Allocation Codes - Allocation Tab

Access this tab using Maintain>Allocation Codes.

Use this tab to make decisions about the allocation method, whether or not to use indirect cost capping, whether you want negative percentages to be considered (where applicable), and how many segments to specify in the allocation code.

• Indirect Cost Cap can be used across all methods for the purpose of comparing the allocation on the specified method to the allocation based on the Modified Indirect Cost method. The system then caps the calculated allocation at the Indirect Cost amount. When this option is selected, one of the Allocation Segments must be selected as the ICR Segment. When the Indirect Cost Rate method is selected, the indirect cost rate cap option is available to ensure that the indirect cost rate is not exceeded for the duration of the period covered by the indirect cost rate. The system calculates the cap for the entire period starting with the ICR start date and ending with the direct cost period end date defined on the calculation. For more information, see Indirect Cost Rate Cap Rules.
• The “Do not calculate using codes with negative percentages” option only applies to the Relative Account Balances, Weighted Average Daily Balances, Labor Hours, and UDF Unit Measures calculation methods. When this option is selected, if one or more of the allocation percentages is calculated as a negative, the system recalculates the percentages without using the Recipient Allocation Segment codes that caused the negative percentages.
• Up to three Allocation Segments can be selected. Adding segments to an allocation code increases control over the specific account code combinations be used in the code.

The system handles allocations of indirect cost and allocations of revenue receipts to asset (generally cash) accounts. The allocations are performed based on the calculation method chosen here, and information entered on the Allocation Codes - Method Tab.

 

Allocation Code: Enter a new allocation code. We recommend using all numeric codes. Numeric codes are generally easier and faster to enter during transaction entry. We also recommend limiting your entry to strictly alphabetic characters (A through Z) or numeric characters (0 through 9), and avoiding the use of symbols, such as: | " [ ] ' % ? < >.

Status: Specify the status of the Allocation Code. When creating a new code, accept the default status A (Active), or select I (Inactive) or D (Discontinued) from the drop-down list. The status can be changed at any time. Below are valid status entries and their descriptions:

• Active (A) - An active status allows you to use an allocation code.
• Inactive (I) - An inactive code means it is no longer used for normal transactions, but it may need to be used at some point. A warning message appears when attempting to use an inactive code. The message is for notification only; the code can still be used in a transaction.
• Discontinued (D) - A discontinued code means it is no longer being used. You cannot use a code with a discontinued status. Discontinued allocation codes appear on reports, but are not included in drop-down lists throughout the system.

Description: Enter a description for the allocation code.

Method: Select one of the following methods to:

• Table - Set percentages, units, and/or monetary amounts for each Recipient Code combination.
• Indirect Cost Rate - Set an Indirect Cost Rate for each Recipient ICR segment code. Cost allocation amounts are calculated based on the indirect cost rate.
• Relative Account Balances - Have the system calculate allocation percentages for each Recipient Code combination. Percentages are based on account balances covering the Balances From through Balances To date range.
• Weighted Average Daily Balance - Have the system calculate allocation percentages for each Recipient Code combination. Percentages are based on the days carried until the balance amount changes.
• Employee Headcount - Have the system calculate allocation percentages based on the number of employees per Allocation Code combination covering the Balances From through Balances To date range.
• Labor Hours - Have the system calculate allocation percentages based on the hours worked per Allocation Code Combination covering the Balances From through Balances To date range.
• Transaction Count - Have the system calculate allocation percentages based on the number of transaction lines per Allocation Code combination covering the Balances From through Balances To date range.
• UDF Unit Measures - Have the system calculate allocation percentages based on the relative balances for each numeric user defined field selected per Allocation Code combination covering the Balances From through Balance To date range.

UDF Name: If the Administrator set up a transaction line user defined field (Organization>Set Up User Defined Fields) that is a number type, it appears in the drop-down list. This field is only available if you select the UDF Unit Measures allocation method.

Use indirect cost limit cap: Select this check box to have the system calculate the allocation amount first by its original method. This amount becomes the Proposed Allocation for purposes of applying the indirect cost cap. After the Proposed Allocation amount is calculated, the system performs a modified indirect cost rate calculation and compares the result. The Proposed Allocation and the Posted Amounts (balances existing in the recipient segment/GL combinations) are added together and compared to the indirect cost IC Limit. The Proposed Allocation will be adjusted downward if posting the Proposed Allocation would put the recipient accounts over the cap. The adjustment is limited to the Proposed Allocation amount.

In the event that the Posted Amounts already exceed the IC Limit, the system sets the allocation amount to zero for any recipient lines affected. An information code of “XCAP” appears in the Codes column of the Recipient section of the Calculated Allocations Report for all affected lines. See Indirect Cost Rate Cap Rules for more details.

If you are performing an allocation and reach the indirect cost rate cap, the allocation transactions are not generated; the remainder stays in the pool. For example, if you have an indirect expense cap, such as 15% of salaries and fringe benefit expenses only, and the expenses exceed the cap amount, they will be considered unallocated indirect expenses. They are not applied to other programs without the cap requirement.

Do not calculate using codes with negative percentages: Select this check box to have the system calculate the allocation percentages. If one or more allocation percentage is negative, the system recalculates the percentages without using the Recipient Allocation Segment codes that caused negative percentages. This option only applies to the Relative Account Balances, Weighted Average Daily Balances, Labor Hours, and UDF Unit Measures calculation methods.

Allocation Segments

• Available, Selected: The system displays all segments, except GL. In the Available column, select up to three segments to allocate from (Pool). This dictates the segments to allocate to (Recipient). Click the Mover (>) to move the codes to the Selected column. If the Fund segment or a balancing segment is selected, you must also select the Interfund/Balancing Accounts for the Pool and Recipient transaction entries.
• ICR Segment: You can designate one segment as the indirect cost rate segment. The indirect cost rate method does not have to be selected; however, you must select this check box if you have selected this method or the Use indirect cost limit cap check box.

Interfund/Balancing Accounts: If a Fund, consolidated organization, or other balancing segment type was chosen above, you must select the General Ledger accounts needed for balancing the allocation entry. Using Interfund/Balancing Accounts with non balancing segments is optional; however, when either a Pool GL Account or Recipient GL Account is entered, both the Pool and Recipient are required.

• Pool GL Account: Enter a Due From account, or select one from the drop-down list. This is the account needed to create the transaction's interfund offset for the pool entry. This field only displays CSH type codes whose currency matches the organization's functional currency. The same GL account can be used for both the Pool GL Account and Recipient GL Account.
• Recipient GL Account: Enter a Due To account, or select one from the drop-down list. This is the account needed to create the transaction's interfund offset for the recipient entry. This field only displays CSH type codes whose currency matches the organization's functional currency.

Allocation Method: The system displays a method of Table, Indirect Cost Rate, Relative Account Balances, Weighted Average Daily Balance, Employee Headcount, Labor Hours, Transaction Count, or UDF Unit Measures on each tab of this form to ensure that you know the method of the selected allocation code you are setting up or editing.