(1) The current year per diem rate will be calculated using the previous fiscal year's actual expenditures and adjustments for expected costs over the biennium.

(a) Appropriate adjustments will be mutually agreed upon by the governing body and the department.

(b) Examples of appropriate adjustments are: expected pay increases from union negotiations, food costs, utility increases, and other items that can change due to inflation.

(2) In the second year of a per diem calculation period, the governing body will receive adjustments to reflect actual costs incurred.

(a) The governing body must submit financial information to document actual expenditures.

(b) The DOC will reimburse the governing body in a lump sum for expenditures that were more than calculated.

(c) If the expenditures were less than the per diem calculation assumed, the governing body will reimburse the department.

(3) The per diem rate for the second year of a per diem period will be calculated based on the first year's per diem and adjustments in the cost allocation plan and indirect cost plan based on actual expenditure information submitted to the department.

(4) The per diem rate calculation and determination will respect the budget process timeframes of the state and the facility governing bodies.

(5) Thirty days before a per diem rate change goes into effect, the department will publish on its web site the calculation data for each facility and will send the data to interested persons. The department will accept public comment on the rate change for 20 days after it is published on the web site. The department will publish on the web site its responses to the comments.