Procedures Followed by Coast Guard in Developing Costs for Selected Programs

The Coast Guard uses two basic methods for accumulating costs. For the Operating Expense and Reserve Training Appropriations, costs are collected by cost centers which are usually operating facilities or organizational units. For the Acquisition, Construction, and Improvements Appropriation and the Research, Development, Test, and Evaluation Appropriation, costs are collected by project since these appropriations are managed on a project basis. Each operating unit has been assigned at least one cost center, and special cost centers have been established for costs incurred by divisions and offices at the district, area, and headquarters level. Within each cost center, costs are categorized by object classes which are based on the 24 standard classes prescribed by the Office of Management and Budget. Cost accounting data are summarized quarterly on a cumulative basis and a report prepared by cost centers and showing costs for object classes within each center. Cost reports are also prepared for each district. For budget presentation, costs must be summarized by programs; the Coast Guard has 13 operational and 12 nonoperational programs. A computer program allocates the costs of the 2,500 cost centers to the 25 programs based on the principle of apportioning costs on the basis of actual time or estimated percentage of effort devoted to a program. Program costs for the Marine Environmental Protection Program and the Enforcement of Laws and Treaties Program, requested by the subcommittee, were estimated since the Coast Guard does not allocate costs below the level of the 13 major operating programs.