Audit report, schedule of reimbursable costs and patient day statistics, Sylvester Health Care, Inc., Sylvester, Georgia, Medicaid provider no. 00143206A, for the year ended June 30, 1994, Georgia Department of Medical Assistance [June 30, 1994]

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STATE OF GEORGIA DEPARTMENT OF AUDITS
254 WASHINGTON STREET ATLANTA. GEORGIA 30334

AUDIT REPORT SCHEDULE OF REIMBURSABLE COSTS AND
PATIENT DAY STATISTICS SYLVESTER HEALTH CARE, INC.
SYLVESTER, GEORGIA MEDICAID PROVIDER NO. 00143206A FOR THE YEAR ENDED JUNE 30, 1994 GEORGIA DEPARTMENT OF MEDICAL ASSISTANCE

SYLVESTER HEALTH CARE, INC. - TABLE OF CONTENTS -
AUDITOR'S REPORT SCOPE OF THE AUDIT SCHEDULE OF REIMBURSABLE COSTS AND PATIENT DAY STATISTICS NOTES TO SCHEDULE SUMMARY OF FIELD AUDIT ADJUSTMENTS EXPLANATION OF FIELD AUDIT ADJUSTMENTS APPENDIX
MANAGEMENT COMMENT LETTER

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V
1 2 3 5 6
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CLAUDE L. VICKERS
STATE AUDITOR (404) 656-2174

DEPARTMENT OF AUDITS
254 Washington Street, S.W., Suite 214 Atlanta, Georgia 30334-8400
March 1, 1995

Nursing Home Reimbursement Section Georgia Department of Medical Assistance 2 Peachtree Street, NW Room 27-208 Atlanta, Georgia 30303-3159
Ladies and Gentlemen:
We have audited the Nursing Home Cost Report filed with the Georgia Department of Medical Assistance under the Title XIX Medicaid Program by Sylvester Health Care, Inc., for the year ended June 30, 1994, and have compiled the accompanying Schedule of Reimbursable Costs and Patient Day Statistics based on our audit. The Nursing Home Cost Report is the responsibility of the management of Sylvester Health Care, Inc. Our responsibility is to determine if the reimbursable costs and patient day statistics reported in the Nursing Home Cost Report are reasonable and allowable, in all material respects, in accordance with the federal and state laws, regulations, policies and procedures governing the Georgia Nursing Home Reimbursement Program. It is also our responsibility to report the results of our audit, including any required adjustments to the cost report data, to the Georgia Department of Medical Assistance.
We conducted our audit in accordance with the Nursing Home Audit Program approved by the Georgia Department of Medical Assistance. Our audit included examining and evaluating, on a test basis, evidence supporting the amounts and disclosures in the Nursing Home Cost Report. Our audit also included assessing the accounting principles used and significant estimates made by management. We believe our audit provides a reasonable basis for our report.
As described in Note 1 of the Notes to Schedule, the accompanying Schedule of Reimbursable Costs and Patient Day Statistics was prepared to present the_data necessary for the Georgia Department of Medical Assistance to determine Medicaid reimbursement and is not intended to be a presentation in accordance with generally accepted accounting principles, nor is it intended to be a complete presentation of the assets, liabilities, revenues and expenses of Sylvester Health Care, Inc., on the basis described.

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In our opinion, the "adjusted totals" column in the accompanying Schedule of Reimbursable Costs and Patient Day Statistics - which was compiled by us and reflects any adjustments to the cost report data required as a result of our audit - presents fairly, in all material respects, the reimbursable costs and patient day statistics of Sylvester Health Care, Inc., for the year ended June 30, 1994, on the basis of accounting described in Note 1.
This report is intended to be used solely in connection with the administration of the Georgia Department of Medical Assistance Nursing Home Reimbursement Program and is not to be used or relied upon for any other purpose.
Respectfully submitted,
atv-~
Claude L. Vickers State Auditor CLV/bd/by
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SYLVESTER HEALTH CARE, INC. SCOPE OF THE AUDIT
FOR THE YEAR ENDED JUNE 30, 1994
This audit was performed in order to determine if the reimbursable costs and patient day statistics reported in the Nursing Home Cost Report are reasonable and allowable, in all material respects, in accordance with the federal and state laws, regulations, policies and procedures governing the Georgia Medicaid Program, and to report to the Georgia Department of Medical Assistance (DMA) any adjustments to the cost report data required as a result of our audit.
In order to accomplish these objectives, we examined, on a test basis, evidence supporting the amounts and disclosures in the Nursing Home Cost Report, and assessed the accounting principles used and significant estimates made by management. Tested transactions and accounts were evaluated for compliance with DMA Policies and Procedures for Nursing Home Services and for compliance with federal laws and regulations applicable to the Title XIX Medicaid Program. Any adjustments to the cost report data required as a result of our audit are included in this report.
Our audit included a limited consideration of the organization's internal control structure sufficient to plan the audit. Our consideration for this limited purpose would not necessarily disclose all reportable conditions in the internal control structure. Accordingly, we do not express an opinion on the internal control structure. However, as a result of our audit, a reportable condition was identified in controls related to compliance with Medicaid policies, procedures, laws and/or regulations. This weakness is described in the management letter included in the Appendix of this report.
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SYLVESTER HEALTH CARE, INC. SCHEDULE OF REIMBURSABLE COSTS AND
PATIENT DAY STATISTICS FOR THE YEAR ENDED JUNE 30, 1994

