administrative expenses
The term administrative costs is a technical term from various scientific disciplines, namely German law , administrative science and business administration , whereby the respective meanings differ considerably from one another. What they have in common is that it is a type of cost that is caused by administrative activity.
Administrative costs in law
The legal administrative costs represent a central concept of the German administrative law and tax law . Administrative costs is the generic term for fees and expenses and as such, in addition to taxes , contributions and special charges, one of the four forms of public charges in the narrower sense. Fees are the public law consideration levied on the basis of a law for performing an official act , i. H. an individually attributable service (main and ancillary service) by a public body , namely an authority . In this respect, performance includes not only those intended by the person liable to pay the fee, but also all other acts or omissions caused by him on the basis of public law obligations. Fees are usually calculated in such a way that they cover the actual costs incurred by the authority involved. Expenses are also costs that have necessarily been incurred by the authority in order to provide the service, although they are to be borne by the recipient of the service. They correspond to the expenses required under private law .
In contrast to the use in business administration, all administrative services ( official acts ) are understood as public administrative services and not just the services that are necessary as supporting functions for the actual function (production). In the Administrative Costs Act, all public administration services are provided for reimbursement, including the actual products in the form of official acts. The calculation of the costs is not based on the real costs. Instead, the administrative costs are to be calculated in such a way that a balance must be guaranteed between the aspects of the amount of the fee, the importance of the task and the economic benefit, and that the total fee does not exceed the total costs (see Section 3 VwKostG ).
According to the basic structure of the public charges, administrative costs should only cover those services of the state which are provided in the predominant individual interest, quasi as a special service of the state to the private sector. Original core tasks fundamentally incumbent on the state (regulatory and criminal police activities in general, interests that cannot be attributed to individually, electoral activities, activities of representatives of the people and governments), on the other hand, should be financed through general tax revenue as the main source of income for the community. In principle, the law on administrative costs is blocked for this area and only permitted in exceptional cases (due to its own regulations).
Legal regulation
Due to the federal structure of Germany and the distributed legislative competence, there are legal regulations at federal , state and local level.
Federal level
From 1970 to August 15, 2013, the Administrative Costs Act (VwKostG) regulated the collection of administrative costs by federal authorities, federal legal entities, institutions and foundations under public law, as well as the like of the states, insofar as these implemented federal law. It contained general regulations on the collection of costs and also referred to executive fee schedules. The respective fee facts and amounts were determined by these fee schedules. When the law on the structural reform of the federal fee law came into force , the VwKostG was replaced by the federal fee law . However, previous fee schedules will remain in force until they are replaced by new fee schedules under the Federal Fees Act.
State level
In addition, all 16 federal states have their own (state) cost or fee laws, which authorize the state authorities to collect costs for services according to original state law (police, fire brigade, schools and universities, cultural institutions, local public transport). Here, too, reference is usually made to special fee schedules for the actual fees and their amount.
Local level
For the municipal level, i. H. Municipalities and (rural) districts , the authorization to levy administrative costs for administrative services of the municipal institutions in self-administration matters is bound to the respective municipal tax laws of the federal states, otherwise to the relevant federal or state laws.
Administrative costs in business administration
In contrast to the use of the term in law, administration costs are conceptually differentiated from production and distribution costs in business administration .
Definition
The HGB does not provide a precise definition of what administrative costs are . Due to the definition problems, there is no generally binding list of administrative costs, as the administrative activities cannot be clearly delimited. The lack of such a generally binding definition can be justified by the fact that no uniform definition can exist for the different corporate purposes. One approach to definition is the company's individual handling of the charging of administrative services.
The following approximations can be found in the literature:
All costs that are not incurred in production or sales and that can be ascribed to the administration of the company are called administration costs (alternatively also management costs ). Since these costs cannot be assigned directly to a product or service, they are always to be assessed as overhead costs in terms of their type and are allocated proportionally to the products. Administrative costs are the expenses for administrative services measured in monetary units. In addition to production costs (costs of production or service) and sales costs, administration costs represent the third cost block of a company or facility. There is no clear definition of what administration costs are.
