SERVICE PROVIDERS AND LEAD AGENCIES. Service Providers and Lead Agencies paid under unit rate contracts funded through awards passed through the Department shall provide a statement of functional expenses in accordance with the sample template provided (see sample A) in their audited financial statements. The functional expense template should be organized such that the natural classifications, defined expense line items (see definitions below) are in the left column, with each service, functional classification, performed by the provider as a column heading extending across the top. The services shown on the functional expense statement are those services as defined by the Department in the Client Services Manual. Currently, the Department is in the rule-making process for the service definition portion of the Client Services Manual. Once finalized, those services should be used for the columnar headings. Costs for each expense line item are broken out by service, with unallowable expenses shown separately. If there are no unallowable costs, please show a zero total in this column. See below for further discussion of unallowable costs. A row should be included indicating the total number of units by service provided for the period under audit. If the service column or service is not unit-based, enter “N/A” for the number of units in the appropriate column. Revenues derived from Department-administered awards are based on units of service produced. It is therefore requested that the program outputs or results (number of units of service provided) be tested to provide reasonable assurance that documentation exists to support that services were delivered for which revenues were earned.1
