Cost Allocation From Temporary Administrative and Support Appropriations (APS 025)

Overview

Applicable to

State agencies.

Policy

State agencies must allocate expenditures within the temporary administrative and support appropriations within 30 days following each of the first three fiscal quarters and within 60 days following year end. (The recommended allocation time frame for simplified reporting agencies is 30 days.)

Legal Citation

Government Code, Section 403.011

Legend

Background

What are A/S Costs?

Administrative and support (A/S) costs are those administrative and support costs that are not directly attributable to a specific strategy.

Without “Indirect Administration”

State agencies can account for their A/S costs separately from their direct strategies, even if they do not have a goal or strategy item called “Indirect Administration.”

Some agencies do not have a goal or strategy item called “Indirect Administration” in the General Appropriations Act (GAA). In this case, the agency must decide whether to charge administrative and support costs to a direct strategy or to a temporary A/S appropriation(s).

State agencies are not required to perform a separate cost allocation (CA) if the costs are posted to a direct strategy appropriation(s).

With “Indirect Administration”

State agencies that have a goal or strategy item styled “Indirect Administration” or similar language in the GAA must charge all A/S costs to that structure and must not allocate these costs back to the direct strategies. No temporary A/S appropriations can be used.

Rules of Allocation

Allocating expenditures can be done within the Uniform Statewide Accounting System (USAS) via expenditure transfers or via an automated cost allocation system. Allocating encumbrances must be performed manually by the agency.

Note: Agencies can also temporarily charge expenses to any appropriation, then perform expenditure transfers to allocate the costs accordingly, rather than setting up temporary A/S appropriations. See For More Information in this accounting policy statement (APS) and Correcting Bookkeeping and Cost Allocation Entries (APS 021) for more details.

Important Processing Dates

Agencies must allocate these expenditures within the 30 days after each of the first three fiscal quarters, and within the 60 days after the fiscal year’s end. (The recommended allocation time frame for GR consolidated agencies is 30 days.) The 60-day year-end requirement is consistent with the 60-day requirement for inputting all payable and encumbrance activity for full reporting agencies. See Encumbrance Reporting and Lapsing of Appropriations (APS 018) for more information.

Any encumbrance or payable not able to be allocated by the end of the 60-day period should be processed against a direct strategy(s). (The recommended allocation time frame for GR consolidated agencies is 30 days.)

Unobligated budget in the A/S appropriation(s) must be returned to the direct strategy(s) within the 60 days following the end of the fiscal year. (The recommended A/S budget return time frame for GR consolidated agencies is 30 days.) The budget amounts returned to the direct strategy(s) will be subject to lapse.

The effective date of allocated transactions will be the last day of the last month being allocated. The generated reversals and liquidations of allocation transactions will have an effective date of the current system date.

ABEST

Unallocated amounts remaining in the A/S program codes will not be included for the Automated Budget and Evaluation System for Texas (ABEST)/USAS reconciliation. ABEST data is based on expenditure-related activity in the direct strategies, excluding the temporary A/S structure.

Roles and Requirements

Comptroller’s Office Requirements

The Comptroller’s office must:

• Establish A/S appropriations as needed for agencies wanting to charge eligible costs to a temporary structure. The appropriation numbers will be 13900, 13901 and 13903-13905, depending on which appropriations an agency uses.
• Ensure that agencies allocate their administrative costs within 30 days after each of the first three fiscal quarters of the year, and within 60 days after the fiscal year end. (The recommended allocation time frame for GR consolidated agencies is 30 days.)
• Ensure that budget transfers between the direct appropriations and the A/S appropriations are processed correctly.
• Ensure unobligated budget remaining in the A/S appropriations is returned to the direct strategies within 60 days after the fiscal year end. (The recommended A/S budget return time frame for GR consolidated agencies is 30 days.)
• Ensure no revenues are deposited/processed in the A/S appropriations (Cost allocation is expenditure based and does not include revenue allocations).

