Accounting Standards

100 - Accounting Standards (Rev. 4, 10-01-01) The HMO/CMP's records must be capable of verification by qualified auditors and properly reflect all direct and indirect costs claimed by the HMO/CMP under the contract. This means that the HMO/CMP's cost data must be based on an approved method of cost finding and on the accrual basis of accounting. However, if a cost-based HMO/CMP is owned and operated by a Federal, State or local government agency and operates on a cash basis of accounting, CMS accepts cost data on this basis, subject to appropriate treatment of capital expenditures.