Legal Definitions - allocable

The term "allocable" describes something that is suitable or capable of being assigned, distributed, or charged to a specific person, department, project, or account. It refers to costs, resources, or responsibilities that can be logically and appropriately attributed to a particular area or purpose.

Here are some examples to illustrate the concept of "allocable":

• Business Operating Costs:

  Imagine a large corporation that operates a central human resources (HR) department providing services to all other departments, such as Marketing, Sales, and Research & Development. The HR department incurs significant costs for salaries, benefits administration software, and training programs.

  These HR costs are allocable to the various operational departments. For instance, if the Marketing department has 20% of the company's total employees, then 20% of the HR department's overall costs might be assigned or "allocated" to the Marketing department's budget. This ensures that each department bears a proportionate share of the shared HR services it benefits from.

• Government Grant Funding:

  Consider a state government agency that receives a federal grant to implement a new public health initiative aimed at reducing childhood obesity. The grant guidelines specify that funds must be used for direct program activities, community outreach, and administrative oversight.

  The federal grant funds are allocable to these specific categories. For example, a certain percentage of the grant might be allocated to hiring nutritionists and fitness instructors (direct program activities), another portion to developing educational materials and hosting community workshops (community outreach), and a smaller percentage to cover expenses like accounting and reporting (administrative oversight). The agency must track and demonstrate that all expenditures are properly assigned to these approved categories.

• Legal Settlement Distribution:

  Suppose a group of investors files a class-action lawsuit against a financial firm for misleading investment advice, resulting in a substantial monetary settlement. The total settlement amount needs to be distributed among the many individual investors who were part of the class.

  The total settlement fund is allocable among the individual plaintiffs based on factors such as the amount of money each investor lost, the duration of their investment, and other criteria established by the court or a designated claims administrator. Some investors might receive a larger share because their financial losses were more significant, while others receive a smaller, but still appropriate, share. The process ensures the funds are fairly distributed according to established legal and financial criteria.