SNF ACFR FAQs

Who must file the Annual Consolidated Financial Report (ACFR)?#

All licensed skilled nursing facilities (SNF) must file the ACFRs on behalf of the organizations that operate, conduct, own, manage, or maintain the SNF.  State- and District-operated SNFs are exempt from these requirements.

What information is included in the ACFR?#

An ACFR is comprised of the following documents:

• A consolidated financial report
• Individual financial statements of related parties
• Visual representation of the organization’s structure that includes related parties.
• Visual representation of the organization’s structure that includes unrelated parties.

What are the components of the consolidated financial report?#

What are consolidated financial statements?#

Consolidated financial statements are comprised of basic financial statements of a consolidated group of entities that include a parent and all its subsidiaries and must be prepared in accordance with the Consolidation Topic of the Financial Accounting Standards Board (FASB) Accounting Standards Codification.

What is a combined financial statement?#

The combined financial statement reports the finances of the subsidiaries and the parent company separately but combined into one document. Within the document, all the parent’s and subsidiaries’ financial statements remain distinct. The combined financial statement is the consolidating balance sheet and income statement, each showing the breakdown by the entities included in the consolidated financial statements.

What is a Statement of Patient Census?#

A Statement of Patient Census is defined as the report form Facility Patient Days by Payer prescribed by the Accounting and Reporting Manual for California Long-Term Care Facilities, Second Edition, incorporated by reference in Section 97019 of the California Code of Regulations; except the data shall include all activity for the entity or entities, not just that of a single facility.

What is a Statement of Patient Revenue?#

A Statement of Patient Revenue is defined as the report form Facility Revenue Information prescribed by the Accounting and Reporting Manual for California Long-Term Care Facilities, Second Edition, incorporated by reference in Section 97019 of the California Code of Regulations; except the data shall include all activity for the entity or entities, not just that of a single facility.

What is the format for the Statements of Patient Census and Patient Revenue?#

These Statements should be formatted per the Annual Disclosure Reporting Form Pages 4.1 and 4.2 as prescribed by the Accounting and Reporting Manual for California Long-Term Care Facilities, Second Edition, Sections 4020.5 and 4020.6, respectively.

What individual financial statements must be included?#

The organization must provide the individual financial statements from each operating entity, licenseholder and related party in which the organization has a control interest of 5% or more and that provides goods and/or services to the SNF, unless the related party financial information is already included in the consolidated report.

These individual financial statements must include, but not be limited to, balance sheets, statements of income, statements of changes in equity, statements of cash flows, and if applicable Statements of Patient Census and Statements of Patient Revenue.

What are the visual representations of the organization’s structure?#

“Visual representation of the organization’s structure” is the definition for organizational chart. Although an organizational chart is typically a diagram or map of the organization’s structure, HCAI does not prescribe the format as long as the relationships between the entities are clearly identified. The document must depict the relationships among the owners, licensee, facility, and related parties.

If the organization has any related parties in which the organization has a control interest of 5% or more and that provide goods and/or services to the SNF, then the organization must provide a visual representation of the organization’s structure that includes those related parties.

If the organization has any unrelated parties that provide goods and/or services to the SNF, including but not limited to management companies and property companies, and that are paid more than $200,000 by the SNF, then the organization must provide a visual representation of the organization’s structure that includes those unrelated parties. Since there is no relationship with unrelated parties, these can be listed with the service or supply provided and amount paid by the SNF.

What is a related party?#

For the purposes of this section, “related party” has the same meaning as in Section 128734 of the Health and Safety Code, and may include, but is not limited to, home offices; management organizations; owners of real estate; entities that provide staffing, therapy, pharmaceutical, marketing, administrative management, consulting, and insurance services; providers of supplies and equipment; financial advisors and consultants; banking and financial entities; any and all parent companies, holding companies, and sister organizations; and any entity in which an immediate family member of an owner of those organizations has an ownership interest of 5 percent or more.  “Immediate family member” includes spouse, natural parent, child, sibling, adopted child, adoptive parent, stepparent, stepchild, stepsister, stepbrother, father-in-law, mother-in-law, sister-in-law, brother-in-law, son-in-law, daughter-in-law, grandparent, and grandchild.

