Corporate Compliance

Tip: Facilitate compliance, or correct a mistake

Compliance Monitor, September 5, 2007

To ensure your facility takes the appropriate steps to comply with regulations regarding the reporting of vendor rebates and discounts, consider creating a monthly discounts and rebates report, says Debi Weatherford, CIA, audit director with CHAN Healthcare Auditors in Atlanta.

"If your facility already produces this report, sample the different types of discounts received by tracing the sample items to the source documents to validate the amount and source of the discount/rebate," Weatherford suggests. "Trace the sample items to the general ledger to ensure the appropriate accounting for the discount/rebate, and review the cost report to determine the reporting of the discount/rebate."

Also, review the processes you use to post miscellaneous cash receipts and identify missed discounts, says Weatherford. You and your colleagues can conduct interviews to inquire how staff members determine whether any of the miscellaneous cash receipts are the result of discounts or rebates.

Finally, try performing a test of a sample of cash receipts, which you can also conduct to look for unidentified discounts or rebates.

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