HSA defends audit delay

The Heath Services Authority issued a press release Friday outlining the state of its financial records following enquiries last week by the Caymanian Compass.

Auditor General Dan Duguay said Wednesday the most recent annual financial report he had received from the authority was for the 2002/2003 financial year.

But on Friday, Mr. Duguay confirmed he had just received the authority’s 2005/2006 financial report.

In a statement, HSA Board Chairman Al Ebanks said the 2006/2007 financial report is currently being finalised.

But financial records for the 2003/2004 and 2004/2005 financial years may never materialise. When the board was appointed in August 2005, there were no substantial reports for the authority and no consistent financial records maintained on which to conduct a proper financial audit, Mr. Ebanks explained.

‘Given the absence of financial data, the board had no basis on which to construct financial reports for the period prior to 2005,’ he wrote.

‘This was of obvious concern and we sought to ensure that this state of affairs was duly documented, as we felt it inappropriate to accept responsibility for something over which we had no knowledge, influence or control.

‘The absence of such records has resulted in major challenges for all concerned.’

Under the Heath Services Authority Law, the Authority is required to submit financial records to the auditor general within two months of the end of the financial year.

The law also requires that annual and half-yearly reports be tabled in the Legislative Assembly and be made public documents no later than four months and two weeks following the end of the financial year, or the next sitting day of the Legislative Assembly thereafter.

Board member Anne Owens said part of the reason for the delay has been the fact the HSA has not had a chief financial officer since early 2006. However, an in-house appointment has recently been made to the position, she advised.

Mr. Ebanks said it was important to highlight that for the first time since its transition to an authority the HSA now has proper financial data that is prepared and reviewed monthly along with a three-year budget forecast.

Nothing new

After becoming health minister following the 2005 election, Anthony Eden said the absence of financial records at the HSA was unbelievable.

Health minister in the previous administration, Gilbert McLean, responded by saying finance and accounting records at the hospital had been in a state of disarray for more than a decade, including the seven years when Mr. Eden first served as health minister from 1994 to 2000.

Mr. Duguay said the 2002/2003 records his office received were effectively incomprehensible.

These records were sent back to the HSA with a ‘denial of opinion’ – the worst opinion an auditor can record. Mr. Duguay has only seen a ‘denial of opinion’ one other time in his professional career.

‘It means we literally cannot do our job and render an opinion. It means the financial information supporting the financial statements is so bad that we are just not able to say one way or the other whether it is fairly stated.’

Bad debt queried

Asked about the magnitude of outstanding debt due to the HSA from patients not paying bills, Mr. Ebanks said he could not provide accurate data on the levels of outstanding debt until the 2006/2007 financial records are finalised and audited.

He will be pleased to make the data available once the report is tabled in the Legislative Assembly, he added.

Mr. Ebanks pointed out that one of the HSA’s mandates is that no one should be denied medical care, regardless of nationality or ability to pay.

‘This will no doubt result in outstanding debt to the authority by patients and is not unusual among public and private hospitals worldwide, where the patients’ insurance does not cover the entire cost of service or where the patient does not have sufficient funds to cover the cost of their care,’ he said.

‘The authority has in place arrangements to facilitate patients that are unable to pay immediately for care to receive medically necessary treatment and a financial plan worked out for ongoing payments.’

Mr. Ebanks’ statement come after Mr. McLean said last week he does not believe the political will exists to challenge a prevailing attitude that people don’t need to pay their hospital bills.

Cerner

Mr. Ebanks confirmed the accounting arm of the Cerner integrated healthcare technology system continues to provide challenges for the authority, but said these are not necessarily unique to the HSA. The authority maintains a close working relationship with Cerner and has service agreements in place to resolve issues as they arise, he added.

Since being rolled out in 2003, the Cerner system has been plagued with difficulties.

However, hospital administrators said in 2006 that the system would work better after an agreement was reached with Cerner to have the system’s software and data processing hosted at a data centre in Kansas City.

Among questions put to Mr. Ebanks by the Caymanian Compass was how much the HSA is paying for the offshore hosting.

Mr. Ebanks did not say how much the arrangement is costing, but said the arrangement will result in significant cost savings.

‘The financial capital required for the acquisition of new computer equipment to facilitate the retention of data in the Cayman Islands; along with redundant backup capabilities; improved reliability, immediate access and resolution of technical issues by Cerner’s support professionals; data security and back-up protection in the event of natural disasters were all factors, which were weighed in making the decision to have the Cerner database housed offshore, the benefits of which are already becoming evident,’ he said.