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Who Do You Trust? Comparing Data on Skilled-Nursing Facilities from the Internal Revenue Service and Health Care Financing Administration

National Center for Charitable Statistics

This article explores the finances of nonprofit skilled-nursing facilities (SNFs) by comparing two sources of data: Internal Revenue Service (IRS) Form 990s and Health Care Financing Administration (HCFA) cost reports. The result shows that the amounts reported to both agencies for bottom-line figures, such as total assets and liabilities, are consistent. More than 80% (263) of the 412 SNFs examined reported either total liabilities or total assets to the HCFA and the IRS that matched within 10%; nearly 60% (235) reported both variables within 1%. However, as the breakout of the financial data becomes more detailed, more inconsistencies are found. Agreement between sources drops rapidly from more than 80% for total liabilities and assets to below 10% for expenses. This may be due to differences in the way that the IRS and HCFA define financial variables, or it may be because preparers are not knowledgeable or careful enough, or because organizations lack adequate accounting systems that allow for accurate, consistent reporting.

References

• American Association of Homes and Services for the Aging. (n.d.). AAHSA backgrounders: Nursing homes [Online]. Available: http://www.aahsa.org/public/nursbkg.htm
• Froelich, K. A., & Knoepfle, T. W. (1996). Internal Revenue Service 990 data: Fact or fiction?Non-profit and Voluntary Sector Quarterly, 25, 40-52.[Abstract]
• Health Care Financing Administration [HCFA]. (n.d.). Highlights: National health expenditures, 1997 [Online]. Available: http://www.hcfa.gov/stats/nhe-oact/hilites.htm
• Moss, M., & Adams, C. (1998, April 7). Citing finances, nursing home throws 60 elderly into the cold. The Wall Street Journal.
• Salamon, L. M. (1995). Partners in public service: Government-nonprofit relations in the modern welfare state. Baltimore: Johns Hopkins University Press.
• Weisbrod, B. A. (1988). The nonprofit economy. Cambridge, MA: Harvard University Press.

Nonprofit and Voluntary Sector Quarterly, Vol. 28, No. 4, 476-490 (1999)
DOI: 10.1177/0899764099284006


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This Article Abstract Free Full Text (Free PDF) Free Alert me when this article is cited Alert me if a correction is posted Services Email this article to a friend Similar articles in this journal Alert me to new issues of the journal Add to Saved Citations Download to citation manager Request Permissions Request Reprints Add to My Marked Citations Citing Articles Citing Articles via HighWire Citing Articles via Google Scholar Citing Articles via Scopus Google Scholar Articles by Gantz, M. Search for Related Content Social Bookmarking                         What's this?