IHS Contract Support Costs Policy Updates
Explore the latest updates in the IHS Contract Support Costs (CSC) policy, focusing on simplification, streamlining processes, and ensuring fair practices for all tribes. Learn about changes in the calculation methods, guidelines for startup and pre-award costs, medical inflation rate adjustments, and key definitions related to CSC funding. Stay informed on the evolving policies impacting tribal self-governance and contract support costs.
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Contract Support Costs Tribal Self Governance Conference April 2019
IHS Business Principles & Goals Comply with requirement to pay full CSC need Improve communication and understanding Improve and simplify business practices o consistency and fairness for all Tribes Implement IHS CSC Policy 2
IHS CSC Policy o October 2016 - announce the updated CSC Policy o The Policy can be found in the Indian Health Manual online - https://www.ihs.gov/IHM/index.cfm?module=dsp_ih m_pc_p6c3#6-3.2E o Includes a new template to calculate CSC o December 2017 temporary suspension of part of the CSC Policy o April 2018 - Tribal Consultation on suspended portion of Policy o Final decision pending with IHS 3
IHS CSC Policy Changes/Updates Overall goal is to simplify and streamline the process Includes Guiding Principles Expanded on definitions to assure and support broad understanding and consistent application Startup and Pre-Award o Paid one time to support the assumption of new program, functions, services and activities o Within 90 days after the initial 12 month period of operation, the Awardee will certify that all funds were spent on the negotiated activities (certification only applies to startup costs) o Pre-award are paid for costs incurred prior to the assumption of PFSA s
IHS CSC Policy Changes/Updates Direct CSC o Medical Inflation Rate o Apply the inflation rate by the end of the first quarter (final percent issued in November) Indirect CSC o Determine if prior year funds were expended; verify that the total health care costs are at least equal to the amount IHS funded. If the expendituresdo not exceed the IHS funding provided, the CSC calculation is subject to calculations outlined in 6-3.2.E.1.a.i.b. o 90 day closeout after contract term available at option of theTribe if rate is current o Use of Rates Fixed w/ Carry Forward current or one year old rate Provisional final 2 year final rate Allowed for grace period for 2014 - 2017
Service Unit Shares 106(a)(1) funds (Secretarial Amount) What is CSC? 106(a)(2) Funds - (CSC)
Key Definitions Contract Support Costs o The full amount of CSC funding for new, expanded, and ongoing contracts or compacts, as determined under this chapter pursuant to 25 U.S.C. 5325(a). o An amount for the reasonable costs for activities which must be carried out to ensure compliance with the terms of the contract and prudent management but which: Normally are not carried out by the respective Secretary in his [her] direct operation of the program; or Are provided by the Secretary in support of the contracted program from resources other than those under contract. o CSC that are eligible include the costs of reimbursing tribal contractors for reasonable and allowable costs of Direct program expenses for the operation of the federal program that is the subject of the contract any additional administrative or other expense related to the overhead incurred by the tribal contractor in connection with the operation of the Federal program, function, service, or activity pursuant to the contract
Key Definitions Direct Contract Support Costs o Direct program expenses for the operation of the ISDEAA Programs that are the subject of the award, that otherwise meet the definition of CSC in 25 U.S.C. 5325(a)(2). o Pays for activities that are not funded in the Secretarial amount or contained in the IDC pool. o See Policy for examples Duplication o The Agency is required to account for activities that may have already been funded in the Secretarial amount with the original transfer of the program. Reasonable Costs o A cost is reasonable if, in its nature and amount, if it does not exceed that which would be incurred by a prudent person under the circumstances prevailing at the time the decision was made to incur the cost.
Key Definitions Allowable Costs o Necessary and reasonable for the performance of the Federal award; consistent with policies and procedures; accorded consistent treatment (a cost cannot be a direct cost if any costs incurred for the same purpose are treated as indirect costs to a different federal award); consistent with generally accepted accounting principles Indirect Cost Rate o Negotiated with the Cognizant Agency (IBC/DCA) o Identifies indirect cost need, not indirect contract support cost need Indirect Costs o Costs that have been incurred for common or joint purposes. These costs benefit more than one cost objective and cannot be readily identified with a particular final cost objective without effort disproportionate to the results achieved.
