REPORT DIGEST

UNIVERSITY OF ILLINOIS

FINANCIAL AND COMPLIANCE AUDIT

(In accordance with the Single Audit Act and OMB Circular A-133)

For the Year Ended:
June 30, 2000

Summary of Findings:

Total this audit 14

Total last audit 16

Repeated from last audit 11

Release Date:
March 20, 2001

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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

 

The University of Illinois Hospital has made significant improvements in its procedures and records but still needs to make further improvements in several areas including:

  • 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.

 

{Financial Information and Activity Measures are summarized on the next page.}

 

UNIVERSITY OF ILLINOIS

FINANCIAL AND COMPLIANCE AUDITS

FINANCIAL OPERATIONS (CURRENT FUNDS)

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

SELECTED ACCOUNT BALANCES (ALL FUNDS)

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

Employment Statistics –
Chicago
Springfield
Urbana-Champaign
Total

Enrollment Statistics –
Undergraduate --
Chicago
Springfield
Urbana-Champaign
Subtotal
Graduate –
Chicago
Springfield
Urbana-Champaign
Subtotal
Total

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

 

 

 

 

 

 

 

 

 

 

 

Patient accounts not all timely billed or adequately monitored

 

 

 

Monthly accounts payable not accurate

 

 

 

Contractual allowances not always correctly recorded at time of service

 

 

 

 

 

 

Medical records not all located in a timely manner

 

 

 

Statistics not always accurate and reliable

 

 

Reporting to State Comptroller's Offset System not timely

 

 

 

 

 

 

 

 

 

 

INTRODUCTION

Our 2000 audit of the University of Illinois is presented in three reports. The financial part consists of two reports which include the various financial statements of the University and other supplementary information. The State and Federal Compliance Audit report contains the compliance findings disclosed by our audit tests.

FINDINGS, CONCLUSIONS, AND RECOMMENDATIONS

PROCEDURES AT HOSPITAL NEED ADDITIONAL IMPROVEMENT

Although there has been significant improvement made in the procedures and records at the University's Hospital, we identified several weaknesses and areas where further improvements are still needed as follows:

  • 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)

University officials concurred with the findings related to the Hospital operations. They stated they will continue to evaluate, modify and improve operations during FY 2001.

OTHER FINDINGS

The remaining findings are being addressed by University management. We will review progress toward the implementation of our recommendations in our next audit. University responses were provided by Dr. Craig S. Bazzani, Vice President for Administration, and Comptroller.

AUDITORS’ OPINION

The financial audit report contains five sets of financial statements in the Annual Financial Report; and the revenue bond financial statements of the Auxiliary Facilities System, the Willard Airport Facility, the Construction Engineering Research Laboratory, and the Health Services Facilities System.

Our auditors state the June 30, 2000 financial statements are fairly presented in all material respects.

_____________________________________

WILLIAM G. HOLLAND, Auditor General

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SPECIAL ASSISTANT AUDITORS

Olive LLP were our special assistant auditors.