State of California Department of Health Care Services Provider Name Fiscal Period Provider Number 77 MC530 Adj. Page or As Increase As No. Exhibit Line Col. Sch Line Reported (Decrease) Adjusted Report References Cost Report Audit Report Explanation of Audit Adjustments Adjustments TOPANGA TERRACE CONVALESCENT CENTER JANUARY 1, 2008 THROUGH DECEMBER 31, 2008 ZZT06092G RECONCILIATION OF THE PROVIDER'S ADJUSTMENTS TO THE AUDIT REPORT 18 10.1(4) 5 14 8A-1 5.00 Plant Operations and Maintenance * ($7,460) $7,460 $0 Not Reported 8A-1 5.04 Plant Operations and Maintenance - Other - Nonlabor * 330,933 (7,460) 323,473 * To reclassify the reported vending machine expense adjustment for proper cost determination. 42 CFR 413.20 and 413.24 / CMS Pub. 15-1, Sections 2300 and 2304 19 10.1(4) 65 14 8A-1 65.00 Dietary * ($156,184) $156,184 $0 Not Reported 8A-1 65.01 Dietary - Salaries and Wages * 285,150 (60,715) 224,435 Not Reported 8A-1 65.02 Dietary - Fringe Benefits * 81,521 (17,358) 64,163 Not Reported 8A-1 65.04 Dietary - Other - Nonlabor * 366,848 (78,111) 288,737 * To reclassify the reported dietary revenue abatement for proper cost determination. 42 CFR 413.20 and 413.24 / CMS Pub. 15-1, Sections 2300 and 2304 20 10.1(4) 100 14 8A-1 100.00 Other Ancillary Services * ($5,101) $5,101 $0 Not Reported 8A-1 100.04 Other Ancillary Services - Other - Nonlabor * 58,211 (5,101) 53,110 To reclassify the reported barber and beauty reclassification for proper cost determination. 42 CFR 413.20 and 413.24 / CMS Pub. 15-1, Sections 2300 and 2304 21 10.1(4) 105 14 8A-1 105.00 Skilled Nursing Care * ($2,000) $2,000 $0 Not Reported 8A-1 105.04 Skilled Nursing Care - Other - Nonlabor * 305,431 (2,000) 303,431 * To reclassify the reported personal items expense adjustment for proper cost determination. 42 CFR 413.20 and 413.24 / CMS Pub. 15-1, Sections 2300 and 2304 22 10.1(4) 165 14 8A-1 165.00 Administration * ($132,046) $12,286 ($119,760) * Not Reported 8A-1 165.11 Administration - Other - Nonlabor * 1,947,392 (12,286) 1,935,106 * To reclassify the reported administration revenue abatements for proper cost determination. 42 CFR 413.20 and 413.24 / CMS Pub. 15-1, Sections 2300 and 2304 *Balance carried forward from prior/to subsequent adjustments Page 4 This is trial version www.adultpdf.com State of California Department of Health Care Services Provider Name Fiscal Period Provider Number 77 MC530 Adj. 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Sch Line Reported (Decrease) Adjusted Report References Cost Report Audit Report Explanation of Audit Adjustments Adjustments TOPANGA TERRACE CONVALESCENT CENTER JANUARY 1, 2008 THROUGH DECEMBER 31, 2008 ZZT06092G RECONCILIATION OF THE PROVIDER'S ADJUSTMENTS TO THE AUDIT REPORT 23 10.1(4) 165 14 8A-1 165.00 Administration * ($119,760) $110,966 ($8,794) * Not Reported 8A-1 165.11 Administration - Other - Nonlabor * 1,935,106 (110,966) 1,824,140 * To reclassify the reported administration expense adjustments for proper cost determination. 42 CFR 413.20 and 413.24 / CMS Pub. 15-1, Sections 2300 and 2304 24 10.1(4) 165 14 8A-1 165.00 Administration * ($8,794) $8,794 $0 Not Reported 8A-1 165.11 Administration - Other - Nonlabor * 1,824,140 (8,794) 1,815,346 * To reclassify the provider's home office expense adjustments for proper cost determination. 42 CFR 413.20 and 413.24 / CMS Pub. 15-1, Sections 2300 and 2304 *Balance carried forward from prior/to subsequent adjustments Page 5 This is trial version www.adultpdf.com State of California Department of Health Care Services Provider Name Fiscal Period Provider Number 77 MC530 Adj. 