In this assignment, we are going to look at how cost is allocated in Government departments and private agencies and discuss the need and importance of the same. Discussion Let us start with the US Army Corp of Engineers. …
Though Obama promised change, Government spending has continued unabated and even the risk of default on debt obligations in the beginning of August 2010 did nothing to dampen the Government’s appetite for spending. Although there was an impasse between those who supported Obama and those who didn’t, in the end common sense meant that the debt ceiling had to be increased for America to avoid default. Notwithstanding the exhortations of the public to stop Government spending, to tighten the belts and purses of the Government agencies and politicians and to stop the war on terror that has resulted in overspending with little results, the inefficiencies, the bumbling and the ineptitude of the Government prevail. Obama-care has been opposed not because it is wrong, but because it would result in just more inefficiency. The government is butting into the realm of the private sector, the same mistake that was made by giving too much responsibility to Fannie Mae and Freddie Mac, the controllers of the home mortgage industry and the housing sector. In such a scenario, cost allocations, revenue and expense targets and continued management reporting can make a world of difference in gauging the efficiencies of Government organizations and agencies. In this assignment, we are going to look at how cost is allocated in Government departments and private agencies and discuss the need and importance of the same. Discussion Let us start with the US Army Corp of Engineers. Even though they are a branch of the US Federal Government, yet they are concerned about cost allocation. The mission of this institution is to provide important and critical public engineering services and to strengthen the security of the USA in times of both war and peace, to energize and motivate the economy, and to reduce risks posed by and as a result of natural and man-made disasters. While we often think of the US Army Corps of Engineers to be a part of the US Army and therefore subject to Government funding, the truth is that it is funded by the taxpayers. No wonder it is worried about its funding and cost allocations. Even the Federal Government has rules and regulations for cost sharing and allocations, and the US Army Corps of Engineers has to abide by them. This means that the feasibility for all proposals and activities planned by the US Army Corps of Engineers has to be discussed and the need and cost of the projects debated before permission to proceed is granted. But the primary purpose of all cost allocations is to ensure their recovery or reimbursement by the powers that be, or to arrive at a basis for sharing of common costs between different arms and agencies of the Government. Both drawdown and flow augmentation methods are considered here (www.nww.usace.army.mil). The drawdown method presupposes that there would be a depletion of natural resources during the project, while the flow augmentation presupposes that there would be an apportionment of storage among already identified purposes. It has been a policy of the US Army Corps of Engineers not to ask for a reallocation of costs unless a major change or overhaul of present facilities is planned to be implemented. Let us now move on to how the City Government plans its cost allocations and revenues. For instance, a perusal of accounting records for the City of Seattle Government Department lists a series of costs and associated cost drivers for allocating these costs. Most of these allocations have been made on the basis of common sense and practical wisdom- although I am sure some have been uniform throughout the history of modern Government. A further look at most of ...
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4 Pages(1000 words)Case Study
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