BUTLER TWP — The Butler County Community College board Wednesday accepted a cost allocation study that the board says shows that no local tax dollars fund its campuses in Lawrence or Mercer counties.

The report was prepared by Black, Bashor & Porsch, certified public accountants of Sharon.

“This is what we have said from the beginning,” said Nick Neupauer, BC3 president. “We are not using Butler County taxpayer dollars in either Lawrence or Mercer counties.”

Using audited figures from the 2009-10 school year, Frank Nagy, the BB&P partner who completed the report, broke out indirect costs and allocated them to each campus according to the percentage of direct costs the campus consumed.

Nagy found that BC3 spends 89 cents on indirect costs for every dollar it spends on direct costs, he said.

The report attributed 88 percent of BC3’s total costs to Butler County campuses, 8.5 percent of total costs to the Lawrence County campus and 3.5 percent of total costs to the Mercer County campus.

The study said the campuses in Lawrence and Mercer counties produce $1.29 million in net income compared to $158,000 in net income for the Butler Township and Cranberry campuses.

Butler County’s larger costs and slimmer net income can be attributed to the larger physical plant and larger numbers of employees at the main campus, Neupauer said. Each of the other campuses has only one building.

On Jan. 14, a draft of the study was sent to Jack McMillin, county controller, who requested the report last April in the midst of a funding dispute.

BC3 received about 11 percent of its funding, apart from student aid, from the county in the 2009-10 school year. That’s about $3.9 million.

“It’s not what I would consider an indirect cost plan,” McMillin said.

In an e-mail to college board members on Jan. 17, he wrote, “The compilation does not resemble anything I’ve seen before — the county indirect cost plan — or even per diem rate workups that were prepared for state and federal inmate billing purposes. All contain considerably more documentation and detail — including an allocation of depreciation.”

In their response, the board members said they agreed with the validity of the controller’s questions, according to the copy of the e-mail McMillin provided.

The two sides will meet to discuss their differences, McMillin said, although BC3 has stressed that there are multiple approaches for any cost study.

“He (Nagy) went through the expense side of our general ledger and looked at direct and indirect costs,” said Jim Hrabosky, BC3 vice president of administration and finance. “He clearly identified four back office functions — these are the indirect costs — to be shared with other campuses.

Back office functions generally are administrative, indirect costs. In BB&P’s report, “indirect costs” include academic and institutional support, student services and operation and maintenance. Direct costs include the costs of instruction, costs of direct benefits and “community service.”

Community service costs run nearly $2 million for the 2009-10 year and reflect classes and training that benefit Butler County residents, Hrabosky said.

The BC3 2009-10 audit was accepted by the college board of trustees at its December meeting.