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Sch Line Reported (Decrease) Adjusted Report References Cost Report Audit Report Explanation of Audit Adjustments Adjustments TOPANGA TERRACE CONVALESCENT CENTER JANUARY 1, 2008 THROUGH DECEMBER 31, 2008 ZZT06092G RECLASSIFICATIONS OF REPORTED COSTS 25 Not Reported 8A-2 165.01 Administration - Salaries and Wages * $377,784 ($87,318) $290,466 * Not Reported 8A-2 165.02 Administration - Fringe Benefits * 137,686 (23,548) 114,138 * Not Reported 8A-2 165.03 Administration - Medical Records - Salaries and Wages 0 87,319 87,319 Not Reported 8A-2 165.04 Administration - Medical Records - Fringe Benefits 0 23,548 23,548 Not Reported 8A-2 165.06 Administration - Medical Records - Other - Nonlabor 0 29,279 29,279 Not Reported 8A-2 165.11 Administration - Other - Nonlabor * 1,815,346 (29,280) 1,786,066 * To reclassify the medical records expense to agree with the general ledger and for proper cost determination. 42 CFR 413.20 and 413.24 / CMS Pub. 15-1, Sections 2300 and 2304 26 Not Reported 8A-2 165.02 Administration - Fringe Benefits * $114,138 ($369) $113,769 * Not Reported 8A-2 165.11 Administration - Other - Nonlabor * 1,786,066 369 1,786,435 * To reclassify the Costco expense for proper cost determination. 42 CFR 413.20 and 413.24 / CMS Pub. 15-1, Sections 2300 and 2304 27 Not Reported 8A-2 165.02 Administration - Fringe Benefits * $113,769 ($970) $112,799 * Not Reported 8A-2 165.11 Administration - Other - Nonlabor * 1,786,435 970 1,787,405 * To reclassify the Office Depot expense for proper cost determination. 42 CFR 413.20 and 413.24 / CMS Pub. 15-1, Sections 2300 and 2304 28 Not Reported 8A-2 105.01 Skilled Nursing Care - Salaries and Wages * $1,287,499 ($23,862) $1,263,637 Not Reported 8A-2 105.02 Skilled Nursing Care - Fringe Benefits * 341,303 (6,326) 334,977 Not Reported 8A-2 125.01 Sub-Acute Care - Salaries and Wages * 3,703,904 (21,503) 3,682,401 Not Reported 8A-2 125.02 Sub-Acute Care - Fringe Benefits * 920,113 (5,342) 914,771 Not Reported 8A-2 75.01 Patient Supplies - Salaries and Wages 0 45,365 45,365 Not Reported 8A-2 75.02 Patient Supplies - Fringe Benefits 0 11,668 11,668 To reclassify the patient supply clerk salary and fringe benefit expense for proper cost determination. 42 CFR 413.20 and 413.24 / CMS Pub. 15-1, Sections 2300 and 2304 *Balance carried forward from prior/to subsequent adjustments Page 6 This is trial version www.adultpdf.com State of California Department of Health Care Services Provider Name Fiscal Period Provider Number 77 MC530 Adj. 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Sch Line Reported (Decrease) Adjusted Report References Cost Report Audit Report Explanation of Audit Adjustments Adjustments TOPANGA TERRACE CONVALESCENT CENTER JANUARY 1, 2008 THROUGH DECEMBER 31, 2008 ZZT06092G RECLASSIFICATIONS OF REPORTED COSTS 29 Not Reported 8A-2 165.11 Administration - Other - Nonlabor * $1,787,405 ($28,763) $1,758,642 * Not Reported 8A-2 165.07 Administration - Facility Licensing Fees 0 28,763 28,763 To reclassify the facility license expense for proper cost determination. 42 CFR 413.20 and 413.24 / CMS Pub. 15-1, Sections 2300 and 2304 30 Not Reported 8A-2 165.11 Administration - Other - Nonlabor * $1,758,642 ($165,325) $1,593,317 * Not Reported 8A-2 165.08 Administration - Liability Insurance 0 165,325 165,325 To reclassify the professional liability insurance expense applicable to the fiscal year under audit for proper cost determination. 42 CFR 413.20, 413.24, and 413.50 CMS Pub. 15-1, Sections 2300, 2302.1, and 2304 31 Not Reported 8A-2 165.11 Administration - Other - Nonlabor * $1,593,317 ($9,734) $1,583,583 * 10.1(4) 45 14 8A-2 45.00 Property Insurance 0 9,734 9,734 To reclassify the property insurance expense for proper cost determination. 