75-03-15-07. Allowable costs.

1. Maintenance rate. Rates include allowable costs described in this subsection. a. Salary and fringe benefits for direct care employees, which must be limited to: (1) The direct care supervisors; (2) Direct care employees; (3) Family engagement specialists performing aftercare services; (4) Cooks; (5) Janitors and housekeepers; (6) Laundry; and (7) Nurses when performing daily supervision, physical examinations, and medical care treatment for residents. If the nurse is providing other services within the facility, a time study will need to be completed. The portion that is daily supervision, resident physical examinations, and medical care treatment may be included in the calculation of the daily rate for maintenance. b. Food. Actual food costs. The value of donated food may not be included in food costs. c. Operating supplies. The cost of supplies necessary to maintain the household for the residents. Costs include cleaning supplies, paper products, and hardware supplies. d. Personal supplies and allowances. The cost of supplies used by an individual resident, including medicine chest supplies, personal hygiene items, sanitary needs, and moneys

given periodically to residents for personal use. Personal supplies and allowances do not include payment, whether in cash or in kind, for work performed by the residents or for bonuses or rewards paid based on behavior.

1. e. School supplies. The cost of school supplies, books, activity fees, class dues, and transportation to school.
2. f. Clothing. The cost of clothing to maintain a wardrobe for any resident.
3. g. Recreation. Costs incurred for providing recreation to residents, including magazine and newspaper subscriptions, sports equipment, games, dues for clubs, and admission fees to sporting, recreation, and social events.
4. h. Utilities. The cost of heat, lights, water, sewage, garbage, and common area cable or satellite TV.
5. i. Telephone. The cost of local service to the living quarters. Long distance calls are allowable only if specifically identified as being related to maintenance and are not service or administrative in nature. Cellular telephones or electronic communication systems, including associated monthly service fees which are less than the capitalization threshold, and are purchased by the facility for use by direct care or aftercare employees to communicate for the purpose of resident safety, programming, transportation, and supervision while on shift are allowable telephone costs.
6. j. Repairs. The cost of routine repairs and upkeep of property and equipment used for the residents. The facility shall capitalize and depreciate repair or maintenance costs in excess of five thousand dollars per project on equipment or over the remaining useful life of the equipment or building or over one-half of the original estimated useful life, whichever is greater.
7. k. Travel. All costs related to transporting residents, exclusive of transportation for evaluations and social service activities. Transportation costs may include actual vehicle expenses or actual costs not to exceed the amount established by the internal revenue service.
8. l. Leases and rentals. The cost of leasing assets from a nonrelated organization. If the lease cost cannot be directly associated with a function, the department shall allocate the cost in accordance with section 75-03-15-05.
9. m. Depreciation expense. Depreciation expense on all capitalized equipment and property which was not purchased with funds made available through other government programs or grants is allowable.
10. n. Insurance. The cost of insuring property and equipment used in the maintenance of residents and liability insurance for direct care employees.
11. o. Medical. Costs for necessary medical-related items for residents which are not covered by the resident's private insurance or governmental medical care programs, provided that facility records demonstrate that the facility has made reasonable attempts to secure insurance or program benefits. Costs may include physical examinations, drugs, dental work, corrective appliances, and required medical care and treatment for residents.
12. p. Administration. Costs of administration which do not exceed limitations, provided that the department, in its discretion, may exclude costs of administration based upon a lack of appropriated funds.

2. Administration costs. Costs for administration include only those allowable costs for administering the overall activities of the facility identified as follows:

a. Compensation for employees, such as facility administrators, accounting employees, clerical employees, administrative support staff, data processing employees, purchasing employees, security employees, clinical team members, such as social workers, treatment coordinators, psychologists, psychiatrists, nursing costs not covered under the maintenance rate, and other professional clinical or treatment employees;

b. Office supplies and forms;

c. Insurance, except property insurance directly identified to other cost categories, and insurance included as a fringe benefit;

d. The cost of telephone service not specifically included in other cost categories;

e. Postage and freight;

f. Professional fees for legal, accounting, and data processing;

g. Computer software costs, except costs that must be capitalized, and computer maintenance contracts;

h. Central or home office costs;

i. Employee recruitment costs;

j. Management consultants and fees;

k. Dues, license fees, and subscriptions;

l. Travel not specifically included in other costs categories;

m. The cost of heating and cooling, electricity, and water, sewer, and garbage for space used to provide administration;

n. The cost of routine repairs and maintenance of property and equipment used to provide administration;

o. The cost of facility operation associated with the space used to provide administration;

p. Property costs. Depreciation, interest, taxes, and lease costs on equipment and buildings for space used to provide administration; or

q. Training. Staff professional development costs, excluding salary and fringe benefits, but including registration, travel, and per diem expenses when addressing allowable training topics noted in 45 CFR 1356.60.

History: Effective November 1, 1985; amended effective March 1, 1999; June 1, 2004; July 1, 2014; October 1, 2019; October 1, 2021.

General Authority: NDCC 50-06-16, 50-11-03

Law Implemented: NDCC 50-06-05.1, 50-11-03.2