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Louisiana LIHEAP Service Delivery Guide 60 | P a g e
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October 13, 1987) regarding the Department’s position on administrative costs in a cash assistance program such as LIHEAP, including the following: ….While we are not including the list of specific functions in the final rule, nonetheless, we believe that the costs associated with those functions, i.e., taking applications, determining eligibility and benefit levels, and monitoring the assistance provided, are normally administrative in a predominantly cash assistance program, such as LIHEAP. Consequently, we will carefully assess any other categorization of these costs in our compliance reviews and in our reviews of audit findings. We will continue to examine grantee programs on a case-by-case basis, looking in particular to other State programs that provide analogous benefits to determine the appropriateness of the State's definition of administrative costs for LIHEAP. ...We agree that outreach activities are not intrinsically administrative...The term encompasses activities that are administrative and others that are not. 7.2 Cost Allocation Plan Subgrantees must develop a cost allocation plan to determine a consistent basis for charging indirect costs to LIHEAP. The cost allocation process should provide for a cost distribution method that links indirect costs to the direct services provided by the Subgrantee and then spread the cost of administration across all Subgrantee programs, and parishes if applicable, on a reasonable and consistent basis. The plan should be reviewed and approved by an auditor. 7.3 Direct and Indirect Costs LIHEAP expenditures are comprised of direct and indirect costs. LHC and Subgrantees should assess their expenditures and assure that the expenditures are incurred and claimed in accordance with applicable federal and state regulations. It is strongly recommended that the parties consult with their auditor on all matters related to financial management. Direct costs are those expenditures which are single program costs and benefit only LIHEAP. Direct costs may include, but are not limited to, salaries and fringe benefits of staff whose time can be clearly identified as working in LIHEAP (either full or part time).