Intended to provide our own search engines and external engines with highly rich, chapter-representative searchable text on the opening pages of each chapter. Because it is UNCORRECTED material, please consider the following text as a useful but insufficient proxy for the authoritative book pages.
Do not use for reproduction, copying, pasting, or reading; exclusively for search engines.
OCR for page 24
24 to classify debt expenditures as an enterprise support program 3.4 Step 4: Allocate a Portion allocable to maintenance because this would falsely increase the of Enterprise Support allocation of enterprise support expenditures to line activities. Expenditures to the Direct payments or pass-throughs to other state or local Maintenance Program government agencies, unlike construction and maintenance programs, do not involve DOT personnel administering, over- Objective seeing, or performing work, nor do they benefit the agency in The objective of Step 4 is to establish the relationship any way. The classification of direct payments or pass-throughs between enterprise support and line programs in order to as a line program would falsely reduce the allocation of enter- allocate an appropriate portion of enterprise support expen- prise support expenditures to line activities. ditures to the maintenance program. The examples described, or any similar expenditures, must be excluded from the calculation. The full cost determination process therefore identifies a third category of enterprise expen- Sources of Information and ditures, special/pass-through, and any expenditure identified as Key Considerations such is indeed excluded. The best source of information regarding the relationships In most cases, the classification of a program is obvious between enterprise support and line programs is the agency's from its name; however, program descriptions provided in personnel. This can be supplemented by documentation about agency annual reports and budget documents can guide the agency programs, which can usually be found in agency annual classification where there is any question. reports and budget documents. As with Step 2, a key consideration for this step in the Illustrative Example process is the objective that the full cost determination process be as practical as possible. To satisfy this objective, it is recom- Table 3.4 lists the set of enterprise programs, total expendi- mended that unless a particular enterprise support program is tures, and classification of programs as line, support, or unambiguously associated with only a subset of the line pro- special/pass-through for the example. In this case, the equip- grams, it should be associated with all line programs. The full ment fund is classified as special/pass-through because it rep- cost calculations for both Alabama DOT and Washington State resents all expenditures associated with the agency vehicle fleet, DOT, documented in Appendix A of the attachment, include which are in turn charged in their entirety to the line programs real-world examples of enterprise support programs that through rental rates. In this case, classifying the equipment support only a subset of line programs. In the case of Alabama fund as a special/pass-through expenditure ensures that these DOT, there are separate central office administration and geo- charges are not double counted. graphically focused (division and district) supervisory expen- For the purposes of this example, therefore, total line pro- ditures for both the construction and maintenance programs. gram expenditure is $127,500,000, total support program In the case of Washington State DOT, its program H, Program expenditure is $8,000,000, and $7,500,000 associated with the Delivery Management and Support, only provides support to equipment fund is excluded from the calculation. its Maintenance, Preservation, and Improvement programs. Table 3.4. Example classification of enterprise programs and expenditures. Program Name Type Total Expenditure Maintenance Line $20,000,000 Construction Line $100,000,000 Traffic operations Line $2,500,000 Public transportation Line $5,000,000 Subtotal $127,500,000 Administration Support $5,000,000 Program delivery support Support $3,000,000 Subtotal $8,000,000 Equipment fund Special/pass-through $7,500,000 Total $143,000,000