REPORT DIGEST

SOUTHERN ILLINOIS UNIVERSITY

PHYSICIANS AND SURGEONS, INC.

FINANCIAL AUDIT

For the Year Ended:

June 30, 2002

Release Date:
February 27, 2003

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State of Illinois

Office of the Auditor General

WILLIAM G. HOLLAND

AUDITOR GENERAL

To obtain a copy of the Report contact:
Office of the Auditor General
Attn: Records Manager
Iles Park Plaza
740 E. Ash Street
Springfield, IL 62703

(217)782-6046 or TDD (217) 524-4646

This Report Digest is also available on
the worldwide web at
http://www.state.il.us/auditor

  

 

 

 

 

 

 

 

 

 

SYNOPSIS

 

 
  • Physicians and Surgeons, Inc. (P&S) does not have procedures in place to identify unresolved aged credit balances and therefore is not able to adequately account for credit balances in patient accounts receivable balances.

 

 

 

SOUTHERN ILLINOIS UNIVERSITY PHYSICIANS AND SURGEONS, INC.
FINANCIAL AUDIT
For The Year Ended June 30, 2002
FINANCIAL OPERATIONS (ALL FUNDS)

FY2002

FY2001*
REVENUE
Net Patient Service Revenue

$48,707,628

$47,367,174
All Other Revenues

534,815

295,405
Total Revenue

$49,242,443

$47,662,579
EXPENSES
University Overhead

$20,368,924

$19,841,774
Salaries

15,826,296

15,279,354
Academic Development

4,905,336

4,534,394
All Other Expenses

5,446,375

4,784,587
Total Expenses

$46,546,931

$44,440,109
OTHER SIGNIFICANT ACCOUNT BALANCES

AT JUNE 30, 2002

AT JUNE 30, 2001
Cash and Investments

$557,022

$260,819
Net Patient Accounts Receivable

$11,177,667

$10,465,569
Net Other Receivable

$4,830,189

$4,090,599
Employee Salaries Payable

$1,874,639

$2,005,422
Total Net Assets

$13,857,315

N/A
Fund Balance

N/A

$11,229,240
* The FY2001 figures have not been restated to reflect the implementation of GASB statements #35, 37 and 38.
CHIEF EXECUTIVE OFFICER
During Audit Period: Mr. David J. Tkach
Currently: Mr. David J. Tkach

 

 

 

 

 

 

 

 

Gross accounts receivable were reduced by $1.6 million in credit balances

INTRODUCTION

This digest covers our financial audit of Physicians and Surgeons, Inc. (P&S) for the year ended June 30, 2002. A compliance audit covering the two years ended June 30, 2003 will be issued at a later date.

FINDINGS, CONCLUSIONS, AND RECOMMENDATIONS

CREDIT BALANCES IN ACCOUNTS RECEIVABLE

During our testing of patient accounts receivable we noted several accounts that had credit balances (amounts due back to either the patient or other third-party payer for duplicate payments, payments not yet matched up to the date of service, or other posting errors). Credit balances at June 30, 2002 totaled $1.6 million.

These credit balances were deducted in arriving at gross accounts receivable of approximately $25 million.

P&S does not have the capability to breakdown the amount of credit balances between those that are due back to patients and other responsible parties and those that require other types of adjustments. Therefore, P&S has not segregated refunds due to patients and other third-party payers in its statement of net assets.

P&S management stated that their current software system does not have the capability to age credit balances. Therefore, they are unable to track those credit balances that have not been resolved quickly.

We recommended P&S implement appropriate internal control procedures for the timely follow up of all credit balances in patient accounts receivable. We further recommended that appropriate measures be taken to review all credit balances greater than one year old currently in the system to ensure that all applicable monies are refunded or necessary adjustments are posted to the accounting records. (Finding #1, page 29)

P&S officials concurred to identify and resolve credit balances on a more current basis. Furthermore, they have identified a way to age credit balances, which will further help to reduce the amount of unresolved credit balances.

AUDITORS’ OPINION

Our auditors stated the June 30, 2002 financial statements of Physicians and Surgeons, Inc. are fairly presented in all material respects.

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WILLIAM G. HOLLAND, Auditor General

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SPECIAL ASSISTANT AUDITORS

Kerber, Eck & Braeckel LLP were our special assistant auditors for this audit.