Key Definitions Indirect Contract Support Costs o Administrative or other expenses related to the overhead incurred by a contractor in connection with the operation of ISDEAA programs pursuant to the contract and that otherwise meet the definition of CSC in 25 U.S.C. 5325(a)(2)- (3). o Based on a Tribe s direct cost base times IDC rate, and accounts for reasonableness and duplication of activities that are included in the Tribe s106(a)(1) amount. Exclusion o Direct expenditures excluded from the direct costs in order to calculate the direct cost base to which the IDC rate is applied. These types of expenditures vary by awardee and are defined in the IDC rate agreement.
Key Definitions Passthrough Expenditure o Similar to exclusions in that pass-through expenditures may be excluded from the direct cost base to which the IDC rate is typically applied, though such expenditures also may be assigned a lower nominal IDC rate. The IDC rate(s) should be applied to such expenditures consistent with the IDC rate agreement. Indirect-Type Costs o Negotiated when a Tribe does not have an IDC rate agreement with their cognizant agency or requests such a negotiation, even if they have a negotiated rate. o IHS and the contractor/compactor will negotiate a lump-sum amount for indirect-type costs that consists of those categories of costs that normally are found in IDC pools of contractors with rates and that are consistent with the requirements of 25 U.S.C. 5325(a)(2)-(3).Categories of typical costs are outlined in the policy. Retained Service o Funding which is eligible to be contracted but for which the awardee has chosen not to contract, and thus, for which the IHS has retained associated funding.
Contract Support Costs (CSC) Negotiation Template (FY 20XX) C h e c k o n e b o x: E s timate o f C S C n e e d Final C S C R e conciliatio n C h e c k o n e b o x: F A A m e n d m e nt F A C u mu l at i v e F u n d i n g R e port ( C F R ) D at e C o m p l e te d: Tribe /Tribal O r g an i zat i o n ( T / T O ) : Nu mb er # # Example T/TO Subtotals T o t al s S o u r c e o f I n p u t s Recurring a nd Non-Recu r ri ng Eligible Funding for the T / T O 's P r ogr a ms, Functions, Services, or Activities ( P F S A ) at the Service Unit Level. Dependi ng on the structure of a n a wa r dee's indirect cost ( I D C ) rate, this m a y include buy- backs. $655,943.00 A P r o g r a m (Service Unit) F u n d i n g E x p e n d i tu r es fr o m carryover fu n d s (for w h i c h C S C w a s n o t fu n d e d previously), N e t of pass- th r o u g hs a n d exclusions Pursuant to Section 6-3.2.E.1.b.1.b.i. This is determi ned by whet her the parties included the funds in the C S C calculation in the year a wa r de d a nd not by h o w the T / T O allocates funding in its accounting records. $0.00 A . 1 Recurring a nd Non-Recu r ri ng Eligible Funding for the T / T O 's P F S A at the Ar ea L evel ( Ar ea Office Tribal Shares, or A O T S ) . $75,000.00 B Total A r e a Tribal S h a r e s Recurring a nd Non-Recu r ri ng Eligible Funding for the T / T O 's P F S A at the Headquarter s L evel (Headquarter s Tribal Shares, or H Q T S ) . $30,000.00 C Total H e a d q u a rte rs Tribal S h a r e s $760,943.00 Items A + B + C (T otal Recurring a nd Non-Recu r ri ng eligible funding a wa r de d under the Secretarial Amou nt D Total Secretarial A m o u n t I D C A s s o c i a te d W i t h Recurring Service U n i t S h a r e s $0.00 Negotiated a nd calculated pursuant to Section 6-3.2.E.3 either: (a) case-by- case analysis, or (b) 97-3 method. E.1 $21,000.00 Negotiated a nd calculated pursuant to Section 6-3.2.E.4, either: (a) case-by-ca se analysis, or (b) 80-20 method. E.2 I D C A s s o c i a te d W i t h Tribal S h a r e s Total I D C Identified A s A s s o c i a te d W i t h th e Secretarial A m o u n t $21,000.00 This represent s P F S A funded in the Secretarial a mou nt determi ned to be duplicative of T / T O I D C Pool. E.3 $739,943.00 I t em D - E . 