The Indianapolis times. [volume] (Indianapolis [Ind.]) 1922-1965, 1931-01-26
OVERHEAD HELD
MUCH GREATER
THAN REPORTED
Cost Placed at 80 Cents on
$500 Should Be 81,
CheCkup Shows.
METHODS ARE ASSAILED
System of Computing Is
Called 'Coverup' by
Legislators.
METHODS ARE ASSAILED
BY BEN STERN

claims OF the Indiana highway
commission that it operated last
year with an administration over
head Of 30 cents on every 500 ex-
pended, were challenged today, when
a check Of the commissions own
annual repor: s=zeAled that the &C
tual overhead on eacn Sl00 was 81
plus.
And for the elevun-yeaf period
since creation Of the commission the
overhead has averaged $3.43 per
500 spent.
Members of the seventy-seventh
general assembly now in session are
amazed at the high administration
costs, and feel they should be
brought to the attention Of the
highway commission probe commit
tee, headed by Senator Charles Strey
(Rep., Kosciusko and Wabash.
Method Called Deceit
The method by which the COM
mission attempts to spread the
thought that its overhead is low was
branded as deceit" by several
members, who turned to the page
in the report which sets out the
commissions version of how each
dollar is spent and saw the very
thin segment representing admins
tration costs.
To accountants who, for years,
I,A hfnl1vUoU do-
partment's method of computing
administrative overhead, the de-
partment has explained that the
salaries of officers for each depart
ment are added to the costs OF each
of these departments.
Under the highway boards COM
putations, these departmental over
head costs were not figured into the
commissions boosted low admin
istration overhead"
In the administrative overhead,
as the commission figures 1t, come
only the salaries of the commission
members. the director, main Office
personnel, and main Office expenses.
Other Departments Protest
This practice of spreading out"
overhead has existed for years and
has occasioned protest by accounts
board members, who felt that 1t
amounts to concealment, rejecting
discredit on other departments,
where the administration overhead
is shown as it actually exists and
is not concealed in the statistics OF
subordinate divisions.
OF the $142, 562, 1864 expended by
the highway commission since It's
inception in 1919, administration
overhead actually totaled $4,897,-
2O5.96, although, according to the
commissions figures, it was but
$568, 1898.
In the fiscal year ended Sept. 80,
1880, the highway department spent
500. 569, 171.12. OF this amount, $685.
764.89 was actual administration
cost. The highway department, IN
its report, however, says, that 1t
spent only $72,911.82 for administra-
ton overhead during the year.
More Than 81
In other words, the commission
claims that out of every SlOO ex-
pended, only 80 cents went for adj
rninistration; whereas the report it.
self reveals that the actual admin
istration expenditure was 81 plus
for each 500.
It is said that the 81 plus is a
higher percentage Of overhead than
that of any preceding commission
administration.
The highway departments meth
cd of adding the overhead to the
general expenditures of subordi-
nate divisions is regarded as sys-
tenn of "robbing Peter to pay Paul.
and in this manner make a show
ing of economy.
In this case, however, 1t does not
work out as in the past, because
the commissions own administra-
tive figure Is higher for the fiscal
YEAR of 1929-193O than in previous
years.
Highest for Construction
Overhead is greater IN Cne COLI
struction division than in any OF
the others because the major por-
ton of the departments work IS
concentrated there. In the last
fiscal year this divisions admins
tration overhead totaled $677,-
799 90. and over the period 1919
1890 it was $3,484, 1856.
These figures do not include
charges for cement, contract pay
ments, labor and material capital
expenditures, right-of-way, motor
equipment or miscellaneous ex-
penditures. If these were added the
total figure for construction for the
ten-year period would be $685.
1875, 729.69.
Plant Chief Transferred
-