Full Cost Accounting

Full cost accounting (FCA) is simply an accounting method to describe the total actual costs of solid waste management.  Managers of solid waste budgets find this approach useful because it allows them to identify and report actual expenses to municipal leadership, identify potential cost savings and background for other decision-making, and evaluate projections.  Fundamental and unique to FCA (rather than budget-based or cash-flow accounting) is that it accounts for the following principles outlined by EPA:

• Costs rather than outlays;
• Hidden costs;
• Overhead and indirect costs;
• Past and future outlays; and
• Costs according to activities or paths.

FCA for solid waste is a valuable tool to help program managers better administer municipal solid waste (MSW) program costs and compare spending across services, predict revenues and address revenue uncertainty, set service fees and rates, and clearly communicate MSW costs to the public.  FCA allows you to run your program using a common business approach called an enterprise fund.  Enterprise funds operate separate from the general fund and have distinct revenue sources like bag or cart fees, base service rates, private hauler licenses or fees, revenues from recycling and investment income.

Having a full understanding of program costs and revenues through the FCA method unlocks opportunities for municipalities to make changes to their programs including modernizing pricing systems for solid waste and recycling.  See CT DEEP’s resources on Saving Money and Reducing Trash (SMART).

CT DEEP Workshops on Understanding Full Costs and Funding Sources

CT DEEP and the US Environmental Protection Agency Region 1 co-sponsored free workshops on transparency and full-cost accounting for solid waste, reducing the burden on municipal solid waste budgets, and increasing diversion. The workshops helped municipalities begin to develop an implementation plan and budget for updating their solid waste program. 

Workshop Materials:

• Agenda
• Morning Session Presentation - Understanding Unit Based Pricing 
• Afternoon Session Presentation - Full Cost Accounting and Program Budgeting

CT DEEP Municipal Solid Waste Management Full Cost Accounting Survey (2008)

In the summer of 2008, the DEEP surveyed municipalities to gather information on municipal solid waste management, such as how municipalities manage their municipal solid waste (MSW), the costs involved, and how those costs are paid for. This provided a baseline of the state’s MSW full cost accounting landscape. Survey results can provide guidance to municipalities as they make decisions on how best to increase their recycling/source reduction rates and manage their remaining solid waste in a practical, efficient, cost effective, and environmentally preferable manner. The survey  was administered through SurveyMonkey, an online tool for creating surveys.

Survey Responses