Agency Requirements

Agencies must:

• Determine whether Correcting Bookkeeping and Cost Allocation Entries (APS 021) or these guidelines will be followed to record A/S costs.
• Record expenditures in the A/S appropriation(s) and allocate expenditures out to direct strategies within 30 days after each of the first three fiscal quarters end and within 60 days after the fiscal year ends. (The recommended allocation time frame for GR consolidated agencies is 30 days.) This can be done manually with expenditure transfers or via an automated cost allocation system within USAS.
• Manually allocate encumbrances.
• Return unobligated budget remaining in the A/S appropriation(s) within 60 days after the fiscal year ends (as a reversal of the original transfers). (The recommended A/S budget return time frame for GR consolidated agencies is 30 days.)

Temporary Administrative and Support Allocations

Using Program Codes

The agency must establish program codes for coding purposes. Agencies can use only one corresponding program code for each A/S appropriation (i.e. five A/S appropriations and five corresponding program codes).

Program Code Numbers

The program codes are identified as follows:

• 3900 – Administrative and Support
• 3901 – Central Administration
• 3903 – Information Resource Technologies
• 3904 – Operating/Support
• 3905 – Regional Administration

Corresponding Appropriations

The corresponding appropriations are identified the same as the program codes, except prefixed with a 1 (i.e., 13900, 13901, 13903-13905). Further identification of these costs can be found in the Legislative Appropriation Request instructions.

Level Three Program Codes

The level three program codes must infer level one program code 1900 and level two program code 2900. The title for both program codes should be “Administrative and Support.”

If Only One A/S Program is Used

If only one A/S Program Code is used, then Program Code 3900 should be used with Appropriation 13900.

If Multiple A/S Codes are Used

If multiple A/S programs are used, then Program Codes 3901 and 3903-3905 are valid.

Program Cost Accounts

Agencies must also establish program cost accounts (PCAs) to record the budget transfers and the applicable costs in the A/S appropriation(s).

Budget Transfers

The budget must be transferred from the direct appropriation(s) to the A/S appropriation(s).

The amounts transferred from the direct appropriations should be in relation to the amount of the expenditures expected to be allocated back to the same strategy.

Note: Each agency determines the amounts transferred to the A/S appropriations.

Committed Budget

Complete a budget revision document in USAS for a committed budget transfer with Document Type A, Batch Type 1, using the coding block in the table below.

Agency	T-code/Title	Appropriation Number	COBJ	PCA	Appropriated Fund/Agency Fund
Allocating Agency	012/Appn Transfer Out	Direct Appn(s) Determined by Agy	7000	Determined by Agency	Determined by Agency
Allocating Agency	018/Appn Transfer In	13900, 13901, 13903–13905	7000	Determined by Agency	Determined by Agency

Additional budgets can be transferred to the A/S appropriations if needed.

Collected Budget

Budget Entry

If an agency wants the A/S appropriation(s) established with a collected budget in USAS, T-codes 015/021 must also be used. Cash must also be transferred to provide funding.

Complete a budget revision document in USAS for a committed/collected budget transfer with Document Type A, Batch Type 1, using the coding block in the table below.

Agency	T-code/Title	Appropriation Number	COBJ	PCA	Appropriated Fund/Agency Fund
Allocating Agency	015/Appn Transfer Out	Direct Appn(s) Determined by Agy	3000	Determined by Agency	Determined by Agency
Allocating Agency	012/Appn Transfer Out	Direct Appn(s) Determined by Agy	7000	Determined by Agency	Determined by Agency
Allocating Agency	018/Appn Transfer In	13900, 13901, 13903–13905	7000	Determined by Agency	Determined by Agency
Allocating Agency	021/Appn Transfer In	13900, 13901, 13903–13905	3000	Determined by Agency	Determined by Agency

Journal Voucher

Complete a journal voucher in USAS for the appropriate revenue or cash transfer for collected budget with Document Type J, Batch Type 2, using the coding block in the table below.

