HYPOTHETICAL VARIANCE:
in this issue:
FULL COST vs OMB
In this issue, we will go over the conversion of a full cost allocation plan to an OMB (Office of Management and Budget) 2 CFR Part 200 compliant cost allocation plan. To understand the process and reason for converting a full cost plan to an OMB plan, we must first understand the differences and uses of the two.
20 CAPTURE. COSTTREE 2016 Q3 ISSUE
3
Used internally within an agency for the reimbursement of the cost of indirect administrative services from non-general fund operations
Used to calculate the indirect costs to be included in the calculation of user fees to the public
Uses a less conservative approach, but still follows the OMB structure
Uses budget numbers to more accurately reflect what is currently happening within the agency, compared to an OMB compliant cost plan, which is two years in the rears
Based on the federal regulations, it includes costs that are excluded from the OMB plan, such as general government costs like city council, elections, and dues and subscriptions
The central support departments are defined as a department whose primary purpose is to support all or a subset of departments/funds within the agency, not to support the public
Used for federal and state grant reimbursements
Very conservative—strictly follows the regulations put in place by the federal government
Actual costs of the last closed-book fiscal year are used to estimate future costs
Many costs are excluded, such as city council and general government expenses—for a full list of unallowable costs to exclude, request a free cost slider from CostTree here
Excludes costs of departments that do not support the entire agency as a whole, such as public works administration and other departments of an administrative nature
The central support departments are defined as a department whose primary purpose is to support ALL other departments/funds within the agency, not to support the public
FULL COST:
2 CFR PT 200:
OMB
FULL COST