Audit report, for the year ended June 30, 1996, Chestnut Ridge Nursing and Rehabilitation Center, Medicaid provider no. 00228049A, Nursing Facilities Services Program [June 30, 1996]

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D. EPAR.T. ME.N'T. ..OF A. UDITS AND AC,C'O,U' NT,.'S

Medicaid and'LocalGovernmentAudits .

AUDIT REPORT FOR THE YEAR ENDED JUNE 30, 1996
,CHESTNUTRIDGENURSINGAND
REHABILITATION CENTER
M.ED,ICAIDPROVlDERNIJMBER. 0022,,8049.A NURSING FACHXfIES SERVICES PROGRAM

TABLE OF CONTENTS

LETTER OF TRANSMITTAL

i

INTRODUCTION

1 Ii

FINDINGS AND RECOMMENDATIONS

4

Summary of Audit Findings Affecting Allowable Costs and Patient Day Statistics 17

Schedule of Allowable Costs and Patient Day Statistics 20

Report Prepared By:
State o/Georgia
Department 0/Audits and Accounts
Medicaid and Local GovemmentAudits Division
w., 254 Washington Street, S. Suite 322
Atlanta, Georgia 30334-8400 (404) 656-2006
Michael A. Plant. Director

CLAUDE L VICKERS
STATE AUDITOR

DEPARTMENT OF AUDITS AND ACCOUNTS
254 Washington Street, S.W., Suite 214 Atlanta, Georgia 30334-8400
Telephone (404) 656-2006 Facsimile (404) 656-7535

August 6, 1997

Members of the Board of Medical Assistance, and The Honorable Marge Smith, Commissioner Department of Medical Assistance 2 Peachtree Street, N.W., 40th Floor Atlanta, Georgia 30303
Ladies and Gentlemen:
This report provides the results of our audit of Chestnut Ridge Nursing and Rehabilitation Center, provider number 00228049A, a participant in the Nursing Facilities Services Program for the year ended June 30, 1996. This report is intended to be used solely in connection with the administration ofthe Georgia Department ofMedical Assistance Nursing Facilities Services Program and is not to be used or relied upon for any other purpose.

CLV/al/cd

1996 Audit Report: Chestnut Ridge Nursing and Rehabilitation Center

1

INTRODUCTION

General Information

The Georgia Medical Assistance Program (Medicaid) is administered by the Georgia Department of Medical Assistance and is jointly funded by the State of Georgia and the federal government. Medicaid pays health care providers for furnishing health care services to individuals or families with low income and limited resources. The Department of Medical Assistance has established specific payment guidelines and limitations for each covered medical service.
Through the Nursing Facilities Services Program, Medicaid pays for care in institutional settings for recipients who are unable to remain at home or in the community. Nursing homes are paid for this service using rates calculated from Nursing Home Cost Reports submitted by each provider. These cost reports include financial, patient census, and other information. Information included in the Nursing Home Cost Report is subject to audit by the Department of Medical Assistance or its agents. In an agreement with the Department of .Medical Assistance, the Department of Audits and Accounts has accepted the responsibility of auditing Medicaid providers.

Provider Information

Chestnut Ridge Nursing and Rehabilitation Center, a 150-bed longterm health care facility located in Cumming, Georgia, is a provider enrolled in the Georgia Medicaid Nursing Facilities Services Program. The facility provides both skilled and intermediate care services to

2

Nursing Facilities Services Program

Audit Objectives

services to resident patients. The facility was owned by HCP III Cummings, Inc., and operated as a component ofPremiere Associates Management Company, a chain organization which filed a Home Office Cost Report with DMA for the year ended June 30, 1996.

The purpose ofthis audit was to detennine whether Chestnut Ridge Nursing & Rehabilitation Center maintained adequate documentation to support the allowable costs and patient day statistics reported in its Nursing Home Cost Report for the year ended June 30, 1996; and to detennine whether Chestnut Ridge Nursing and Rehabilitation Center complied with the federal and state laws,. regulations, policies and procedures for the Nursing Facilities Services Program in effect for that period. The specific objectives of this audit were to:



detennine if allowable costs reported in the Nursing

Home Cost Report are reasonable and allowable, in all

material respects, in accordance with federal and state

laws, regulations, policies and procedures governing

the Georgia Nursing Facilities Services Program;



compare patient day statistics included in the cost

report to provider records to detennine if the patient

day statistics are accurately reported; and



recommend appropriate action based on the results of

our audit.

