Colorado WIC Program Policies and Procedures Section 5: NSA Expenditures Revised: 01.01.2023

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Fiscal Overview & Reporting Requirments

Policy: Local WIC Agencies shall submit monthly expenditure reimbursement requests and shall submit monthly or quarterly time studies regarding

Regulation: 7 CFR §246.1, 2 CFR Part 200, subpart A_f, 2 CFR Part 400 and 415, Office of Management and Budget Circular A-130, State Agency and FNS Guidelines and Instructions, USDA FNS Allowable Costs for Breastfeeding Peer Counseling Funds (January 2022).

Procedure/Additional Guidance: WIC is a federally funded program through the United States Department of Agriculture (USDA) Food and Nutrition Services (FNS) with strong financial accountability, and strict rules attached to the use of WIC funds. The Colorado WIC program receives three distinct kinds of funds, for food benefits, for Nutrition Services and Administration (NSA), and for Breastfeeding Peer Counseling (BFPC).

Food funds are spent by WIC participants at the grocery store or pharmacy. Food funds come from the federal WIC grant and rebates received on bid infant formula bought by WIC participants. Breast pumps for participants may also be purchased using food funds.

NSA funds are spent at the state and local level for staff, rent, educational materials, equipment, overhead, and all other costs involved in delivering WIC services to participants. In Colorado, WIC program service funds come entirely from the federal grant and some local agencies’ general fund contributions.

Breastfeeding Peer Counseling funds are spent at the state and local level to continue to build up and expand breastfeeding and peer counseling efforts. The use of these funds for activities that are outside of approved breastfeeding peer couseling implementation plans or that are not supported by the WIC Breastfeeding Model Components for Peer Counseling is not authorized.

Financial Management Standards All local agencies must have a financial management system in place which, at a minimum, ensures the following:  Accounting records are supported by source documents  Records show the source and application of funds and contain information pertaining to reimbursement from Federal funds, authorizations, obligations, unobligated balances, assets, liabilities, outlays and income  Accurate, current, and complete disclosure of the financial results of the Program, and effective control over, and accountability for all funds, property, WIC checks, and other Program assets to assure that they are safeguarded and used solely for authorized purposes  Comparison of actual outlays with budgeted amounts  A systematic method to assure timely and appropriate resolution of audit and/or monitoring findings and recommendations  Records detailing all procurements made with WIC funds that assure that such procurements meet Federal and State procurement standards  An accounting system that ensures that no other program costs are charged to WIC  Adequate internal controls to assure separation of duties

Allowable WIC Costs – General All local Colorado WIC Agencies operate under the auspices of the CDPHE WIC Program. Local agencies perform under the jurisdiction of a State of Colorado contract with the WIC Program.

Federal funds are available to local agencies through contracts/agreements to provide for the following:

 Cost of WIC food benefits  Certification of WIC participants  Nutrition education  Breastfeeding Promotion  Outreach  General program administration

Colorado WIC Program Policies and Procedures Section 5: NSA Expenditures Revised: 01.01.2023

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Prior to entering into a formal contract, the State WIC Office allocates funds to each local agency through a funding formula. A formal contract, specifying the maximum administrative budget and effective time periods for that budget, is signed by the local agency, the State WIC Office, and the CDPHE. The contract specifies that administrative costs are reimbursed upon the basis of the maximum allocated amount or actual documented expenditures, whichever is less, and that costs will be reimbursed up to the allowed maximum.

Expenses in excess of the maximum will not be reimbursed. WIC contracts cannot be amended retroactively (i.e., if you need additional funds for June and do not request those additional funds until July, WIC will not be able to amend your contract).

If you have any questions regarding maximums or unexpected problems staying within those maximums, please call the WIC Fiscal Unit Manager.

All local agencies are required to follow Federal Regulations (7CFR Part 246 and 7CFR 3016), the State WIC Program Manual, and applicable OMB rules and regulations -2 CFR Chapter I, and Chapter II, Parts 200, 215, 220, and 230 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards.

This provides guidelines for identifying allowable costs under grants to public entities and nonprofit organizations. It states that users should not construe the failure to mention a particular item of cost as an implication that such cost item is either allowable or unallowable. Users are instructed to determine the appropriate treatment of a cost item that is not expressly mentioned by relating it to the treatment of similar items that are mentioned. The general rule for determining the allowability of costs is the “reasonable and necessary” cost test.

Reasonable Costs:  Provide the Program a benefit generally commensurate with the costs incurred,  Are consistent with the costs of similar items from other vendors,  Are in proportion to other program costs for the function that the costs serve,  Are a priority expenditure relative to other demands on available administrative resources, and  Have a proven or intuitive positive impact.

Necessary Costs:  Are incurred to carry out essential program functions, and  Cannot be avoided without adversely impacting program operations.

