It is the responsibility of each county (or contract provider) to secure and maintain the adequate housing to efficiently meet particular needs of its Department of Social Services (or other provider agency) in the administration of the social services programs. Toward that end, costs incurred in providing such space will generally be allowable and eligible for state and federal financial participation.
Claims may be made for cost incurred in:
l. Paying rent and attendant service and maintenance costs in privately owned buildings
2. Providing service and maintenance for buildings owned by the county (or provider agency).
3. Making repairs or alterations to buildings owned by the county (or provider agency)
4. Providing adequate and necessary parking areas for facilities owned by the county (or provider agency)
5. Upfit and/or renovations for buildings acquired by the county via lease/purchase agreements. No costs for uplift and or renovations may be claimed for leased space unless ownership passes to the county at the end of the lease term.
Such reporting must be for actual costs incurred in providing a benefit to the social services programs, and must be reasonable and necessary for proper and efficient administration of those programs. In addition, such reporting must be net of all applicable credits, and may not be included as a cost of other federally funded programs in either the current or a prior period.
The Division of Social Services does not currently engage in the approval of cost-of-space agreements, nor does it require claimants to secure three letters of comparable rent. Nevertheless, counties are reminded of the federal requirement that the total cost of space, whether in a privately or publicly owned building, may not exceed the rental cost of comparable space and facilities in a privately owned building in the same locality. Effective July 1, 1984 the State's method of implementing this requirement is as follows: (a) for publicly owned buildings, reimbursement is limited to no more than the actual cost; (b) for rented or leased space, either competitive procurement is required or justification for a sole source is required.
l. Rent and/or Service and Maintenance in Leased/Rented Buildings (from private owners or other public agencies)
A copy of the signed lease agreement executed in accordance with N.C. General Statute l59 must be kept on file. Unless specifically authorized to do so by the County Board of Commissioners, DSS directors may not sign leases for facilities.
Costs are allowable if documented and if the following procurement procedures are followed:
If the expenditure of funds during the lease period (or for one year, whichever is longer) exceeds $90,000, formal bidding procedures must be followed (advertising, receiving of sealed bids, etc.). A new lease or a renewal would both require formal bidding if the lease/rental cost exceeds $90,000.
If the amount of the rental/lease is from $30,000 to $90,000, an informal bidding process is required (quotations from vendors on price and availability may be solicited by phone, letter or similar methods).
2. Service and Maintenance Costs in County Owned Buildings (or Provider Agency Owned Buildings)
Financial participation is available for service and maintenance costs that are necessary to maintain space suitable for continuous occupancy by the local department. Examples might include the costs associated with utilities, insurance, security, janitorial service, elevator service, painting, decorating, and up keeping of grounds, normal maintenance repairs, and depreciation. A county may claim FFP for DSS occupied space only; no claim may be made for the cost of idle, excess, or unoccupied space, except with prior written approval of the grantor federal agency. In addition, actual expenditures for interest incurred for the financing of buildings is allowable for buildings newly occupied on or after October l, l980.
Reporting for service and maintenance may be on the basis of actual current expenditures, or they may be on the basis of a "fixed" amount which is derived from the actual certified (audited) expenditures of the previous fiscal year.
When reportings are based on the fixed amount method, the necessity of adjusting reportings to actual cost is avoided because the county is, in effect, reporting actual costs one year in arrears.
Financial participation is available in the cost of maintenance, repairs, and alterations of space occupied by county departments of social services and provider agencies. Such costs must be necessary for the maintenance of proper facilities used for the administration of the social services programs. Routine maintenance repairs may be reported in full at the time expenditures are made, but major renovations and/or alterations must be reported on the basis of depreciation or use allowance.