1996 Audit Report: Chestnut Ridge Nursing and Rehabilitation Center

3

Scope and Methodology

To accomplish these objectives, we performed a limited review of the provider's internal control structure to the extent necessary to plan our audit. We interviewed provider personnel and examined records and documentation to determine the adequacy of amounts and disclosures included in the Nursing Home Cost Report. We also reviewed, on a test basis, evidence supporting these amounts and disclosures and assessed the accounting principles used and significant estimates made by management. We evaluated the tested transactions and accounts for compliance with cost reporting principles included in the Health Care Financing Administration Provider Reimbursement Manual (HCFA Pub. 15-1) and DMA Policies and Procedures for Nursing Facility Services.
The Department of Audits and Accounts is responsible for providing the Department ofMedical Assistance with information regarding the accuracy of cost and patient data for Chestnut Ridge Nursing and Rehabilitation Center for the year ended June 30, 1996. If the Department of Medical Assistance implements the recommendations in this report by adjusting the allowable costs and/or patient day statistics used in calculating the provider's billing rate, the provider may appeal to the Department of Medical Assistance for reconsideration of the audit findings. For this reason, we have not included a response from the provider in our report. However, we have discussed the contents of this report with the provider and have considered its responses when preparing the report. In all other respects, this audit was conducted in accordance with generally accepted government auditing standards.

4

Nursing Facilities Services Program

FINDINGS AND RECOMMENDATIONS

Finding No.1

Incorrect Expense Classifications

Documentation examined during the audit showed that some ofthe expenses were not classified in accordance with the Uniform Chart of Accounts prescribed by the Department ofMedical Assistance for providers participating in the Medicaid Nursing Facilities Services Program. We recommend that the provider implement policies and procedures to ensure that all of its expenses are classified in the appropriate cost centers. We recommend that the Department of Medical Assistance make the following adjustment to reclassify costs to the appropriate cost centers.
(DMA Policies and Procedures, Appendix D)

COST CENTER Routine Services Cleaning Employee Recruitment Office Supplies Ward Clerk Salaries and Benefits Special Services Association Dues Linen Office Supplies Travel Dietary Dietary Supplements Maintenance Supplies Office Supplies Travel Laundry and Housekeeping Cleaning Dietary Supplements Linen

$ (1,363) (3,332) . (2,637) (52,523) $

$

(701)

(328)

(502)

(193)

$

821

(315)

(72)

(753)

$

1,363

(821)

328

(59,855) (1,724) (319) 870

1996 Audit Report: Chestnut Ridge Nursing and Rehabilitation Center

5

Operation and Maintenance of Plant Ad Valorem Tax Communication Maintenance Supplies Expense Travel
Administrative and General Association Dues Communication Employee Recruitment General Liability Insurance Expense Lease Guarantee Expense Office Supplies Travel Ward Clerk Salaries and Benefits
Property and Related Expenses Ad Valorem Taxes General Liability Insurance Expense Lease Guarantee Expense
Total Adjustment to Allowable Costs

$

(109)

(1,483)

315

(1,206)

$

701

1,483

3,332

76

(12,643)

3,211

2,152

52,523

$

109

(76)

12,643

$

(2,483)
50,835 12,676
0

Finding No.2

Lack ofSufficient Documentation
Some of the expenses included in allowable costs 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. We recommend that the provider implement policies and procedures to ensure that all expenses shown on the cost report are supported by sufficient documentation. We recommend that the Department of Medical Assistance make the following adjustment to remove the undocumented expenses from allowable costs.
(HeFA Pub. 15-1 Section 2304)

6

Nursing Facilities Services Program

COST CENTER Routine Services Special Services Dietary Laundry and Housekeeping Operation and Maintenance ofPlant Administrative and General Property and Related Expenses
Total Adjustment to Allowable Costs

$ (13,357) (7,429) (5,264) (1,851) (3,705)
(12,921) (15,581)
$==:!I::!(62Q==1!:::Q~8=)

Finding No.3

Expense Reimbursements

Documentation examined during the audit showed that amounts shown on the cost report as revenues were from sales of materials and/or services, the cost of which were included in allowable costs claimed. Federal regulations provide that amounts received for discounts, allowances, refunds and rebates are not to be considered a form of income but should be used to reduce the specific costs to which they apply. We recommend that the provider implement policies and procedures to ensure that allowable costs claimed are reduced by any expense reimbursements received. We recommend that the Department ofMedical Assistance make the following adjustment to reduce allowable costs claimed by expense reimbursements shown as revenues.
(HCFA Pub. 15-1 Sections 800, 809)

