THE BASIC APPROACH TAKEN BY REJIS, A DATA-PROCESSING SYSTEM SERVING CRIMINAL JUSTICE AGENCIES IN THE GREATER ST. LOUIS, MO., AREA, TO IDENTIFYING COSTS ASSOCIATED WITH OPERATING A REGIONAL DATA-PROCESSING CENTER WITHIN AN EXISTING MUNICIPAL POLICE DEPARTMENT IS OUTLINED. THE FOLLOWING FINANCIAL PRINCIPLES UNDERLYING THE REJIS COST ALLOCATION PHILOSOPHY ARE DISCUSSED: BASING BUDGET ALLOCATIONS ON ACTUAL RATHER THAN PROJECTED USAGE; NOT CHARGING USERS FOR THE FIRST YEAR'S SERVICES; TAKING INTO CONSIDERATION USERS' FISCAL PERIODS; INCLUDING IN THE COST ALLOCATION ONLY THOSE AGENCIES ACTUALLY CONNECTED VIA TERMINALS TO THE REJIS SYSTEM; MAINTAINING PAYMENT CONTINGENCIES FOR MARGINAL USERS; NOT ADJUSTING THE COST ALLOCATION REPORT AT THE YEAR'S END; ESTIMATING ANTICIPATED SURPLUS FUNDS AND IDENTIFYING THIS AMOUNT AS A REDUCTION IN THE GROSS CHARGES TO USERS; AND USING A PUBLIC ACCOUNTANT TO PREPARE THE COST ALLOCATION REPORT. THE COMPUTATION METHODS USED BY REJIS TO ALLOCATE COSTS ARE EXPLAINED AND ILLUSTRATED IN TABLES. THE REJIS COST ALLOCATION APPROACH IS SAID TO HAVE BEEN INSTRUMENTAL TO THE STABLE DEVELOPMENT OF THE SYSTEM. (LKM)