42 CFR 413.20 and 413.24 CMS Pub. 15-1, Sections 2300, 2302.4 and 2302.8 32 Not Reported 8A-2 165.11 Administration - Other - Nonlabor * $1,583,583 ($329,091) $1,254,492 * Not Reported 8A-2 165.10 Administration - Quality Assurance Fees 0 329,091 329,091 To reclassify the reported quality assurance fees expense for proper cost determination. 42 CFR 413.20 and 413.24 / CMS Pub. 15-1, Sections 2300 and 2304 33 Not Reported 8A-2 60.04 Laundry and Linen - Other - Nonlabor * $242,695 ($1,023) $241,672 * Not Reported 8A-2 65.04 Dietary - Other - Nonlabor * 288,737 1,023 289,760 To reclassify the uniform expense for proper cost determination. 42 CFR 413.20 and 413.24 / CMS Pub. 15-1, Sections 2300 and 2304 *Balance carried forward from prior/to subsequent adjustments Page 7 This is trial version www.adultpdf.com State of California Department of Health Care Services Provider Name Fiscal Period Provider Number 77 MC530 Adj. 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Sch Line Reported (Decrease) Adjusted Report References Cost Report Audit Report Explanation of Audit Adjustments Adjustments TOPANGA TERRACE CONVALESCENT CENTER JANUARY 1, 2008 THROUGH DECEMBER 31, 2008 ZZT06092G RECLASSIFICATIONS OF REPORTED COSTS 34 Not Reported 8A-2 170.04 Inservice Education - Nursing - Other - Nonlabor * $4,502 ($4,502) $0 Not Reported 8A-2 165.11 Administration - Other - Nonlabor * 1,254,492 4,502 1,258,994 * To reclassify the purchased service seminar expense for proper cost determination. 42 CFR 413.20 and 413.24 / CMS Pub. 15-1, Sections 2300 and 2304 35 Not Reported 8A-2 60.04 Laundry and Linen - Other - Nonlabor * $241,672 ($198,531) $43,141 Not Reported 8A-2 60.03 Laundry and Linen - Agency Staff 0 198,531 198,531 To reclassify the contract labor expense for proper cost determination. 42 CFR 413.20 and 413.24 / CMS Pub. 15-1, Sections 2300 and 2304 36 Not Reported 8A-2 165.11 Administration - Other - Nonlabor * $1,258,994 ($12,000) $1,246,994 * Not Reported 8A-2 85.04 Pharmacy - Other - Nonlabor * 384,075 12,000 396,075 * To reclassify the Medliance expense for proper cost determination. 42 CFR 413.20 and 413.24 CMS Pub. 15-1, Sections 2300, 2302.4 and 2302.8 *Balance carried forward from prior/to subsequent adjustments Page 8 This is trial version www.adultpdf.com State of California Department of Health Care Services Provider Name Fiscal Period Provider Number 77 MC530 Adj. 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Sch Line Reported (Decrease) Adjusted Report References Cost Report Audit Report Explanation of Audit Adjustments Adjustments TOPANGA TERRACE CONVALESCENT CENTER JANUARY 1, 2008 THROUGH DECEMBER 31, 2008 ZZT06092G ADJUSTMENTS TO REPORTED COSTS 37 Not Reported 8A-2 5.04 Plant Operations and Maintenance - Other - Nonlabor * $323,473 $5,728 $329,201 * To adjust the reported vending machine expense adjustment to agree with the provider's records and for proper cost determination. 42 CFR 413.20 and 413.24 / CMS Pub. 15-1, Sections 2300 and 2304 10.1(4) 25 14 8A-2 25.00 Depreciation - Equipment $49,439 38 To adjust the provider's reported depreciation expense adjustment to ($536) exclude depreciation for an asset that was fully depreciated prior to the fiscal year under audit. 42 CFR 413.5 and 413.24 CMS Pub. 15-1, Sections 2300 and 2302.1 39 To adjust the provider's reported depreciation expense adjustment to (4,444) agree with the prior audit findings for the fiscal year ended ($4,980) $44,459 * December 31, 2005. 