United States
Department of Interior
U.S. Geological Survey
Common Business Practices Handbook
Prepared by Office of Administrative Policy and Services
November 2002
1. Purpose
2. Projects, Accounts, and Agreements
3. Costs
4. Bureau Costs
6. Leave Costs
7. Burden Rates
8. Standard Cost Center Accounts
9. Work Performed for Other Cost Centers
10. Facility Costs
Section 4 of Survey Manual 501.1, Cost Distribution, states that: "USGS is one corporate entity that adheres to a uniform business philosophy and to standard business practices." The Survey Manual describes USGS's financial and business policies. The Business Practices Handbook described the practices and procedures intended to carry out those policies. The Handbook is intended to be a principal resource for both administrative and program staff involved in financial and business matters.
The Handbook is divided into chapters. Each chapter deals with a topic. Each chapter identifies the Survey Manual chapter it is intended to implement.
The Handbook is intended as "a living document." New chapters will be added as new or improved practices are developed.
Chapter 2: Programs, Projects, Accounts, Agreements and Customer Numbers
Objectives:
Background:
USGS describes its work to the outside world in terms of programs. It carries out its work organized into projects. The USGS accounting system collects cost data about projects in accounts and records funding information in agreements. USGS uses customer numbers to collect additional financial information about projects and programs. The following describes each of these key elements in USGS's financial policies and procedures and the relationships among them.
Policy:
Survey Manual Chapter 501.1
Cost Distribution
Content
1. What are projects in USGS? A project is set of related activities designed to achieve a definite goal, with measurable products, services, or results. A project is a fundamental unit to describe work efforts. All work at USGS is defined in terms of projects. Every project has a single project chief, who is a USGS employee. Project plans and budgets are captured in BASIS+.
1. What are installation-wide projects in the Federal Financial System (FFS), USGS's accounting system? An installation-wide project in FFS is a data element used to collect financial data for a project.
2. How do installation-wide projects in FFS relate to projects in BASIS+? Each installation-wide project in FFS is a project in BASIS+.
Installation-wide project (FFS) = Project (BASIS)
3. How are installation-wide projects in FFS designated? An installation wide project is designated by seven alphanumeric characters; the first four designate the 'lead' cost center and the next three are linked to the BASIS+ project. For nearly all projects, the last three characters are a unique combination generated in BASIS+.
Example:
Lead cost center = DDDD
Project (from BASIS) = ABC
Installation-wide Project = DDDDABC
4. What is the "lead cost center" for an installation-wide project? The lead cost center is the cost center to which the project manager belongs.
1. What is an account in FFS? An account is a data element in FFS in which USGS records costs.
2. Are accounts designated in FFS? An account is designated by the combination of the appropriate cost center or organization designation, composed of four alpha-numeric characters, and the appropriate project designation, composed of the last three alphanumeric characters of the project code, plus two alphanumeric characters that the cost center may use at its discretion.
Example:
Cost Center = CCCC
Project = ABC
Account = CCCCABC00
3. In an account code, what does the cost center or organization mean? The cost center or organization portion of the account code designates the cost center or organization that incurred the costs.
4. How does the cost center or organization portion of the account code relate to the lead cost center in the installation-wide project? Cost center or organization in the account code and lead cost center in the installation-wide project are not necessarily related. In some cases, the cost center that incurs the cost may be the cost center to which the project manager belongs. In other cases, the cost center or organization that incurs the cost is not the cost center to which the project manager belongs.
5. How do accounts relate to installation-wide projects? An account can relate to only one installation-wide project. More than one account can relate to the same installation-wide project.
6. Can accounts have sub-accounts? At the cost center's discretion, an account can have sub-accounts. The cost center can use the final two characters of the account code to designate sub-accounts.
Example:
Account = CCCCABC00 (without subaccount)
Account = CCCCABC0A (with subaccount)
Account = CCCCABC01 (with subaccount)
1. What are tasks? In BASIS+, tasks are components of a project.
2. Can accounts relate to tasks? At the cost center's discretion, an account can relate to a task. The cost center can use the final two characters of the account code to tie the account to a task.
Example:
Account = CCCCABC00 (without subaccount)
Account = CCCCABCZZ (with task designation added)
1. What are programs in USGS?
USGS programs are thematic, have Federal mission-oriented goals, an identifiable
customer base, and identifiable source(s) of funding in the Annual Budget Request
to Congress (the Green Book). USGS has 27 (?) programs.
2. How are USGS programs organized in the Annual Budget Request to Congress
(Green Book)?
In the Annual Budget Request to Congress (Green Book), USGS programs fit within
a hierarchy. Budget activities are subdivided into sub-activities; sub-activities
are, in turn, subdivided into program elements. In most cases, the lowest level
of the hierarchy, either sub-activities or program elements, constitutes the
USGS programs. (See Appendix 2A for the current list of USGS programs.)
3. How are USGS programs represented in FFS?
FFS uses the data element 'program class' to represent budget activities and
the data element 'program type' to represent sub-activities.
The FFS data element 'program' includes both USGS programs and multi-disciplinary efforts. (See below for a definition of a multi-disciplinary effort.)
Budget Activity (Green Book) = Program Class (FFS)
Sub-Activity (Green Book) = Program Type
Program Element = Program(FFS)
(Programs in FFS also include multi-disciplinary efforts.)
1. What is a multidisciplinary effort?
A multidisciplinary effort is a body of work that draws funding from more than
one USGS program and
Examples of multidisciplinary efforts:
2. How do multi-disciplinary efforts relate to USGS programs?
Each multi-disciplinary effort may be funded from certain, specified USGS programs.
3. How are multi-disciplinary efforts designated in FFS?
Each multi-disciplinary effort is designated by one or more FFS program codes.
Each of these FFS program codes relates to a single budget activity, that is,
in FFS, to a single program class.
4. How are multi-disciplinary efforts linked to USGS programs in FFS?
FFS accounts that relate to multi-disciplinary efforts are linked to FFS agreements
that are, in turn, linked to USGS programs through the appropriate customer
number(s).
For example, an account linked to the Chesapeake Bay Ecosystem effort could be linked to one of four program codes (3CHES, 4CHES, 5CHES or 7CHES). The first character of the program code refers to the budget activity (program class) of the USGS program providing the funding. If the program providing the funding belonged to the Water Resources Investigations budget activity (Program Class 40000), 4CHES would be the proper program code.
The account would also be linked to one or more FFS agreements tied to the USGS program(s) that provided the funding. The agreement and customer numbers would designate the USGS program. If, for example, the USGS program were Ground Water Resources, the customer number would be 0P41040.
FFS distributes the costs recorded in an account linked to a multi-disciplinary effort to the USGS programs that provide the funding in proportion to the funds provided. A program that provides 50 percent of the funds receives 50 percent of the costs.
1. In FFS, what are customer numbers, or vendor numbers?
For work funded by reimbursements, the customer number designates the customer
for whom USGS is performing the work.
For work funded by appropriations, the customer number designates the USGS program that provides the funds.
2. How are customer numbers designated?
Customer numbers are designated by 11 alphanumeric characters.
3. What is the purpose of customer numbers for work supported from appropriations?
Customer numbers are an additional means to collect data about appropriated
work.
1. In FFS, what are agreements?
In FFS, an agreement is a data element used to record funding.
2. How are FFS agreements designated?
An agreement is designated by up to 15 alphanumeric characters. For agreements
that relate to appropriated funding, the designation refers to a USGS program.
For agreements that relate to reimbursements, the designation relates to the customer. For many agreements that relate to reimbursements, the agreement number includes an identifying number provided by the customer, often the customer's document number.
I. Linking Agreements and Programs
1. How do FFS agreements relate to USGS programs?
A FFS agreement can relate to only one USGS program. A FFS agreement cannot
relate to a multi-disciplinary effort.
USGS program = FFS Agreement
J. Linking Accounts and Programs
1. How are FFS accounts tied to programs?
When a FFS account funded from appropriated dollars is established, it is tied
to a USGS program or a multidisciplinary effort, in other words to a FFS 'program,'
on the Default Values (DVAL) table in FFS.
K. Linking Customer Numbers and Agreements
1. How do agreements relate to customer numbers?
In FFS, a customer number can relate to many agreements; an agreement can relate
to many customer numbers.
