The Department of Health and Human Services needs stronger leadership to promote and monitor the implementation of managerial cost accounting (MCA) throughout the department, the Government Accountability Office has said.
An HHS official said MCA at the department level was limited to aggregating costs from its operating divisions to prepare so-called “statements of net cost” and did not focus on preparing MCA information for managerial decision-making, according to GAO-06-599R. The report cited the numerous laws, standards and requirements emphasizing the need for cost information and cost management including the Chief Financial Officers Act and the Financial Management Improvement Act.
The report said HHS has assigned responsibility for MCA implementation at the component level to its 11 operating divisions, but did not take an active leadership role to promote MCA or monitor implementation at the divisions, which vary in mission and focus.
As a result, department officials did not have information about which components had and used MCA, and had to find that information out from its various programs and activities, the report said.
For example, it said neither of the two components it reviewed — the Centers for Medicare and Medicaid Services and the Centers for Disease Control and Prevention — had an MCA system in place at the component level to allocate costs to activities, services and outputs in support of managerial decision making.
As a result, the department lacks routine access to reliable cost information to inform management decisions, according to GAO.
