(a) Start-up costs specified in Education Code section 8255, not to exceed 15 percent of the expansion amount.

(b) Administrative costs, not to exceed 15 percent of net reimbursable program costs. Such costs include activities that do not provide a direct benefit to the children, parents, or providers.

(c) Employee compensation, including fringe benefits, and personal service contracts.

(d) Equipment and equipment replacement with prior Early Education Division approval if required in the annual preschool contract.

(e) Improvement of sites and adjacent grounds to meet or continue to meet CCR, title 22, Community Care Licensing Standards. Reimbursable improvements are those that:

(f) Taxes, insurance, and maintenance for buildings and/or equipment.

(g) Depreciation based on the useful life of an asset using a straight-line method from the original date of acquisition. Depreciation shall not be claimed on land, donated assets or assets purchased with public funds.

(h) A use allowance for buildings and improvements, computed at annual rate not to exceed 2 percent of acquisition costs. A use allowance for equipment computed at an annual rate not to exceed 6 2/3 percent of acquisition costs. A use allowance shall not be claimed on assets purchased with contract funds or on land, and shall not be claimed for assets for which depreciation has been claimed.

(i) Travel and per diem expenses, including approved out-of-state travel, at rates not to exceed those rates paid to the majority of CDE's represented employees computed in accordance with California Department of Human Resources regulations, CCR, title 2, subchapter 1. The Early Education Division shall notify the contractor of a change in expense rates within 30 calendar days after the Early Education Division has received notification of a change in rates from the California Department of Human Resources.

(j) An indirect cost rate based on an approved cost allocation plan, not to exceed the rate specified in the annual preschool contract.