A FFS agreement that relates to appropriated funding can relate to only one customer number. Both the FFS agreement and the customer number refer to the same USGS program.
USGS Program = Customer Number = FFS Agreement
L. Linking Agreements and Accounts
1. How do FFS accounts relate to FFS agreements?
An account that is tied (on the DVAL table) to a USGS program can relate only
to agreements (and customer numbers) that relate to the same USGS program.
An account that is tied (on the DVAL table) to a multi-disciplinary effort can relate to agreements (and customer numbers) tied to several USGS programs. Nevertheless, all the USGS programs must belong to the same budget activity, that is, to the same program class.
An account can relate to many agreements that relate to reimbursements.
The same account can relate to an agreement tied to a USGS program and to an agreement tied to reimbursements only if the account relates to a cooperative project and the agreements are tied to the account through fund split. (See questions F4 and F5 below.)
2. How should a cost center establish accounts to fund work on the same
installation-wide project from more than one USGS program or multidisciplinary
effort?
Since an account that relates to a USGS program or a multidisciplinary effort
can relate to only one agreement, a cost center establishes multiple accounts
if it wants to fund work on the same installation-wide project from more than
one program or multi-disciplinary effort. The cost center can use the last two
characters of the account number to distinguish the accounts.
Example:
Installation-wide Project Account Agreement (Program)
DDDDABC CCCCABC00 [Land Remote Sensing]
DDDDABC CCCCABC01 [Geologic Hazards Assess.]
3. If a cost center wanted to establish more than one account related to
the same program and the same installation-wide project, how should it distinguish
the accounts?
Each account must have a unique number. If a cost center wants two accounts
to relate to the same installation-wide project, it uses the last two characters
of the account number to distinguish them.
Example:
Installation-wide Project Account Agreement (Program)
DDDDABC CCCCABC00 [Land Remote Sensing]
DDDDABC CCCCABC0A [Land Remote Sensing]
4. How should a cost center establish accounts if it wanted to fund work
on the same installation-wide project from a USGS program and from reimbursements?
If a cost center wants to fund work on the same installation-wide project from
a USGS program and from reimbursements, it could establish two accounts, one
tied to an agreement linked to the USGS program and the another linked to one
or more reimbursable agreements.
Example:
Installation-wide Project Account Agreement (Program)
DDDDABC CCCCABC00 [Land Remote Sensing]
DDDDABC CCCCABC0C [Reimbursable Agree.]
5. How should a cost center establish accounts if it wanted to fund a cooperative
project, that is, a single work effort funded from both appropriations and reimbursements?
An agreement for a cooperative project can relate to more than one customer
number and, therefore, more than one source of funding. One customer number
relates to a USGS program; the other to reimbursements. A cost center could
establish a single account for a cooperative work effort, tied to the appropriate
agreements. Since the account is funded from two different sources (but not
two different programs), the cost center must establish it in FFS differently
from accounts that are funded only from appropriated sources or only from reimbursable
sources.
The cost center establishes the Budget Fiscal Year Project Customer Agreement (FPCA) records as normal, with one FPCA record for the appropriated funds that uses an appropriated customer number and agreement and one FPCA record for the reimbursable funds that uses the reimbursable customer number and agreement. In the Defaulted Value (DVAL) table, the entry in the FUND field is "*SIR".
The cost center also makes a new entry must be made in the Fundsplit table (FSPL). In the table, the cost center enters the fiscal year, the budget fiscal year, the fund split code (*SIR), the discipline, the organization code, the job number, and one line for each funding source (one line for appropriated funds, and one line for the reimbursable funds). On the lines, the cost center indicates the percentage of cost that should be posted to each source of funds. The total must equal 100 percent as shown in the example below.
Example:
Installation-wide Project = DDDDABC
Account=CCCCABC00
Agreement (Program)=Cooperative Project
Customer Numbers =Federal State Cooperative Program and Reimbursable Customer
| NUMBER | BFYS | FUND | PERCENTAGE |
| 1 | 2002 | SIRAD | 33.300 |
| 2 | 2002 | SIRAR | 66.700 |
Detailed instructions for the process can be found at "http://www.usgs.gov:8888/ops/finance/pcas/9-fund-split.doc"
on the USGS intranet.
When documents are processed in FFS, 33.3 percent of the costs will be posted to the SIRAD fund, and 66.7 percent of the costs will be posted to the SIRAR fund.
Objectives
Policy:
Survey Manual chapter 501.1, Cost Distribution
Background:
Costs are the measure of the resources consumed in producing a good or service.
In the Federal government, costs differ from obligations, the measure of payments that the government will be required to make in the current period or a future period.
In the Federal government, costs also differ from expenditures, or outlays, the measure of payments that the Treasury makes.
Costs are a key measure of both economic and financial performance. In the private sector, companies need to know the costs associated with producing goods and services in order to determine whether or not they are making a profit. Federal agencies are also required to know the full costs of the goods and services they produce. Costs form an important part of the annual financial statements that Federal agencies are required to produce. The Office of Management and Budget, the Department of the Treasury and other central Federal agencies increasingly use cost data to evaluate the performance of Federal programs. Managers within USGS need cost data in order to make informed decisions about programs and projects.
Content:
1. What categories of costs are recognized at the USGS?
In accordance with generally accepted accounting standards, the USGS recognizes
direct and indirect costs. Distributed direct costs are included in the category
of direct costs. Indirect costs include facilities-related indirect costs, common
services indirect costs, and bureau costs.
USGS records other information about costs, such as the object class, the nature of the goods or services consumed or purchased. Salaries, personnel benefits, supplies, and equipment are all examples of object classes.
1. What are direct costs?
Direct costs are all costs that can be specifically or readily identified with
producing a specific product or providing a specific service. (Source: Department
of Interior Accounting Manual, page 6-6-4). In USGS, a direct cost is one that
can be readily identified with a specific project.
Examples:
1. What are distributed direct costs?
Distributed direct costs are costs that apply to more than one project, but
not all projects, within a cost center and that can be distributed to projects
in a consistent, equitable and cost-efficient manner.
Examples:
1. What are indirect costs?
Indirect costs are those costs that cannot be specifically or readily identified
with producing a specific product or providing a specific service, but that
can be shown to bear some relationship to, result from, or be in support of,
the product or service. (Source: Department of Interior Accounting Manual, page
6-6-5).
In USGS, an indirect cost is one that cannot be readily identified with a project. These costs include facilities-related indirect costs, common services indirect costs, and bureau costs.
Examples:
1. How do I decide what is a direct cost, and what is an indirect cost?
To record costs correctly, you should ask yourself the following questions and
take the appropriate actions. Keep in mind that all facilities-related costs
are first recorded in standard facilities accounts and then, if appropriate,
moved to one or more project accounts.
| If the answer is yes | If the answer is no | |
| [1] Does the cost apply to only one project? | Record the cost in an account tied to that project. (In the case of a facilities-related cost, move the cost from a facilities account to a project account.) | Go to question two. |
| [2] Does the cost apply to more than one project, but not all projects in the cost center? | Go to question three. | Go to question three. |
| [3] Is there a consistent, reasonable, and cost efficient way to distribute the cost to the appropriate projects? | Distribute the cost among the appropriate projects, and record the cost in accounts tied to the appropriate project. (In the case of facilities costs, move the costs from a facilities account to several project accounts.) | Go to question four. |
| [4] Is the cost related to facilities? (See Chapter 10 for more information on facilities-related costs.) | Leave the cost in the appropriate facilities account | Go to question five. |
| [5] Does the cost appear on the list of common services costs contained in Chapter 5? | Record the cost in your cost center's common services accounts. Reconsider your answers to the preceding questions or request approval from the Chief Financial Officer to treat the cost as a common services cost. | Reconsider your answers to the preceding questions or request approval from the Chief Financial Officer to treat the cost as a common services cost. |
Questions & Answers
Q. If a cost center treats a certain type of cost as an indirect
cost, can it treat it as a direct cost later in the same fiscal year?
A. A cost center should be consistent during the fiscal year. If a cost
center decides that a certain type of cost benefits the entire cost center and
therefore should be treated as a common services indirect cost, the cost center
should continue to treat the same type of cost under same circumstances as a
common services indirect cost. If a cost center has recorded a certain type
of cost as a direct cost, it should continue to treat the same type of cost
under the same circumstances as a direct cost throughout the fiscal year.