COST CENTER Routine Services Special Services Dietary Laundry and Housekeeping Operation and Maintenance of Plant Administrative and General

$

(5,987)

(1,340)

(777)

(10,715)

(161)

(473)

Total Adjustment to Allowable Costs

$'==::!l(:::!:19~45~3=)

1996 Audit Report: Chestnut Ridge Nursing and Rehabilitation Center

7

Finding No.4

Accrual Basis ofAccounting

Documentation examined during the audit showed that amounts recorded for certain expenses did not reflect actual amounts incurred for the period under review. Federal regulations provide that expenditures...are recorded in the period in which they are incurred, regardless of when they are paid. We recommend that the provider implement policies and procedures to ensure that costs are recorded in the period in which they are incurred. We recommend that the Department ofMedical Assistance make the following adjustment to decrease allowable costs claimed for expenses not applicable to the year under review.
(HeFA Pub. 15-1 Section 2302.1)

Adjustments to Balance Sheet Accounts:

Allowable Costs

.June 30, 1995 Balance Accounts Payable

$===(~3==2~7~6!::1!::)

June 30, 1996 Balance Accounts Payable
Total Adjustment to Allowable Costs

$===(!ci!9==6~8~Q==) $==:!c:(]~2!!=9:E::!:5:!!6!::1!::)

COST CENTER Routine Services Special Services Dietary Laundry and Housekeeping Operation and Maintenance of Plant Administrative and General
Total Adjustment to Allowable Costs

$

(6,969)

(1,883)

(1,260)

(889)

(621)

(1,334)

$====::::l(c:!::]~2::6:95~66l::.)

8

Nursing Facilities Services Program

Finding No.5

Related Party Costs

Documentation examined during the audit showed that the provider paid for services obtained from related parties. Federal regulations provide that costs applicable to services, facilities, and supplies furnished by related organizations are includable in the allowable costs of the provider at the cost to the related organization. We recommend that the provider implement policies and procedures to ensure that only the costs incurred by the related organization to furnish services, facilities, and supplies are included in allowable costs. We recommend that the Department of Medical Assistance make the following adjustment to reduce allowable costs to the related party's cost.
(HCFA Pub. 15-1 Section 1000)

COST CENTER Routine Services Special Services

$

(682)

(40,852)

Total Adjustment to Allowable Costs

$====(=4=]~53==4:!::C:)

Finding No.6

Costs Not Related to Patient Care
Allowable costs claimed 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 allowable costs. We recommend that the provider implement policies and procedures to ensure that expenses claimed in the cost report do not include items not related to patient care. We recommend that the Department of Medical Assistance make the following adjustment to remove the non-patient care expenses from allowable costs.
(HCFA Pub. 15-1 Sections 219, 2102.1, 2122.2; DMA Policies and Procedures Section 1002.1(k))

1996 Audit Report: Chestnut Ridge Nursing and Rehabilitation Center

9

ITEMS Association Dues (50%) Income Taxes Insurance Expense Applicable to Related Facilities Loss on Sale ofReceivables Non-Sufficient Funds Expense
COST CENTER Special Services Administrative and General
Total Adjustment to Allowable Costs

$

(249)

(45)

(279)

(69,805)

(364)

$ (70742)

$

(249)

(70,493)

$

(70742)

Finding No.7

Liabilities Not Liquidated
Liabilities shown on Schedule C of the cost report for June 30, 1995, included amounts which had not been paid at June 30, 1996. In addition, liabilities shown on Schedule C of the cost report for June 30, 1996, included amounts the provider decided not to pay in the subsequent year. Federal regulations provide that short term liabilities must be liquidated within one year after the end of the cost reporting period in which the liability was incurred and must be made by check or other negotiable instrument, cash or legal transfer of other assets. Furthermore, where the liability is not liquidated within the I-year time limit or does not qualify under the exceptions specified in HCFA 15-2305.1, the cost incurred for the related goods and services is not allowable in the cost reporting period when the liability is incurred, but is allowable in the cost reporting period when the liquidation of the liability occurs. We recommend that the provider implement policies and procedures to ensure that liabilities included in the cost report are liquidated within the required time frame. We recommend that the Department ofMedical Assistance make the following adjustment to reduce allowable costs for the expense relating to the unliquidated liability.
(ReFA Pub. 15-1 Section 2305A)

10

Nursing Facilities Services Program

COST CENTER Special Services Administrative and General
Total Adjustment to Allowable Costs

