Internet Exercise #1

The U.S. Department of Health and Human Services (HHS) handles numerous grants and disbursements for various government programs. HHS has developed a "process through which these central service costs can be identified and assigned to benefited activities on a reasonable and consistent basis." Its "Central Service Cost Allocation Plan (CSCAP) provides that process in Attachment C, "Requirements for Cost Allocation Plans," which may be viewed at http://www.hhs.gov/grantsnet/state/pt4.html.

Review the information provided on this website. Then, write a brief paper (4 paragraphs) that answers the following questions.

• What is the purpose of the CSCAP?
• What must be included in a CSCAP?
• Five major cost categories are listed. (See section 4.5 of report.) What do the cost allocation plans that are required for each of these categories have in common? How do they differ?
  • Allocated Central Services
  • Internal Service Funds
  • Self-insurance Funds
  • Fringe Benefit Funds
  • Pension Benefit Costs
• Review the suggested bases for cost allocation of the various service departments. (See section 4.6 of report.) Do you agree with the allocation bases?

Internet Exercise #2

The Controller's Office of Creighton University sets forth policies and procedures for service center operations on its website at http://www.creighton.edu/controllers/cost/capl01.htm.

Review the information provided on this website. Then, write a brief paper (4 paragraphs) that answers each of the following questions.

• What is the purpose of these policies and procedures, and why is there a need for these formal written policies and procedures?
• How does Creighton define a service center, and why does the Controller's Office feel the need to formally define a service center?
• Do Creighton's service centers attempt to make a profit? What is the policy with regards to transactions with entities outside the University?
• Why does Creighton have a policy on establishing a service center? Why is there a need for such a policy, and what approvals are required?