Q. A cost center manager spends time working specifically on some
projects, as well as performing his management responsibilities. How should
his time be treated?
A. When a manager performs work that benefits a specific project, for
example, a day spent in meetings about the project, the manager's hours for
that day should be charged to an account related to that project.
Q. How should a cost center record the costs of technical and support
staff?
A. To the greatest extent possible, salaries and benefits should be charged
directly to the projects on which employees actually work. If a technician performs
work related to a specific project, the hours worked should be recorded in an
account related to that project. When a maintenance worker assembles a piece
of equipment for a specific project, the hours worked should be recorded in
an account related to that project.
Q. How should a cost center record the costs of non-capitalized equipment?
A. If the equipment is purchased for a specific project, the cost should
be charged to an account related to that project.
If the equipment benefits some, but not all, projects at a cost center, the cost center should consider distributing the costs to the appropriate projects. To do so, the cost center will need a consistent, equitable, and cost efficient method to distribute the costs.
A key ingredient will be data on which to base a distribution. Can the cost center easily determine how much each project uses the equipment or how much each project benefits from the equipment? Are there other data, labor costs or hours worked, on which the cost center could base a fair distribution without an undue amount of effort? If so, the cost center may have the means to distribute the costs.
If the costs of the equipment cannot be either charged to a project or distributed to several projects, the cost center should consider the cost as common services indirect costs.
Q. A cost center operates vehicles. How should their costs be distributed
to the projects?
A. Vehicles and vessels are likely candidates for distributed direct
costs, if some, but not all, projects in the cost center use the vehicles or
vessels. The costs involved must be significant. The cost center must have data
on which to base a distribution, for example, data about which projects used
the vehicles or vessels. The distribution process should not involve an undue
amount of administrative effort. The distribution itself should be fair and
reasonable.
Q. A cost center operates several laboratories. How should those
costs be treated?
A. To treat the costs as direct costs, the cost center would need to
know the project that benefits from each laboratory. If several projects, but
not all projects in the cost center, benefit from the laboratory, the cost center
should consider treating the costs of the laboratories as a distributed direct
cost. If all projects in the cost center have access to the laboratory and the
cost center does not collect data about who uses the laboratory, the cost center
should consider the costs as indirect costs. The cost center should charge the
cost of operating the laboratory to its common service accounts and the rent,
and other facilities costs, for the laboratory to one of its facilities accounts.
Objectives:
Policy:
Survey Manual Chapter 501.1 Cost Distribution
Content:
1. What costs does the bureau pay?
The bureau pays costs that benefit the entire bureau or that cannot be readily
assigned to cost centers. The bureau pays the following costs:
Bureau Organizations
Director's Office
Immediate Office
Budget
Communications
Strategic Planning and Analysis
Geographic Information Officer
Administrative Policy and Support
Office of Human Resources
Office of Personnel
Office of Employee Development
Office of Equal employment Opportunity
Workforce Planning
Associate Directors' Immediate Offices
Regional Headquarters
Regional Director's Immediate Office
Regional Executives' Immediate Offices
Office of Regional Services
Other Regional Staff
Open House
Exhibits
Boy Scout Jamboree
Bureau Libraries
International Activities (administrative costs)
Security (administrative costs)
Tort Claims (Beyond cost center's ability to pay)
EEO Settlements (Beyond cost center's ability to pay)
Workers Compensation (Costs that cannot be readily assigned to cost centers)
Voice FTS (Headquarters)
Postage (Headquarters)
National Center Employee Assistance (Headquarters)
National Center Health Unit (Headquarters)
Department of Interior Costs
DOI Working Capital Fund Payments
Congressional Maps
Information Technology
FTS (Data)
Bureau Information Infrastructure
Lotus Operations
Lotus Help Desk
Lotus Enterprise Support
Notes System Administrative Support
Oracle Enterprise Maintenance
Enterprise Business Systems
Contributions to Information Technology Working Capital Funds
B. Accounting for Bureau Costs
1. How will cost centers assign funding for costs that the bureau pays?
All costs paid by the bureau are treated as if they were funded by the Science
Support program.
Since accounts may be funded by only one USGS program, cost centers establish separate accounts for costs the bureau pays.
Chapter 5: Common Services Costs
Objectives:
Content:
1. What are common services costs?
Common services costs are costs that could benefit an entire cost center. USGS
has identified the following costs as those that may be considered as common
services costs:
Management
Center Director/District Chief/Chief Scientist
Assistant Director/Associate District Chief/Associate Chief Scientist
Branch/Section Chief
Assistant Branch/Section Chief
Sub-district Chief
Full Time Supervisor
Part Time Supervisor
Secretary (for one of the above managers/supervisors)
Administration
Administrative Officer
Administrative Technician
Procurement/Contracts Staff
Finance Staff
Human Resources Staff
Operations
Travel
Postage and Shipping
Office of Personnel Management Recruitment Fees
Equal Employment Opportunity Investigations
Relocation Expenses
Health (Unit) Care
Employee Assistance
Labor Union Activities
Awards
Security Clearances
Home Leave
Safety Activities
Hazardous Waste
Warehouse Operations
Above Standard Facility Costs
Facility Moving Costs
Computer Support
Specialists
Systems Managers
Programmers
Data Management Staff
Computer Usage
Software Acquisition and Development
Laboratories
Laboratory Operations and Services
Laboratory Management Staff
Support Services Contract Management Staff
Library Operations
Publications
Non-technical Review and Approval Services
Technical Editing
Report Preparation
Publication Costs
Printing
Visual Information Services Group Charges
Outreach
Visitors Center
Open House(s)
Training (Salary & Expenses)
Mandatory Training
General Training
Communications Systems (Voice and Data)
Telecommunications (FTS 2001)
Local Telephones
Project Development and Planning
Office and Production Supplies
Equipment
Vessel, Aircraft and Vehicles-Purchase
Vessel, Aircraft and Vehicles-Operation
Topic Specialist - Technical Support Function
Discipline Specialists
Safety
Training
Contingency (Unanticipated Requirements) Fund
1. What are common services indirect costs?
Common services indirect costs are common services costs that cannot be readily
assigned to projects and accounts.
1. How should a cost center establish its common services rate?
2. How is the common services rate calculated?
A net common services rate is calculated by dividing total common services indirect
costs by the sum of total direct costs.
Common services rate = common services indirect costs/(total direct costs)
Example:
A cost center has total direct costs of $10,000,000 and common services costs
of $3,000,000.
The common services rate (net) = $3,000,000/ $10,000,000 = .30 (30 percent)
C. Distribution of Common Services Indirect Costs1. How are Common Services indirect costs distributed?
Common services costs are distributed to accounts based on the sum of the direct
costs recorded in the accounts.
Questions & Answers
Q. If a cost category, for example, the cost of an administrative
officer, is included on the list of common services costs, must a cost center
include all the costs in that category as common services indirect costs?
A. The list of common services costs includes all costs that may be considered
as common services indirect costs. A cost center need not treat all costs in
that category as common services indirect costs.
The first choice should always be charging the cost to a specific project, if, in fact, the cost can be tied directly to that project. Only when the cost cannot be reasonably charged to a specific project, or be distributed on a reasonable basis to several projects should it treated as a common services indirect cost.
Q. Are some of the costs included in the list of common services
costs more likely to be treated as common services indirect costs than others?
A. Some costs, by their nature, relate to the cost center as whole. The
salary and benefits of the cost center manager or the administrative officer
are two good examples. These costs are most likely to be common services indirect
costs.
Other costs are quite likely to be project-specific. Publishing costs, printing costs, and certain kinds of computer costs fall into this category. Nevertheless, it is possible that some such costs cannot be tied to a specific project and should, therefore, be treated as common services indirect costs.
In general, the costs listed at the top of the list are most likely to be considered as common services indirect costs. As one moves down the list, the likelihood, in general, becomes less.
Q. Since some costs are almost always common services costs, wouldn't
it make more sense to consider them all common services indirect costs from
the beginning?
A. Overall, the aim is to maximize direct costs and minimize indirect
costs. Allowing for the possibility that some costs, even those most likely
to be indirect costs, may, in some cases, be direct costs is one way to do this.
Q. Many cost categories included on the list of common services costs
could just as easily be direct costs. Why are they on the list?
