---
kind: "section"
citation: "42 C.F.R. § 460.204"
title: "42"
number: "460.204"
heading: "Financial recordkeeping and reporting requirements."
url: "https://uscodex.org/cfr/42/460.204"
---

# §460.204. Financial recordkeeping and reporting requirements.

- (a) **Accurate reports.** A PACE organization must provide CMS and the State administering agency with accurate financial reports that are—
  - (1) Prepared using an accrual basis of accounting; and
  - (2) **Verifiable by qualified auditors.**
- (b) **Accrual accounting.** A PACE organization must maintain an accrual accounting recordkeeping system that does the following:
  - (1) **Accurately documents all financial transactions.**
  - (2) **Provides an audit trail to source documents.**
  - (3) **Generates financial statements.**
- (c) **Accepted reporting practices.** Except as specified under Medicare principles of reimbursement, as defined in [part 413](/cfr/42/part413.md) of this chapter, a PACE organization must follow standardized definitions, accounting, statistical, and reporting practices that are widely accepted in the health care industry.
- (d) **Audit or inspection.** A PACE organization must permit CMS and the State administering agency to audit or inspect any books and records of original entry that pertain to the following:
  - (1) **Any aspect of services furnished.**
  - (2) **Reconciliation of participants' benefit liabilities.**
  - (3) **Determination of Medicare and Medicaid amounts payable.**

## Notes

### Authority

Authority: 42 U.S.C. 1302, 1395, 1395eee(f), and 1396u-4(f).

### Source

Source: 64 FR 66279, Nov. 24, 1999, unless otherwise noted.