benefits of compliance
18 CAPTURE. COSTTREE 2016 Q3 ISSUE
Government Benefits
• Maximize reimbursement to the General Fund for services performed, so that taxpayer dollars are used for public service and not administration
• Understand the full cost of service to calculate accurate user fees—never concern yourself with wondering if you are under or over charging again
• Accurately demonstrate the level of administrative support to auditors and any interested parties
• Compliance with the Uniform Guidance avoids suspension or termination of federal funding
Nonprofit Benefits
• Uncovering the true cost of the administrative burden allows for resources (human and financial) to be better allocated for maximum community impact
• Leveraging the detailed findings to determine shortfalls in order to avoid subsidizing programs and to quickly determine if fundraising efforts need to be increased
• Once an administrative burden is clearly identified, grant funding can be approached from a position of power; it will be clear whether a grant should be applied for or not
In regard to cost allocation, there has been a reluctance to change, and many agencies’ cost allocation efforts are tied to (in some instances, decade) old Excel spreadsheets that are slightly modified each year so nothing is broken. Although cost allocation via Excel is problematic and error-prone, it is what many agencies are accustomed to and comfortable with.
Was that your eyes rolling back in your head at the mention of a cost allocation plan? Believe me, I get it, but times have changed, and so have the tools for preparing cost allocation plans.
Technology is continually taking the old way of doing things and creating more efficient ways to accomplish tasks. When did you last visit a Blockbuster store or reach for the yellow pages to find the phone number for a local pizza place?
Cost allocation plan preparation has also evolved, and now it is easier than ever to calculate and spread indirect costs, while adhering to the Uniform Guidance to achieve maximum benefit.
By understanding the true cost of your administrative burden and taking advantage of the Uniform Guidance, the benefits begin to present themselves.
There is no reason for not understanding an agency’s administrative burden.
Use the Uniform Guidance to your advantage and view your cost allocation plan
as a means to generate more for your community.
—Former U.S Deputy Attorney General Paul McNulty
“If you think compliance is expensive, try non-compliance.”