Allocating Severance Pay/ Retirement Insurance – Functional Allocations
I am working with a nonprofit that is covering medical insurance for an executive director that left the organization in a past fiscal year as part of a retirement/separation agreement.
How would you advise coding that from a functional allocation perspective given the employee did not work this fiscal year, and therefore we cannot observe how she spent her time for the organization. Would it all be management & general as part of an HR/risk management expense, or can the organization code based on the breakdown the ED had before they departed (E.g., 60% program, 10% management, 30% fundraising)?
This organization is small, so coding it all to M&G could have a significant impact on their program expense ration.