42 CFR 413.20 and 413.24 / CMS Pub. 15-1, Sections 2300 and 2304 Not Reported 8A-2 165.02 Administration - Fringe Benefits * $112,799 40 To eliminate the prior year fringe benefit expense. ($233) 42 CFR 413.5 and 413.24 CMS Pub. 15-1, Sections 2300 and 2302.1 41 To eliminate the bonus expense due to insufficient documentation. (2,250) 42 CFR 413.20 and 413.24 / CMS Pub. 15-1, Sections 2300 and 2304 42 To eliminate the other employee benefit expense due to insufficient (200) documentation. ($2,683) $110,116 * 42 CFR 413.20 and 413.24 / CMS Pub. 15-1, Sections 2300 and 2304 *Balance carried forward from prior/to subsequent adjustments Page 9 This is trial version www.adultpdf.com State of California Department of Health Care Services Provider Name Fiscal Period Provider Number 77 MC530 Adj. Page or As Increase As No. Exhibit Line Col. Sch Line Reported (Decrease) Adjusted Report References Cost Report Audit Report Explanation of Audit Adjustments Adjustments TOPANGA TERRACE CONVALESCENT CENTER JANUARY 1, 2008 THROUGH DECEMBER 31, 2008 ZZT06092G ADJUSTMENTS TO REPORTED COSTS Not Reported 8A-2 165.02 Administration - Fringe Benefits * $110,116 43 To eliminate the other employee benefit expense due to lack of ($1,229) documentation. 42 CFR 413.20 and 413.24 / CMS Pub. 15-1, Sections 2300 and 2304 44 To eliminate luxury item not related to patient care. (1,082) 42 CFR 413.9(c)(3) / CMS Pub. 15-1, Sections 2102.3 and 2104.3 ($2,311) $107,805 45 Not Reported 8A-2 165.01 Administration - Salaries and Wages * $290,466 ($58,563) $231,903 Not Reported 8A-2 165.11 Administration - Other - Nonlabor * 1,246,994 (53,598) 1,193,396 * To adjust the administrator's compensation to the amount allowable based upon the State's administrator compensation tables. 42 CFR 413.102 and 413.24 CMS Pub. 15-1, Sections 901, 902.3, 904 , 1005, and 2304 46 10.1(4) 25 14 8A-2 25.00 Depreciation - Equipment * $44,459 ($1,578) $42,881 To eliminate the patient television costs. 42 CFR 413.5 and 413.9(c)(3) / CMS Pub. 15-1, Section 2106.1 10.1(4) 20 14 8A-2 20.00 Depreciation - Leasehold Improvements $63,448 47 To adjust for a change in useful life to agree with the $387 American Hospital Association Guidelines. 42 CFR 413.20 and 413.134(b)(7) CMS Pub. 15-1, Sections 104.17 and 104.18 48 To include the depreciation expense for the cabinet in conjunction with 291 adjustment number 60. $678 $64,126 42 CFR 413.134 / CMS Pub. 15-1, Sections 108.1 and 2300 *Balance carried forward from prior/to subsequent adjustments Page 10 This is trial version www.adultpdf.com State of California Department of Health Care Services Provider Name Fiscal Period Provider Number 77 MC530 Adj. Page or As Increase As No. Exhibit Line Col. Sch Line Reported (Decrease) Adjusted Report References Cost Report Audit Report Explanation of Audit Adjustments Adjustments TOPANGA TERRACE CONVALESCENT CENTER JANUARY 1, 2008 THROUGH DECEMBER 31, 2008 ZZT06092G ADJUSTMENTS TO REPORTED COSTS Not Reported 8A-2 165.11 Administration - Other - Nonlabor * $1,193,396 49 To eliminate the travel expense due to insufficient documentation. ($3,412) 42 CFR 413.20, 413.24, and 413.9(b)(2) CMS Pub. 15-1, Sections 2102.3, 2136.2, 2300, and 2304 50 To adjust the accounting expense that the provider accrued to agree (10,410) with the invoices provided. 42 CFR 413.20 and 413.24 / CMS Pub. 15-1, Sections 2300 and 2304 51 To eliminate the prior year legal expense. (922) 42 CFR 413.5 and 413.24 CMS Pub. 15-1, Sections 2300 and 2302.1 52 To eliminate the legal fees due to insufficient documentation. (2,090) 42 CFR 413.20 and 413.24 / CMS Pub. 15-1, Sections 2300 and 2304 53 To adjust the liability insurance expense to agree with the policy (1,777) amounts applicable to the fiscal year under audit. 