ADMINISTRATIVE English meaning

The excess of the actuarial value of the assets of a pension plan over the actuarial accrued liability is an actuarial surplus and is treated as a negative unfunded actuarial liability. Indirect cost rate proposal means the documentation prepared by a governmental unit or subdivision thereof to substantiate its request for the establishment of an indirect cost rate. State public assistance agencies will develop, document and implement, and the Federal Government will review, negotiate, and approve, public assistance cost allocation plans in accordance with Subpart E of 45 CFR Part 95.

The measure of the actuarial accrued liability at a plan’s inception date is the present value of the units of benefit credited to employees for service prior to that date. (This method is also known as the unit credit cost method without salary projection.). Indirect cost rate is a device for determining in a reasonable manner the proportion of indirect costs each program should bear.

How do Administrative Expenses Work?

Under 40 U.S.C. 3702 of the Act, each contractor must be required to compute the wages of every mechanic and laborer on the basis of a standard work week of 40 hours. Work in excess of the standard work week is permissible provided that the worker is compensated at a rate of not less than one and a half times the basic rate of pay for all hours worked in excess of 40 hours in the work week. The requirements of 40 U.S.C. 3704 are applicable to construction work and provide that no laborer or mechanic must be required to work in surroundings or under working conditions which are unsanitary, hazardous or dangerous. These requirements do not apply to the purchases of supplies or materials or articles ordinarily available on the open market, or contracts for transportation or transmission of intelligence. In accordance with the statute, contractors must be required to pay wages to laborers and mechanics at a rate not less than the prevailing wages specified in a wage determination made by the Secretary of Labor.

• Semi-variable expenditures have fixed and variable elements to them.
• (2) The costs of finding a new home, such as advance trips by employees and spouses to locate living quarters and temporary lodging during the transition period, up to maximum period of 30 calendar days.
• Such indirect costs may be reimbursed under the Federal award or used to meet cost sharing or matching requirements.
• In the event that an institution returns to a post-determined rate, any over- or under-recovery during the period in which negotiated fixed rates and carry-forward provisions were followed will be included in the subsequent post-determined rates.
• So, yours may be higher or lower depending on your expenses and business’s needs.
• The organization must have an established accounting system prior to being awarded a grant or contract with a federal government agency.

The estimated service life of a tangible capital asset (or group of assets) is a current forecast of its service life and is the period over which depreciation cost is to be assigned. Home office means an office responsible for directing or managing two or more, but not necessarily all, segments https://personal-accounting.org/debt-yield-calculator-hud-loans/ of an organization. It typically establishes policy for, and provides guidance to, the segments in their operations. It usually performs management, supervisory, or administrative functions, and may also perform service functions in support of the operations of the various segments.

Administrative Costs definition

The portion of such costs that exceeds the cost of airfare as provided for in paragraph (d) of this section, is unallowable. Costs incurred for interest on borrowed capital, temporary use of endowment funds, or the use of the non-Federal entity’s own funds, however represented, are unallowable. Financing costs (including interest) to acquire, construct, or replace capital assets are allowable, subject to the conditions in this section. (2) Costs of insurance or of contributions to any reserve covering the risk of loss of, or damage to, Federal Government property are unallowable except to the extent that the Federal awarding agency has specifically required or approved such costs. (a) Cost increases for fluctuations in exchange rates are allowable costs subject to the availability of funding. Prior approval of exchange rate fluctuations is required only when the change results in the need for additional Federal funding, or the increased costs result in the need to significantly reduce the scope of the project.

• This category of costs does not relate specifically to any business function such as production and sales.
• Cognizant agency for indirect costs means the Federal agency responsible for reviewing and approving the governmental unit’s indirect cost rate(s) on the behalf of the Federal Government.
• General and administrative expenses are costs that aren’t related to sales or production that you take on when running your business—like internet and power bills, executive salaries, and rent.
• (3) Known questioned costs that are greater than $25,000 for a type of compliance requirement for a major program.
• The cognizant agency for indirect costs must conduct any necessary negotiations with an educational institution regarding amounts questioned by audit that are due the Federal Government related to costs covered by a negotiated agreement.

Management is strongly motivated to maintain low administrative expenses relative to other costs, as this allows a business to utilize leverage more effectively. The sales-to-administrative expense ratio helps companies to measure how much sales revenue is being portioned to covering administrative costs. Companies incur administrative expenses administration cost meaning in order to perform basic operations (e.g., administer payroll or healthcare benefits), increase oversight and efficiency, and/or comply with laws and regulations. On the income statement, administrative expenses appear below cost of goods sold (COGS) and may be shown as an aggregate with other expenses such as general or selling expenses.

Why Is It Important to Track Your General and Administrative Expenses?

That can include turning off equipment and lights at the end of the day or when not in use. You can also move to a smaller office space if rent costs become a problem. First, take a hard look at your administrative and general expenses since you can significantly reduce them without disrupting or hurting production. You include the salaries and wages of employees working in the production unit in the COGS section and those working in the sales unit in the Selling section of SG&A. Whether you’re running a construction company, a restaurant, or any small business, you’ll need to cover general and administrative expenses (G&A).