Mild53

I agree, a cost accounting consultand who can set our cost stucture is necessary. Where woould you advise that I look for one? Is this a specialty or will most large accounting firms be able to handle this?

To clarify I would allocate the facility costs and list them under "direct expense".

Thank-you very much for your assistance. I will try to get them to apply FAR Part 31.2. Wish me luck. Unfortunately, the staff in agencies sometimes has no idea what they are asking for. I am thinking of allocating faciltiy costs (rent, utlitites, telephone, internet, etc) based on a % of Direct labor. We only provide services, so I think it is reasonable to allocate these costs this way. FAR Part 31.2 appears to broad enough to allow this. Have you seen these costs allocated this way?

My company is a commercial for-profit company that most often works for state government on health care projects. These projects in turn are funded by the Federal government and subject to Federal rules. For projects in one state we complete detailed cost and budget forms that are structured to meet OMB Circular A-122, which I see is intended for non-profits. My first question is this. 1) Is there a similar circular to be used by for-profit organizations? I think this state may be stuck on using A-122 for this assignment, so I will probably have to adjust our for–profit accounting to non-profit rules. This brings my next questions. 2) How do I interpret the description of direct costs from Circular A-122. “Direct costs are those that can be identified specifically with a particular final cost objective, i.e., a particular award, project, service, or other direct activity of an organization” Do direct costs include cots for having a place for employees to work such s rent, utilities, phone, technology? 3) How do I interpret this “Indirect costs are those that have been incurred for common or joint objectives and cannot be readily identified with a particular final cost objective”. I am told that the maximum overhead amount for this project is 10% is this the same as indirect? . What typically counted as in overhead for non-profits? Thank-you for any assistance you can provide.