The State WIC Program has final authority over what constitutes reasonable and necessary costs.

The following categories of cost are allowable under WIC regulations:  The amount of funding allocated for food costs is based on predicted caseload levels.  Operational and administrative costs allowable costs are outlined as follows:

Colorado WIC Program Policies and Procedures Section 5: NSA Expenditures Revised: 01.01.2023

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Direct Costs Salaries and Wages Compensation of employees for actual time and effort devoted specifically to the WIC program, including fringe benefits. Time and effort (T & E) certification must be available at the local agency. These T & E forms must include the employee's and supervisor's dated signatures and a certification statement. Supplies Costs of materials acquired, consumed, or expended specifically for WIC, i.e., food models and samples; medical supplies such as Band-Aids; office supplies such as paper, pens; nutrition education materials and printing costs (see Nutrition Education below). Nutrition Education Nutrition Education and Breastfeeding Promotion expenses, i.e., costs related to individual or group educational sessions with participants; provision of nutrition education and/or breastfeeding promotion materials such as pamphlets, training and evaluation of education, and mailing education materials. These costs must be clearly identified on the Contract Reimbursement Statement. Equipment Equipment: Office equipment such as chairs, desks, filing cabinets, non-expendable medical equipment; blood analysis equipment, measuring boards, and scales. Equipment purchases must have prior approval from the Fiscal Unit Manager. Equipment is defined as an article of non-expendable, tangible personal property having a useful life of more than one year and an acquisition cost which equals or exceeds the lesser of the capitalization level established by the governmental unit for financial statement purposes or $5,000.

All equipment purchased with WIC funds becomes the property of the WIC Program. Per 7 CFR 3016.32(d)(1), property records must be maintained by the local agency that include a description of the property, a serial number or other identification number, the source of the property, who holds the title, the acquisition date, cost of the property, percentage of Federal participation in the cost of the property, the location, use and condition of the property and ultimate disposition data including the date of disposal and sale price of the property. No WIC equipment may be disposed of without State and/or USDA approval. The local agency will return WIC equipment if so requested.

A physical inventory of the equipment must be taken and the results reconciled with the property records bi-annually. All ADP equipment must have prior approval from USDA through the Fiscal Unit Manager or it will not be reimbursed. When equipment is billed to the State WIC Program during the last month of the fiscal year, causing the local agency to exceed their contract maximum, it will be processed as follows:  When the equipment purchased was requested in the approved WIC budget, or approval has been received from the Fiscal Unit Manager, the amount of the equipment will be reimbursed (while other expenditures to the extent of the contract excess will not be reimbursed) and will become the property of WIC. When the equipment purchased was not requested in the approved WIC budget, or approval was not received from the Fiscal Unit Manager the amount of the equipment will be deducted (not allowed) from the reimbursable amount and the equipment will become the property of the local agency. Travel WIC personnel travel to and from clinic sites and travel necessary to fulfill WIC Program functions. All out-of-state travel, and travel other than within the agency service area or to State-sponsored WIC meetings must meet the generally accepted accounting criteria of “reasonable and necessary” and further the goals of the program. Mileage will be reimbursed at the local agency’s rate up to the maximum allowed by the IRS.

Colorado WIC Program Policies and Procedures Section 5: NSA Expenditures Revised: 01.01.2023

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Lab Fees Lab fees associated with certification. (Lab fees cannot be charged to participants, Medicaid or other third parties). Outreach Outreach costs, including advertising. Program Incentives Program incentive items. Reasonable and necessary costs that promote the specific Program purposes of outreach, nutrition education and/or breastfeeding promotion. Program incentive items are primarily intended for use by Program participants or potential participants. Occasionally, it may sometimes be appropriate to distribute Program incentive items to staff when those items present an outreach, nutrition education, or breastfeeding message. These items should be of nominal cost. Contact your nutrition consultant for more information. Physical Activity Elements of physical activity promotion as a part of nutrition education may be considered an allowable cost for the WIC Program. Examples of allowable costs include: educational materials that reinforce health benefits of physical activity, nutrition education classes that reinforce and contain physical activity messages, brief physical activity demonstrations, training for staff on the health benefits, promotion of physical activity, and how to promote behavior change in participants. (See Unallowable costs for examples of items that are not allowable.) Building Space & Related Facility Costs The rental cost of space in privately – or publicly-owned buildings used for the benefit of the Program is allowable subject to the following conditions:  The total cost of space may not exceed the rental cost of comparable space and facilities in a privately owned building in the same locality  The costs charged to WIC must be based on actual costs paid by the agency  WIC’s share of the rental costs must be based on WIC’s share of the total space based on square footage studies

When the building is owned by the county and/or agency and no rent is paid, a usage fee or depreciation cost may be charged. These charges must be in accordance with the appropriate OMB fiscal guidelines. Purchase, Repair or Renovation of Buildings The purchase, repair or renovations of real property are capital expenditures that require prior approval from the USDA Regional Office. Only in areas where other options are not available, will USDA approve capital expenditures for the purchase, repair or renovation of buildings. Any local agency requests for prior approval must be submitted to the State WIC Office for submission to the USDA. Upkeep of grounds, necessary maintenance, normal repairs and alterations, and the like are allowable to the extent that they: keep property in an efficient operating condition, do not add to the permanent value of property or appreciably prolong its intended life, and are not otherwise included in rental or other charges for space.

