As providers finalize their Consolidated Fiscal Reports (CFRs), it’s common to encounter recurring challenges that can delay filings, create discrepancies, or result in additional follow-up from funders. To help streamline the process and reduce errors, we’ve outlined the top 10 issues we frequently see—and practical steps you can take to avoid them in future reporting cycles.
1. Missing Programs
The days of reporting the same programs on the CFR year after year are over. Providers need to review all funding received to ensure that they include all appropriate programs on the CFR. Providers can, and should, reach out directly to the funder and request a list of all programs being operated by their agency code.
2. Missing or Incorrect Site Data
CFR-1 lines 1 through 12 are generally considered basic data but submitting complete and accurate data on these lines is critical when the funders are reconciling contracts and rates. These lines should be reviewed before the CFR is filed for completeness and accuracy.
3. Units of Service
The majority of letters we see from the funders are related to units of service, either being reported on the wrong line or not agreeing with what the funder paid. Billing records should be reviewed in detail to ensure that units of service are accurately reflected in the CFR. Providers can usually generate reports from them to determine how many units of service were paid or they can be obtained by contacting the funder. Additionally, during the review process, the CFR should be reviewed to ensure that the line the units are reported on (13a, 13b or 13c) correlates with where the revenue is reported.
4. Revenue and/or Expenses Not Appropriate for the Program and/or Funder
Although contra-intuitive, the same revenue or expense, line in your general ledger (GL) might be reported differently in the CFR depending on the program. For example, while reporting prior year revenue adjustments on line 86 is acceptable for OPWDD and SED programs, it is not acceptable for OMH and OASAS programs. Additionally, there are some programs on the CFR that might only have wages and benefits and others that might only have OPTS. Having an individual who knows the programs and is familiar with the CFR manual is imperative to submitting a complete and accurate CFR.
5. Credit Loss Expense (Bad Debt Expense)
ASU 2016-13 Current Expected Credit Loss (CECL) not only impacted financial statements but also affected the CFR. Although most people think that the reporting of contract adjustments and credit losses has the same bottom-line impact; however, there are potential funding implications. Understanding the difference and tracking appropriately in the GL will help ensure they are reported correctly on the CFR.
6. Non-Allowable Costs
We continue to see issues and questions related to non-allowable costs. It’s not enough for the person preparing the CFR to review know which costs are nonallowable. Anyone who codes expenses to the GL should be familiar or have access to the listing of nonallowable costs (can be found in the CFR Manul Appendix X) so they can be tracked separately for easier CFR reporting.
7. Incorrect Reporting on Funding
Understanding the sources of grants and contracts is imperative to report correctly on the CFR. Inaccurate reporting of grants and net deficit funding are resulting in additional time spent correcting CFRs. Additionally, although COVID-19 Pandemic is over, we are still dealing with the effects of reporting funding received during this time on the CFR. Not only were the various types of funding reporting differently on the CFR, but it also varied by funder. For example, eFMAP funds are treated differently on the CFR than Healthcare Worker Bonuses. Tracking these funds separately and accurately in the GL is imperative when it comes to CFR reporting.
8. Supplemental Schedules are Not Completed or Completed Incorrectly
Each funder, and even program, has different reporting requirements related to the supplemental schedules. Reviewing the manual to ensure that all the required supplemental schedules are completed, and that you are completed properly is crucial to preparing a complete and accurate CFR.
9. Inaccurate Reporting of Payroll Data
Reconciling the wages from the payroll system (PR) to the GL the hardest part of preparing the CFR. Reconciliation should be completed on a regular basis throughout the year (i.e. quarterly) to ease the burden when it comes time to prepare for the CFR. If wages are being moved between programs throughout the year, the movements should be made in both the GL and PR systems. If they can’t be done in both, the movements need to be tracked to ease the reconciliation process. Additionally, there needs to be collaboration/coordination between HR and Finance when it comes to assigning position/job codes to employees.
10. Missing Documentation for Cost Allocations
Cost allocation methodologies need to be documented and in accordance with the CFR Manual (Appendices J, K, L, FF and G). Allocations methodologies need to be reasonable, consistently applied from year to year, use information that is readily available and manageable. Don’t lose sight of the big picture and materiality.
By proactively addressing these common pitfalls, providers can save valuable time, ensure greater accuracy, and maintain compliance with funder requirements. Staying organized, reviewing data throughout the year, and understanding program-specific reporting rules are key to smooth CFR preparation. If you need further guidance or have any questions, we are here to help. Please do not hesitate to reach out to discuss your specific situation.
This material has been prepared for general, informational purposes only and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. Should you require any such advice, please contact us directly. The information contained herein does not create, and your review or use of the information does not constitute, an accountant-client relationship.
