deltek insight 2012: interpreting the statement of indirect expenses

Interpreting the Statement of Indirect Expenses

Stacey McCarver, Deltek

GC-298

Abstract

GCS Premier’s Statement of Indirect Expenses (SIE)

is critical to fully understanding your indirect rates and rate

structures. Attend this session and unlock the mysteries of

the SIE! Topics on the agenda include a discussion on the

differences between Company-Wide and Divisional Reports,

tiering, variances and unabsorbed amounts. A Deltek

expert will provide tips and tricks and reveal the power behind

this valuable GCS Premier report.

2 ©2012 Deltek, Inc. All Rights Reserved

Agenda

Statement of Indirect Expenses (SIE) Overview

Company-Wide or Divisional SIE Report

Inter-divisional Allocations

The Tiering Process & Inter-pool Allocations

Unabsorbed Amounts

Target vs. Actual Rate Comparison

TIPS


Statement of Indirect Expenses (SIE) Overview

Statement of Indirect Expenses

What is the Statement of Indirect Expenses (SIE)?

A report that provides the calculations that derive your company’s

indirect rates.

Each pool contains two pages.

Page 1 – Detailed listing of all accounts assigned to the pool (the

numerator). Basically this shows you the pool costs.

Page 2 - Shows what cost elements are included in the base (the

denominator) and how the costs are applied. Basically this shows you

the pool base.

Pool Costs divided by Pool Base = Indirect Rate



SIE Legend

Section Line Color

Company Wide or Divisional SIE

Actual Costs

Budgeted Costs

Base Amounts

Indirect Rate

Applied Amounts

Unabsorbed amounts

Target vs. Actual variance

Tiering


Co-Wide SIE Divisional SIE


©2012 Deltek, Inc. All Rights Reserved7

How do I know if I should run the Co-Wide SIE or the

Divisional SIE?




Army-Div1

Fringe 32.0%

Open

Co OH 35.14%

Cust OH 27.13%

MH 5.32%

Sub H 4.97%

G&A 16.73%



Army-Div1

Fringe 32.0%

Open

Co OH 32.14%

Cust OH 27.13%

MH 5.32%

Sub H 4.97%

G&A 16.73%

Navy-Div2

Fringe 32.0%

Open

Co OH 32.14%

Cust OH 27.13%

MH 5.32%

Sub H 4.97%

G&A 16.73%

Air Force-Div3

Fringe 32.0%

Open

Co OH 32.14%

Cust OH 27.13%

MH 5.32%

Sub H 4.97%

G&A 16.73%



Army-Div1

Fringe 35%

Open

HQ OH 76%

Army OH 34%

Pentagon OH 45 %

M&S 3%

G&A 14%

Navy-Div2

Fringe 35%

Open

HQ OH 76%

Navy OH 92%

Open

M&S 3%

G&A 14%

Air Force-Div3

Fringe 35%

Open

HQ OH 76%

Air Force OH 88%

Edwards OH 56%

M&S 3%

G&A 14%



General Guidelines

If you only have 1 division - Co-Wide SIE

If you have multiple divisions and:

Rates are the same for all divisions – Co-Wide SIE

Rates vary by division – Divisional SIE

When you run a Co-Wide SIE

Division 1’s pool structure is used as a template for entire company



What does the Inter-divisional allocation do?

The inter-divisional allocation transfers amounts from a pool in one

division to all pools with the same pool number in other divisions

The inter-divisional allocation is a horizontal allocation across

divisions.

It allows you to collect pool costs in one division and allocate

them to other divisions in the G/L.

JE’s are prepared. You must post these JE’s

Does my company need to perform these allocations?



Army-Div1

Fringe 35%

Open

HQ OH 76%

Offsite OH 43%

Open

M&S 3%

G&A 14%

Navy-Div2

Fringe 35%

Open

HQ OH 76%

Offsite OH 43%

Open

M&S 3%

G&A 14%

Air Force-Div3

Fringe 35%

Open

HQ OH 76%

Offsite OH 43%

Open

M&S 3%

G&A 14%


The Tiering Process and Inter-pool Allocations

The Tiering Process

Tiering is a process used to group “Like Type Costs”

GCS Premier offers 3 tiers

Lower pool numbers can tier to higher pool numbers

Typical Tiering setup is:

Tier 1 – Fringe, pool numbers 1 - 2

Tier 2 – Overhead, pool numbers 3 - 6

Tier 3 – G&A, pool number 7

Inter-pool JE’s are prepared to post the tiering amounts to the

G/L.


Inter-pool Allocations

Does my company need to perform the inter-pool allocations?

If you have a Divisional SIE – Yes

If you have a Co-Wide SIE - Optional

If you want the tiering to be reflected on the Income Statement – Yes

The inter-pool allocation transfers amounts between pools in

the same division

Think of it as a vertical allocation

Remember to post the inter-pool journal entries



Army-Div1

Fringe 35%

Open

HQ OH 76%

Offsite OH 43%

Open

M&S 3%

G&A 14%


The Tiering Process


Fringe is

applied to

Overhead

Labor

Inter-divisional & Inter-pool allocations

Army-Div1

Fringe 35%

Open

HQ OH 76%

Army OH 34%

Pentagon OH 45 %

M&S 3%

G&A 14%

Navy-Div2

Fringe 35%

Open

HQ OH 76%

Navy OH 92%

Open

M&S 3%

G&A 14%

Air Force-Div3

Fringe 35%

Open

HQ OH 76%

Air Force OH 88%

Edwards OH 56%

M&S 3%

G&A 14%


Unabsorbed Amounts &Target vs. Actual Rate Comparison

Unabsorbed Amounts

Unabsorbed amounts are on page 2 of the SIE

Only a concern if they are large amounts

Truncating the rate to four decimal points creates small

“unabsorbed” amounts

SIE Legend

Section Line Color

Unabsorbed amounts

Target vs. Actual variance


Target vs. Actual Rate comparison

This tells you what the rate variance is for each pool.

Located on the second page of each pool calculation

Why is the Pool Base different for the G&A Pool

See page 12

When posting revenue the system will ask you if you want to

post the variances to the IS and BS


Descriptions on the SIE

Where do the descriptions come

from?

Identify /Change descriptions in

the contract suffix file

Put the suffix number in the

description – i.e. Direct Labor 39

Remember to reconcile the

SIE back to your G/L each

month

Toggling between Co-Wide

vs. Divisional SIE

Can you do this?

When it doesn’t make sense to

run both reports

First run the inter-div

allocation then run the inter-

pool allocations by tier

Rate calculation should be

across-down-across-down-

across

Tips


Questions?


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deltek insight 2012: interpreting the statement of indirect expenses

Technology

divisional sie report8how

cowide report

divisional setup

divisional pool report

indirect rate52012 deltek

cowide setup

divisional reports

pool base