those prerequisites required by law. minimum, provide the following prerequisites: a. Social security contributions or a substitute State plan where permitted. b. Federal unemployment insurance contributions. c. unemployment compensation insurance contributions. d. Workman’s compensation insurance coverage. 8. If proposed fringe benefits are based on 8. The organization must use one or a estimates, determine the propriety of the combination of the following methods method used. for estimating fringe benefits: a. Past experience for a given type of position. b. Fringe benefits of a comparable organization. c. Anticipated organization, Federal or State regulation changes, etc. Regardless of the method used, a test of reasonableness should be made by comparing fringe benefits paid in the most recently completed fiscal year with that of total salaries paid. (This information may be contained in the organization’s certified financial statements. 9. If a fringe benefit rate is used, determine 9. Nonprofit In addition to negotiating – whether the organization is a nonprofit or indirect cost rates, a DCA office may a profitmaking entity. negotiate the establishment of fringe benefit rates if the organization uses a rate to charge and bill fringe benefits. Profit The propriety of a fringe benefit – rate for a profitmaking organization may best be determined by comparing the rate proposed with the most recent historical fringe benefit rate available, or by comparing the benefit rate with that or an organization of similar nature, type, and size. 10. If only one fringe benefit rate is 10. Very often where different classes of proposed, determine whether two or individuals are employed (e.g., more would be more equitable. professional and clerical), two or more fringe benefit rates may be appropriate.
those prerequisites required by law. minimum, provide the following prerequisites: a. Social security contributions or a substitute State plan where permitted. b. Federal unemployment insurance contributions. c. unemployment compensation insurance contributions. d. Workman’s compensation insurance coverage. 8. If proposed fringe benefits are based on estimates, determine the propriety of the method used. 8. The organization must use one or a combination of the following methods for estimating fringe benefits: a. Past experience for a given type of position. b. Fringe benefits of a comparable organization. c. Anticipated organization, Federal or State regulation changes, etc. Regardless of the method used, a test of reasonableness should be made by comparing fringe benefits paid in the most recently completed fiscal year with that of total salaries paid. (This information may be contained in the organization’s certified financial statements. 9. If a fringe benefit rate is used, determine whether the organization is a nonprofit or a profitmaking entity. 9. Nonprofit – In addition to negotiating indirect cost rates, a DCA office may negotiate the establishment of fringe benefit rates if the organization uses a rate to charge and bill fringe benefits. Profit – The propriety of a fringe benefit rate for a profitmaking organization may best be determined by comparing the rate proposed with the most recent historical fringe benefit rate available, or by comparing the benefit rate with that or an organization of similar nature, type, and size. 10. If only one fringe benefit rate is proposed, determine whether two or more would be more equitable. 10. Very often where different classes of individuals are employed (e.g., professional and clerical), two or more fringe benefit rates may be appropriate.
Panel1_DHS-Site-Visit-Checklists-and-Guidelines-6-27-2016.docx