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6C H A P T E R 3 Many Agencies Need Better Cost and Service Accounting In these days of rising fuel prices and limited budgets, transportation providers are being asked more frequently to work cooperatively with other agencies to ensure that services are delivered in the most cost-effective manner. This situation is particularly true in the area of human ser- vices transportation, where public transportation providers and human service agencies are being asked to coordinate their efforts to ensure maximum productivity at minimum cost. Although the objectives for coordinated services may differ somewhat from community to community, the fundamental purposes are usually to ⢠Avoid duplicative and overlapping services. ⢠Reduce service gaps. ⢠Increase services. ⢠Ensure cost effectiveness and cost savings. ⢠Provide safe and reliable transportation services. The administrative and financial complexities involved in coordinating transportation are significant. Agencies with specific client populations and funding sources have their own oper- ating procedures, even their own vocabularies. If these agencies are going to work together, how do they know that they are being treated fairly when it comes to paying for the services that they share? Many transportation providers do have at least a somewhat accurate sense of what it costs them to provide services, but that information is seldom reported in detail. Reports of ser- vices provided and their costs are needed in sufficient detail to allow for comparisons, analy- sis, accountability, and the determination of program effects. Improved cost accounting methods are needed 1. To ensure that all operators are recording all services and costs on an accurate and consistent basis. 2. To ensure that complete information is reported on transportation services and costs and is available to a wide range of decision-makers. 3. To develop a uniform service and cost-reporting methodology that can be used to track and analyze transportation services and costs. 4. To share the costs of transportation services among the users and other beneficiaries of those services, when appropriate. When these objectives are achieved, transportation providers, administrators, and funders will have the information they need to provide the most transportation services they can in the most cost-effective manner. Factors That Affect Transportation Cost and Service Reports
Reporting Problems Affect Transportation Coordination Efforts Today, there is great variety among client transportation services delivered by human service programs, with significant differences in service delivery methods, reporting, and eligibility requirements. Human service programs that provide transportation services have uniquely different missions; one agency may provide employment services while another may have the delivery of health care services as their primary mission, and the transportation services needed for the success of these programs are not the primary concerns of program administrators. These complexities are compounded by the fact that no single law or statute created federal human services transportation programs. Unlike federal transit programs that are all codified under a single piece of authorizing legislation, there is no legislative or statutory uniformity on how human services transportation services are to be reported or delivered. Each program has devel- oped its own idiosyncratic regulations, eligibility requirements, and operating procedures. Because they have developed autonomously, some federal programs also may fund the same types of ser- vices as other federal programs. Coordinating these currently disparate transportation services can be highly beneficial to local communities, but the lack of consistent methods for reporting program outputs and costs stands in the way of achieving this coordination. For coordination efforts to succeed, potential coor- dination partners will need to analyze their services and costs using comparable data. This Toolkit provides the tools needed to generate such data for assistance in implementing coordinated transportation efforts. Like other projects before it (see TCRP Report 144, Volume 2, âResearch Reportâ), this project has come to these conclusions: ⢠The major federal programs have very different data collection and reporting requirements for transportation services, and many state administering agencies impose their own account- ing and reporting practices on local service providers. ⢠Some local service administrators develop their own unique internal accounting and data collection processesâoften more complex than the federal or state requirements. ⢠The lack of any uniform standards in the many different human service and transportation programs means that these individualistic approaches to data collection and reporting often result in incomplete statements of program costs and services. Currently, the kinds of problems with human services transportation cost recording and report- ing include the following: ⢠Transportation costs often are combined into generalized accounting categories that do not allow transportation costs to be reported as a separate and distinct cost category. ⢠Partially as a result of the practice of combining transportation costs into more general account- ing categories, overall transportation expenses tend to be significantly underreported. ⢠Payments for transportation services may or may not have any direct relationship to the costs of providing services. ⢠The costs of administering transportation services may not be reported accurately: transportation-related expenses such as administrative salaries, office rent, accounting ser- vices, and other administrative overhead items have been both understated and overstated in various communities. ⢠Staff travel for the purpose of transporting clients often is not reported as a transportation expense but is reported as an administrative or case-management cost. ⢠Identifying the specific federal or state program dollars used for funding transportation services may be difficult because of the blending of state and federal funding sources at the local level. Factors That Affect Transportation Cost and Service Reports 7
Clearly, some (perhaps most) agencies will have to make a number of changes in the way they approach data collection and reporting if they are going to work together. But why should these agencies change? Why go to the cost and expense of doing things differently in the future? The answers were discussed in Chapter 2: 1. To improve internal program management. 2. To increase the cost effectiveness of services throughout the community. 3. To support requests for future funding. Requirements for Uniform Service Cost Reporting Ideally, the following elements should be incorporated into any framework for a uniform transportation services cost reporting structure: ⢠The principles of cost allowability articulated in the Office of Management and Budget (OMB) Circulars A-87 and A-122. ⢠The procedures for the allocation of indirect costs articulated in OMB Circulars A-87 and A-122. (For OMB Circular A-87, see http://www.whitehouse.gov/omb/circulars_a087_2004. For OMB Circular A-122, see http://www.whitehouse.gov/omb/circulars_a122_2004.) ⢠A cost reporting framework that does not prescribe a specific accounting approach. Rather, the framework should emulate the approach used in the public transportation industry for cost reporting (the U.S. Department of Transportationâs [DOTâs] National Transit Database Uniform System of Accounts). Thus, each agency may maintain its own accounts and records necessary to meet its own internal information requirements and grant reporting standards, as applicable. Some translation of these internal accounts may be necessary to meet the require- ments of the framework. ⢠Cost reporting that is based on the accrual method of accounting. ⢠Capital costs that are segregated and treated separately from program operating costs. ⢠Services and costs that are reported separately for each of the different modes of transportation services: community transportation, case management transportation, specific individual transportation, and managed care transportation. ⢠A functional approach to cost accounting. ⢠Uniform definitions of common service units, such as those provided in this reportâs Glossary (see Volume 1 of TCRP Report 144). 8 Sharing the Costs of Human Services Transportation