Does the consolidated financial report need to be audited by a CPA?#

No, the consolidated financial report is not required to be audited by a CPA.  However, if the consolidated financial report has been audited by a CPA, then the audit report must be submitted. If the consolidated financial report has not been audited, it must be reviewed by a CPA.

HCAI understands that the Statement of Patient Census and Statement of Patient Revenue are not statements standardized by FASB, therefore, these statements shall undergo a regulatory review by a CPA to ensure compliance with the Accounting and Reporting Manual for California Long-Term Care Facilities, Second Edition (Manual) incorporated by reference in Section 97019 of Title 22 of the California Code of Regulations. Because the Statement of Patient Census is comprised of non-financial data, HCAI provides an “Agreed-Upon Procedures” engagement. This regulatory review shall determine if the patient census and the patient revenue are reported under the payer categories and routine service revenue centers as they are defined in the Manual.

Do the individual financial statements need to be reviewed or audited by a CPA?#

No, the individual financial statements are not required to be reviewed or audited by a CPA.

Do these requirements apply to any other long-term care facilities?#

No, these requirements apply only to those facilities licensed as skilled nursing facilities pursuant to subdivision (c) of Section 1250 of the Health and Safety Code.  State- and District-operated facilities are exempt. These requirements do NOT apply to facilities licensed as intermediate care facilities (ICFs) or congregate living health facilities (CLHFs).

What is the required method of submission?#

SNFs are required to submit the ACFR using HCAI’s System for Integrated Electronic Reporting and Auditing (SIERA).

Submissions must be accompanied by a signed certification. A recommended blank certification form can be downloaded from SIERA.

Are there any restrictions on file types that can be submitted?#

Yes, all documents must be submitted in a machine-readable, text-based Portable Document Format (PDF) file. Document files cannot be scanned versions or images of paper documents.

What does machine-readable, text-based mean and why is it required?#

HCAI is following California’s Open Data Policy and the Federal OPEN Government Data Act of 14 January 2019 which directs government agencies to publish public data in a machine-readable format. This Act defines machine-readable data as “data in a format that can be easily processed by a computer without human intervention while ensuring no semantic meaning is lost.” Text-based documents are documents that contain only text and are readable in any text editor and most word processors. Documents scanned into a PDF file become an image-based file. Scanned or any other image-based documents are not acceptable because they are not readable or easily processed by computers.

Can a SNF submit hardcopy documents?#

No, hardcopy reports will not be accepted.

Where can I obtain a Certification form?#

A recommended blank certification form can be downloaded from SIERA.

Who can sign the Certification form?#

The certification form must be signed by a duly authorized official of the health facility or of the health facility’s home office (an official/employee authorized to act on the facility’s or home office’s behalf and includes, but not limited to, Administrator, President, Chief Executive Officer, Chief Financial Officer, Vice President, Controller, and Finance Officer). Certification forms signed by health facility consultants are not acceptable.

When are the reports due?#

An ACFR is due within four months of the SNF’s fiscal year-end and must be submitted on or before the due date. However, where a SNF has been granted an extension, the ending date of the extension shall constitute the new due date for that report.

If a due date falls on a weekend or a State of California observed holiday, the due date does not change. The ACFR must be submitted on or before the due date. However, an ACFR submitted on the first business day following a weekend or holiday due date will be considered timely and will not result in a penalty.

Can we request an extension?#

Yes, a SNF may request a 90-day extension to file the report if needed due to unintended or unforeseen delays.

If your SNF ACFR has not been submitted on or before the due date, an extension request must be submitted to avoid penalties.

You may submit an online request by clicking the Request Extension tab found in the top banner of the SNF ACFR pages in SIERA. Please view the QuickStart Guide – Starting a New Report for more information.

If a due date falls on a weekend or a State of California observed holiday, an extension request submitted on the next business day will be considered timely and will not result in a penalty.

Is there a penalty for non-submission?#

Yes, a SNF that fails to submit an ACFR by the due date is liable for a civil penalty of $100 for each day after the due date that the report is not submitted.

Will the data submitted be available to the public?#

Yes, HCAI is required to post the ACFRs to its website. All submissions are a public record within the meaning of Section 7922.505 of the Government Code and are subject to disclosure pursuant to the California Public Records Act (Division 10 (commencing with Section 7920.000) of Title 1 of the Government Code).