Agency	T-code/Title	Appropriation Number	COBJ	PCA	Appropriated Fund/Agency Fund
Allocating Agency	406/Rev Transfer Out	Direct Appn(s) Determined by Agy	3970	Determined by Agency	Determined by Agency
Allocating Agency	405/Rev Transfer In	13900, 13901, 13903–13905	3970	Determined by Agency	Determined by Agency
Allocating Agency	404/Cash Operating Transfer Out	Direct Appn(s) Determined by Agy	7968	Determined by Agency	Determined by Agency
Allocating Agency	403/Cash Operating Transfer In	13900, 13901, 13903, 13905	3968	Determined by Agency	Determined by Agency

Returning Budgets

The amounts returned to the direct strategy(s) are subject to lapse as outlined in the Encumbrance Reporting and Lapsing of Appropriations (APS 018).

Agencies must use the same transaction codes used above to return the budget, except an R for reversal is used. The sequence for the budget reversal T-codes must be 021R/018R, 012R/015R.

USAS Profiles

Profiles

There are three primary profiles used in the Cost Allocation (CA) system:

• Agency Control Profile (25)
• Cost Allocation Profile (22)
• Fixed Percent Allocation (23)

Index Code Requirement

The CA system requires an index code to be entered on the Cost Allocation Profile (22) and Fixed Percent Allocation (23), even for agencies that do not use these coding elements in USAS.

If your agency does not use the index code in USAS, you must:

1. Establish a generic organization code of 0000 in the Organization Code Profile (D03).
2. Establish a generic index of 99999 in the Index Code Profile (24).

Agency Control Profile

The Agency Control Profile (25) determines:

• The type of allocation (cash, accrual or both),
• The number of months, and
• Trial versus the actual amount posted in USAS.

Users should update all fields in this screen before creating other cost allocation-related profiles.

Key Fields on the Agency Control Profile (25)

• CA RUN – Starts the CA system processing. The most common value is B to allocate both accruals and cash.
• CA POST – Determines whether to generate reports only (N), to generate activity for review (H) or to post activity without review (Y). The recommended value for agency review is H.
• CA RANGE FROM/TO – Determines the period that will be allocated. If allocating on a memo basis, the range will be the unallocated months. If allocating on an actual basis, the range will be year-to-date.
• CA BY IDX – Input 1 is in this field if index code is not used by the agency.

Cost Allocation Profile

The Cost Allocation Profile (22) identifies:

• All PCAs that will be allocated.
• The basis of allocating them.

Note: Basis refers to memo or actual cash posting and to allocations based on either fixed or calculated percentages.

The CA system takes two USAS cycles to generate allocation transactions. The USAS CA control reports are also available on the second day.

Note: The valid values for entering cost allocation depend on the allocation being performed.

Key Fields on the Cost Allocation Profile (22)

• SEQ – Determines under which step this PCA will be allocated. Most agencies perform a single step allocation. In this case, this value is 1.
• DIST TYPE – Determines whether the allocation has fixed percentages (4) or calculated percentages (5) (fixed percent is more common).
• CHG/CR TC – Determines what T-code will allocate the charge and credit activity, which, in turn, corresponds to whether the allocation is memo or actual.
• INDEX CODE – 00000 if not allocating by Index.

USAS Fixed Percent Allocation Screen

The Fixed Percent Allocation (23) screen is used only if the user is allocating with set percentages.

Note: A fixed percentage of expended amounts is allocated to the coding blocks identified in the 32 potential ranges.

Key Fields on the Fixed Percent Allocation (23) Screen

CROSS FUND IND – Determines whether the allocated amounts can cross appropriated funds.

% – Determines the percentage allocated to the specified coding block. The percentages must add up to 1.00000.

INDEX CODE – 00000 if not allocating by Index.

T-codes

T-codes determine whether allocations will be on a memo or an actual basis

Memo Allocations

In automated cost allocation, memo allocations are only required from the A/S appropriation, unless crossing appropriated funds.

Memo-based T-codes affect Balance Type 22 (Cost Alloc Memo E) on various USAS financial inquiry screens. These T-codes do not affect cash or have any financial reporting impact.

Memo Allocation T-codes

Here are some of the most commonly used memo allocation T-codes:

• Charge Cash – 305/Credit Cash – 306
• Charge Accrual – 324/Credit Accrual – 325
• Charge Payroll – 324/Credit Payroll – 325

Year-to-date T-codes (Less Common Memo Allocation T-codes)

Another less common pair of memo allocation T-codes for charge cash/credit cash is 293/294.

