[Code of Federal Regulations]
[Title 28, Volume 2]
[Revised as of July 1, 2003]
From the U.S. Government Printing Office via GPO Access
[CITE: 28CFR100.14]

[Page 421]
 
                    TITLE 28--JUDICIAL ADMINISTRATION
 
              CHAPTER I--DEPARTMENT OF JUSTICE (Continued)
 
PART 100--COST RECOVERY REGULATIONS, COMMUNICATIONS ASSISTANCE FOR LAW ENFORCEMENT ACT OF 1994--Table of Contents
 
Sec. 100.14  Directly allocable costs.

    (a) A cost is directly allocable to the CALEA compliance effort:
    (1) If it is a plant cost incurred specifically to meet the 
requirements of CALEA sections 103 and 104; or
    (2) If it benefits both the CALEA compliance effort and other work, 
and can be distributed to them in reasonable proportion to the benefits 
received.
    (b) The burden of proof shall be upon the carrier to justify that 
such cost is an allocable cost under this part.
    (c) An allocable cost shall not be assigned to the CALEA compliance 
effort if other costs incurred for the same purpose in like 
circumstances have been included as a direct cost of that, or any other, 
cost objective.
    (d) The accumulation of allocable costs shall be as follows:
    (1) Allocable costs shall be accumulated by logical cost groupings 
with due consideration of the reasons for incurring such costs.
    (i) Each grouping should be determined so as to permit distribution 
of the grouping on the basis of the benefits accruing to the multiple 
cost objectives.
    (ii) Similarly, the particular case may require subdivision of these 
groupings (e.g., building occupancy costs might be separable from those 
of personnel administration within the engineering group).
    (2) Such allocation necessitates selecting a distribution base 
common to all cost objectives to which the grouping is to be allocated. 
The base should be selected so as to permit allocation of the grouping 
on the basis of the benefits accruing to the multiple cost objectives.
    (3) When substantially the same results can be achieved through less 
precise methods, the number and composition of cost groupings should be 
governed by practical considerations and should not unduly complicate 
the allocation.
    (4) Once a methodology for determining an appropriate base for 
distributing allocable costs has been agreed to, it shall not be 
modified without written approval of the FBI, if that modification 
affects the level of reimbursement from the government. All items 
properly includable in an allocable cost base should bear a pro rata 
share of allocable costs irrespective of their acceptance as 
reimbursable under this part.
    (5) The carrier's method of allocating allocable costs shall be in 
accordance with the accounting principles used by the carrier in the 
preparation of their externally audited financial statements and 
consistently applied, to the extent that the expenses are allowable 
under there regulations. The method may require further examination 
when:
    (i) Substantial differences occur between the cost patterns of work 
under CALEA compliance effort and the carrier's other work;
    (ii) Significant changes occur in the nature of the business, the 
extent of subcontracting, fixed-asset improvement programs, inventories, 
the volume of sales and production, manufacturing processes, the 
carrier's products, or other relevant circumstances; or
    (iii) Allocable cost groupings developed for a carrier's primary 
location are applied to off-site locations. Separate cost groupings for 
costs allocable to off-site locations may be necessary to permit 
equitable distribution of costs on the basis of the benefits accruing to 
the multiple cost objectives.
    (6) The base period for allocating allocable costs is the cost 
accounting period during which such costs are incurred and accumulated 
for distribution to work performed in that period. The base period for 
allocating allocable costs will normally be the carrier's fiscal year. A 
shorter period may be appropriate when performance involves only a minor 
portion of the fiscal year, or when it is general practice to use a 
shorter period. When the compliance effort is performed over an extended 
period, as many base periods shall be used as are required to accurately 
represent the period of performance.