Finding 513898 (2024-001)

2024 – 001 – Allowable costs/cost principles - Cost Transfers Grantor: Department of Health and Human Services Passthrough Agency: The Commonwealth of Massachusetts Department of Public Health Program Name: Family Planning – Services Project Grant (FPSPG) Award Name: Family Planning Services Award Year: 2024 Award Number: INTF3323MM3230133136 Assistance Listing Number: 93.217 Criteria The Department of Health and Human Services policy manual requires permissible cost transfers to be made promptly after the error occurs but no later than 90 days following the occurrence unless a longer period is approved in advance by the Grants Management Office. The Alliance’s Cost Transfer policy is to complete the Cost Transfer Explanation & Justification Form (“Form”) and to obtain the necessary approvals. The Form is required for cost transfers less than 90 days that are either (1) $500 or greater or (2) outside the accounting period (month). For cost transfers over 90 days, the Alliance must complete the Form including an explanation for the lateness of the transfer and obtain the approval by the Department Chairperson and the Director of Sponsored Research Administration. Condition Through our testing of the cost transfers over the Family Planning Services award, we selected three cost transfers. For each of the three selections, the entity did not complete the required Form and was not able to evidence that appropriate approval was obtained for the cost transfer. Cause For two of the samples that were processed within 90 days, the Alliance completed a hospital non-staffing reclass request form but did not complete a Cost Transfer Explanation & Justification Form as required. For the third sample relating to payroll reclasses for one individual over 90 days, no Form was completed. The individual completing the cost transfers was not aware of the Cost Transfer Explanation & Justification Form requirement. Effect The Alliance did not properly complete the Cost Transfer Explanation & Justification Form for the three samples. Although the cost transfers were deemed to be allowable, the Alliance did not retain any evidence that appropriate approvals were obtained. Questioned Costs There were no questioned costs associated with this finding as the cost transfers were allowable and allocable to the awards to which they were transferred. Recommendation The Alliance should implement training and communication to clarify their cost transfer policy over the Form and the required approvals. Management’s Views and Corrective Action Plan Please refer to the Alliance’s Management’s Views and Corrective Action Plan included at the end of this report for additional details.