Apply Overhead and Cost Allocations

Classification: GoldFinch Native · Additional Application · Configured Solution

Overview

Organizations may allocate shared or indirect costs across grants, projects, programs, departments, funds, or other reporting dimensions. The governing grant terms and the organization’s approved cost-allocation policy determine the permitted methodology.

GoldFinch Accounting can record the approved allocation entries and provide related financial reporting. GoldFinch does not automatically determine the correct allocation method, eligible-cost base, indirect-cost rate, ceiling, exclusion, or regulatory treatment for a grant.

Allocation rules and calculations may require CloudBudget, another budgeting or grant-management application, customer-specific Salesforce automation, or an approved external calculation process.

Define the allocation rule

Each rule should identify:

• Approved percentage or rate
• Allocation base, such as eligible direct costs, salaries, headcount, usage, or another approved measure
• Included and excluded accounts or cost categories
• Applicable grants, programs, projects, departments, and funds
• Effective beginning and ending dates
• Ceilings, limitations, exceptions, and rounding rules
• Required source documents and approvals
• Responsible preparer and reviewer

Common allocation methods

Depending on the grant terms and approved policy, an organization may use:

• Fixed percentages
• Eligible direct costs
• Salary or labor hours
• Headcount
• Square footage
• Units of service or activity
• Equipment or resource usage
• Another documented and permitted allocation basis

The presence of a calculation option does not establish that the method is allowable under a particular award.

Allocation process

1. Confirm the approved rule, rate, base, effective period, and eligible grants.
2. Retrieve the applicable source costs.
3. Review inclusions and remove ineligible or previously allocated amounts.
4. Calculate the proposed allocation using the approved method.
5. Review totals, rounding, ceilings, match treatment, and exceptions.
6. Obtain the required approval.
7. Post the approved allocation through the applicable GoldFinch Accounting process.
8. Reconcile the allocation with source records and the general ledger.
9. Retain the calculation, source references, rule version, approval, and posting evidence.

Control considerations

• Restrict changes to approved allocation rules.
• Use effective dates when a rate or basis changes.
• Prevent duplicate allocation of the same source cost.
• Separate preparation, review, approval, and posting when required.
• Distinguish direct costs, allocated shared costs, and indirect costs in reports.
• Retain the original calculation when corrections or reallocations are posted.

Important limitation

GoldFinch can record and report approved accounting entries, but it does not provide legal or compliance advice about the allowability of costs or the correctness of an allocation method.