3-3 Interdepartmental Billings for Services Policy

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Approved: County Administrator
Authority: Auditor Controller / County Administrator
Revised Date: 07/27/2004

1. Purpose
2. Policy
3. Responsibilities
   

I. Purpose

To establish criteria and responsibilities for interdepartmental billings.

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II. Policy

1. Direct billings for services will be considered an appropriate option when they meet all of the following criteria:  
   
   1. Maximize revenues or reduces costs to the County:
      
      1. Serve to control demand for services; 
         
      2. Provide central funding pool for providing services which are more economically provided on a central basis; and 
         
      3. Provide information for good economic decision-making.
   2. Are more appropriate than charging based on the A-87 cost plan (i.e. because more precise and timely user accountability is preferred; highly variable costs); and
   3. Are sufficiently cost beneficial to warrant the billing of such services.

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III. Responsibilities

1. Responsibilities for billings include:
   1. For new billings:
      
      1. Department heads must submit a department/agency billing authorization form and receive approval from the CAO and Auditor-Controller.
   2. Department heads will work with the Auditor-Controller and the CAO to establish:
      
      1. A justification for the new billing; 
         
      2. A methodology for calculating rates; 
         
      3. Systems for internal accounting controls; and 
         
      4. Budgetary accounts.
   3. Such request should be submitted in time to be approved by November 30 for implementation in the following fiscal year.  
   4. The department head will negotiate an agreement with other department heads/agency directors for the provision of services.
2. For approved billings:
   1. The justification and calculation methodology for each rate will be reviewed annually by November 30 by the Auditor-Controller and County Administrator's Office for implementation in the following fiscal year. Mid-year changes to billings or rates are discouraged. However, if absolutely essential, they must be coordinated with affected Department Heads and approved by the Auditor-Controller and County Administrator.
   2. The department head is responsible for maintaining appropriate internal controls for accounting. Supporting documentation must be maintained on the costs of the service and billings to departments.
   3. The billing department will compare billed amounts to actual costs for the immediate past fiscal year and modify subsequent rate calculations as appropriate. Documentation will be provided to the CAO and the Auditor-Controller.
   4. The Auditor-Controller will provide a report of large variances in the A-87 Cost Plan to billing departments as appropriate. The department head will be responsible for reviewing the variance and determining whether a change in rate calculation methodology is required.
3. Responsibilities for Budget Coordination
   1. Each department is responsible for including a copy of the agreed upon charges between departments, which is signed by both department heads, within their budget submittal package to the County Administrator’s Office. To request an interdepartmental billing for services, please complete the Interdepartmental Billing Authorization form.

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