A. The list contains all the cost categories that could reasonably be
common services indirect costs. In some cases, they could be direct costs as
well. The test of whether a cost is indirect or direct is whether it can be
tied reasonably to a specific project.
Q.Should the cost of some positions, cost center managers, for example,
be considered entirely common services indirect costs?
A. It may be that, over the course of a year, the entire costs of a position
prove to be common services indirect costs. It may be that, at the start of
a year, it is reasonable to assume that the entire costs of a position will
be common services indirect costs. Nevertheless, these are judgments that each
cost center must make for itself, keeping in mind the basic guidance that the
first choice should be to charge costs to a specific project when the cost can
be reasonably tied to the project.
Q. Should the salaries and benefits of researchers whose duties include
supervision be counted as indirect costs under Part Time Supervision?
A. To the extent that the researcher's work as a supervisor can be tied
to specific projects, the cost should be charged to accounts tied to those projects.
Only the supervisory time that cannot be tied to a specific project may be considered
as a common services indirect cost.
Q. Should computer support for specific projects be included as common
services indirect costs? Should computer support for the entire cost center
be considered a common services indirect costs?
A. Computer support for specific projects should be charged to the projects
as direct costs. Computer support for the cost center at large should be charged
as common services indirect costs.
Q. Should computers themselves be included as indirect costs?
A. The same guidance applies to equipment purchases as to other kinds
of costs. If the equipment can be tied to a specific project, the cost should
be tied to that project. The costs of certain kinds of equipment should be treated
as distributed direct costs. If the equipment benefits several projects, but
not all projects in the cost center, and the cost center has some data on which
to base a fair cost distribution, the cost center should consider distributing
the costs to the appropriate projects.
Q.Why are costs of discipline specialists common services costs and
not project costs?
A. Discipline specialist costs that benefit the cost center in general
and cannot be tied to specific projects should be charged as common services
indirect costs. If a discipline specialist works on a specific project, those
costs should be charged to the project as a direct cost.
Q. Should the costs of project-specific products be included under
publications?
A. Project-specific products should be charged to the projects as direct
costs. Publications that benefit the cost center in general should be charged
as common services indirect costs.
Q. Should the cost of project-specific training be included under
Mandatory Training?
A. Project-specific training should be charged to the projects as direct
costs. Mandatory or general training that is not tied to a specific project
should be charged as common services indirect costs.
Q. Should project-specific operation of vessels, aircraft, and vehicles
be included under common services?
A. Project-specific operation of vessels, aircraft, and vehicles should
be charged to the projects as direct costs. Operation of aircraft and vehicles
that is not tied to a specific project should be charged as common services
indirect costs.
Q. Is travel for everyone considered an indirect cost?
A. When travel costs can be tied to a specific project, they should be
charged to the project as direct costs. The cost of travel that is not tied
to a specific project should be charged as common services indirect costs.
Q. Is postage and shipping for everything considered an indirect
cost, or just postage and shipping that is not related to a project?
A. Project-specific postage and shipping should be charged to projects
as direct costs. Postage and shipping that is not tied to a specific project
should be charged as common services indirect costs.
Q. Should monetary awards for project staff be charged to projects,
and awards to common services personnel to be paid from common services?
A. The test is whether the nature of the award is related to a project.
If the performance being rewarded relates to a specific project, the cost should
be charged to the project. If not, the cost of the award should be considered
a common services indirect cost.
Q. Will cost centers have the option to choose if a project pays
for training if it directly benefits only the project?
A. Project-specific training should be charged to the projects as direct
costs. Mandatory or general training that is not tied to a specific project
should be charged as common services indirect costs.
Objectives:
Policy:
Survey Manual Chapter 501.1 Cost Distribution
[NOTE: Distribution of leave costs on a standard basis is optional in fiscal
year 2003.]
Background:
The cost of annual, sick, holiday and terminal leave accounts for roughly eight percent of USGS's costs each year. To account for the full cost of every project, USGS uses a standard procedure to distribute these costs to accounts (projects).
Content:
1. What leave costs does USGS distribute to accounts (projects) on a standard
basis?
USGS distributes the cost of annual, sick, holiday, and terminal leave to accounts
(projects) on a standard basis.
B. Distribution of Leave Costs
1. How does USGS distribute leave costs to accounts (projects)?
USGS distributes leave costs within each cost center in proportion to labor
costs, that is, the cost of salaries and benefits for regular hours worked.
Every cost center has a standard account for leave costs, designated as XXXX-0AL-00, where XXXX is the cost center designation. When employees record annual, sick, or holiday leave in the time and attendance system, they enter their cost center's standard leave account. When terminal leave is paid and recorded in FFS, it is recorded in the cost center's standard leave account.
FFS records the appropriate leave costs in each cost center's standard leave account. Each month, a program distributes the leave costs in each cost center's standard leave account to the accounts (projects) in the cost center in proportion to labor costs. The program takes into account both leave costs and labor costs for the year to date so that, at the end of the year, the distribution of leave costs among accounts (projects) is in proportion to labor costs for the entire fiscal year.
2. How does USGS treat the costs of leave other than annual, sick, holiday,
and terminal leave?
The costs of other kinds of leave, such as administrative leave, are treated
like all other costs not related to facilities. When they can be tied to a specific
account (project), they are charged to that account. When they cannot be tied
to a specific account (project), they are treated as common services costs.
1. How does USGS plan for leave costs?
Each year, cost centers receive data about their leave usage in the preceding fiscal year, the cost of annual, sick, holiday, and terminal leave in the cost center as well as the cost of salaries and benefits for regular hours. With these data, the cost centers can calculate leave costs as a percentage of labor costs for the cost center.
Project chiefs and others can calculate the average number of hours an employee works in the cost center and use the figure in constructing project budgets. For example, if a cost center's leave costs represented 15 percent of the total cost of regular hours worked, the average employee works the equivalent of 1,775 hours a year and takes 313 hours of leave. A project chief can then budget for 1,775 hours of work for each employee in the cost center.
2. All employees, even those in the same cost center, do not take the average amount of annual, sick, and holiday leave. How can the distribution of leave costs within cost centers on a standard basis affect project budgets and spending?
Employees do not all take the average amount of leave during a fiscal year. Some take more; some take less. It is likely, therefore, that the distribution of leave costs within each cost center in proportion to labor costs will cause costs for some projects to exceed the original estimates and for others to fall below estimates. If the employees working on a project take more than average leave during the year, the project's costs are likely to be less than planned. If the employees working on a project take less than average leave during the year, the project's costs are likely to be more than planned.
In most cases, the difference between the planned spending and actual spending is likely to be small. While leave usage varies among employees, among projects, and among cost centers, the use of annual, sick, and holiday leave, in general, is relatively stable and predictable. Nevertheless, in some cases, the differences are significant.
3. What can a cost center do to minimize the adverse effects that surpluses or shortfalls caused by the distribution of leave costs might cause?
In some cases, differences in leave usage can be known in advance and planned for. Using something other than the cost center average leave costs when constructing a project budget might reduce or eliminate a surplus or shortfall.
Managing leave, particularly annual leave, consistently may reduce differences among projects. Encouraging employees to use their annual leave will bring employees' leave usage closer to the average.
In some cases, cost center managers may be able to transfer money among projects to offset surpluses and shortfalls caused by the distribution of leave costs. A principal reason for managing leave costs at cost centers is to provide an opportunity to do so.
Objectives:
Policy:
Survey Manual Chapter 501.1, Cost Distribution.
Content:
A. Recording and Distributing Costs
1. How does USGS distribute indirect costs?
The USGS takes steps in the following order to record and distribute costs:
2. How are facilities costs distributed?
All facilities costs are first recorded in standard facilities accounts. Facilities
costs that relate to specific projects and tasks are then assigned to accounts
tied to those projects and tasks. Facilities costs that are not directly assigned
to accounts are distributed to accounts based on the labor costs, including
(no sooner than 2004) the labor costs of contractors assigned space at USGS
sites. Facilities costs are not distributed to the common services account.
Example:
| Account No.1 | Account No.2 | Account No.3 | |
| Direct Costs | $1,000,000 | $1,500,000 | $3,000,000 |
| Labor Costs | $600,000 | $400,000 | $2,000,000 |
| Facilities Costs | $60,000 | $40,000 | $200,000 |
The cost center has a (net) facilities rate of 10 percent; that is, for every dollar of direct labor costs, an account receives ten cents of facilities costs.
