N.J. Admin. Code § 8:31B-4.2

Current through Register Vol. 56, No. 11, June 3, 2024

Section 8:31B-4.2 - Functional versus responsibility reporting

(a) A prerequisite for the informed review of hospital data is good communication, i.e., a common understanding and use of terminology among all parties. Imperfect communication results when terms such as "hours", "dietary", "purchased services", etc. mean different things to different people. The objective in the design of this manual is to achieve uniform reporting of financial elements consistent with uniform definitions of functional cost and revenue centers, statistical data, patient data and the natural classifications of expenses, i.e., salaries, supplies.

(b) Expenses, revenues and other data reported in a manner consistent with the definitions included herein will provide a sound basis for the establishment of a uniform system of reporting. This manual, however, is not requiring that institutions adopt this functional reporting system for their internal management reports, so long as institutions maintain the ability to report data with reasonable accuracy in accordance with the functional definitions and expense and revenue classifications defined herein.

(c) A hospital should structure its accounts for the purpose of managing a sound cost-effective and financially viable organization. In many instances, principally due to various budgetary control objectives, this goal may be better achieved through recording of expenses and revenues on a responsibility basis. However, it is highly unlikely that expenses and revenues recorded on a responsibility basis can be reported "as is" on the prescribed uniformed functional basis. This will necessitate the recast of expenses, revenue and statistics per N.J.A.C. 8:31B-4. Various reporting schedules provide the hospital with the opportunity to insure that the financial data used to develop the financial elements of the current Cost Base, despite the recasts and allocations involved, are equivalent to the hospital's own audited financial statements. A working knowledge of the principles, concepts and definitions included herein, especially with regard to the inclusion of specific functions within reporting centers and of the natural classifications of expense, is necessary for a hospital's accurate compliance with these reporting requirements.

N.J. Admin. Code § 8:31B-4.2

Amended by R.1993 d.593, effective 11/15/1993.
See: 25 New Jersey Register 3117(a), 25 New Jersey Register 5149(a).