$

(3,748)

(14,561)

$===='=:]~8=::30~9==)

Finding No.8

Expense Applicable to Other Chain Components

Allowable costs claimed included speech therapy services expense applicable to another chain component. 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. We recommend that the provider, its home office, and all other components of the chain implement policies and procedures to ensure that all costs are included in allowable costs of the chain component to which they apply. We recommend that the Department of Medical Assistance make the following adjustment to remove from allowable costs the expenses applicable to other chain components.
(HCFA Pub. 15-1 Section 2304)

COST CENTER Special Services

$,==='.=1~37===5~)

COMPONENT FACll..ITIES Cedar Valley Nursing and Rehabilitation Center Rockmart Nursing and Rehabilitation Center
Total Adjustment to Allowable Costs

$

908

467

$======1=::37~5=

1996 Audit Report: Chestnut Ridge Nursing and Rehabilitation Center

11

Finding No.9

Recalculation ofAncillary Services Cost Adjustment

The provider received revenues from the sale of ancillary services to patients; therefore, allowable costs for special services are limited to the maximum allowable cost calculated on Schedule B-1 A ofthe cost report. Documentation examined during the audit showed that certain corrections were necessary to amounts reported on Schedule B-1A as total cost per books, total charges, Medicaid charges, total patient days, and Medicaid patient days. These findings required the recalculation of Schedule
B-1A. A copy ofthis recalculation has been furnished to the provider. We recommend
that the provider implement policies and procedures to ensure that all information used to calculate the ancillary services cost adjustment is correct. We recommend that the Department ofMedical Assistance make the following adjustment to increase allowable costs for the net effect of the recalculation.
(General Instructions to the Cost Report)

Ancillary Services

Adjustment Per Cost Report

Recalculated Adjustment Audit Finding

Physical Therapy Pharmacy Speech Therapy Occupational Therapy

$ (188,490) $ (172,856) $

(23,005)

(19,269)

(75,273)

(61,299)

(137,636)

(118,066)

15,634 3,736 13,974 19,570

$ (424404) $ (371 490) $

52914

COST CENTER Special Services

$,==~52~91!:::l4~

Finding No. 10

Allocation ofIndirect Expenses to Non-Patient Care Areas
The provider uses a portion of its building for purposes which are not related to patient care. Indirect expenses related to the non-patient care use of the building are calculated on Schedule B-5 of the cost report. Docu:.nentation examined during the

12

Nursing Facilities Services Program

audit showed that certain corrections were necessary to amounts reported on Schedule B-5 as allowable costs and square footage. These findings required the recalculation of Schedule B-5. A copy of this recalculation has been furnished to the provider. We recommend that the provider implement policies and procedures to ensure that all information used to allocate indirect expenses to non-patient care areas is correct. We recommend that the Department of Medical Assistance make the following adjustment to decrease allowable costs for the net effect of the recalculation. (HCFA Pub. 15-1 Section 2102.3; General Instructions to the Cost Report)

COST CENTER Laundry and Housekeeping Operation and Maintenance of Plant Property and Related Expenses

$

(1,333)

(938)

0,901)

Total Adjustment to Allowable Costs

$==::!c(4==17~2!!::1!::)

Finding No. 11

Fixed Asset Purchases Claimed as Expense
Allowable costs claimed included purchases of assets which are considered to be capital additions to property under generally accepted accounting principles. The Uniform Chart of Accounts issued by DMA provides for inclusion of such assets in property accounts. We recommend that the provider implement policies and procedures to ensure that all purchases of fixed assets are shown on the cost report as capital additions. We recommend that the Department of Medical Assistance make the following adjustment to reduce allowable costs by the amount of purchased assets claimed as expense and to increase allowable costs by depreciation allowable.
(HCFA Pub. 15-1 Section 108; DMA Policies and Procedures, Appendix D)

1996 Audit Report: Chestnut Ridge Nursing and Rehabilitation Center

13

COST CENTER Operations and Maintenance Cost ofMajor Moveable Equipment Property and Related Expenses Allowable Depreciation Expense
Total Adjustment to Allowable Costs

$

(3,873)

194

$===(~3:::6!:!::7!::::!!9=)