3 F Direct Co s ts F u n d e d th r o u gh Secretarial A m o u n t $76,390.00 P er prior-year agreement . T o be provided by I H S w h e n final inflation rate for previous year becomes available (usually in N ovember ) . Final rate would be u sed to update this amount, a nd a wa r d T / T O inflation on D C S C at the end of I H S 's first quarter. S ee Section 6-3.2.D.3. G Prior Y e a r Direct C S C ( D CS C) N e e d 1 . 6 % H Inflation Factor $77,612.24 I.1 D 2 1 -2 2 will automatically incorporate either the prior-year D C S C need (reflected in D 2 1 ) or, if there is a current- year renegotiation, the renegotiated a mou nt (reflected in D22). $0.00 Cu r r e n t Y e a r D C S C N e e d I.2 $77,612.24 Summarizes the negotiation for Nonrecur ri ng P r e - A w a r d a nd Startup costs for n e w or expa nded P F S A s in the upcoming year. $450.00 I.3 Startup a n d P r e - A w a r d N e e d Items F + I , but s ubject to Section 6-3.2, Paragraph E.1.a, Es timate of Indirect C S C N e e d a n d F undi n g Prior to t he Contract Year a n d E.1.b, Determination of Final A m o u n t for Indirect C S C N e e d a n d F undi n g. $818,005.24 J Total Direct Co s ts $14,262.29 T he a mou nt of passthrou ghs a nd exclusions funded by I H S . K Less: P a s s th r o u g h s a n d Exclusions $803,742.95 I t em J - K Current I D C rate. If T / T O has multiple I D C rates, enter blended rate a nd submit detailed calculation of the blended rate. L Direct Co s t B a s e 1 5 . 0 0 % M M o s t current I D C rate I t em L * M Equals I t em E . 3 if the T / T O has higher than a 2 5 . 0 0 % I D C rate; if T / T O has a rate of 2 5 . 0 0 % or lower the credit in I t em O is ba sed on the total I D C need for Tribal Shares generated by the T / T O 's rate plus the I D C Associat ed with Recurring Service Unit Shares ( I t em E.1) (Direct C ost B a se x I D C R a t e) $ 1 2 0 , 5 6 1 . 4 4 N I D C N e e d (Non-Recurring) B a s e d o n I D C Rate Credit for I D C A s s o c i a te d w i th th e Secretarial A m o u n t $12,600.00 O I t em N - O (T otal I D C need less credit for I D C associated with the Secretarial a mou nt $ 1 0 7 , 9 6 1 . 4 4 P Cu r r e n t - Y e a r Indirect C S C N e e d A s negotiated, pursuant to Section 6-3.2E.2; see also Exhibit G, footnote 10. Enter $ 0 if the T / T O negotiates indirect C S C solely ba sed on its I D C rate. $ 0 . 0 0 Q I D C- T y p e Co s ts $ 1 8 6 , 0 2 3 . 6 8 Items I.2 + I.3 + P + Q (T otal need for D C S C , indirect C S C , a nd P r e - A w a r d a nd Startup) R Cu r r e n t - Y e a r Total C S C N e e d I t em I.2 $ 7 7 , 6 1 2 . 2 4 S Cu r r e n t - Y e a r D C S C N e e d T otal D C S C funding paid to the T / T O year-to-date. $ 0 . 0 0 T Total D C S C P a i d Year-to-Date $ 1 0 7 , 9 6 1 . 4 4 Items P + Q U Cu r r e n t - Y e a r Indirect C S C N e e d $ 1 0 0 , 0 0 0 . 0 0 T otal indirect C S C funding paid to the T / T O year-to-date. Total Indirect C S C P a i d Year-to-Date V I t em I.3 $ 4 5 0 . 0 0 W Cu r r e n t - Y e a r Startup a n d P r e - A w a r d N e e d Total Startup a n d P r e - A w a r d C S C P a i d Year-to- D a te $ 0 . 