and send documentation to the SWCAP analyst: Grant Application Legislation Other relevant information

14. July 30, 200314 SWCAP Recoveries - continued SWCAP recoveries must be transferred to the General Fund within 30 days after the end of each quarter. No automatic transfer by the SCO. Federally funded State departments initiate the transfer process via a transfer letter.

15. July 30, 200315 SWCAP Recoveries - continued State departments prepare a “Transfer Letter.” (See SAM Section 8755.2 for example.) State Controller’s Transaction Request, form CA 504. Include specific information in the “Transfer Letter.” See next slide.

16. July 30, 200316 SWCAP Recoveries - continued Specific information includes: SWCAP transfer amount. Time period the recovery spans. General Ledger account. Current fiscal year: Budgeted SWCAP recoveries. Total SWCAP recoveries transferred.... And...

17. July 30, 200317 SWCAP Recoveries - continued Prior fiscal year total SWCAP recoveries transferred. Person to contact for questions. Include: Name Telephone number E-mail Transfer letter signed by the chief of the accounting office.

18. July 30, 200318 SWCAP Recoveries - continued Send transfer letter and one copy to your Department of Finance (Finance) budget analyst. Finance budget analyst will review, contact you with any questions, sign both copies, forward the original to the State Controller’s Office, and send copy to the SWCAP analyst.

19. July 30, 200319 SWCAP Recoveries - continued State Controller’s Office (SCO) will transfer the funds. Finance SWCAP analyst will: Reconcile transfer letter with SCO records. Monitor recoveries. Contact State department on their recoveries or lack of recoveries.

20. July 30, 200320 SWCAP Recoveries - continued Yearly, Finance SWCAP analyst will contact State departments to review their SWCAP recoveries or lack of recoveries. Yearly, Bureau of State Audits will review State departments federal funds, budgeted SWCAP amount and recoveries, Finance recoveries reconciliations, and responses from State departments on recoveries or lack of recoveries.

21. July 30, 200321 Amount of SWCAP budgeted and recovered is shown at this link: Link to SWCAP Historical Data SWCAP Historical Data

22. July 30, 200322 We hoped this helped. Please view our other presentations.