Finding No. 12

Allocationsfrom Home Office

The provider was a component of a chain organization for the year ended June 30, 1996. As a result of our audit of the home office cost report filed in connection with. the Medicaid Nursing Home Facilities Program, we recommended that the Department of Medical Assistance make adjustments to the allowable costs claimed by the home office. We recommend that the provider and its home office implement policies and procedures to ensure that only allowable costs are allocated from the home office to the provider. We recommend that the Department of Medical Assistance make the following adjustment to correct allowable costs to reflect the allocation ofthe adjustments made to the home office cost report.
(HCFAPub. 15-1 Section 2150)

COST CE;NTER Administrative and General Functionally Allocated Costs Pooled Costs Allocation Statistics Administrative Expenses Non-Capital Related Interest Expense Property and Related Expenses Pooled Capital Related Interest Expense
Total Adjustment to Allowable Costs

$ 37,947
2,534 (3,595)
(22,686) $

14,200

18,057 $==~32~25~7=

14

Nursing Facilities Services Program

Finding No. 13

Home Office Costs Paid by Chain Component

Allowable costs claimed by this component ofa chain organization included amounts incurred for the benefit of the entire chain. Federal regulations provide that allowable costs incurred for the benefit of, or directly attributable to, a specific provider must be allocated directly to the ch.ain entity for which they were incurred; however, federal regulations also provide that allowable costs that have not been directly assigned to specific chain components must be allocated among the providers on a basis to equitably allocate the costs over the chain components or activities receiving the benefits of the costs. We recommend that the provider and its home office implement policies and procedures to ensure that costs incurred for the benefit of the entire chain organization are included in home office allowable costs rather than in the provider's allowable costs. We recommend that the Department of Medical Assistance make the following adjustment to remove the costs benefiting the entire chain from this provider's allowable costs.
(HCFA Pub. 15-1 Section 2150.3)

COST CENTER Administrative and General

$===(6=::0=,6=93:=)

Finding No. 14

Cost Report Adjustment Reversal
An adjustment was made during cost report preparation to offset the gain from the sale of fixed assets against allowable costs. Documentation examined during the audit showed that the amount recorded as income was actually rental income from suppliers. Federal regulations provide that amounts paid by a supplier for use of equipment constitute a form of discount. Federal regulations also provide that amounts received for discounts, allowances, refunds and rebates are not to be considered a form of income but should be used to reduce the specific costs to which they apply. The rental income from suppliers actually earned during the period has been included in the adjustment recommended in Finding No.3. In addition, Federa1 regulations provide that cost information as developed by the provider must be current, accurate, and in sufficient detail to support payments made for services

1996 Audit Report: Chestnut Ridge Nursing and Rehabilitation Center

15

rendered to beneficiaries. We recommend that the provider implement policies and procedures to ensure that adjustments made during cost report preparation are accurate. We recommend that the Department of Medical Assistance make the following adjustment to reverse a portion of the provider adjustment.
(HCFA Pub. 15-1 Sections 800, 809,2304)

COST CENTER Property and Related Expenses

$====::i1:::::;,O=7=:,:E::15~

Finding No. IS

Excess Depreciation

Documentation examined during the audit in support of fixed assets and depreciation showed that either the property was not included in the proper class or depreciation was not calculated in accordance with DMA guidelines. DMA Policies and Procedures require the use ofminimum required asset lives. We recommend that the provider implement policies and procedures to ensure that depreciation expense is calculated in accordance with DMA guidelines. We recommend that the Department of Medical Assistance make the following adjustment to reduce allowable costs claimed by the amount of depreciation expense claimed in excess of the total allowable.
(DMA Depreciation Guidelines, DMA Policies and Procedures Section 1002.1 (k)

COST CENTER Property and Related Expenses

$.===(=3=:63=)

Finding No. 16

Patient Day Statistics
Census records examined during the audit were incomplete and unreliable. Therefore, patient day statistics reported in the cost report could not be verified. 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. We recommend that the provider implement policies and

16

Nursing Facilities Services Program

procedures to accumulate accurate patient day statistics. We recommend that the Department of Medical Assistance make the adjustment of 2,157 days to increase patient day statistics to reflect 100% occupancy during the year under review.
(HCFA Pub. 15-1 Section 2304)

Finding No. 17

Accounts Receivable Credit Balances
Documentation examined during the audit showed that the provider had numerous credit balances in its individual accounts receivable. Credit balances in the facility's accounts receivable result from overpayments for services provided to its patients. The $3,003.72 shown in the following table represents overpayments from the Department of Medical Assistance that had not been resolved as of April 30, 1997. We recommend that the provider review its credit accounts receivable and refund overpayments to the appropriate party. We further recommend that the provider to ensure that overpayments on implement policies and procedures patients' accounts are promptly refunded to the payor. We also recommend that the Department of Medical Assistance review this matter and recover any overpayments identified.