0 0 T otal Startup a nd P r e - A w a r d C S C funding paid to the T / T O year-to-date. X N o te R e g a r d i ng S u b - A w a r d s : T h e te m p l a te a w a r d s C S C o n th e direct cost b a s e incurred b y th e T/TO. C S C n e e d of th e T / T O A N D th e T / T O treats s u b - a w a r d s as a p a s s th r o u g h cost w h e n d e te r m i n i n g its direct cost base, th e total C S C n e g o ti a te d can b e a d ju s te d to incorporate eligible costs specifically identified for e a c h s u b - a w a r d e e ( w h i l e recognizing s u b - a w a r d e e p a s s th r o u g hs a n d exclusions a n d th e s u b - a w a r d e e ' s indirect cost rate). If th e T / T O h a s a n a g r e e m e n t( s ) w i th a s u b - a w a r d e e w h o s e costs are eligible to b e c o n s i d e red in th e 15 F o o tn o te : This T e m p l a te is a tool u s e d b y th e Indian H e a l th Service (IHS) for calculating a n d negotiating CS C. N e i th e r this T e m p l a te n o r a n y o th e r negotiation d o c u m e n ts creates a contractual obligation o n b e h a l f of either IHS o r a T/TO. T h e C S C a m o u n t that th e parties a g r e e is r e q u i re d u n d e r a n y Indian S e l f - D e te rm i na ti o n a n d Education Assistance Act ( I S D E A A ) a g r e e m e n t will b e identified in th e a g r e e m e n t itself.
Direct Contract Support Costs Negotiating DCSC - IHS CSC Policy o Manual Exhibit 6-3-G, Section C Steps: 1. The Tribe must submit a proposal The policy identifies what the proposal should typically include. The IHS verifies the amounts in the proposal Reasonableness Verify fringe rates that are identified May require requesting further documentation from Tribe 3. To compute the DCSC requirement, the awardee and the IHS must negotiate the total cost to the awardee of the activities to be supported with CSC. 4. The IHS reviews for duplication of costs, identify any activities that are already included in the Secretarial amount. 2.
Indirect-Type Costs Awardees without negotiated rates o Or Awardee has an outdated rate o The CSC policy also provides that Tribes can request such a negotiation even if they have a negotiated rate Annual lump sum amount Overhead or indirect-type costs Cannot be for activities funded in the Secretarial amount or costs funded through direct CSC.
CSC Reconciliation Data updates o Rate changes o Pass throughs and exclusions o Changes in base funding o Review for reasonableness and duplication Communication o Overpayments - Notice to Tribe o Share documentation used to calculate overpayment o Follow up with appropriate amendments or modifications Communication with Tribes o Use of CSC Negotiations template o Agreement on CSC need and payment
Use of Indirect Cost Rate o Commitment to comply with Tribal Rate o Rate Year o Pass throughs and exclusions o Changes in base funding o Review for reasonableness and duplication
CSC Fund Status FY 2014 - 2019 Fiscal Year FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 FY 2019 Appropriations $612,483,901 $662,970,000 $686,859,423 $714,596,372 $762,642,272 $822,227,000 Disbursed $611,282,992 $639,125,541 $675,328,915 $705,355,391 $754,253,926 $304,976,365 Balance $1,200,909 $23,844,459 $11,530,508 $9,240,981 $8,388,346 $517,250,635 Reconciliation remains open for all years
Questions? Contact Information: Roselyn Tso, Director Office of Direct Service and Contracting Tribes Phone: 301-443-1104 Cell: 971-506-1928 Email: Roselyn.Tso@IHS.gov
