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4 determine state DOT budget priorities, establish cost accounting procedures, determine the type of enterprise software used at the DOT, and determine the fleetâs strategic focus and mission. These individuals use fleet cost information to prioritize budget expenditures and justify fleet costs to elected officials. Financial accountants in the state DOT use fleet cost data for federal reimbursements of work performed by the state DOT on federal projects. Federal-aid funds are generally distributed to states using formulas specified in federal law, although the money is not provided up front: the federal law provides a promise of future reimbursement. The fund distribution enables a state DOT to enter into agreements with the FHWA that will ultimately be reimbursed from highway trust fund receipts (such as gas tax revenue). Central fleet managers have the greatest need for reliable cost information. These individuals use cost information daily for various reasons, which are outlined in Chapter 2.3. Individuals who work for the district engineering administrator (including the district maintenance engineer, resident maintenance engineers, and shop managers) ensure that costs are tracked properly by mechanics and other staff under their supervision. This entails ensuring that personnel use the correct work/bill code for work performed, log their hours of work appropriately, and assign work/bill codes to the correct shop or piece of equipment. 2.3. Role of Fleet Manager in Cost Accounting Among the many roles of fleet managers, it is central to serve as an informal cost accountant. Fleet managers are the conduit for countless streams of cost and budget information, which they must organize, synthesize, and apply daily. Fleet managers do not need to be a Certified Public Accountant, but they do need a solid understanding of the big picture in cost accounting to understand how to make sense of fleet costs. Fleet managers use cost information for at least six broad management tasks: ⢠Equipment Replacement Decision. Determining which classes of equipment and which pieces of equipment within a class (such as snowplows) are the worst performing from a cost perspective and why. This function requires a firm grasp of lifecycle cost approaches. NCHRP Report 879 discusses one approach to optimal equipment replacement cycles (Hamilton 2018). Other resources are available from the American Public Works Association (APWA), the National Association of Fleet Administrators (NAFA), and other fleet organizations. ⢠Outsource Decision. Calculating if outsourced equipment would be more cost-effective than using the fleet equipment. One of the most common motivations for outsourcing public functions is the perceived potential for cost savings and the ability to free up
