A primary reason for preparing a SWCAP is to maximize, from a statewide perspective, the use of federal dollars. Typically, agencies which receive federal funding have provisions within their federal agreement or grant which allow for the inclusion of overhead or indirect costs. The federal government will reimburse the agency for a share of these costs. Central service costs represent indirect costs to agencies. If these costs can be identified and properly allocated on an acceptable and consistent basis, the federal government will allow such indirect costs to be included in the agency request for federal dollars. Without a SWCAP there is no mechanism to identify these costs and provide a systematic allocation.
Once a SWCAP plan is developed it must be certified by the federal cognizant agency. For the State of Kansas, as referred to above, this is done through the annual audit performed by the Department of Health and Human Services. After the audit is completed, a negotiation agreement is executed between the Director of the Division of Accounts and Reports for the State of Kansas and the Director of the Division of Cost Allocation of the Department of Health and Human Services for the federal government. This agreement fixes the amount of statewide indirect central services costs allocated to each state agency for the fiscal year which the plan year covers.