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¶ … U.S. Army Corps of Engineers worry about cost allocations? Aren't they a branch of the U.S. Federal Government? Why does it matter whether or not costs are allocated?
Army Corps of Engineers is indeed a department of the federal government. However, this is no way means that the Corps is not responsible for spending money as efficiently as possible. While many people are dismissive about government spending, assuming the worst possible excesses of public employees, it is in fact the case that public agencies and everyone who works for them is obligated to use public funding in the most responsible way possible (U.S. Army Corps of Engineers).
Of course, this does not always happen. However, the federal government (as well as state and local governments) have a number of laws and/or regulations that are in place precisely to ensure that public agencies and their employees are responsible with the public's money. This push to be fiscally responsible is in fact one of the primary bases for the practice of cost allocation. Cost allocation is the process by which the costs of a project are assessed to the different agencies (or other entities) according to the proportion of responsibility (U.S. Army Corps of Engineers).
For example, an Army Corps project might benefit interstate travel (which is a federal responsibility),...
Careful cost allocation of such a project would ensure that the federal government would pay for one-third of the project, the state would pay for one-third of the project, and the private property owners would pay the final third.
This process creates a plan that "identifies, accumulates and distributes allowable direct and indirect costs" with contracts. "A plan for allocating joint costs is required to support the distribution of those costs & #8230; All costs included in the plan must be supported by formal accounting records to substantiate the propriety of the eventual charges." (Cost allocation plans).
2. The City of Seattle reading lists a series of costs and associated cost drivers for allocating these costs. Do you agree with the cost drivers (cost allocation factors)? Why do you suppose these drivers were selected? Does it make sense to have all of these individual costs and drivers identified or should there be a more uniform method of allocating costs? Why do they allocate costs anyway in a government (City Government) setting -- aren't cost allocation methods mostly for manufacturing companies?
The cost allocation factors make sense in the context of the assessment of tasks…
References
Colleges and universities. Retrieved from http://rates.psc.gov/fms/dca/faq-cu.pdf.
Cost allocation plans. Retrieved from http://www.vwn.virginia.gov/pdfs/wiamouappendb2.pdf
U.S. Army Corps of Engineers. Retrieved from http://www.nww.usace.army.mil/lsr/reports/misc_reports/allocate.htm
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