Allocable Costs: Allocable costs have the following typical characteristics:
OMB Circular A-87 prescribes the principles and factors determining allowable or unallowable costs. Under these principles, an allowable cost must be:
Equipment Depreciation: Allowable for cost plan purposes. Allowable equipment has been identified and the depreciation costs have been allocated to the central services based upon depreciate by department.
Excluded Cost: Costs that are excluded and therefore not included in the indirect cost computation since they would distort the allocation base. For example, capital (equipment) and debt service.
Indirect Cost: A cost incurred for a joint or common benefit and cannot be directly or specifically identified with the cost objectives that benefit from it. Indirect costs must be allocated to the benefiting cost objectives.
Indirect Cost Pool: The accumulated costs that jointly benefit two or more programs or cost objectives. The total allowed indirect costs. It represents the numerator used in the fractional computation of an indirect cost rate.
Roll Forward (Fixed Rate with Carry-Forward): This fixed rate with carry-forward is the difference between estimated costs and actual costs. The rate is not retroactively adjusted. The difference is carried forward as an adjustment to calculate the rate for a future period.
Statewide Cost Allocation Plan (SWCAP): The mechanism by which the State identifies, summarizes, and allocates indirect costs in a logical and systematic manner. The SWCAP is required for the State to obtain reimbursement from the federal government. Section I of the SWCAP is the central service allowable costs provided to all State agencies. Section II of the SWCAP identifies and reports the internal service funds information and costs that are billed to user agencies.
Unallowed Costs: Costs that cannot be charged to federal programs either as a direct cost or included as part of the indirect cost pool when calculating an indirect cost rate. Examples: bad debt, contingencies, contributions and donations, entertainment, fines and penalties, interest, other financial costs, and governance.