City Non-Profit Contracting Task Force
June 4, 2003
10:00 a.m. – 12:00 p.m.
Corrected
Minutes
(additions in bold and underlined)
CALL TO ORDER:
Co-Chair Blackwell called the meeting to order at 10:15 a.m.
ROLL CALL:
Representing Non-Profit Community:
Judith Stevenson, Baker Places (representing Jim Illig, Project Open Hand)
Bruce Rice, Huckleberry Youth (representing Salvador Menjivar, Hamilton Family Center)
Tony Michelini, Catholic Charities of the Archdiocese of San Francisco
Tiffany Mock-Goeman, Continuum
Debbi Lerman, Huckleberry Youth (representing Sandy Mori, Kimochi, Inc.)
Nancy Rubin, Edgewood Center
Jonathan Vernick, Baker Places
Representing City Departments:
Judith Blackwell, Office of Contract Administration
Gene Coleman, Mayor’s Office of Community Development
Pauson Yun (representing David Curto, Dept. of Human Services)
Winna Davis, Dept of Children, Youth and their Families
John Haskell (representing Ed Harrington, Controller)
Anne Okubo, Dept. of Public Health
Others:
Debbie Gordon, Controller’ Office
Galen Leung, Dept. of Public Health
Staff:
Henny Lee, Dept. of Administrative Services
CONSENT CALENDAR:
Motioned, seconded, and approved the May 28 Meeting Minutes.
REPORT OF THE CO-CHAIRS:
None
DISCUSSION & POSSIBLE ACTION ITEMS:
Agenda Item 5, Recommendation #1: Implementation Plan – Report to the Board of Supervisors;
5.1 Report from the Implementation Plan Report Committee.
The Committee Chair distributed a working draft of the recommendations to be included in the report. With the exception of Agenda Item 6.5 below regarding indirect cost, the remainder of the meeting was spent on reviewing, discussing and agreeing on Recommendations #4, #11 and #13, pages 1 through 4, of the document. The Committee Chair brought a laptop computer so that changes were made immediately to the document. See Attachment A.
The Task Force also discussed and agreed on the following:
- The recommendations will be listed in the final report by category in the following order; contracting, monitoring, and automation/standardized forms.
- The quick reference recommendation numbers should be dropped from the final report to avoid confusion.
- A separate recommendation is needed to address cost of living adjustments for non-profit contracts including adjustments for indirect cost, see Agenda Item 6.5 below.
- The Implementation Plan Report Committee meetings will be moved to City Hall. Administrative staff will arrange for a meeting room, post the meeting notices to the CNPCTF website, and notify Task Force members.
Agenda Item 6.5 Recommendation #4: Establish accounting principles for non-profits.
Continue discussions on indirect cost from the May 14 Meeting Minutes:
- Currently the definition and percentage of what is covered by indirect cost varies by funding source and by department.
- The general fund component of contract funding often times is used to cover indirect costs.
- Non-profits would like guidelines on what are acceptable indirect costs.
- Departments feel that developing such guidelines will cause less flexibility for both departments and non-profit contractors.
- Non-profits need an appeals process to question what charges are covered under indirect costs.
The following summarizes the discussions of the Task Force regarding indirect cost:
- The Controller’s representative distributed copies of A Guide for Nonprofit Organizations: Cost Principles and Procedures for Establishing Indirect Cost and Other Rates for Grants and Contracts with the Department of Health and human Services, U.S. Department of Health and Human Services, May 1983, OASBM-5, see Attachment B.
- Federal funding sources for indirect cost recoveries requires cost allocation plans from non-profit contractors.
- OMB A122 does not allow for indirect cost beyond the cost and scope of the contract.
- Indirect cost rates do not fully cover the non-profit’s cost of doing business.
- Where appropriate, some departments use general funds to increase the indirect cost rate.
- The definitions and rates for indirect costs are unclear and inconsistent across City departments.
- It would be difficult to establish a citywide indirect cost rate because of the nature of the funding sources and programs funded.
- Departments should work towards consistent definition and rates for indirect cost across its divisions by funding source and programs.
- Departments should also work to increase, standardize and provide flexibility of allocations to indirect cost.
- For non-profit contracts, the funding source determines service units and total spending. Consequently, there is no leeway to compensate for increased indirect costs.
- The issue of indirect cost is a subset of a larger issue related to cost of living adjustments.
- While cost of living adjustments have been made to personnel salaries in non-profit contracts, other indirect operating costs including health benefits and worker’s compensation have not been similarly adjusted.
- There has only been a 1% cost of living adjustment for non-profit contractors’ indirect operating cost in the past eight years.
- Non-profit contractors should receive parity with City departments for cost of living adjustments for personnel salaries and other operating expenses.
- City departments however suffer the same difficulty of not receiving any cost of living adjustments to their other operating expenses. Consequently, departments absorb the differences by reducing goods and/or services provided.
Attachments:
- Implementation Plan Report Committee draft document, dated 6/4/03
- A Guide for Nonprofit Organizations: Cost Principles and Procedures for Establishing Indirect Cost and Other Rates for Grants and Contracts with the Department of Health and human Services, U.S. Department of Health and Human Services, May 1983, OASBM-5 (This attachment is not available electronically. Contact Henny Lee at 415-554-7036 for a hard copy)
Agenda Items: See June 11 Agenda
Public Comment: None
Adjournment: 12:00 p.m.
