Finding Text
Criteria or Specific Requirement – Management is responsible for preparing the financial statements in accordance with generally accepted accounting principles.
Condition – Significant adjusting entries were made to accrued expenses, estimated third‐party payer settlements and related employee benefits expenses and patient service revenues.
Context – Estimated self‐funded health plan claims liability and settlement activity related to estimated third‐party payer settlements were not properly recorded.
Cause – Estimated self‐funded health plan claims liability and prior year third-party payer settlements are not reconciled and reviewed regularly due to limited personnel.
Effect or Potential Effect – The District’s internal financial statements were misstated.
Recommendation – We recommend the District ensure that reconciliations to the financial statements are performed timely and the internal financial statements be adjusted accordingly.
Views of Responsible Officials and Planned Corrective Actions – Management agrees with the finding and will implement the recommendation.