Patient Name
Beck, Della Brown, Louise Cole, William Sexton, Sylvia
Total

Balance

$

832.62

268.50

883.20

1,019.40

$ 3,003.72

1996 Audit Report: Chestnut Ridge Nursing and Rehabilitation Center

17

SUMMARY OF AUDIT FINDINGS AFFECTING ALLOWABLE COSTS AND PATIENT DAY STATISTICS

FINDING NUMBER

ALLOWABLE COSTS

Routine Services

1

Incorrect Expense Classifications

2

Lack of Sufficient Documentation

3

Expense Reimbursements

4

Accrual Basis of Accounting

5

. Related Party Costs

Special Services

1

Incorrect Expense Classifications

2

Lack of Sufficient Documentation

3

Expense Reimbursements

4

Accrual Basis of Accounting

5

Related Party Costs

6

Costs Not Related to Patient Care

7

Liabilities Not Liquidated

8

Expense Applicable to Other Chain

Components

9

Recalculation of Ancillary Services Cost

Adjustment

Dietary

1

Incorrect Expense Classifications

2

Lack of Sufficient Documentation

3

Expense Reimbursements

4

Accrual Basis of Accounting

$ (59,855) (13,357) (5,987) (6,969) (682) $

$ (1,724) (7,429) (1,340) (1,883)
(40,852) (249)
(3,748)
(1,375)
52,914

$

(319)

(5,264)

(777)

(1,260)

(86,850)
(5,686) (7,620)

18

Nursing Facilities Services Program

FINDING NUMBER

ALLOWABLE COSTS

Laundry and Housekeeping

1

Incorrect Expense Classifications

$

870

2

Lack of Sufficient Documentation

(1,851)

3

Expense Reimbursements

(10,715)

4

Accrual Basis of Accounting

(889)

10

Allocation of Indirect Expenses to Non-Patient

Care Areas

(1,333)

Operation and Maintenance ofPlant

1

Incorrect Expense Classifications

$ (2,483)

2

Lack of Sufficient Documentation

(3,705)

3

Expense Reimbursements

(161)

4

Accrual Basis of Accounting

(621)

10

Allocation ofIndirect Expense to Non-Patient

Care Areas

(938)

11

Fixed Asset Purchases Claimed as Expense

(3,873)

Administrative and General

1

Incorrect Expense Classifications

$ 50,835

2

Lack of Sufficient Documentation

(12,921)

3

Expense Reimbursements

(473)

4

Accrual Basis of Accounting

(1,334)

6

Costs Not Related to Patient Care

(70,493)

7

Liabilities Not Liquidated

(14,561)

12

Allocations from Home Office

14,200

13

Home Office Costs Paid by Chain Component

(60,693)

(13,918) (11,781) (95,440)

1996 Audit Report: Chestnut Ridge Nursing and Rehabilitation Center

19

FINDING NUMBER

ALLOWABLE COSTS

Property and Related Expenses

1

Incorrect Expense Classifications

$ 12,676

2

Lack of Sufficient Documentation

(15,581)

10

Allocation ofIndirect Expense to Non-Patient

Care Areas

(1,901 )

11

Fixed Asset Purchases Claimed as Expense

194

12

Allocations from Home Office

18,057

14

Cost Report Adjustment Reversal

10,715

15

Excess Depreciation

(363)

23,797

Total Audit Findings Affecting Allowable Costs

$ (197,498)

PATIENT DAY STATISTICS
16 Increase in Patient Day Statistics

2 157

20

Nursing Facilities Services Program

SCHEDULE OF ALLOWABLE COSTS AND PATIENT DAY STATISTICS

ALLOWABLE COSTS

COST REPORT TOTALS

FIELD AUDIT FINDINGS

AUDITED TOTALS

Routine Services

$ 1,870,828 $ (86,850) $ 1,783,978

Special Services

148,717

(5,686)

143,031

Dietary

497,214

(7,620)

489,594

Laundry and Housekeeping

301,525

(13,918)

287,607

Operation and Maintenance of Plant

214,297

(11,781)

202,516

Administrative and General

502,595

(95,440)

407,155

Property and Related Expenses

375,873

23,797

399,670

Total Allowable Costs

$ 3,911,049 $ (197,498) $ 3,713,551

PATIENT DAY STATISTICS

52,743

2,157

54,900