What Are Allocations & How Do I Use Them?

Some political organizations conduct both state and federal political activity and have separate arms to do this. In these cases, they’ll have one political committee registered with the FEC and one registered on the state level. This is most common for state and local political committees, but PACs can also do this.

When an organization has these two affiliated committees, they will have some expenses that are shared between the two committees. Those expenses will be paid out of the federal account and then the state account will reimburse the federal account. To manage this, we have a special Allocations tool that allows you to track, report, and properly enter their allocation transfers between the two accounts.

Allocations are used for reporting shared activities between both federal and non-federal financial accounts. Allocations are most often used by party committees or organizations that have expenses or fundraising that need to be shared between federal and non-federal filers. There are a lot of rules on what is okay to share and what is not. Be sure to review the FEC rules regarding allocations carefully.

In ISP you can create allocations for use with transactions as well as indicate the Allocation Transfers from a non-federal account to a federal account to pay for the non-federal share of activity. Allocation activity is reported on the various Form 3x Schedule H sections. 

Allocations usually need to be created each year or election cycle and reported on the first filing that period. 

How do I create an Allocation?

Allocations are created by navigating to the Accounting tab, then to Allocations. At the bottom of the screen, click + Add Allocation. From there you can enter the settings needed for your allocation.

Allocation Type: There are a number of different Allocation Types possible depending on the activity. The most common Allocation Type is Administrative.

Fixed Allocation Ratio: For most Allocation Types you will have several different fixed ratios to pick from. These ratios are set, depending on the type of federal elections going on that year. For example, if this year is a presidential and senate election year, the Federal w/ President & Senate – 36% Federal ratio will be used. If it is a year where there is no federal election activity the 15% ratio would be used.

Once you have an allocation created, you will see the allocation information listed on the Allocations page. To the far right next to the letter i is a stacked line icon. Mouse over that and you can see the totals of transactions using this allocation. If this is your first allocation, it will be all zeros, but after adding a transaction with an allocation, you can come back here and see the impact applying an allocation will have.

How do I add allocations to transactions?

After creating one or more allocations, you will see a new Allocation dropdown field available when entering transactions. Whenever you select an Allocation in the dropdown for a transaction, you are telling the system this is a transaction that needs to be on the Form 3x as allocated between federal and state funds. Only select an allocation if the transaction needs to be reported as shared. Otherwise, this field should be blank.

How do I indicate an Allocation Transfer of Funds?

In addition to reported shared activity via allocations, you can also record and report allocation transfers from a non-federal financial account to a federal financial account to pay for the state share of any disbursements.

To add an Allocation Transfer, navigate to Accounting, then to Allocations. To the right of the allocation, click the blue Add Allocation Transfer button you want to record a transfer for. A popup will appear with some fields that are very similar to an Internal Transfer transaction. Enter the details of the transfer, including the financial account the funds are going to and where they are from. This will create an Allocation Transfer transaction that will show on the register. In the non-federal financial account, it will appear as money out and in the federal financial account, it will appear as money in. This is the only type of transfer transaction that is reportable between financial accounts.