Local agencies shall ensure that no claim is submitted for reimbursement of services already funded by other state or federal programs, or for costs which are not allowable.

Indirect Costs  Indirect costs are those incurred for a common or joint purpose benefiting more than one cost objective and not readily assignable to the direct costs specified previously.  Shared expenditures such as postage, phone, and administrative overhead in terms of salaries of administrators, accountants, nurses.  Other shared expenditures such as building space, heating and lighting and printing or copying.  Documentation must be submitted on a yearly basis (or as the rate changes) to CDPHE for approval.  Costs included in the indirect cost pool cannot be charged as direct costs.

Questions concerning allowable costs should be directed to the State Fiscal Unit Manager. Effective January 1, 2015 changes in OMB circular guidance allows that agencies may submit indirect costs up to 10% per invoice without prior approval from CDPHE’s internal auditing department. No indirect rates exceeding 10% will be reimbursed without a CDPHE approved indirect rate. Rate changes occurring within a contract year must be reflected on contract reimbursement statements.

Colorado WIC Program Policies and Procedures Section 5: NSA Expenditures Revised: 01.01.2023

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Unallowable Costs Costs NOT Allowed Are Specified Below:  Food costs may not be used as a basis for determining indirect cost rates.  Bad debts any losses arising from uncollectible accounts and other claims and related costs.  Contingencies, contributions to a contingency reserve or any similar provision for unforeseen events.  Contributions and donations.  Entertainment, costs of amusements, social activities and incidental costs relating thereto, such as meals, beverages, lodgings, rentals, transportation and gratuities.  Fines and penalties costs resulting from violations of, or failure to comply with Federal, State and local laws and regulations.  Governor's expenses, salaries and expenses of the Office of the Governor or the chief executive of a political subdivision are considered a cost of general State or local government.  Interest and other financial costs, interest on borrowings (however represented), bond discounts, cost of financing and refinancing operations and legal and professional fees paid in connection therewith, are unallowable except when authorized by Federal legislation.  Legislative expenses, salaries and other expenses of the State Legislature or similar local governmental bodies such as county supervisors, city councils, school boards, etc., whether incurred for purposes of legislation or executive direction.  Under recovery of costs under grant agreements any excess of cost over the Federal contribution under one grant agreement is not allowable under other grant agreements.  Implementation and maintenance of Health Insurance Portability Accountability Act (HIPAA) and National Smallpox Vaccination Program (NSVP).  Biological Disaster Response Teams, unless all other sources of funds are exhausted.  Physical activity items such as, fitness center dues or memberships, exercise equipment, exercise classes, incentive items. Contact the State Office with any questions.

This list is not all-inclusive. Questions concerning the allow ability of costs should be referred to the State Fiscal Unit Manager prior to purchase and/or expenditure.

Local Agency Retention of Records Full and complete records concerning program operations shall be maintained. These records shall include, but are not limited to:  A copy of the contract with the State WIC Program.  Information on the service area and financial eligibility standards used.  Complete and accurate participant records documenting nutrition risk, certification information of applicants, foods prescribed, nutrition care, counseling, and referrals provided under the WIC Program.  Complete, accurate, documented, and current accounting of all funds received and expended pursuant to the contract.  Detailed inventory records including purchase date, acquisition cost, location, inventory number, and disposition information.  Complete and accurate retail records documenting training, monitoring, and problems of each retailer.  Racial/ethnic participation data.  Fair hearing information.  Participant abuse records.

All WIC Program records shall be retained for 3½ years following the end of the applicable Federal fiscal year. The USDA has reserved the right to require by written notice, retention of any records deemed by it to be necessary for resolution of an audit or any litigation. If any litigation, claim, or audit is started before the expiration of the 3½ year period, the records must be retained until all litigation, claims or audit findings involving the records have been resolved.Additionally, if the USDA deems any of the program information to be of historical interest, it may require the state or local agency to forward such records to the department whenever the state or local agency decides to dispose of them.

All WIC records shall be available during normal office hours for representatives of the Colorado Department of Public Health & Environment, The United States Department of Agriculture, The General Accounting Office of the United States, and State designated auditors to inspect, audit and copy, provided that medical case records of individual participants shall remain confidential.