3. How are common services indirect costs distributed?
Common services costs are distributed to accounts based on the direct costs
recorded in the account. USGS uses the burden rate in FFS to carry out the distribution.
Example:
| Account No.1 | Account No.2 | Account No.3 | |
| Direct Costs | $1,000,000 | $1,500,000 | $3,000,000 |
| Common Services Costs | $172,000 | $258,000 | $516,000 |
The cost center has a (net) common services rate of 17.2 percent; that is, for every dollar of direct costs, 17.2 cents of common services costs are associated with the account.
4. How are bureau costs distributed?
Bureau costs are distributed based on the sum of the direct costs, facilities-related
indirect costs, and common services indirect costs recorded in the account.
USGS uses the burden rate in FFS to carry out the distribution.
Example:
| Account No.1 | Account No.2 | Account No.3 | |
| Direct Costs (A) | $1,000,000 | $1,500,000 | $3,000,000 |
| Facilities Costs (B) | $60,000 | $40,000 | $200,000 |
| Common Services Costs (C) | $172,000 | $258,000 | $516,000 |
| Total (A+B+C) | $1,232,000 | $1,798,000 | $3,716,000 |
| Bureau Costs | $135,500 | $198,000 | $409,000 |
The bureau, in this example, has a (net) bureau rate of 11 percent; that is, for every dollar of direct costs, facilities-related indirect costs, and common services indirect costs, 11 cents in bureau costs are associated with the account.
1. How would a cost center combine a common services rate and the bureau
rate into a single FFS burden rate for an account?
A cost center can combine the common services rate with the bureau rate by adding
the sum of the two rates to their product. If the common services rate is c,
and the bureau rate is b, the formula for the combined rate is b + c + (b x
c)
Example:
Common Services Rate = 0.172 (17.2 percent)
Bureau Rate = 0.11 (11 percent)
Combined Rate = .11 + .172 + (.11 x .172)
= .282 + (.019)
= .301 (30.1 percent)
Example:
| Account No.1 | Account No.2 | Account No.3 | |
| Direct Costs | $1,000,000 | $1,500,000 | $3,000,000 |
| Common Services Rate | 0.172(17.2 percent | 0.172(17.2 percent) | 0.172(17.2 percent) |
| Bureau Rate | 0.11(11 percent) | 0.11(11 percent) | 0.11(11 percent) |
| Burden Rate | 0.301(30.1 percent) | 0.301(30.1 percent) | 0.301(30.1 percent) |
| Total Burden | $301,000 | $451,500 | $903,000 |
| Common Services Costs | $172,000 | $258,000 | $516,000 |
| Bureau Costs | $129,000 | $193,500 | $387,000 |
C. Defining Net and Gross Rates
1. What is a net rate?
A net rate is a percentage applied to a body of costs intended to add additional
costs. USGS uses net rates to distribute indirect costs to direct costs, for
example.
2. What is a gross rate?
A gross rate is a percentage that describes the proportion that one number is
of another number. A gross rate describes, for example, the proportion that
indirect costs are of total costs.
D. Calculating Net and Gross Rates
1. How is a net rate calculated?
A net rate is calculated by dividing the additional costs by the original costs.
In the case of direct and indirect costs, a net rate is calculated by dividing
the indirect costs by the direct costs.
Example:
Direct Costs = $100,000
Indirect Costs = $15,000
Indirect Rate (net) = 15,000/100,000 = .15 (15 percent)
2. How is a gross rate calculated?
A gross rate is calculated by dividing a number by the number of which it is
a part. For cost purposes, a gross rate is calculated by dividing indirect costs
by total costs, normally the sum of direct and indirect costs.
Example:
Direct Costs = $100,000
Indirect Costs = $15,000
Total Costs = $115,000
Indirect Rate (gross) = 15,000/115,000 = 0.13 (13 percent)
3. How is a gross rate calculated from a net rate?
The gross rate equals the net rate divided by 1 plus the net rate
Example:
Net Rate = 011 (11 percent) = 0.11/1.11
Gross Rate = 0.11/(1 + .11) = 0.099 (9.9 percent)
4. How is a net rate calculated from a gross rate?
The net rate equals the gross rate divided by 1 minus the gross rate.
Example:
Gross rate = 0.099 (9.9 percent)= 0.099/0.901
Net Rate = 0.099/(1 - .099) = 0.11 (11 percent)
1. When would a cost center use a net rate?
Net rates address at least two questions.
If a cost center knew the amount of costs that needed to be distributed, for example, indirect costs that needed to be distributed to several projects, calculating the net rate would provide the basis for distribution.
Example:
Indirect Costs = $20,000
Total Project (Direct) Costs = $500,000
Indirect Rate (net) = 20,000/500,000 = 0.4 (4 percent)
Multiplying each project's direct costs by 4 percent would yield each project's share of the indirect costs.
If a cost center knew a project's direct costs and the applicable net rate, the cost center could calculate the total costs for the project.
Example:
Project (Direct) Costs = $50,000
Indirect Rate (net) = 0.04 (4 percent)
Total Costs (Direct + Indirect) = 50,000 x 1.04 = $52,000
2. When would a cost center use a gross rate?
A gross rate indicates how much of a body of costs belongs to a category. A
gross rate indicates, for example, what part of total costs is devoted to indirect
costs.
Example:
Total Costs = $150,000
Indirect Rate (gross) = 0.12 (12 percent)
Indirect Costs = 150,000 x 0.12 = $18,000
Chapter 8: Standard Cost Center Accounts
Objective:
Content:
1. What account does a cost center have to record common services costs?
Every cost center has a common services account. The account is designated as
an organization code + COM + two characters.
2. Can a cost center establish sub-accounts for the common services account?
A cost center can use the final two characters of the account code to designate
sub-accounts for the common services account.
1. What accounts does a cost center have to record facilities costs?
Every cost center has three accounts to record facilities costs:
1. What account does a cost center establish to record leave costs?
Every cost center has an account in which employees record the cost of annual,
sick, and holiday leave and in which administrative staff record the cost of
terminal leave. The account is designated as organization code +0AL+ two characters.
[The standard leave account is optional for fiscal year 2003.]
1. What default accounts should a cost center establish?
Every cost center has at least two default accounts:
1. What accounts does a cost center have to record costs it plans to distribute
to multiple accounts?
Every cost center should establish an account to record each type of cost it
intends to distribute to multiple accounts, that is, that it intends to treat
as distributed direct costs. USGS has established standard designations for
two such accounts:
Chapter 9: Work Performed at More than One Cost Center
Objective:
Policy:
Survey Manual Chapter 501.1 Cost Distribution
Background:
USGS projects can involve work by more than one cost center. To promote cooperation among cost centers, USGS seeks to eliminate any financial disincentives to cost centers working together.
Content:
A. Charging Indirect Costs at Only One Cost Center
1. How can a project chief or cost center manager ensure that each part
of a project that involves work at more than one cost center is charged indirect
costs, that is, common services costs, indirect facilities costs, and bureau
costs, only once?
The best, and easiest, way to ensure that work is charged indirect costs only
once is to allocate the relevant funds to the cost center that will perform
the work, at the outset. If, during the program planning and funds allocation
processes, the work and the funds to support it are assigned to the cost center(s)
that will perform the work, indirect costs will be charged only at that cost
center. This applies to work funded by appropriated funds and to work funded
by reimbursements from customers and partners.
If the funds are not assigned to the cost center that will perform the work and the amount involved is $10,000 or more, the cost center with the funds transfers the funds to the cost center that will perform the work. A cost center will request a suballotment to transfer the appropriated funds.
To transfer reimbursements so that another cost center can perform work, the cost center with the funds decreases the funds associated with the reimbursable agreement by the appropriate amount. The cost center that will perform the work establishes a new account with the appropriate agreement number and customer number and establishes the funding at the appropriate level.
If the funds are not assigned to the cost center that will perform the work and the amount involved is less than $10,000, the cost center with the funds excludes the funds involved, that is, the funds that it uses to pay the cost center that performs the work, from its distribution of common services, and indirect facilities costs. The cost center that pays for the work includes the funds in its distribution of bureau costs. Cost centers distribute bureau costs only to work funded from reimbursements. The cost center that performs the work will include the funds in its distribution of common services costs and indirect facilities costs.