The benefit of these T-codes would be if your allocation percentages change during the year and all allocated amounts need to reflect the latest percentages.

These T-codes generate reversal transactions in order to accommodate a year-to-date allocation method.

Actual Allocations

Allocations across appropriated funds must be on an actual basis. Actual allocations are required when allocating between direct strategies.

Actual-based T-codes affect Balance Type 15 (Cash Expenditures) and Balance Type 17 (Accrued Expenditures) on various USAS financial inquiry screens. These T-codes are expenditure transfers – they affect cash and financial reporting.

Actual Allocation T-codes

Here are some of the most commonly used actual allocation T-codes:

• Charge Cash – 366/Credit Cash – 367
• Charge Accrual – 320/Credit Accrual – 321
• Charge Payroll – 320/Credit Payroll – 321

Memo and Actual Allocation of Encumbrances

The allocation system allocates cash expenditures, accrued expenditures and payroll expenditures only. Allocation of encumbrances must be done manually by the agency.

For a memo allocation, T-code 354 allocates encumbrances into the direct appropriation(s) and T-code 355 allocates out of the A/S appropriation(s). These transactions must be performed using user class 31. The Document Type is J and the Batch Type is 4.

For actual allocation of encumbrances, T-code 207 can be processed against the direct strategies initially instead of flowing through the A/S appropriation(s).

Note: The T-codes are usually backdated to the last day of the previous month in question.

Entering Data

How to Run the Cost Allocation

Follow the steps in the table below to run the cost allocation:

Step	Action
1	Set the proper values on the Agency Control Profile (25) screen.
2	Change the CA RUN field value from N to the appropriate value.
3	Ensure that the CA TYPE field value is set to R if a range of months is being run.
4	Ensure that the correct number of steps is set. For single step agencies, the NO STEPS field value is 01 and the LAST STEP field value will be 00.
5	Verify the CA POST field indicator. The setting H generates CA reports and places a batch(s) on hold on the IT file (53 screen).*
6	Set the CA RANGE FROM/TO field. The range for memo T-codes 305/306 is unallocated months (e.g. 01-03, 04-06). The range for actual T-codes 366/367 or memo T-codes 293/294 is year-to-date (e.g. 01-03, 01-06).
7	Verify that the Cost Allocation Profile (22) and Fixed Percent Allocation (23) screens are correct.
8	Ensure that a profile is established for each PCA that recorded an allocated expenditure.
9	Ensure that the allocation T-codes are correct.
10	Ensure that the receiving coding blocks and percentages are correct.

* To have this batch post, the batch must be recomputed (510 screen, action = R), then released (502 screen, action = R). The batch can also be deleted if the data is not accurate.

Verifying Data

Verifying Cost Allocation Data

While the cost allocation batch is on hold on the IT file (53 screen), the batch can be viewed to analyze the detail. Reports are also generated to assist with verification.

Once the allocated data is posted in USAS, financial inquiry screens, reports and ABEST/USAS reconciliation are affected. However, the depth of verification is left to the agency to determine.

Verification Reports

The DAFR8700 (Cost Allocation General Ledger Expenditures by AY, Index and PCA) report can be requested both before and after CA is posted. This report assists with verification at the Comptroller object level. Agencies must request this report via the Report Request Profile (91).

The DAFR5851 (CA Transaction Summarization Detail) report generates after CA is initiated and is recommended for detailed transaction-level information.

In addition, the DAFR5821 (Cost Allocation Summary Report) is recommended for summary-level verification. DAFR5821 can verify at the appropriation level and has columns corresponding to each obligation being allocated (cash, accrued and payroll expenditures).

Verification Screens

Users can determine if all obligations are allocated by comparing the amounts against the expenditure-related balance types on the Appropriation Record Inquiry (62) screen. Memo allocations, accruals and payroll accrued amounts are combined in the DAFR5821 report’s Memo Accrued column but are separate balance types on the Appropriation Record Inquiry (62) screen.