42 CFR 413.20, 413.24, and 413.50 CMS Pub. 15-1, Sections 2300, 2302.1, and 2304 54 To eliminate the prior year professional fee expense. (646) 42 CFR 413.5 and 413.24 CMS Pub. 15-1, Sections 2300 and 2302.1 55 To eliminate the professional fees expense due to insufficient (217) documentation. ($19,474) $1,173,922 * 42 CFR 413.20 and 413.24 / CMS Pub. 15-1, Sections 2300 and 2304 *Balance carried forward from prior/to subsequent adjustments Page 11 This is trial version www.adultpdf.com State of California Department of Health Care Services Provider Name Fiscal Period Provider Number 77 MC530 Adj. Page or As Increase As No. Exhibit Line Col. Sch Line Reported (Decrease) Adjusted Report References Cost Report Audit Report Explanation of Audit Adjustments Adjustments TOPANGA TERRACE CONVALESCENT CENTER JANUARY 1, 2008 THROUGH DECEMBER 31, 2008 ZZT06092G ADJUSTMENTS TO REPORTED COSTS Not Reported 8A-2 165.11 Administration - Other - Nonlabor * $1,173,922 56 To eliminate the professional fee expense not related to patient care. ($1,630) 42 CFR 413.9(c)(3), 413.20, and 413.24 CMS Pub. 15-1, Sections 2102.3, 2300, and 2304 57 To eliminate the non allowable cable expense. (17,554) 42 CFR 413.5 and 413.9(c)(3) / CMS Pub. 15-1, Section 2106.1 58 To eliminate the Franchise Tax Board penalty expense. (296) 42 CFR 413.9(c)(3) / CMS Pub. 15-1, Sections 2102.3 and 2122.1 ($19,480) $1,154,442 Not Reported 8A-2 5.04 Plant Operations and Maintenance - Other - Nonlabor * $329,201 59 To eliminate the non allowable patient television expense. ($5,750) 42 CFR 413.5 and 413.9(c)(3) / CMS Pub. 15-1, Section 2106.1 60 To eliminate the cabinet expense that should have been capitalized. (6,800) 42 CFR 413.20 and 413.134 / CMS Pub. 15-1, Section 108 ($12,550) $316,651 61 Not Reported 8A-2 160.04 Activities - Other - Nonlabor * $13,379 ($280) $13,099 To eliminate the guest activities expense due to lack of documentation. 42 CFR 413.20 and 413.24 / CMS Pub. 15-1, Sections 2300 and 2304 *Balance carried forward from prior/to subsequent adjustments Page 12 This is trial version www.adultpdf.com State of California Department of Health Care Services Provider Name Fiscal Period Provider Number 77 MC530 Adj. Page or As Increase As No. Exhibit Line Col. Sch Line Reported (Decrease) Adjusted Report References Cost Report Audit Report Explanation of Audit Adjustments Adjustments TOPANGA TERRACE CONVALESCENT CENTER JANUARY 1, 2008 THROUGH DECEMBER 31, 2008 ZZT06092G ADJUSTMENTS TO REPORTED COSTS Not Reported 8A-2 75.04 Patient Supplies - Other - Nonlabor * $373,223 62 To eliminate the prior year rental expense. ($951) 42 CFR 413.5 and 413.24 / CMS Pub. 15-1, Sections 2300 and 2302.1 CCR, Title 22, Section 51511(c) 63 To eliminate the rental expense already paid through the patients' (36,074) share of cost. 42 CFR 413.20, 413.24, and 413.5 CMS Pub. 15-1, Sections 2300, 2304, and 2409 CCR, Title 22, Section 51511(c) 64 To eliminate the rental expense for items not included in the daily (85,223) Medi-Cal rate. ($122,248) $250,975 42 CFR 413.20 and 413.24 / CMS Pub. 15-1, Sections 2300 and 2304 CCR, Title 22, Section 51511(c) 65 Not Reported 8A-2 85.04 Pharmacy - Other - Nonlabor * $396,075 ($185,965) $210,110 To eliminate the reported legend drug expense. 42 CFR 413.20 and 413.24 / CMS Pub. 15-1, Sections 2300 and 2304 CCR, Title 22, Section 51511(c) 66 Not Reported 8A-2 105.04 Skilled Nursing Care - Other - Nonlabor * $303,431 ($3,121) $300,310 To eliminate the expense for the items not included in the daily Medi-Cal rate. CCR, Title 22, Section 51511(c) *Balance carried forward from prior/to subsequent adjustments Page 13 This is trial version www.adultpdf.com . Report Audit Report Explanation of Audit Adjustments Adjustments TOPANGA TERRACE CONVALESCENT CENTER JANUARY 1, 2008 THROUGH DECEMBER 31, 2008 ZZT06092G RECONCILIATION OF THE PROVIDER'S ADJUSTMENTS. Report Audit Report Explanation of Audit Adjustments Adjustments TOPANGA TERRACE CONVALESCENT CENTER JANUARY 1, 2008 THROUGH DECEMBER 31, 2008 ZZT06092G RECLASSIFICATIONS OF REPORTED COSTS 25 Not Reported. Report Audit Report Explanation of Audit Adjustments Adjustments TOPANGA TERRACE CONVALESCENT CENTER JANUARY 1, 2008 THROUGH DECEMBER 31, 2008 ZZT06092G RECLASSIFICATIONS OF REPORTED COSTS 29 Not Reported