Cost Accounting in Local Government

Cost Allocation Plans (CAPs)

A Cost Allocation Plan will allow an Agency to fairly and completely allocate its administrative costs. This will allow the General fund to recover costs from Enterprise Funds, Grant Funds, and will also determine the overhead costs on the hourly rates of staff providing fee services.

A-87 Cost Plans

Using actual expenditures and documented time allocations, the A-87 Plan follows the guidelines outlined by the federal government through OMB Circular A-87. This plan should be used for federal grant administrative cost recovery.

Total Cost Plans

When grant regulations are not an issue, a Total Cost Plan, which uses the costs that the A-87 Plan disallows, is able to allocate all indirect costs like the private sector routinely does. This plan is recommended whenever the goal is to fully allocate indirect costs for interfund transfers and fee calculations.

More Information

Read the folllowing articles for more information about Cost Allocation Plans, or check out other articles using the category links to the right.
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Costing in the City is written by the principals of Revenue & Cost Specialists, L.L.C., a consulting firm that has worked with governmental agencies since 1980.  If your agency needs a Cost Allocation Plan, see what we do or check out our software.