2. How can a cost center exclude funds from its distribution of common services
costs and indirect facilities costs?
USGS uses burden rates in FFS to assign common services costs to all accounts
(projects) and bureau costs to accounts (projects) funded by reimbursements.
To exclude funds within an account from the distribution of common services
costs, a cost center can either establish a second account with a burden rate
that includes only bureau costs, or adjust the burden rate for the original
account. The adjusted burden rate is the weighted average of rate that includes
only bureau costs applied to the funds that the cost center uses to pay the
performing cost center and the original burden rate applied to the remaining
funds.
For example:
An account contains $225,000, of which $5,000 is to pay another cost center for work performed. The normal burden rate for the account is 35 percent. The cost center computes the adjusted burden rate as follows:
$220,000 x 0.35 = $77,000 [funds remaining in paying cost center]
$5,000 x 0.11 = $550 [funds paid to performing cost center]
$77,000 + $550 = $77,550 [total burden due]
$77,550/$225,000 = .345 (34.5 percent) [weighted average]
To exclude funds from the distribution of indirect facilities costs, the cost center must record the costs incurred by the performing cost center as something other than labor costs. FFS distributes indirect facilities costs based on labor costs.
B. Recovering Indirect Costs from Another Cost Center
1. How can a cost center ensure that it recovers the common services costs
and indirect facilities costs associated with work the cost center performs
for other cost centers?
Normally, a cost center charges costs associated with work performed for other
cost centers to a separate account. The account is normally not funded, that
is, at the time the cost center performs the work it does not have the funds
to pay for it. Because the account is not funded, FFS does not assign indirect
costs to it through the burdening process. Therefore, to recover common services
costs, the cost center that performs work for another cost center, computes
the appropriate amount and includes it in its bill to the paying cost center.
If a cost center chooses to recover indirect facilities costs associated with work performed for other cost centers, it follows the same procedure. It computes the appropriate amount and includes it in its bill to the paying cost center. To ensure that FFS does not, in the meantime, distribute facilities costs to the account to which the cost centers charge the costs of performing the work, the cost center associates the account with an appropriated fund. FFS distributes facilities costs only to accounts associated with reimbursable funds.
C. Performing Work on One Project at Two Cost Centers
1. How can costs incurred at two or more cost centers be assigned to the same project?
USGS projects can include work at more than one cost center. A project, as described in BASIS+, is represented in FFS, USGS' accounting system, as an installation-wide project. An installation-wide project, in turn, can comprise several accounts in FFS. Each account belongs to a cost center.
Example:
Account at Cost Center A -- AAAA-ABC-00
Account at Cost Center B -- BBBB-ABC-00
Both accounts are tied to an installation-wide project-XXXX-ABC
D. Charging Another Cost Center's Account
1. Can a cost center performing work for another cost center charge the costs to an account belonging to the funding cost center?
A cost center performing work for another cost center can charge the costs to an account belonging to the funding cost center. Nevertheless, the performing cost center would be unable to charge the funding cost center for any indirect costs, that is, common services or indirect facilities costs.
If, for example, cost center B performed work for cost center A and charged the costs to one of cost center A's accounts, the costs would be taken into consideration when cost center A distributed its indirect costs. They would not be taken into consideration when cost center B distribute.
Objectives:
Policy:
Survey Manual Chapter 501.1, Cost Distribution
Content:
1. What are facilities?
Facilities are separate and individual buildings, structures, or other constructed real property improvements where USGS activities are housed in the performance of bureau work. They include large research vessels, office space, laboratory space, warehouse space, related parking and common space.
Large research vessels differ from near-shore, small vessels based in length, portability and accommodations. A large research vessel is at least 45 feet in length, not capable of being towed by a vehicle, and has accommodations for overnight use by more than one person. All large vessels are manned by marine professionals, including a licensed captain and qualified marine machinery repairer.
An installation is an operational unit comprised of one or more facilities and the associated land (for example, the EROS Data Center is an installation).
2. What is not considered a facility?
Facilities do not include sites housing field instrumentation only, such as gauging stations, non-facility related wells, cableways, or personal property. The bureau's Facilities Budget Activity provides a small amount of funding, however, for specialized research equipment (for example, gauging stations and cableways) as part of the Deferred Maintenance and Capital Improvement Plan.
1. What are facilities costs?
Facilities-related costs are the costs that relate to the building, structures,
and other constructed real property improvements where USGS resources are housed
to carry out mission-related work. The USGS has identified the following costs
as facilities costs:
Rental Payments to the General Services Administration (GSA) includes payments to the General Services Administration for rental of space and rent related services. Costs for rental payments to the General Services Administration are charged to object class 23.1.
Rental Payments to Federal sources includes permanent or recurring rental payments to Federal agencies other than the General Services Administration for space, land, and structures that are subleased or occupied by permits, regardless of whether the space is owned or leased. Rental payments to Federal sources do not include rental costs for temporary storage space, conference rooms, or exhibit space. Costs for rental payments to Federal sources are charged to object class 25.3C.
Rental Payments to non-Federal sources includes permanent or recurring rental payments for possession and use of space, land, and structures leased from non-Federal sources (for example, commercial landlords, universities, or other non-profit organizations). Rental payments to non-Federal sources do not include rental costs for temporary storage space, conference rooms, or exhibit space. Costs for rental payments to non-Federal sources are charged to object class 23.2.
Cooperative Space Arrangements includes payments for possession and use of space, land, and structures obtained through a cooperative agreement with a non-Federal source. The cooperative agreement will include services other than space, land, and structures. Cooperative space agreements must include an actual transfer of funds. The amount recorded for facilities costs should be for only those costs that meet the definition of facilities costs.
In-Kind Space includes the cost of possession and use of space, land, and structures obtained through an agreement in exchange for services rather than an actual transfer of funds, for example, Direct Services in the Water Cooperative Program. The value (cost) of in-kind space is determined using standard market comparison procedures.
Operations and Maintenance includes the recurring costs of the basic upkeep of facilities and of maintaining them in compliance with applicable safety and other standards. Salaries, benefits, and operating expenses of USGS staff who perform or have direct oversight of operations and maintenance are included in operations and maintenance.
Operations costs include the recurring costs incurred in the day-to-day operations of a facility. Operations includes costs such as:
Maintenance includes recurring costs required to maintain facilities and structures so that they realize the originally anticipated useful life of the asset, including:
Maintenance includes the following activities:
Capital Improvement includes the construction, installation, or assembly of a new facility, or the alteration, expansion, or extension of an existing facility to accommodate a change of function or unmet programmatic needs.
2. What costs should a cost center exclude under the facilities category of costs?
The salaries and other expenses associated with personnel at any level (headquarters, discipline, regional, and other) who provide management oversight and support services, not directly related to a facilities operations and maintenance, are excluded from facilities costs. The salaries and expenses of scientists and technicians conducting research on vessels should not be included.
Excluded from facilities costs are costs for operations not directly related to the facility, but that support the activities of building occupants and programs: warehousing and mailroom services, copy center distribution, postage, communication costs (equipment and line charges for both voice and data), shuttle services, and hazardous waste disposal.
Excluded are non-recurring costs for General Services Administration facilities, usually a one-time expenditure that the General Services Administration requires of an agency when it wants a level of quality or quantity that is above the commercial standard (for example, buildout costs). In addition, costs related to moves and relocation expenses are not included.
3. What are facilities-related indirect costs?
Facilities-related indirect costs are facilities costs that benefit the entire cost center and cannot be readily assigned to one or a group of projects or accounts.
C. Distributing Facilities Costs to Cost Centers
1. How are facilities costs distributed to the cost centers?
For full cost accounting, all facility costs are distributed to the cost center (national center and field center) or bureau center within USGS that occupies or uses the facility.
When a single cost center occupies a facility, all facility costs are distributed to the cost center.
When two or more cost centers share a facility, the facilities costs are distributed to the cost centers based on the square footage occupied. Costs for space that is not clearly tied to a cost center, but is used by several cost centers, are distributed to the appropriate cost centers based on an equitable and consistent methodology. For example, if several cost centers use a laboratory, the laboratory's facilities costs could be distributed to the appropriate cost centers based on the cost center's use of the laboratory.
