PAULA MCELWEE: So we've talked about your indirect and your direct costs.

And now we need to talk about how you reconcile that.

That is slide 85 where we start talking about reconciling all the figures you just came up with.

How do you reconcile that back to either your last audited financial statement or back to your 990 that was submitted to the IRS on your costs?

I've had people call me in a panic on this one, John, but those aren't the same numbers.

That's right, because they're not the same year.

Almost always, your reconciliation is to some past number, and your Indirect Cost Rate Proposal is for the future, based on the current.

So different time periods, operational here, which is why you need the reconciliation.

You can't match the numbers.

You're not going to match the numbers.

But what you are going to do is say, well, we have additional income now in this amount of additional income that we expect to receive during this, you know, 16, 17 year, and we have these expenses that are new, and we've lost this funding and you're going to make the numbers make sense from your old either audited or 990 figure and your reconciled figure based on your current planning.

Does that kind of make sense?

So it is going to be different years.

That's what we're reconciling.

That's what you're explaining, which is why you're asking for a different number than what your past numbers are.

And you almost always would be asking for a different number, but if the number is the same, that's fine.

You can just say it's the same.

But you should be reconciling those two sets of numbers so you can see what changed from then until now.

Did I say that right?

JOHN HEVERON: Yep.

PAULA MCELWEE: All right.

That's what we're talking about on that slide 85.

JOHN HEVERON: That's good to point out.

You may not have any differences, you may not have any reconciling items, because keep in mind, the numbers being different doesn't mean that the percentage or the process is different.

So really, there should almost be a bias towards using exactly the numbers, as long as the general administrative were properly calculated.

The last few things from this prior session are just examples, most of you have already done this, so I just want you to be aware of the fact that the wording, language is here for you.

The first is a lobbying cost certificate.

You can follow that language exactly.

So certificate of indirect fixed and administrative costs and you can use the exact wording.

Again, it is technically accurate.

It's from HHS website and from the guidance, from the appendix to Uniform Guidance, so it is right up to date.

And that continues on slide 88.

And the only final thoughts on this is, we want to remind you, that the template, probably an Excel template that you use to do that original calculation with the break down of the payroll and then the list of direct and indirect costs, those things, you're going to have to use every year.

You're not going to have to do the reconciliation every year.

That was just once.

You're not going to have to do the explanation of how you allocate costs, that was only once.

You just need to go back and say, here's the final numbers.

Same formula, new final numbers, and then this is what we expect our rate to be based on for the coming year.

And they will approve it after some period of time.

It really depends on who is looking at your indirect costs.

It can happen very quickly and it can take months and months.

We have one client who has a very big complex set of financial statements, and he'll go more than a year.

He will go into a second year with a provisional rate and it won't be approved.

Not a problem.

They still continue to pay based on the provision.

Some resources for this.

Paula, you wanted to comment on resources here?

PAULA MCELWEE: I guess you know, we're one of your resources, and each of you are doing this enough differently that sometimes it's going to work best if we see a copy of what you're doing and work with you individually on it.

So some of you who talked to us during the break had a very specific set of questions that might not be the same as whatever the activities are that other centers are doing.

So please don't hesitate to contact me.

If you haven't picked up a card from me yet, I have some up here.

I tried to get around to the tables but I know I missed some.

Trying to do that during breaks.

Do consider sending that draft of your proposal to us, I'll look it over, give you commentary and if I am stuck, I'll give it to John.

He'll given you some commentary.

It may take time to get that done.

Because this methodology is static, once you've done it, you're stuck kind of thing.

You want to make sure it's as good as it can be.

If you've already turned it in and you are waiting for approval, we don't know if there are going to be options for you to make later changes.

We really do not know the answer to that question.

We will talk to our people at the federal level because we've heard from a couple of you that you wished you'd done it differently.

If you fall into that category, we will try to get the word back out if we find out that there is a method for asking for a change, because I think that you know, it's just not so simple to understand this right out of the gate and we're all struggling a little with the information in this transition so keep that in mind.

We have some specific links at ACL on their website, at Health and Human Services for the Administration on Community Living and those are listed as resources for you there, so you've got the actual link, visit those.

On the ACL website, you'll also find a document called Guidance for Centers for Independent Living Grantees, so be sure you look as those resources because those are things that are different than when we did Cost Allocation Plans for Department of Education.

It really is different the way that this is approached.

So be sure to read those as you go.

Any other resources we want to mention?

JOHN HEVERON: Not at this point, Paula.

But I'm sure that your website will continue to get updated as resources become available.

PAULA MCELWEE: Well, and I have not mentioned besides the website, I also do a blog, and so if new information comes down, we make sure we mark that.

It will be in some of these materials before we're done.

I'll give you the background on it.

It's a blog where we're posting it.

You can subscribe to it and then you'll get the post actually to your e- mails.

So you know if you want to comment on it or learn more about it, or read it or pass it along to your board or whatever you'd like to do it with it.

I try to cover the issues and the questions that are coming up from all of you and I take the identifying information out and post the answers so that we can all learn from each other that way.

So that website is ILNET-TA.org, ILNET.

No it is not, I do this every time.

I could not get the one I wanted.

So it's IL- NETTA.org.

Go in and be sure to subscribe if you want to know about that stuff.

Cause you might not go on a regular basis.

But you would be notified there's new information we are learning and this is certainly one of the topics we'll talk about.

Okay.