Section 75-03-20-02 - Financial reporting requirements1. Records. a. The center will maintain on the premises census records and financial information which will be sufficient to provide for a proper audit or review. For any cost being claimed on the cost report, sufficient data must be available as of the audit date to fully support the report item. b. Where several centers are associated with a group and their accounting and reports are centrally prepared, added information must be submitted for those items known to be lacking support at the reporting center prior to the audit or review of the center. Accounting or financial information regarding related organizations must be readily available to substantiate cost. c. Each center shall maintain, for a period of not less than five years following the date of submission of the cost report to the state agency, financial and statistical records of the period covered by such cost report which are accurate and in sufficient detail to substantiate the cost data reported. Each center shall make such records available upon reasonable demand to representatives of the department. 2. Accounting and reporting requirements. a. The accrual basis of accounting, in accordance with generally accepted accounting principles, must be used for cost reporting purposes. However, if conflicts occur between ratesetting procedures and generally accepted accounting principles, ratesetting procedures will prevail. A center may maintain its accounting records on a cash basis during the year, but adjustments must be made to reflect proper accrual accounting procedures at yearend and when subsequently reported. b. To properly facilitate auditing, the accounting system should be maintained in such a manner that cost accounts will be grouped by cost category and be readily traceable to the cost report. c. The cost report must be submitted on or before the last day of the third month following the center's report year. The report must contain all actual costs of the provider, adjustments for nonallowable costs, and client days. d. Upon request, the following information must be made available. (1) A statement of ownership including the name, address, and proportion of ownership of each owner. (2) Copies of leases, purchase agreements, appraisals, financing arrangements, and other documents related to the lease or purchase of the center or a certification that the content of any such document remains unchanged since the most recent statement given pursuant to this subsection. (3) Supplemental information reconciling the costs on the financial statements with costs on the cost report. (4) Copies of leases, purchase agreements, and other documents related to the acquisition of equipment, goods, and services which are claimed as allowable costs. e. If the center fails to file the cost report on or before the due date, the department may impose a nonrefundable penalty of ten percent of any amount claimed for reimbursement. The penalty may be imposed after the last day of the first month following the due date and continues through the month in which the statement or report is received. f. The center will make all adjustments and allocations necessary to arrive at allowable costs. The department may reject any cost report when the information which has been filed is incomplete or inaccurate. In the event that a cost report is rejected, the department may impose the penalties described in subdivision e. g. The department may grant an extension of the reporting deadline to a center. To receive such an extension, a center must submit a written request to the division of mental health services. 3. The department will perform an audit of the latest available report year of each center at least once every six years and retain for at least three years all audit-related documents, including cost reports, working papers, and internal reports on rate calculations which are utilized and generated by audit staff in performance of audits and in establishing rates. Audits will meet generally accepted governmental auditing standards. 4. Penalties for false reports. a. A false report is one wherein a center knowingly supplies inaccurate or falseinformation in a required report that results in an overpayment. If a false report is received, the department may: (1) Immediately adjust the center's payment rate to recover the entire overpayment within the rate year; (2) Terminate the department's agreement with the center; (3) Prosecute under applicable state or federal law; or (4) Use any combination of the foregoing actions. b. If a center claims as an allowable cost costs which have been previously adjusted, the department may determine that the report is a false report. Previously adjusted costs which are being appealed must be identified as unallowable costs. The center may indicate that the costs are under appeal and not claimed under protest to perfect a claim should the appeal be successful. N.D. Admin Code 75-03-20-02
Effective December 1, 1991.General Authority: NDCC 25-03.2-10, 50-06-16
Law Implemented: NDCC 25-03.2, 25-03.2-08(3)