Allocation Of Ordinary Maintenance Expenditures

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Allocation of Ordinary Maintenance Expenditures (1b) Similarly I used the ABC model to determine the amount of non-personnel expenditures (or ordinary maintenance) allocated to each Traffic Unit activity. Lieutenant Allen did not fully account for the other overhead or maintenance expenditures assigned to Traffic Enforcement such as training, office supplies, vehicle repairs, motor gas and oil costs. Our ABC analysis allocates approximately $19,049 in ordinary maintenance expenditures to Traffic Enforcement (significantly more than the $500 estimated by Lieutenant Allen from the line-item budget). Based on staff interviews and the ABC model, these expenditures (training, office supplies, and professional services) are allocated in a…show more content…
The City appropriately uses a cost driver related to vehicle usage given its direct relationship to the designated expenditures (vehicle repairs/gas and oil expenses) incurred by the Traffic Unit. By applying a cost driver, the City of Somerville will objectively allocate expenditures across the Traffic activity units that directly benefit from the cost incurred. The City ABC team, in consultation with a top City manager, inventoried six activity centers within the Traffic Unit: (1) Investigate Accidents; (2) Manage Tow Companies; (3) Traffic Enforcement (including ticket issuance and court prosecution of tickets); (4) Staff/Supervise Crossing Guard Posts; (5) Process Data; and (6) Organize Special Events. In these six activities, the Mayor has prioritized the traffic enforcement activity as an important cost for the City to control. The traffic enforcement activity includes vehicle-related costs (i.e. Repairs – Vehicles and Motor Gas and Oil). Considering that using City vehicles throughout the municipality is likely needed for the remaining five activities within the Traffic Unit program, it is difficult to decide on the proportion of vehicle-related expenditures that should be assigned to the “traffic enforcement” activity pool. Based on the Traffic Unit line-item
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