The new reimbursable cost manual (“RCM”) for the 2016/2017 fiscal year has been issued. These are the regulations that you will be held to for fiscal 2017 when completing your 2017 CFR and what the OSC will use in conducting its audits of the 2017 fiscal year. The more significant changes to this version of the RCM are:
- The SEIT make-up provisions are outlined within the RCM, requiring SEIT make-ups when the SEIT teacher is absent and, when appropriate to the individual student’s needs, the student has an excused absence. The provider may, but is not required to, make up sessions for unexcused student absences.
- Allows for the reimbursement of uniforms for security (PTC 105) and housekeeping/ maintenance (PTC 102), subject to the non-direct care screen.
- Provides allowance for 100 level staff and office workers (code 505 and 605) to work more than 1 FTE, similar to direct care workers. All other non-direct care workers are still limited to 1 FTE.
- Provides that merit awards (bonuses) can factor in an employee’s longevity and attendance as part of the merit as long as they are measured and supported by written employee performance evaluations.
- Allows providers to pay sign-on bonuses subject to the following provisions:
- Can only be paid to direct care workers
- Must be paid within first year of employment
- May not exceed 10% of individuals compensation
- Terms must be articulated in a written agreement
- Can only be for positions where the organization has difficulty recruiting staff (supported by high turnover and/or staff vacancies)
- Allows providers to pay retention bonuses subject to the following provisions:
- Can only be paid to direct care workers
- Must be reflected in a written agreement, including the requirement for receiving such bonus, amount and timing of payment, and forfeiture upon termination
- Cannot be paid during first year of employment
- Cannot exceed 5% of compensation
- Only can be paid to employees, not contractors
- Follows bonus rules in that it must be paid within 2.5 months after year-end.
- Allows for reimbursement of educational assistance costs, including student loans, as compensation as long as such costs were incurred taking a course or pursuing a degree relevant to the field in which the employee is working and the employer has exhausted all Federal and other grant options available to cover such education costs. In addition, the employee must receive a passing grade, and other parameters exist.
- Discretionary pension contributions are limited to 25% of an individual employee’s compensation
- Legal and other professional fees incurred with respect to any actions or proceedings brought to challenge audit results or any act, omission, or determination by a funding body, are not allowable (e.g. if you sue regarding OSC audit findings)
- Requires providers to shop their debt to ensure most competitive interest rates, every 5 years
- Provides for a graduated disallowance of working capital interest for late filers of CFR’s, if filed within 90 days. If the filing is more than 90 days late, working capital interest is non-allowable.
- Prohibits the ability for providers to loan tuition revenues received from State or local governments or school districts for education of students pursuant to Article 81 and/or Article 89 of Education Law.
- Outlines new documentation requirements for documentation of consulting fees (such as accounting and legal fees) and also vehicle charges.
If you need any clarification about any of these changes, please don’t hesitate to reach out to us.
If you would like to learn more about this topic, please contact:
This article was also featured in our newsletter Special Ed-ition Vol. 15
Kenneth R. Cerini, CPA, CFP, FABFA
Managing Partner
Ken is the Managing Partner of Cerini & Associates, LLP and is the executive responsible for the administration of our not-for-profit and educational provider practice groups. In addition to his extensive audit experience, Ken has been directly involved in providing consulting services for nonprofits and educational facilities of all sizes throughout New York State in such areas as cost reporting, financial analysis, Medicaid compliance, government audit representation, rate maximization, board training, budgeting and forecasting, and more.