Cost allocation is the process of assigning the shared cost of an item or service to two or more programs, and it's a key element of the Fiscal Management System. Organizations use cost allocation to ensure that costs are shared equitably across different funding sources and programs.

This Management Matters interactive module is designed to:

• Discuss reasons for cost allocation
• Deepen your knowledge of cost allocation, and its regulatory requirements
• Define key cost terms
• Describe a step-by-step process for developing a cost allocation plan
• Explore the concept of layered funding in Early Head Start-Child Care Partnerships
• Test your knowledge