Schedule F-1
– Other Occupancy Expenses –
Administrative Buildings (Waiver-related)
The purpose of Schedule F-1 – Other Occupancy Expenses: Administrative Buildings is to identify non-depreciation and non-amortization expenses for building space that supports administrative program functions. The schedule should be completed for the provider service locations included on the Certification Page – Provider Service
Locations schedule.
Other occupancy expenses related to the maintenance of building space used to support administrative functions include rent, utilities and maintenance, interest expense and insurance and property taxes. Note this schedule does not include occupancy expenses for Residential service locations, as those expenses are reported on Schedule A, Column D, Line 24. Also, if a building has been GF (as discussed in the instructions for Schedule E), the interest and
principal payments must be recorded on Schedule E.
Note that occupancy expenses for buildings used to deliver Non-residential services should be reported on Schedule A, Column D for service locations included on the Certification Page – Provider Service Locations schedule and Schedule A, Column B for service locations not included on the Certification Page – Provider Service Locations.
Column Descriptions
(Column A) Waiver Expense:
Other occupancy expenses for administrative buildings reported on this schedule should reflect expenses incurred in FY 2014/2015 related to the provision of Residential eligible services with cost-based rates to Waiver-enrolled participants specific to the service locations included on the Certification Page – Provider Service Locations schedule.
Note the expenses allocated to the Waiver should be based on reasonable, logical expense allocation statistics that are consistent with the expense allocation method for the expense category. The provider should maintain working papers to support the expense allocations, documenting an audit trail from total provider expense through Waiver expenses allocated to
applicable service location codes. These working papers should be organized in an easily audited format traceable to supporting source documents. ODP, or its authorized agent, may conduct periodic audits of this information.
Line Descriptions
(Line 1) Rent of Space:
Enter the amount paid for rent during the FY 2014/2015 reporting period. Rental expenses for administrative buildings are allowable to the extent that the rates are reasonable in light of such factors as:
§ Rental expenses of comparable property, if any.
§ Market conditions in the area.
§ Alternatives available.
§ Type, life expectancy, condition and value of the property leased.
Rental arrangements should be reviewed periodically to determine if circumstances have changed and other options are available.
Expenses for building and office space rented or leased by related or unrelated parties to support administrative functions are allowable. The amount of rent charged to a given program shall be prorated in direct relation to the amount of space utilized by the functions they support. The allowable rent expense for any facility is the lesser of:
§ The expenses allowed for mortgages or other property loans, or
§ The rental charge published for the general public for similar space in the geographic area.
Any amounts in excess of the allowable rent expense must be recorded on Schedule A,
Column E, as a non-allowable expense. The amount recorded in Schedule F-1 would represent only the allowable rent expense allocated to the Waiver program.
Allowable cost guidelines for the rent of space are outlined below:
§ Rental expenses under “sale and lease back” arrangements are allowable only up to the amount that would be allowed had the provider continued to own the property. This amount would include expenses such as depreciation or UA, maintenance, taxes and insurance.
§ Rental expenses under leases which are required to be treated as capital leases under US GAAP are allowable only up to the amount that would be allowed had the provider purchased the property on the date the lease agreement was executed. The provisions of FASB Statement 13, Accounting for Leases, (superseded by FASB Accounting Standards Codification Section 840) shall be used to determine whether a lease is a capital lease. (Line 2) Utilities & Maintenance:
Enter the expenses incurred for utilities, such as heat, electric, water, sewage and fuel necessary to maintain and occupy a building.
(Line 3) Interest Expense – Buildings:
Enter the amount of interest paid for long-term building borrowing. If a building has been GF (as discussed in the instructions for Schedule E), the interest and principal payments (which are in lieu of depreciation) must be recorded on Schedule E, not Schedule F-1. If an administrative building was purchased after July 1, 2009, and is being depreciated, the depreciation would be recorded on Schedule E, and the interest expense would be recorded on Schedule F-1.
Please note that a classified loan schedule should be uploaded to support expenses submitted on this line that are $5,000 and above. The schedule should include the name of the lender, purpose of the loan, period of the loan, interest rate, interest expense and balance of the loan at the end of the reporting period.
Allowable interest expenses include, but are not limited to:
§ Financing expenses (including interest) paid or incurred which are associated with the otherwise allowable expenses of building acquisition, construction or fabrication, reconstruction or remodeling completed on or after October 1, 1980.
§ Financing expenses (including interest) paid or incurred on or after September 1, 1995, for land or associated with otherwise allowable expenses of equipment.
Allowable interest expenses are subject to the conditions below:
§ The financing is provided (from other than tax or user fee sources) by a bona fide third party external to the provider.
§ The assets are used in support of the program,
§ Earnings on debt service reserve funds or interest earned on borrowed funds pending payment of the construction or acquisition expenses are used to offset the current period's expense or the capitalized interest, as appropriate.
(Line 4) Insurance and Property Tax:
Enter the total expenses related to insurance and property taxes for buildings that support administrative functions. Required occupancy-related taxes and payments made in lieu of taxes are an allowable expense. However, penalties resulting from delinquent tax payments, including legal fees, are non-allowable. Do not include general liability insurance (see Schedule F), insurance for Waiver-enrolled participant Transportation (see Schedule I), or insurance related to Residential services (reported on Schedule A, Column D, Line 24).
(Line 5) Other Occupancy:
Enter the total amount of other expenses related to the maintenance and occupancy of building space that supports administrative functions. If the expense on this line exceeds $10,000 or 5% of the provider’s total other occupancy expenses, the provider should itemize and report the expense separately with an explanation on the Comments Page or provide a supplemental schedule.
(Line 6) Total Other Occupancy Expenses: Administrative Buildings: This line is automatically calculated as the sum of Lines 1 through 5.