New York Codes, Rules and Regulations › Title 10 - DEPARTMENT OF HEALTH › Chapter V - Medical Facilities › Subchapter A - Medical Facilities-minimum Standards › Article 8 - New York State Annual Hospital Report › Part 442 - Reporting Principles And Concepts › Specialized Reporting Areas › Section 442.25 - Hospital research and education costs

Current through Register Vol. 46, No. 28, July 10, 2024
[ 1630 ]
All direct costs incurred in
						  conducting hospital research and formal educational activities (as opposed to
						  in-service education) must be recorded in Unrestricted Fund cost center
						  accounts 8010-8199 (Research Expenses) or 8220-8299 (Education
						  Expenses).
(b)
Grant
						accountability.
[ 1631 ] When separate accounting is required by law,
						  grant contract, or donations restricted for research and educational
						  activities, separate cost centers must be maintained. Transfers from restricted
						  funds to match the expenditures for these activities must also be segregated
						  into separate accounts in the series 5020-5199 (Research) or 5280-5300
						  (Education). Thus, accountability is maintained for all restricted research and
						  educational activities.
(c)
Overhead allocation.
[ 1632 ]
(1) No
						allocation of indirect overhead is to be made on the books prior to cost
						reporting unless such allocation is required by grant contract. When a grant
						contract calls for the payment of direct costs plus an overhead factor, the
						overhead factor should be included in billing, but no allocation should be made
						in the hospital's accounting records.
(2) The following example illustrates the
						accounting treatment of restricted grant activity:
(i) Assume that a hospital received a
						specific research grant on December 1, which called for payment of direct costs
						incurred, plus an overhead allocation of 10 percent of such costs. At December
						31 (the hospital's year-end), $150 of direct costs had been incurred. The
						following entries would be made in the hospital's accounting records at
						December 31:
(ii) Unrestricted
						Fund.
(ii)
Unrestricted
						Fund.
Account
Dr.
Cr.
Research
8010
$150
Cash
1010
$150
Due from Specific Purpose Fund
1074
$165
Transfer from restricted funds for research
										expenses
5020
$165
To record specific research direct costs and
										to set up receivable and other operating revenue from restricted fund for
										direct costs, plus overhead allocation.
(iii) Specific Purpose Fund.
Fund balance-Transfers to Operating Fund for
										Operating Purposes
2797
$165
Due to Operating Fund
2781
$165
To record liability to Unrestricted Fund for
										direct research costs and overhead allocation.
(3) If direct overhead must, by grant
						contract, be recorded in the Unrestricted Fund cost centers used for the
						recording of the direct costs of the grant activity, the natural expense
						classification.89 (other expenses) must be used. A separate cost center
						entitled "Overhead Applied" should be established in the Unrestricted Fund and
						credited with the amount of such overhead allocation. For reporting purposes
						the balance in the "Overhead Applied" cost center must be offset against the
						grant activity cost center, so costs remaining in the grant activity cost
						center are direct costs only.