COST ALLOCATION PLAN Purpose/General Statements The purpose of this cost allocation plan is to summarize, in writing, the methods and procedures that this organization will use to allocate costs to Administrative/General, Fundraising, and both Programs supported by various grants, contracts and agreements. OMB Circular A-122, 'Cost Principles for Non-Profit Organizations,' establishes the principles for determining costs of grants, contracts and other agreements with the Federal Government. TEDDY BEARS AGAINST VIOLENCE's Cost Allocation Plan is based on the Direct Allocation method described in OMB Circular A-122. The Direct Allocation Method treats all costs as direct costs except general administration and general expense. Direct costs are those that can be identified specifically with a particular final cost objective. Indirect costs are those that have been incurred for common or joint objectives and cannot be readily identified with a particular final cost objective. Only costs that are allowable, in accordance with the cost principles, will be allocated to benefiting Programs by TEDDY BEARS AGAINST VIOLENCE. General Approach The general approach of TEDDY BEARS AGAINST VIOLENCE in allocating costs to particular Categories is as follows: Allocation of Costs All allowable direct costs are charged to the correct Category (Program, Fundraising, or General & Administration) as identified by actual expense incurred, then allocated to the specific Program usage by methods as stated later in this document. All allowable indirect costs (costs that benefit all Categories and cannot be identified to a specific Program) are allocated using a method stated later in this document that results in an equitable distribution. Lastly, all Program costs are further broken down by Funding source percentage in accordance with contracts and grant applications for each funding organization. The following information summarizes the procedures that will be used by Teddy Bears Against Violence beginning September 1, 2009: A. Compensation for Personal Services documented with timesheets showing time distribution for all employees and allocated based on time spent on each Category. Salaries and wages are charged directly to the program for which work has been done, any Administrative/General duties, and Fundraising activities (see Example 1). Program percentages are further broken down by Program activity percentage (s Example 2). a. Fringe benefits (FICA, UC, and Worker's Compensation) are allocated using the percent of Category payroll to the total Agency payroll. b. Vacation, holiday, and sick pay are allocated in the same manner as salaries and wages. 1
B. Travel Costs Allocated based on purpose of travel. All travel costs (local and out-of-town) are charged directly to the program for which the travel was incurred. Travel costs that benefit more than one Category will be allocated based on each category s expense to the total of the specific expense (s Example 3). Travel costs that benefit all Programs will be allocated based on the ratio of the Client Census Population Percentages (see Example 6). C. Professional Services Costs (such as consultants, accounting and auditing services,) Allocated to the Category benefiting from the service. All professional service costs are charged directly to the program for which the service was incurred. Costs that benefit more than one program will be allocated to those programs based on the ratio of each program's expenses to the total of such expenses (see Example 3). Costs that benefit all programs will be allocated based on the Client Census Population percentages (see Example 6). D. Office Expenses and Supplies (including office supplies and postage) Allocated based on usage. Supplies and expenses used for a specific program will be charged directly to that program. Postage expenses are charged directly to programs to the extent possible. Costs that benefit more than one program will be allocated to those programs based on the ratio of each program's expenses to the total of such expenses (see Example 3). Costs that benefit all programs will be allocated based on the client Census Population percentages (see Example 6). E. Printing (including supplies, maintenance and repair) Expenses are charged directly to programs that benefit from the service. Expenses that benefit more than one program are allocated based on the ratio of the costs to the total expenses. Costs that benefit more than one program will be allocated to those programs based on the ratio of each program's expenses to the total of such expenses (see Example 3). Costs that benefit all programs will be allocated based on the ratio of each program's expenses to total expenses (see Example 4). F. Equipment Teddy Bears Against Violence depreciates equipment when the initial acquisition cost exceeds $5000. Items below $5000 are reflected in the supplies category and expensed in the current year. Unless allowed by the awarding agency, equipment purchases are recovered through depreciation. Depreciation costs for allowable equipment used solely by one program are charged directly to the program using the equipment. If more than one program uses the equipment, then an allocation of the depreciation costs will be based on the ratio of each program's expenses to the total of such expenses (see Example 3). Costs that benefit all programs will be allocated based on the ratio of each program's expenses to total expenses (see Example 4). G. Facilities Expenses (Includes Rent, In-Kind Rent, Utilities and In-Kind Utilities) Allocated based upon usable square footage per Category. The ratio of total square footage used by all personnel per Category to total square footage is calculated (see Example 5). Facilities costs related to individual Program activities are allocated based on the ratio of Program square footage to total square footage (see Example 5A) on a line item by line item basis. H. Insurance Insurance needed for a particular Category or Program is charged directly to the Category or Program requiring the coverage. Other insurance coverage that benefits all Categories or Programs is allocated as follows: Property and General Liability is based on the square footage usage (see Example 5 & 5A). Employee Dishonesty Bond premiums are allocated to those Programs based on the ratio of each Category's personnel costs (salaries & applicable benefits) to the total of such personnel costs (see Example 1 & 2). 2