Common space, or space that cannot be tied to a specific cost center and is shared by all cost centers (for example, cafeteria, bathrooms, and auditorium), is distributed to cost centers based on an equitable and consistent methodology. For example, common space could be distributed in proportion to the square footage occupied by each cost center.
2. How is the bill for rental payments to the General Services Administration distributed from the bureau to the cost center?
The bureau's Real Property Management System (RPM), a real property and space inventory database, tracks square footage occupied for each USGS location. The Real Property Management System incorporates the General Service Administration's inventory, which is organized in terms of building assignments and captured in the form of Client Billing Records. Working with local representatives, the Branch of Management Services in each region and the Branch of Facilities Management at headquarters track the space occupied by cost centers within each building assignment. Changes to occupancy information are made with concurrence of local representatives. The Branch of Management Services in each region reports to the Branch of Management Support, at headquarters, all changes to space assignments (whether the General Services Administration assignment has changed or not) to be entered into Real Property Management System.
By September 15 of each year, the Fiscal Services offices coordinate with the Branches of Management Services to provide the Office of Financial Management a listing of the building numbers and the accounts to charge for each General Services Administration building assignment. For buildings occupied by more than one cost center, the account numbers and the percentage of the costs that should be applied to each account number are provided.
USGS pays the rent charges due each month to the General Services Administration through IPAC, an electronic payment system operated by the Department of the Treasury for Federal agencies. With each monthly rent bill, the General Services Administration provides an updated space inventory. The Branch of Management Support compares the current month's inventory with the previous month's inventory and produces a difference report, listing each change. The Branch of Management Support uses the report to update the space allocations for the current month. Otherwise, the space allocations remain as they were in the previous month. Once the Branch of Management Support allocates all the space on each Client Billing Record, the Office of Financial Management distributes the rent charges to the cost center accounts. The cost centers review the monthly financial reports and notify the Fiscal Services offices and Management Services of any changes. The Fiscal Services offices notify the Office of Financial Management of any changes required to accounts or cost distributions.
3. How does a cost center determine the correct percentage distribution when there are multiple Client Billing Records within a building?
The current Real Property Management financial program distributes costs at the building level. When there are multiple Client Building Records, Regional Management Services staff, document the distribution of space by cost center within each Client Building Record and consolidate the Client Building Record distributions into a building level distribution.
In the example below, the space in a building is recorded in two building assignments and, therefore, two Client Building Records. Two cost centers occupy the building. The Management Services staff distributed the space within each Client Building Record and, then, constructed the distribution for the entire building.
| CBR | CO0061357 | CBR | CO0061303 | Building | ||
| Science Center | Cost | Share | Cost | Share | Cost | Share |
| Regional Geologist | 884,926 | 91% | 403,081 | 100% | 1,288,007 | 94% |
| Mineral Resources Team | 87,520 | 9% | 87,520 | 6% | ||
| Total | 972,446 | 100% | 403,081 | 100% | 1,375,527 | 100% |
The Branch of Fiscal Services, in this example, would provide the Office of Financial Management with the accounts for the two cost centers and their percentage share of the building's rent; in other words, 6 percent for the Mineral Resources Team and 94 percent for the Regional Geologist.
D. Distributing Facilities Costs to Projects
1. How do cost centers record facilities costs?
Every cost center has standard facilities accounts designated as follows:
All facilities costs will be first recorded in one of these standard accounts to be later distributed to projects.
An account may be funded from only one fund type. If a cost center pays for rent costs with monies from the Facilities Budget Activity and from other appropriated funding, it has at least two rent accounts. Appropriated funding for operations and maintenance costs and for deferred maintenance costs is available for two fiscal years. Cost centers are likely, therefore, to have at least two accounts for operations and maintenance, and at least two accounts for deferred maintenance. One account in each case is funded by the monies that were first available last fiscal year and one account by the monies that were first available this fiscal year. Accounts available for two years should remain open until funds are expended.
2. How does a cost center distribute facilities costs to projects?
To improve reporting of facilities costs, cost centers will first charge all costs that fit the definition of facilities costs (see section B.1. above) to one of the standard facilities accounts (xxxx-RENxx for rent and xxxx-OMCxx for operations and maintenance).
If the cost relates to only one project, the cost center charges the cost to the appropriate facilities account and then uses a standard voucher to move the charges to the appropriate account (project).
If the cost relates to several projects within the cost center, but not all projects, and the cost center has a reasonable basis for distributing the cost among projects, the cost center charges the cost to the appropriate facilities account, calculates the distribution among projects, and uses standard vouchers to move the charges to the appropriate accounts (projects).
All remaining facilities costs benefit the entire cost center and are considered indirect costs. The cost center charges them to the appropriate standard facilities account and an accounting system program will distribute them on a monthly basis to project accounts in proportion to labor costs (object classes 111A-E, 113A-E, 121A-Q, 121T-122B). USGS Manual 501.1 Cost Distribution states that the distribution includes the labor costs of contractors who are assigned space at a USGS site. Nevertheless, data are not currently available within the accounting system to implement this in 2003. The accounts that contain appropriated funding will not receive an actual transfer of the facilities costs. Rather, a report will be available to show the appropriated share of facilities costs. Accounts funded from reimbursements will be charged for their share of facilities costs.
Costs related to deferred maintenance and capital improvement projects funded by the bureau's Deferred Maintenance and Capital Improvement line item are funded by appropriations and are not distributed to reimbursable projects.
3. Are facilities costs related to Fixed Assets distributed to projects?
Facilities costs charged to object classes for capitalized property are excluded from the distribution process. The applicable object classes are 311A, 311B, 311D, 311E, 311H, 311J, 311K, 311L, 323A, 323B, 323C, 323H, 323Y, 323Z, 324J. Costs related to capitalized property require a fixed asset number in the accounting system and reconciling the fixed assets to the general ledger is difficult when costs are distributed to multiple accounts (projects).
4. How are a cost center's indirect facilities costs distributed from the facility accounts to the project accounts?
A cost center's indirect facilities costs are distributed to projects in proportion to the labor costs (salaries and benefits, object classes 111A-E, 113A-E, 121A-Q, 121T-122B)
| Account No.1Appro | Account No.2 Approp. | Account No.3 Reimb. | Total | |
| Labor Costs | $600,000 | $400,000 | $2,000,000 | $3,000,000 |
| Indirect Facilities Costs | $60,000 | $40,000 | $200,000 | $300,000 |
How the accounting system carries out the distribution of indirect facilities costs to accounts (projects) differs according to the type of funding for accounts (projects).
For accounts (projects) funded from appropriations, the accounting system produces a report that displays the amount of indirect facilities costs attributable to each account.
For accounts (projects) funded from reimbursements, the accounting system distributes the appropriate portion of the costs collected in the standard facilities accounts to each account. The distribution is part of the normal month-end accounting cycle and takes place prior to the monthly Project Cost Accounting System distribution is run (this allows the burden rate to be applied on top of the facilities cost distributed to reimbursable customers).
The system generates standard voucher clones (called an SZ document) that record a negative expenditure to the facilities accounts and a positive expenditure to the reimbursable accounts. Each month's distribution involves all indirect facilities cost incurred during the current fiscal year. The system reverses any standard vouchers generated in earlier distributions and recalculates the distribution of indirect facilities costs. The system bases the new distribution on the labor costs incurred by reimbursable project accounts during the current fiscal year. Indirect facilities costs charged to a prior budget fiscal year (or the second year of a two year appropriation) are redistributed. Labor costs charged to a prior budget fiscal year (or the second year of a two-year appropriation) are used to calculate the percentages for redistribution.
In the example from the above table, the $60,000 and $40,000 indirect facilities costs attributable to the appropriated projects are displayed on a report; the $200,000 is redistributed to the reimbursable project.
5. How does a cost center exclude certain accounts (projects) from the distribution of indirect facilities costs?
The following describes the process within BASIS+:
The following describes the process within the Federal Financial System:
E. Calculating a Facilities Rate
1. How does a cost center calculate its facilities rate? Calculating a facilities rate requires estimates of total facilities-related indirect costs and total direct labor costs (salaries and benefits) including the labor costs of contractors who are assigned space at USGS sites.
Calculating a cost center's facilities rate involves the following steps:
In the table above, #3, the cost center has a (net) facilities rate of 10 percent (300,000/3,000,000); that is, for every dollar of direct labor costs, an account receives ten cents of facilities costs.
