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![handle is hein.gao/gaobablbn0001 and id is 1 raw text is:
1TESTRICTED - Not to be released outside the General 6 Q-O _ 7
Accounting Office except on the basis of specific approval
by the Office of Congressional Relatons,' a record of which
is kept by the Distribution Section, Publications Bragi 0 1 .
COMPYROL-LER GENERAL OF THE UNITED STATES
WASHINGTON, D.C. ,548 Z ] .
B-172707 RELEASED
The Honorable Harrison A. Williams, Jr.
United States Senate
Dear Senator Williams:
In your July 25, 1973, letter to Mr. Joseph D. Gleason, National
Vice President, American Federation of Government Employees (AFGE), a
copy of which you sent us, you indicated your interest in having GAO
i' investigate the methods used for computing the overhead rate at Fort
Monmouth, New Jersey.!
Mr. George R. Boss, Director, Labor Management Department, AFGE,
also referred this matter to us for review on February 1 and July 30,
1973. He was concerned with the determination and distribution of
overhead costs in the Army Electronics Command's (ECOM) Research,
Development, and Engineering (RD&E) Directorate. (See enclosures I
and II.) He believed the overhead distribution methods were adversely
affecting the use of certain in-house trade skills and the maintenance
of an RD1E capability.
Although the conditions described in Mr. Boss' letters may have
existed during the early formulation and implementation of the cost
accounting system, ECOM has made many improvements in the overhead
cost structure over the past several years. The overhead distribution
methods employed during fiscal year 1973, which are described briefly
below, appear reasonable and appropriate.
Overhead costs are composed of costs incurred for support
services obtained from outside the laboratory cost centers and of
overhead costs generated within the laboratories' cost centers but
not identified with specific projects.
Outside overhead includes support services, such as utilities,
received from Fort Monmouth headquarters activities and general and
administrative costs, such as staff offices and general supplies,
of the RDE Directorate's operations. Utility costs are allocated
to the'Directorate on the basis of space occupied and other relevant
criteria. Outside costs that are identifiable directly with a
specific project or laboratory cost center are charged directly to
the project or center. Costs that are not so identifiable are](ViewImageLocal?handle=hein.gao/gaobablbn0001&div=1&collection=&method=preview&ext=.png&size=3)