I. Telephone/Communications Long distance calls are charged to each Category, if readily identifiable. Telephone or internet expenses that benefit more than one Category will be allocated to those Categories based on the square footage usage (see Example 5 & 5A). I more than one Program benefits, each program's expenses will be based on the percentage ratio of the Client Census (see Example 6). J. Training/Conferences/Seminars Allocated to the Category/Program benefiting from the training, conferences or seminars. Costs that benefit more than one Category/Program will be allocated based on the ratio of each Program's salaries to the total of such salaries (see Example 1 and 2) K. Other Costs (including dues, licenses, fees, repairs, etc.) Other costs will be allocated to appropriate Categories and expensed in Programs reviewed on a one by one basis appropriate to the particular cost. L. All Expenses identified as ONLY a Program Category expense will be allocated based on the Program the expense is incurred for directly. If an expense benefits more than one Program, it will be allocated to those Programs based on the ratio of each Program s documented use or the allocation method found to be appropriate for the expense as identified in this document. (see Example 3 & 4). M. Special Costs (Groceries and In-Kind Shelter Donations) Expenses are charged directly to the Programs that benefit from the service. Costs that benefit more than one Program will be allocated to those Programs based on the ratio of each Program s expenses to the total of such expenses based on the Client Census Reports (see Example 6). N. In-Kind Volunteer Expense Is reviewed by actual volunteer service on a one by one basis (see Example 3) O. Unallowable Costs Costs that are unallowable in accordance with OMB Circular A-122, including alcoholic beverages, bad debts, advertising (other than help-wanted ads), contributions, entertainment, fines and penalties. Lobbying and fundraising costs are unallowable, however are treated as direct costs and allocated their share of general and administrative expenses. EXAMPLE 1 Costs that benefit the Categories are allocated based on the ratio of each Category's personnel costs (salaries & applicable benefits) to the total of such personnel costs, as follows: Category Personnel Costs Percentage of Total Amount allocated for Administrative/General $ 51,044 13% $ 130 Fund Raising $ 26,341 7% $ 70 Program $ 310,019 80% $ 800 Total Personnel $ 387,404 100% $ 1,000 EXAMPLE 2 Costs that benefit all Programs are allocated based on the ratio of each Program's personnel costs (salaries & applicable benefits) to total personnel costs as follows: PROGRAM Personnel Costs Percentage of Total Amount allocated for Family Violence $ 283,229 91% $1,820 Sexual Assault $ 26,790 9% $ 180 Total Program Personnel $ 310,019 100% $2,000 3
EXAMPLE 3 Specific expense costs (ex. - Travel) that benefit all Categories will be allocated based on the ratio of each Category's expense to the total expense and will be reviewed on a one by one basis as follows: Category Specific Program Expense (Travel) Percentage of Total Amount allocated for Admin/General Travel $ 750 3% $ 30 Fund Raising Travel 0 00% $ 0 Program Travel $ 26,350 97% $ 970 Total Travel Expense $ 27,100 100% $1,000 EXAMPLE 4 Specific expense costs (ex. - Travel) that benefit both Programs are allocated on a one by one cost basis, based on the ratio of expense identified for each Program as follows: PROGRAM Specific Program Expense Percentage of Total Amount allocated for Domestic Violence $ 24,273 92% $1,840 Sexual Assault $ 2,078 8% $ 160 Total Program Expense $ 26,350 100% $2,000 EXAMPLE 5 Facilities costs are allocated based on square footage. Square footage for each Program, fund raising, and general and administrative activity is considered in the analysis. The calculation is as follows: Category Square Footage Percentage of Total Amount allocated for Administration &General 881 18% $ 180 Fund Raising 483 10% $ 100 Program 3,535 72% $ 720 Total Facilities Expense 4,900 100% $1,000 EXAMPLE 5A Program expenses are allocated to each Program based on the square footage of each Program to the total square footage of all Programs on a line by line basis. The calculation is as follows: PROGRAM Square Footage Percentage of Total Amount allocated for Domestic Violence 2,651 75% $1,500 Sexual Assault 884 25% $ 500 Total Program Expense 3,535 100% $2,000 4
EXAMPLE 6 Program expenses allocated by the any method listed above and are identified as benefiting both Programs may be further allocated based on the Client Census Population percentage. PROGRAM Client Census Percentage of Total based on Client Census Amount allocated for Family Violence 49,528 95% $1,900 Sexual Assault 2,607 5% $ 100 Total Program Rent 52,135 100% $2,000 EXAMPLE 7 *** Expenses (Direct and Indirect) may be allocated based on the Full Time Equivalent (FTE) method. The breakdown of allocated cost for each program, fund raising, and general and administrative activity is considered in the analysis. The calculation is as follows: Activity Full Time Equivalents $1,000 Amount Allocated (FTE) % Family Violence 6 43% $ 430 Sexual Assault 5 36% $ 360 Gen. & Admin. 2.75 20% $ 200 Fund Raising.25 1% $ 10 Total 14 100% $1,000 ***Example only. Not supported by all other TBAV documentation. 5