The following principles will govern financial participation in the costs of maintenance repairs and alterations:
a. Expenditures should be necessary and beneficial to the successful operation of the county or provider agency program.
b. Where space is shared with other agencies, the cost of repairs or alterations benefiting all agencies must be allocated on the basis of a reasonable pro rata share; that is, on the basis of the amount of space occupied by the county or provider agency in relation to the total building space. Where repairs and alterations benefit only one agency, these costs (whether direct expense or depreciation) will be charged to that agency. The county DSS should retain documentation to support their method of prorating shared building expenses.
c. The county DSS must retain documentation of depreciation schedules, which must be based on the straight line method. The county must retain documentation of the original cost of the building and the cost of any renovations to the building.
2. Distinction Between Maintenance Repairs and Major Renovations/Alterations
The distinction between maintenance repairs and (major) renovations and alterations usually depends on whether the expenditure is for routine "up-keep" of the building or for extensive repairs or alterations involving substantial structural changes or replacements.
a. Maintenance Repairs
Repairs of this type are generally minor in nature and do not involve structural changes or alterations in buildings. Examples of minor maintenance repairs include patching of a roof, painting and decorating, repairing plaster, repairing doors and locks, minor or routine repairs to elevators, plumbing, or electrical equipment, and repair of equipment parts. Maintenance repair items should not be capitalized and depreciated. These items should be reported as expenses for the month in which they are paid.
These repairs usually involve substantial alterations and/or structural changes in buildings. Examples of major renovations and alterations include the following: replacement of a whole roof, construction of fixed or permanent partitions, the cost and installation of heating, plumbing, air conditioning, and electrical systems. All items classified as major renovations or alterations should be capitalized and depreciated over the anticipated life of the item or the remaining life of the building.
NOTE: No costs for major renovations and alterations may be claimed for leased space. The space must be owned by the county or must have been acquired through a lease purchase agreement with ownership passing to the county at the end of the lease term.
l. The costs of providing parking facilities necessary for the efficient administration of the social services program will be subject to Federal financial participation.
2. The provision of parking facilities for the use of the staff of a county department of social services, and for persons who may need to visit the offices on official business, is an important means of facilitating the administration of the public assistance programs. Since home investigations of applicants and recipients of public assistance are generally necessary in the determination of eligibility, it is usual that such investigations are made by field workers using a car. In view of the location of many county social services departments (in business districts where streets in the vicinity of the offices are congested) and of the widespread practice of metering street space in urban localities, it becomes increasingly important for field workers as well as other agency staff to have ready access to convenient parking space. For the same reasons, some provision for off-street parking is frequently necessary for the public that may need to visit the social services office on official business.
3. Financial participation is available in the cost of providing parking facilities under the policies applicable to all other joint administrative costs. Participation in such expenses would include the costs of providing parking facilities which are of benefit to both the staff of the social services and contract provider agencies, and to persons who may need to visit the office of the social services department on official business. Parking facilities (for the purpose of financial participation) include the rental, construction, or purchase of garages and parking lots, excluding the cost of land. For purchase and construction of a parking facility, the amount claimed must be limited to annual depreciation or use allowance that is calculated using an actual cost basis. However, if expenditures for parking facilities are incurred in connection with the purchase or construction of office space, they will be considered as costs of occupancy of the building for purposes of Federal financial participation under the principles governing the costs of office space.
4. If garage or parking lot space is to be used jointly by one or more other agencies, the cost must be allocated on the basis of the extent of use by each agency or the proportion of the total space allotted for use by the department of social services.
Fees for street parking or fees paid for individual parking space are not considered administrative expense and therefore are not covered for participation.
The occupancy of a building under a rental-purchase or a lease with option to purchase agreement is allowable only with prior approval of the federal grantor agency. The county would need to submit their plan to the Division for review and forwarding to the federal office for approval. No financial participation is available for these agreements prior to the receipt of written approval from the federal grantor.
Also under rental-purchase or a lease with option to purchase agreement, reimbursement is limited to the amount allowable if the building had been purchased outright.
For questions or clarification on any of the policy contained in these manuals, please contact your local county office.