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Comprehensive Cost Identification

Every budgetary unit should undertake a review of all costs with a special emphasis on identifying “hidden costs”.  This is especially important when reviewing new costs, but this type of review should also be periodically undertaken with the costs of existing programs.  Often the impact of these “hidden costs” is magnified by their recurrence over multiple years.  Examples of items that are often overlooked are:


  • Fringe benefit costs associated with new positions

                    · Appendix B-1 lists fringe cost factors

  • Changes in existing fringe benefit costs due to changes in benefits eligibility, benefits enrollment status, or benefits expense rates.

                    · An employee may move from non-eligible benefits status to eligible benefits status

                    · A benefits eligible employee may change benefits selections that will result in                       cost changes

                                      · Most commonly, such cost changes occur when an employee changes from                                         the PEIA single plan to the family plan or vice-versa.

                                      · Costs can be found in Appendix B-1

  • Operating expenses associated with new positions

              · Equipment

              · Telephone costs

              · Supplies

              · Travel

  • Routine equipment upgrades

              · Most commonly the replacement of outdated computers

  • Expense increases resulting from changes in the mission of the unit

              · Changes in the basic activities of a unit will impact the budget of the unit