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Application of Indirect Rates to Projects

After you have calculated rates for pools, post the Allocation Journal to the General Ledger.

At that point, the following tables are updated: FS_SUM, GL_POST_SUM, GL_DETL, and ALLOC_BASIS_JNL_HS. The Allocation Journal is then cleared.

Note: If you have a service center that allocates costs to any project direct-cost accounts (that is, the service center is allocating to ODC items) or to any other account that is included in a subsequent pool's base, you must post the Allocation Journal more than once. Do the "initial pass" on your calculations, post the Allocation Journal, then perform the allocation calculations again and post again. This is required to post the costs into the general ledger for the subsequent pool calculations. If you do not calculate and post allocation amounts which are part of the base of subsequent pools, the service center costs are not posted to the general ledger, and are not included in the basis for those subsequent pools' calculations. This results in incorrect rate calculations. Whether or not multiple posting of the Allocation Journal is required depends entirely on your pool structure and sequencing setup.

After posting the Allocation Journal, you are finished applying rates to projects. Before you can start this process, the Rate Application table must exist and be current. This table contains all of the Base Accounts used by the Compute/Print Pool Rates screen, and is the source for the application of rates to projects.

You must re-create the Rate Application table whenever you modify any one of the following three fields on the Manage Cost Pools screen:

  • Pool Base Account (Pool Base subtask)
  • Pool Sequence Number
  • Apply Rates to Projects check box

To re-create the table, you must go to the Build Rate Application Table screen and click . If you do not know whether or not to re-create the table, check the Manage Allocation Groups screen to see whether the Rebuild of Rate Application Table Required check box is selected.

After you have created the Rate Application table, you can apply rates to projects. This process involves the following:

  1. The Rate Application table is read sequentially and each Base Account is processed separately.

    For each individual Base Account/Organization combination, the General Ledger (GL_POST_SUM) is read, and Current Period, Period-To-Date, and YTD costs or hours (for hours-based pools) are summarized for each project element that had activity within that account/organization combination.

  2. For each pool listed in the Rate Application table for that Base Account/Organization combination, Current and YTD Actual, Current and YTD Target and Current and YTD Cost of Money rates are collected from the Rate Table.

    Override rates are collected from the Project Burden Cost Ceilings screen.

  3. If you are using the YTD Rate Application Method (you selected the Year to Date Rates option on the Corporate Settings subtask of the Configure Project Settings screen), the YTD rates are applied to the YTD cost or hours (for hours-based pools) for each project element that was collected in Step 1.

    This results in the calculation of YTD Actual Burden Cost, YTD Target Burden Cost (or Override Burden Cost if Override Rates were found in Step 2), and YTD Cost of Money Burden for both Actual and Target.

    If you are using the YTD Rate Application Method, Costpoint calculates the Current Subperiod Burden Cost by subtracting the previous YTD Burden (burden that was calculated for all subperiods except for the current subperiod) from the newly calculated YTD Burden. The Period-To-Date Burden Cost is calculated in the same manner — all burden calculated for periods less than the current period is subtracted from the newly calculated YTD Burden.

  4. After the YTD and Current Period Burden have been calculated, Costpoint updates the Project Reporting Repository (PROJ_SUM and PROJ_BURD_SUM tables) with the following:
    1. YTD Direct Cost from the General Ledger (GL_POST_SUM) for each project/account/organization combination
    2. YTD Burden Cost by Pool for each project/account/organization combination
    3. Current Subperiod and Period-To-Date Direct Cost from the General Ledger (GL_POST_SUM) for each project/account/organization combination
    4. Current Subperiod and Period-To-Date Burden Cost by Pool for each project/account/organization combination
  5. If you are using the Current Period Rate Application Method (you selected the Current Period Rates option on the Corporate Settings subtask of the Configure Project Settings screen), Costpoint calculates the Current Subperiod Burden by multiplying the Current Period Rate by Current Subperiod Direct Cost or hours (for hours-based pools) for Actual, Target, and Cost of Money.

    Costpoint derives the Period-To-Date and YTD Burden Cost by adding Subperiod Burden for the Period-To-Date and for the Year-To-Date. Costpoint then performs all of the updates noted in Step 4.