Personnel and material costs in the following areas are regularly added to administrative costs :
Other statements for administrative costs give greater detail to material costs :
- Administrative staff costs
- Supervisory board remuneration
- Association contributions
- Examination costs
- Rent and lease
- Depreciation on factory and office equipment
- Postage
- Travel expenses (if no sales expenses )
use
In business administration, the term administrative costs is used in connection with a company's profit and loss account . The Commercial Code (HGB) provides for two methods for structuring the income statement ( Section 275 HGB), the total cost method and the cost of sales method . In the case of the latter, under section 5, the “general administrative costs” are to be deducted from sales as an independent cost item. If the total cost method is used, these costs are summarized under the item “other operating expenses” (item 8).
In cost and performance accounting, in contrast to material or production costs, administration costs can only be posted to overhead cost centers and must be credited to cost objects using allocation approaches in the overhead costing. The fact that this demarcation and definition of administrative costs is also not unambiguous is shown, for example, by the fact that, according to Section 255 of the German Commercial Code (HGB), special administrative costs can be capitalized in the production costs if they arise directly in or for production (e.g. material and tool management, warehouse management). According to IAS (IAS 2.13f. And IAS 16.15) even certain administrative costs that are directly related to production have to be capitalized.
Special features of donation organizations
The events surrounding the German UNICEF committee at the beginning of 2008 raised public awareness of the administrative costs of donation organizations. To this end, the German Central Institute for Social Issues publishes the amount of administrative costs in relation to total expenditure in its donation almanac every year. Three categories are defined: 0-10 percent (low, 47 percent of all listed organizations); 10–20 percent (appropriate, 34 percent) and 20–35 percent (reasonable, 19 percent). The costs taken into account include two groups: The expenses that serve to raise funds and self-presentation (advertising costs) as well as all other expenses that do not directly serve the statutory work (administrative costs such as personnel management, bookkeeping, donation management, accounting, communication, auditing, legal advice). Ancillary project costs are defined as project expenses.
Administrative costs in public administration
In administrative science, there is a third interpretation of the concept of administrative costs. The term is used - in addition to the already mentioned use in the law on fees - in the field of social insurance. There it is used to differentiate between service expenditure (pension, illness) and the costs of administration, which include the following individual items:
- Personnel costs
- Material costs
- Advertising expenses
- Expenses for self-administration
- Legal prosecution and arbitration costs
- Contributions to remuneration to third parties for administrative purposes.
According to the Federal Ministry of Health, the administrative costs of the statutory health insurance in 2005 amounted to 5.6 percent of the total costs. The German pension insurance gives a value of 1.5 percent for its area. It is questionable which standards are to be applied to quantify administrative costs and, in particular, to what extent the percentages can be compared. In health insurance, a large number of different business transactions occur during the entire "insurance process", whereas in pension insurance this is regularly limited to the end of the "insurance process". In accident insurance, this can be illustrated even more clearly using the example of accident pensions: the costs of determining the pension do not differ, but the amount of the pension - by which the administrative costs are proportionately measured - is very different: the amount of the pension is based on the commercial trade associations the actual annual earnings meanwhile, for example, the pension amount at the agricultural professional associations is calculated according to very low, flat-rate annual earnings.
literature
- Gonas, Jürgen: Basics of an administrative cost accounting . 2nd edition Baden-Baden: Nomos, 1992.
- Wöhe, Günter: Introduction to general business administration . 22nd edition Munich: Verlag Franz Vahlen, 2005.
- Krag, Joachim: accounting. Commercial and tax law basics . Munich: Verlag Franz Vahlen, 1997.
- Bahmer, Bernhard and Siegwart, Hans: The differentiated accounting of administrative costs and sales costs in the industry . Bern: Paul Haupt, 1991.
- German Central Institute for Social Issues: DZI Spenden-Almanach 2007/8 . Berlin: Self-published by DZI, 2007.