REIMBURSABLE COSTS

PER COST REPORT
AS FILED

OFFICE

FIELD

AUDIT

AUDIT

ADJUSTMENTS ADJUSTMENTS

ADJUSTED TOTALS

Routine Services

$ 755,048

$ 18,623 $ 773,671

Special Services

84,473

(20,723)

63,750

Dietary

277,333

(381)

276,952

Laundry and Housekeeping

170,206

170,206

Operation and Maintenance of Plant

91,499

(522)

90,977

Administrative and General 201,570

(1,701)

199,869

Property and Related Expenses

180,714

(336)

180,378

Total Reimbursable costs $1,760,843

$ (5,040) $1,755,803

PATIENT DAY STATISTICS

35,023

14

35,037

2

SYLVESTER HEALTH CARE, INC. NOTES TO SCHEDULE
FOR THE YEAR ENDED JUNE 30, 1994
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES ENTITY INFORMATION
Sylvester Health Care, Inc., is a 117-bed long-term health care facility located in Sylvester, Georgia. The facility provides both skilled and intermediate care services to resident patients. The facility was operated as a freestanding nursing home for the year ended June 30, 1994.
BASIS OF ACCOUNTING The Nursing Home Cost Report and the associated Schedule of Reimbursable
Costs and Patient Day Statistics, hereinafter referred to as the Schedule, were prepared in conformity with the Principles of Reimbursement for Provider Cost published by the Secretary of Health and Human Services as modified by the provisions of Policies and Procedures for Nursing Home Services published by the Georgia Department of Medical Assistance. This basis of accounting required by the Medicaid Program differs from generally accepted accounting principles. Consequently, the information presented in this report reflects only the allowable reimbursable costs and patient day statistics and required for DMA to determine the healthcare provider"s Medicaid reimbursement rate. This report does not reflect the provider's financial position or the results of its operations; it is intended to be used solely in connection with the administration of the Georgia Department of Medical Assistance Nursing Home Reimbursement Program and is not to be used or relied upon for any other purpose.
NOTE 2: OFFICE AUDIT ADJUSTMENTS The Office Audit Adjustments column on the Schedule is provided to show
the net effect of adjustments made during the office audit process. No office audit was performed prior to the cost report field audit and, therefore, no adjustments are shown.
NOTE 3: FIELD AUDIT ADJUSTMENTS The Field Audit Adjustments column on the Schedule is provided to show
the net effect of adjustments made during the cost report field audit process. The audit adjustments made as a result of this audit are shown on the Summary of Field Audit Adjustments and are explained in the Explanation of Field Audit Adjustments.
NOTE 4: LEASED FACILITIES The land, buildings, and equipment used in health care operations were
leased from H. G. Davis, Jr. The cost of this lease was $3.57 per available bed per day for the year ended June 30, 1994.
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SYLVESTER HEALTH CARE, INC. NOTES TO SCHEDULE
FOR THE YEAR ENDED JUNE 30, 1994 NOTE 5: PROPERTY COST REIMBURSEMENT
Records examined during the audit showed that the lease on the facility was renewed on December 9, 1991. Because this property transaction occurred after June 14, 1983, the provider is reimbursed for property and related expenses under the Dodge Index system rather than historical costs.
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SYLVESTER HEALTH CARE, INC. SUMMARY OF FIELD AUDIT ADJUSTMENTS
FOR THE YEAR ENDED JUNE 30, 1994

ADJUSTMENT NUMBER

REIMBURSABLE COSTS

ROUTINE SERVICES

1

Incorrect Expense Classifications

$ 18,623

SPECIAL SERVICES

1

Incorrect Expense Classifications

$ (20,192)

2

Lack of Sufficient Documentation

(531)

(20,723)

DIETARY

1

Incorrect Expense Classifications

(381)

OPERATION AND MAINTENANCE OF PLANT

1

Incorrect Expense Classifications

(522)

ADMINISTRATIVE AND GENERAL

1

Incorrect Expense Classifications

$ 1,852

2

Lack of Sufficient Documentation

(2,329)

3

Costs Not Related to Patient Care

(1,224)

(1,701)

PROPERTY AND RELATED EXPENSES

1

Incorrect Expense Classifications

$

620

4

Excess Vehicles

(956)

(336)

Net Adjustment to Reimbursable Costs

$ (5,040)

