A recent EPA publication, Full Cost Accounting For Municipal Solid Waste Management: A Handbook, provides and excellent guide for municipalities seeking to implement full-cost accounting (FCA) in their management of municipal solid waste (MSW). Its comprehensive discussions cover everything from the importance of PCA to recommendations on the presentation of results. It provides detailed information on what to include-as well as what not to include-in FGA for MSW programs. Additionally, it has a variety of suggestions on how to collect the required data, allocate costs that are £hared with ether departments, and include a variety of hidden costs.

The handbook stresses the importance of several key factors when implementing PCA for MSW programs. Foremost among these factors is full costing-the need for reporting all of the costs associated with any current or proposed activity. This differs from the traditional cash-flow accounting method, which reports the flow of current financial resources-the current year's spending for a program. FCA, which takes into account depreciation, amortization, externalities, environmental factors, and contingent costs, is not restricted to only current-year expenditures; therefore, it allows the public and decision makers to understand the real costs of various programs and activities.

Full-costing also requires that municipalities take a "cradle to grave" approach to activity costing. Failing to cover up-front and back-end costs will lead municipalities to underestimate the true total cost. As an example the EPA found that "in 1992 Lafayette and West Lafayette, Indiana, reported substantially different average costs per household for solid waste management. The difference turned out to largely reflect costs for yard waste and cleanup of a former land fill; West Lafayette included those costs in its calculations while Lafayette did not." Lafayettes failure to report some of its back-end cots distorted the true average cost of its MSW operations.

Another problem area the handbook identifies is hidden costs. These are costs that may appear to be "free" but are not. They often involve resources that have no current-year costs but are of value to the MSW program. As an example, the EPA cites the following case:

The city of Charlotte has an agreement with Macklemberg County, North Carolina, that allows Charlotte to dispose of 170,000 tons of MSW per year at no cost. Is MSW disposal free for Charlotte? No. In fact, Charlotte received the right to dispose at no charge due in exchange for municipal assets to Macklemberg County. Thus depreciating the value of those assets over the life of the agreement would be one way to measure the cost of waste disposal to Charlotte. Another way would be to consider the actual market value of the disposal rights owned by the city: instead of selling those rights, Charlotte is using them.

In addition to these technical issues, the handbook recommends a variety of styles for reporting FCA data. They point out the need and effectiveness of tailoring reports to concentrate on the particular goals or activities that are of interest to the target audience. Tailoring reports creates greater understanding for both decision makers and the public, allowing them the issue or topic of interest without the distraction of extraneous data or data presented in a confusing manner.

The handbook provides a good base of information and advice on how to implement FCA. A number of charts help identify facts that might be relevant, and a variety of other factors that serve to help municipalities start their own FCA programs. There are numerous examples throughout the book and a comprehensive example in the appendix. This handbook can be a starting point for any MSW manager seeking to implement full cost accounting.