Section 75-04-05-12 - Adjustment to cost and cost limitation1. Provider agencies under contract with the department to provide services to individuals with developmental disabilities who provide intermediate care facilities for individuals with intellectual disabilities shall submit a statement of costs to the department by October first of each year.2. Provider agencies shall disclose all costs and all revenues.3. Provider agencies shall identify income to offset costs when applicable in order that state financial participation not supplant or duplicate other funding sources. Income must be offset up to the total of appropriate allowable costs. If actual costs are not identifiable, income must be offset up to the total of costs described in this section. If costs relating to income are reported in more than one cost category, the income must be offset in the ratio of the costs in each cost category. These sources, and the cost to be offset, must include the following: a. Fees, the cost of the service or time for which the fee was imposed excluding those fees based on cost as established by the department.b. Insurance recoveries income, costs reported in the current year to the extent of costs allowed in the prior or current year for that loss.c. Rental income, cost of space in facilities or for equipment included in the rate of payment.d. Telephone and internet income from clients, staff, or guests, cost of the service.e. Rental assistance or subsidy when not reported as third-party income, total costs.f. Interest or investment income, interest expense.g. Medical payments, cost of medical services included in the rate of payment as appropriate.h. Respite care income when received for a reserved bed, room, board, and staff costs.i. Other income to the provider agency from local, state, or federal units of government may be determined by the department to be an offset to cost.4. Payments to a provider agency by its vendor are considered as discounts, refunds, or rebates in determining allowable costs under the program even though these payments may be treated as "contributions" or "unrestricted grants" by the provider agency and the vendor. However, such payments may represent a true donation or grant, and as such may not be offset against costs. Examples include when: a. Payments are made by a vendor in response to building or other fundraising campaigns in which communitywide contributions are solicited.b. Payments are in addition to discounts, refunds, or rebates, which have been customarily allowed under arrangements between the provider agency and the vendor.c. The volume or value of purchases is so nominal that no relationship to the contribution can be inferred.d. The contributor is not engaged in business with the provider agency or a facility related to the provider agency.5. If an owner or other official of a provider agency directly receives from a vendor monetary payments or goods or services for the owner's or official's own personal use as a result of the provider agency's purchases from the vendor, the value of such payments, goods, or services constitutes a type of refund or rebate and must be applied as a reduction of the provider agency's costs for goods or services purchased from the vendor.6. If the purchasing function for a provider agency is performed by a central unit or organization, all discounts, allowances, refunds, and rebates must be credited to the costs of the provider agency in accordance with the instructions above. These may not be treated as income of the central purchasing function or used to reduce the administrative costs of that function. Such administrative costs are, however, properly allocable to the facilities serviced by the central purchasing function.7. Purchase discounts, allowances, refunds, and rebates are reductions of the cost of whatever was purchased. They must be used to reduce the specific costs to which they apply. If possible, they must accrue to the period to which they apply. If not, they will reduce costs in the period in which they are received. The reduction to cost for supplies or services must be used to reduce the total cost of the goods or services for all clients without regard to whether the goods or supplies are designated for all clients or a specific group. a. "Purchase discounts" include cash discounts, trade, and quantity discounts. "Cash discount" is for prepaying or paying within a certain time of receipt of invoice. "Trade discount" is a reduction of cost granted certain customers. "Quantity discounts" are reductions of price because of the size of the order.b. Allowances are reductions granted or accepted by the creditor for damage, delay, shortage, imperfection, or other cause, excluding discounts and refunds.c. Refunds are amounts paid back by the vendor generally in recognition of damaged shipments, overpayments, or return purchases.d. Rebates represent refunds of a part of the cost of goods or services. Rebates differ from quantity discounts in that they are based on the dollar value of purchases, not the quantity of purchases.e. "Other cost-related income" includes amounts generated through the sale of a previously expensed item, e.g., supplies or equipment.N.D. Admin Code 75-04-05-12
Effective July 1, 1984; amended effective June 1, 1995; July 1, 2001; May 1, 2006.Amended by Administrative Rules Supplement 2017-363, January 2017, effective 1/1/2017.Amended by Administrative Rules Supplement 368, April 2018, effective 4/1/2018.General Authority: NDCC 25-01.2-18, 50-06-16
Law Implemented: NDCC 25-18-03, 50-24.1-01