The Appropriation Record Inquiry (62) screen can determine if all obligations have been allocated. Balance Type 22 can track this activity. For the A/S appropriation(s), this amount will be negative.

Verification Balance Types

Memo Allocation

To verify that all obligations have been memo allocated, look at the last month allocated, then add the following balance types from the Appropriation Record Inquiry (62) screen: BT 15+16+17+18+22. The sum should equal zero.

If the sum does not equal zero and the amount is a positive number, there is unallocated activity. A PCA without a corresponding 22/23 CA profile may have been used, or encumbrances were not allocated manually.

If the calculation does not equal zero and the amount is negative, there is over-allocation. You should reverse this activity.

Actual Allocation

Since actual allocations affect cash, the system posts transactions as accruals in order to backdate the transactions into the last month being allocated.

Moving obligations out of the A/S appropriation(s) should result in a negative Balance Type 17. To verify that these obligations have been allocated, look at the last month allocated, then add together the following balance types from the Appropriation Record Inquiry (62): BT 15+16+17+18. The sum should equal zero.

If the sum does not equal zero and the amount is a positive number, there is unallocated activity. A PCA without a corresponding 22/23 CA profile may have been used, or encumbrances were not allocated manually.

If the calculation does not equal zero and the amount is negative, there is over-allocation. This activity should be reversed.

Posting Allocation Data

Once the cost allocation data has been verified, the batch(es) need to be released from the IT file. First, recompute the batch, then release it. Delete the batch if the data is not accurate.

For More Information

General Information

The allocation of the expenditures can be performed manually via expenditure transfers. See Correcting Bookkeeping and Cost Allocation Entries (APS 021) for more information, and Encumbrance Reporting and Lapsing of Appropriations (APS 018) for the Binding Encumbrance and Payable Report requirements.

Additional Cost Allocation Information

Multiple Appropriation Years

If agencies do not want multiple appropriation years allocated, users should inactivate the Cost Allocation Profile(s) (22) or change the SEQ field on the 22 screen to segregate the AYs.

Allocating Accrual Amounts

Accruals should be allocated when the appropriation year being allocated is equal to the current fiscal year. When the appropriation year is less than the fiscal year, accruals should not be allocated via the automated system.

To accomplish a cash-only allocation, fill in the CA RUN field on the Agency Control Profile (25) screen with C (instead of B) for both cash and accruals. Accruals should be allocated manually when the FISCAL YEAR and appropriation year do not equal.

Reversal Transactions

When accruals are allocated on a memo or actual basis, the T-codes used generate reversal transactions. Payroll accruals and accruals in the A/S appropriation(s) (Balance Type 16 and Balance Type 17 respectively) become cash expenditures.

If the allocated accrued transactions did not reverse, the amounts are allocated twice — once as accruals and once as cash in the next period allocation.

Fatal Funding Errors in Liquidation Batch

When allocating on an actual basis using T-codes 366/367, these transactions post in USAS as accruals before they are turned into cash expenditures. However, the liquidation batch may have fatal funding errors. Budget and/or cash transfers must be performed and posted, then the liquidating CA T-code batch released to complete the full effect of the allocation. Under no circumstances should any data elements be changed on the liquidation batch. This can create inconsistent appropriation and financial balances between the accrual and the liquidation.

Partial Year Allocations

The CA system allows partial year allocations (for example, June, July and August) until the end of November. Manual allocation and automated allocation requiring a year-to-date range are possible until the fiscal year is closed.

The CA TYPE field value used starting Dec. 1 for the prior year year-to-date range can only be P. The CA RANGE FROM/TO field must be 01/13 to run the last period of the prior fiscal year.

Year-end Allocations

Year-end allocation should not be performed until all payable and encumbrance activity is recorded in the A/S appropriations. Any encumbrance or payable not able to be allocated by the end of the 60-day period should be processed against a direct strategy(s). (The recommended allocation time frame for GR consolidated agencies is 30 days.)

USAS Coding Instructions

Refer to USAS Coding Instructions (FPP Q.010) for valid values and additional information.