CORE-843

RECORDKEEPING & CLAIMS

Calculating the Administrative Fee for Sponsoring Organizations of Centers

INTRODUCTION

Sponsoring organizations must learn how to correctly calculate their annual administrative fee. The 15% is only one component in determining the sponsoring organization’s administrative fee.

 

To determine their administrative fee, sponsoring organizations can withhold the lesser of:

  • Component 1: 15% of their total meal reimbursement; or
  • Component 2: their actual net allowable administrative costs.

Sponsoring organizations should remember:

  • There is not an automatic or “blanket” 15% fee
  • You must determine your net allowable administrative costs first, and then
  • Calculate the lesser amount between the actual net allowable administrative costs and 15% of the meal reimbursement
  • You cannot include cash-in-lieu when calculating the fee
  • The administrative fee is applicable to sponsoring organizations of affiliated and unaffiliated centers

Summary: If your annual net allowable administrative costs are less than 15% of the meal reimbursement, then you can only withhold your administrative fee based on your actual net allowable administrative costs.

Remember, the 15% calculation applies only to the meal reimbursement and does not include cash-in-lieu.

CONTINUE