For the Year Ended:
June 30, 2000

Total this audit 14

Total last audit 16

Repeated from last audit 11

Release Date:
March 20, 2001

State of Illinois
Office of the Auditor General

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

• the billing, monitoring and collecting of patient accounts receivable,

• the accurate accumulation of monthly accounts payable,

• the consistent recognition of contractual allowances at the time of service,

• the control over the movement of medical records,

• the maintenance of accurate and reliable operating statistics and patient receivable information, and

• the timely reporting of past due patient or student accounts to the Comptroller's Offset System.

FY 2000

FY 1999

REVENUES

State Appropriations
Student Tuition and Fees
Federal Grants
Grants and Contracts
Other Sources
Enterprise Sales
Hospital Sales
Total

$664,818,000
328,415,000
398,812,000
238,824,000
494,345,000
208,438,000
292,199,000
$2,625,851,000

$636,891,000
310,066,000
385,463,000
220,786,000
458,474,000
199,076,000
267,090,000
$2,477,846,000

EXPENDITURES AND MANDATORY TRANSFERS

Instruction
Research
Public Service
Academic Support
Operation of Plant
Other Expenditures and Mandatory Transfers
Auxiliary Enterprises
Hospital Activities
Total

$565,892,000
415,812,000
245,382,000
165,039,000
142,011,000
575,626,000
193,604,000
276,260,000
$2,579,626,000

$546,070,000
387,182,000
236,857,000
148,780,000
137,773,000
540,047,000
182,609,000
259,884,000
$2,439,202,000

June 30, 2000

June 30, 1999

Cash and Investments
Campus Plant Facilities
Accrued Compensated Absences
Revenue Bonds Payable

$882,923,000
$3,574,941,000
$196,096,000
$544,111,000

$684,213,000
$3,351,532,000
$194,083,000
$358,475,000

SUPPLEMENTAL INFORMATION

FY 2000

FY 1999

Cost Per Student –
Undergraduate –
Chicago
Springfield
Urbana-Champaign
Graduate –
Chicago
Springfield
Urbana-Champaign

12,363
742
13,562
26,667

16,170
2,183
28,916
47,269

8,440
1,896
9,935
20,271
67,540

$6,002
8,545
6,141

$13,246
8,858
14,193

12,308
735
13,288
26,331

16,384
2,373
28,645
47,402

8,415
1,961
9,662
20,038
67,440

$5,761
7,678
6,245

$12,378
8,030
14,434

UNIVERSITY PRESIDENT
During Audit Period: Dr. James Stukel
Currently: Dr. James Stukel

• The Hospital continued to experience problems in billing and monitoring the collection of patient accounts receivable. Our testing noted outpatient accounts which were not billed because they were too old and did not include diagnosis codes. Other accounts had not been billed because the responsible third-party payer classification had changed thus requiring a new billing. Billing and monitoring patient accounts is a complex function that must be performed timely and accurately. (Finding 4, pages 17-18)

• The Hospital did not have an adequate process for the timely and accurate accumulation of monthly accounts payable. Throughout the year, the Hospital recorded an estimated monthly accounts payable amount due to information system deficiencies. During the year-end closing process, approximately $3 million of additional unrecorded liabilities were identified and recorded as of June 30, 2000. (Finding 5, page 19)

• The Hospital inconsistently calculated contractual allowances. A contractual allowance is that portion of a patient's account that will not be collected due to a contractual agreement with a third-party payer to accept less than the standard charge. The effect of a contractual allowance is typically to reduce patient accounts receivable and revenues in the accounting records at the time the service is delivered. Our testing noted that for 3 out of 75 transactions tested, the Hospital did not record the contractual allowance until the time of collection, and for one other transaction the Hospital recorded the allowance twice. In these 4 instances the contractual allowance adjustment was approximately $430,000. Untimely or incorrect recording of contractual allowances misstates the Hospital's periodic operating statements. (Finding 10, page 26)

• The Hospital did not have adequate control over all medical records. During our testing, we were unable to obtain medical records for all patients selected for testing in a timely manner. Movement of medical records must be carefully controlled so that all records can be located in a timely manner. Accounts cannot be billed until the medical record is reviewed for completeness and coded. The records must then be retained to support the propriety of amounts billed. (Finding 11, page 27)

• Key operating statistics and patient receivable information used by the Hospital to monitor and analyze operations were estimated for financial analysis since accurate, actual data was not available. Accurate statistics are necessary to enable management to make informed decisions. (Finding 12, page 28)

• The Hospital did not make timely submissions of all past due patient or student accounts to the State Comptroller's Offset System. The State Collection Act of 1986 requires the submission of accounts greater than $1,000 which are more than 90 days past due. Based on a prior finding, the University requested and was granted an exception to allow submission of accounts greater than $1,000 and 180 days past due. We noted that 5 out of 25 accounts outstanding for more than 180 days had not been submitted to the State Comptroller's Offset System. (Finding 13, page 29)