2. What is the purpose of a facilities rate?
A facilities rate provides only the means to estimate the amount of indirect facilities costs to distribute to projects (accounts). The rate is not used in reimbursable agreements or in the accounting system as an overhead rate. Cost centers include the rate in BASIS for estimating indirect facilities costs at the project level for reimbursable projects. During the year, all actual facilities costs are first charged to the standard cost center facilities accounts and then distributed by the accounting system to reimbursable funded accounts based on its actual labor costs.
3. What information should a cost center use to estimate its facilities costs?
To estimate facilities costs, a cost center uses the prior year's actual costs or the most current data, projected for the end of the year and adjusted for known upcoming changes. Changes could include space expansions or decreases and inflationary cost increases. In buildings that house more than one cost center, the cost center coordinates its estimates with the other cost centers involved and the Regional Branch of Management Services The Regional Branch of Management Services provides a table of costs and space occupancy percentages to all cost centers housed in the same building.
1. How does a cost center pay for facilities costs?
In general, USGS uses funds appropriated to the Facilities Budget Activity to pay for the appropriated share of facilities costs, and collects the reimbursable share of facilities costs from its customers and partners. Distributing the appropriate share of facilities costs to accounts (projects) funded by reimbursements ensures that customers and partners pay their fair share of facilities costs.
Cost centers receive a portion of the Facilities Budget Activity by direct allocation to the standard facilities accounts. Cost centers link their allocation to the standard facilities accounts through a funding agreement and a customer number tied to the Facilities Budget Activity. Rent costs are funded by annual appropriations and tracked in fund code SIRAD, and operations and maintenance costs are funded by two-year appropriations and tracked in fund code SIRMD.
If the allocation of funds from the Facilities Budget Activity is insufficient to cover the appropriated share of facilities costs, the difference/shortfall is funded from other appropriated program funds. Cost centers create additional facilities accounts (xxxx-RENxx and xxxx-OMCxx) tied, through customer numbers and funding agreements, to the appropriate USGS program. The last two characters will differentiate accounts funded by the Facilities Budget Activity from other appropriations. Cost centers use a standard voucher to move the "shortfall" from the accounts funded with the Facilities Budget Activity to the program funded facilities accounts. The frequency of the standard vouchers depends on the billing cycle agreed to with the customer; however, a minimum schedule of quarterly standard voucher processing through the third quarter, then monthly in the fourth quarter is recommended.
When cost centers move facilities costs from the standard facilities accounts to specific appropriated projects, the cost centers create additional accounts linked to the appropriate project and funded from the Facilities Budget Activity.
All facilities accounts will have a zero percent cost center burden rate.
2. How does a cost center determine the funds sources available for facilities costs?
Annually, the Facilities Operating Plan (facilities costs and funding distribution tables) is developed displaying the current year's facilities costs by location for each cost center and the funding sources (the Facilities Budget Activity, program funds, and estimated reimbursements recovered) available to each cost center. The table provides the basis for funds allocations.
G. Administering Facilities Costs
1. What reports are available for a cost center to review its facilities costs?
The accounting system produces a report that displays the indirect facilities costs attributable to each cost center account funded by appropriations as well as a report that reflects the cost center's total facilities costs charged to the standard facility accounts prior to redistributions. The FFS Report 271 will summarize costs by object class for 231x, 253x, and 232x.
2. How does a cost center administer changes in costs or reimbursements?
The cost center reviews monthly financial reports and General Services Administration rent charges and notifies the Fiscal Services offices and Management Services of any changes. The Fiscal Services offices notify the Office of Financial Management of any changes required to accounts or cost distributions. Management Services notifies the Branch of Management Support, APS of any changes in the space inventory distributions.
Questions & Answers
Q. How are costs associated with cost centers that cross regional
boundaries handled?
A. Costs associated with field offices/stations that cross regional boundaries
will be recorded under their cost center, although the field office or field
station may be served by a different region. That is, field offices and stations
should be aligned with the organization to which they belong.
Q.When are salaries and benefits costs considered facilities costs?
A. The salaries and benefits should be captured as facilities costs only
if they are at least 25 percent or more of that person's time. Charge the percent
of time spent on operations and maintenance to the facilities accounts and the
balance to project accounts.
Q.When are the salaries and benefits of the administrative officer
or Center Director who spends time on facilities issues considered facilities
costs?
A. The definitions applied to the Facilities Budget Activity exclude
the salaries, benefits, and operating costs for facilities staff at the cost
center, regional, discipline, and bureau headquarters level who provide oversight,
management and support services of the program. Facilities costs include only
activities related to the operations and maintenance of a facility and should
be included only if the time spent on these activities is 25 percent or more.
Q. If a warehouse facility benefits only certain projects, would
only those projects receive a distribution of costs?
A. Yes, in this case, a cost center would apply the steps related to
distributed direct costs and charge the facilities costs to only those projects
that benefit. The cost center should do so using a consistent and equitable
methodology.
Q. Isn't the facilities rate for appropriated funding set at the
bureau level?
A. No, the facilities rate for appropriated projects is determined by
the labor costs incurred by projects funded by appropriated dollars. The cost
center is responsible for estimating the appropriate share of facilities costs.
Q. Are contractors who perform work at USGS sites included
in labor costs?
A. Yes, if the contractor performs work at and is located at USGS sites,
their labor costs should be included.
Q. Is USGS rented storage space considered a USGS site?
A. Yes, if the space is not temporary storage space (rented for less
than a year).
Q.Do locations where USGS pays rent through a cooperative agreement
constitute USGS sites?
A. Yes, rent is a term used that includes rental payments to the General
Services Administration, rent to non-Federal and Federal sources other than
the General Services Administration, space provided through cooperative agreements,
and other arrangements such as in-kind services.
Q. Are direct services exchanged for space equivalent to rent?
A. Yes, rent is a term used that includes rental payments to the General
Services Administration, rent to non-Federal and Federal sources other than
the General Services Administration, space provided through cooperative agreements,
and other arrangements such as in-kind services.
Q. Where are renovation/building costs to be placed?
A. If the costs are non-recurring and not funded through appropriations
in the Facilities Budget Activity, they are paid for with program funds or charged
to the cost center's common services accounts.
Q. Since there is no mechanism to plan for new construction
or out-year planning through the facilities funding, will it ever happen that
we could include our working capital investments (a minimum amount) in our facilities
budget instead of having to plan for these out of current dollars?
A. Through the budget process, there is opportunity to request funding
for such needs. Nevertheless, there is no guarantee that the needs will be funded.
The bureau's working capital fund provides a mechanism for the cost center to
plan for non-recurring costs. You should refer to the Bureau's Working Capital
Fund Handbook. The cost center may use funds from the Facilities Budget Activity
to invest into the working capital fund as long as the cost center has an approved
investment plan and the funds are not needed to cover shortfalls.
Q. Will the cost center be forced to charge the reimbursable
customer the percentage required to make up the shortfall?
A. The cost center's shortfall is the appropriated share of costs that
are not funded by the Facilities Budget Activity. The shortfall should not be
charged to a reimbursable customer; rather, the cost should be covered by appropriated
program funds.
Q. If funds derived from reimbursable projects and the Facilities
Budget Activity are not enough to prevent a "shortfall" at a cost center, is
it the intent of USGS to cover the facilities costs with appropriated funds?
A. If the allocation of funds from the Facilities Budget Activity is
insufficient to fully fund the appropriated share of facilities costs, the difference
is funded from other appropriated program funds, not from reimbursements. The
reimbursable customer should be billed for only its fair share of facilities
costs. An important corollary is that shortfalls should not stem from the failure
to charge reimbursable customers for their appropriate and fair share of facilities
costs.
Q. How should a cost center display the facilities costs in an agreement?
A. The facilities costs should be shown as a cost, not as a rate.
Q. How should a cost center charge deferred maintenance project costs
not funded by the bureau's deferred maintenance and capital improvement line
item?
A. A cost center should charge deferred maintenance costs to a standard
facilities account xxxx-DMPxx. This account is tied to the fund source provided
for the project, including if the fund source is the operations and maintenance
funding or program funds.
Q. How are the facilities costs for the cost center manager and the
administrative office recorded?
A. The facilities related costs for the cost center manager and other
staff and services included in common services, such as common services labs,
are included in the cost center's indirect facilities costs and not recorded
in the common services accounts.