PATIENT DAY STATISTICS

5

Increase in Patient Day Statistics

14

5

ADJUSTMENT NUMBER
1

SYLVESTER HEALTH CARE, INC. EXPLANATION OF FIELD AUDIT ADJUSTMENTS
FOR THE YEAR ENDED JUNE 30, 1994

EXPLANATION

INCORRECT EXPENSE CLASSIFICATIONS

Documentation examined during the audit showed that some of the expenses were not classified in accordance with the Uniform Chart of Accounts prescribed by the Department of Medical Assistance for providers participating in the Medicaid Nursing Home Reimbursement Program. This adjustment is made to reclassify costs to the appropriate cost centers. (DMA Policies and Procedures, Appendix D)

COST CENTER Routine Services Salaries and Employee Benefits Special Services Cable Television Salaries and Employee Benefits Dietary Lease Expense Operation and Maintenance of Plant Cable Television Lease Expense Administrative and General Salaries and Employee Benefits Property and Related Expenses Lease Expense

$ 18,623

$

283

(20,475)

(20,192)

(381)

$

(283)

(239)

(522)

1,852

620

Net Adjustment to Reimbursable Costs

$

0

2

LACK OF SUFFICIENT DOCUMENTATION

Some of the expenses shown on the cost report were not supported by adequate documentary evidence. Federal regulations provide that cost information as developed by the provider must be current, accurate, and in sufficient detail to support payments made for services rendered to beneficiaries. This adjustment is made to remove the undocumented expenses from reimbursable costs. (HCFA 15-2304)

COST CENTER Special Services Administrative and General

$

( 531)

(2,329)

Total Adjustment to Reimbursable Costs

$ (2,860)

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ADJUSTMENT NUMBER
3

EXPLANATION {continued)

COSTS NOT RELATED TO PATIENT CARE

Expenses claimed in the cost report included payments which were not considered to be for patient care operations. Federal regulations provide that costs which are not appropriate or necessary and proper in developing and maintaining the operation of patient care facilities and activities are not allowable in computing reimbursable costs. This adjustment is made to remove the non-patient care expenses from reimbursable costs. (HCFA 15-2102.3; OMA Policies and Procedures Section 1002.l(k))

Items Advertising Flowers

s

(348)

(876)

s (1,224)

COST CENTER Administrative and General

s (1,224)

4

EXCESS VEHICLES

Documentation examined during the audit showed that expenses were claimed for three vehicles for the year under review. DMA guidelines allow a maximum of two vehicles for nursing homes of the size operated by the provider. This adjustment is made to reduce reimbursable costs claimed for the cost of insuring vehicles operated in excess of the maximum number allowable. (DMA Vehicle Guidelines)

COST CENTER Property and Related Expenses

s

(956)

5

PATIENT DAY STATISTICS

Census records examined during the audit showed that the nursing home had 35,037 patient days of service rather than the 35,023 shown on the cost report. The adjustment of 14 days has been made to correct the statistical information.

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CLAUDE L. VICKERS
STATE AUDITOR (404) 656-2174

DEPARTMENT OF AUDITS
MEDICAID AND LOCAL GOVERNMENT AUDITS DMSION
254 Washington Street, S.W., Suite 214 Atlanta, Georgia 30334-8400
MANAGEMENT COMMENT LETTER

MICHAEL A. PLANT
DIRECTOR (404) 656-2006

Georgia Department of Medical Assistance Atlanta, Georgia
and Management Officials of Sylvester Health Care, Inc.
We have audited the records and documentation supporting the cost report filed by Sylvester Health Care, Inc., in connection with the Medicaid Nursing Home Reimbursement Program for the year ended June 30, 1994. Our audit included a limited consideration of the organization"s internal control structure sufficient to plan the audit. Our consideration for this limited purpose would not necessarily disclose all reportable conditions in the internal control structure. Accordingly, we do not express an opinion on the internal control structure.
However, as a result of this audit, a condition was noted that we believe is a weakness which should be addressed by management. In our audit we found that accounts receivable credit balances at June 30, 1994, totalling $24,753.46 had not been refunded to the Department of Medical Assistance.
As a participant in the Medicaid Nursing Home Reimbursement Program, the Provider has the responsibility of compliance with program policies and procedures particularly with provisions of the Federal Provider Reimbursement Manual. Section 2304 of this publication states:
"Cost information as developed by the provider must be current, accurate, and in sufficient detail tosupport payments made for services rendered to beneficiaries. This includes all ledgers, books, records and original evidences of cost ( purchase requisitions, purchase orders, vouchers, requisit,ions for materials, inventories, labor time cards, payrolls, bases for apportioning costs, etc.) which pertain to the determination of reasonable cost, capable of being audited."
The provider should take corrective action to resolve the audit findings mentioned above.
This management comment letter is related to findings during an audit of the cost report filed in connection with the Medicaid Nursing Home Program by
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Sylvester Health Care, Inc., for the year ended June 30, 1994. This letter and the related audit report are intended to be used solely in connection with the administration of the Medicaid Nursing Home Reimbursement Program.
GEORGIA DEPARTMENT OF AUDITS
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