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NONPROFIT-ACCOUNTING6 MIN READ

Worked Walkthrough: split a shared federal cost

Allocate a shared cost to federal and non-federal programs based on proportional benefit and support.

Allocate a $4,800 shared outreach software invoice using usage records across federal, city, and unrestricted programs. Charge each award only for the share of cost that benefits that award and is supported by a reasonable driver. The common shortcut is to charge the federal grant because it has remaining budget. That violates allocability because budget room is not proof of benefit. Choose the driver Usage records are the driver because the software cost scales with outreach records managed. Driver choice should match the cost. For seats, use user counts; for campaigns, use records or activity volume. Calculate total use Federal…

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