42 CFR § 460.204 - Financial recordkeeping and reporting requirements.

---
identifier: "/us/cfr/t42/s460.204"
source: "ecfr"
legal_status: "authoritative_unofficial"
title: "42 CFR § 460.204 - Financial recordkeeping and reporting requirements."
title_number: 42
title_name: "Public Health"
section_number: "460.204"
section_name: "Financial recordkeeping and reporting requirements."
chapter_name: "CENTERS FOR MEDICARE & MEDICAID SERVICES, DEPARTMENT OF HEALTH AND HUMAN SERVICES"
subchapter_number: "E"
subchapter_name: "PROGRAMS OF ALL-INCLUSIVE CARE FOR THE ELDERLY (PACE)"
part_number: "460"
part_name: "PROGRAMS OF ALL-INCLUSIVE CARE FOR THE ELDERLY (PACE)"
positive_law: false
currency: "2026-04-05"
last_updated: "2026-04-05"
format_version: "1.1.0"
generator: "[email protected]"
authority: "42 U.S.C. 1302, 1395, 1395eee(f), and 1396u-4(f)."
regulatory_source: "64 FR 66279, Nov. 24, 1999, unless otherwise noted."
cfr_part: "460"
---


# 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 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.