Section 445.1 - Introduction

445.1 Introduction. (4000) (a) The account distribution index serves as a reference for proper classification of supplies and services expenses.

(b) (4001) The account distribution index is divided into two sections. Section 445.2 of this Part, "Job Titles by Natural Classification Index", lists various job titles and the natural classification of salaries and wages to which they must be charged as expenses. For example, the job title "accountant" requires that the salaries of an accountant must be charged to the natural classification .02 (Technician and Specialist).

(c) Section 445.3 of this Part, "Supplies and Services by Natural Expense Classification Index", lists various types of supplies and services and the cost center and natural classification to which they must be charged as expenses. In many cases, the cost center which originally receives the supply items is not the cost center to which the supply expense must be charged. For instance, although nonchargeable sutures may be received in the Central Service and Supply cost center and charged to inventory, upon requisition they are sent to an Operating Room cost center and their cost must be transferred interdepartmentally to that using cost center. It is this using cost center which is indicated in the Supplies and Services by Natural Expense Classification Index. All medical and surgical supplies and equipment expense related to patient chargeable items is to be charged to the Medical Supplies Sold cost center (account 7110), regardless of the cost center which actually issues the supplies. In order to have a matching of revenue and expense, the revenue related to the patient-chargeable supplies is to be credited to the Medical Supplies Sold revenue center (account 4110). All drug expense related to patient-chargeable pharmacy items is to be charged to the Drugs Sold cost center (account 7150) regardless of the cost center which actually issues the item. The revenue related to the patient-chargeable item is to be credited to the Drugs Sold revenue center (account 4150).

(d) Many of the items listed are not referenced to a single cost center, but to the "using" or "appropriate" cost center. These are items commonly used in more than one cost center, whose cost must be recorded directly or by interdepartmental transfer to the using cost center.
 

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