Open Hospital District Financial Reporting, Board Responsibility Compliance

Presentation Transcript

Open Hospital District Financial Reporting, Board Responsibility & Compliance Doug Albright-Chair, Health Care Practice Ogden Murphy Wallace 1601 Fifth Avenue-Seattle, WA 98101 206.447.7208 omwlaw.com

Panel and Format Ivan Dansereau, State Auditor's Office Don Hansen, Moss Adams, CPAs Doug Albright, Ogden Murphy Wallace - Healthcare Practice Group Presentations Extended Q & A

Themes Good administration/monetary consistence = to a great extent judgment skills Current law gives critical, yet fragmented, comfort & direction Importance of consistence projects and Board of Commissioners (Board) instruction what's to come is unverifiable, however clinic regions ought to be proactive

Themes (proceeded with) Driven by Medicare/Medicaid misrepresentation and saw extortion "Feature Test"

Panel Member Roles Ivan will underscore the state's inspecting part and issues he sees Don will cover state & government issues from a CPA reviewer's perspective I will underline creating Board budgetary/consistence oversight obligations

The Future is Uncertain "The future ain't what it used to be." Yogi Berra Enron/Sarbanes-Oxley Increased medicinal services control Increased accentuation on commitments of Boards/officials Increased monetary weight on doctors (turf fights, and so forth.) Increased money related examination

The Good Governance Motto A decent administration Board/council part is, similar to a decent Scout: Trustworthy, Loyal, Helpful, Thrifty, Obedient, Brave and Reverent And, add to the rundown: Law Abiding, Prudent, Educated, Inquisitive, Diligent and Involved If you were a Scout, what is absent?

Friendly Courteous Kind Cheerful Clean Answer to the Test

Board Financial Responsibilities Based on general Board obligations notwithstanding particular evaluating benchmarks to be talked about by Ivan and Don, the money related obligations of the Board ought to be considered with regards to the general obligations of the Board and creating norms

Core Duty - The Obvious A center obligation of any Board or advisory group part is to fill the need of the association Committee individuals ought to likewise be centered around the obligations and duties of the panel Finance, Audit and Compliance Committees are critical to monetary and lawful consistence

The Board's Responsibilities The Board is in charge of: building up the District's approaches, settling on significant choices, appointing to the Superintendent, and giving viable oversight of District operations

The Right to Rely In the private area, a chief is qualified for depend on data, feelings, reports, or explanations, budgetary articulations and other budgetary information, arranged/exhibited by: Officers or representatives of the enterprise whom the executive accepts to be solid and equipped in the matter introduced

The Right to Rely (proceeded with) Counsel, open bookkeepers, or different people as to matters which the chief accepts to be inside such individual's expert or master ability

The Right to Rely (proceeded with) A council of the Board . . . properly assigned . . . as to matters inside its assigned expert, which board of trustees the chief accepts to legitimacy certainty ; inasmuch as,. . . the executive demonstrations in compliance with common decency, after sensible request when the need therefor is shown

The Good News The law perceives that an open authority ought not be subject for optional choices or inability to settle on an optional choice inside his/her official limit (RCW 4.24.470)

The Limits of the Good News Scope of "tact" poorly characterized and prone to change "post-Enron" Breach of trustee obligation Intentional offense or a knowing infringement of law Conflict of intrigue/individual advantage (RCW 42.23) Open Meetings and other statutory prerequisites

Intentional/Knowing Violation How figure out whether an infringement is knowing? Powerful administrative consistence program? Dependence on administration and counselors Acquiescence to lead may compare to knowing infringement Reasonable to anticipate that courts will translate "knowing" all the more extensively, and if a Commissioner is aware of an infringement, can't assert inability to act was optional

Elements of Fiduciary Duties The obligation to go about as a guardian to the greatest advantage of the association incorporates various components that can be independently depicted:

Duty of Oversight Duty to deal with the association through appointment to directors Board/advisory group individuals can't be relied upon to deal with the everyday exercises of an association, and in this manner courts will typically offer reverence to choices of the Board concerning what makes a difference in which it will (or won't) get to be distinctly included

Duty of Care/Attention/Inquiry Board/panel individuals ought to: Educate themselves with all sensibly accessible data before making a move Act with mindfulness and care suitable considering the present situation in the release of their obligations Make sensible request in regards to the operations and consistence of the association Remember - insight into the past is 20/20

Duty of Loyalty Board individuals ought to release their obligations to profit the area, not themselves, unveil clashes, maintain a strategic distance from exercises that may strife with the locale's central goal and evade rivalry with the region RCW 42.23.070 contains the fundamental necessities

Duty of Obedience Board/council individuals ought to be steadfast to the basic legislative purposes and objectives of the region Effective conveyance of value human services administrations to the group

That's Enough Background What's occurring now?

Auditor Independence Ivan and Don will examine Example of expanded consideration regarding irreconcilable situations in the broadest feeling of the idea

Audit Standards Don will talk about effect of Sarbanes-Oxley

Internal Auditing "an autonomous, target confirmation and counseling movement intended to include esteem and enhance an association's operations" "a deliberate, taught way to deal with assess and enhance adequacy of hazard administration, control, and administration" Microsoft/huge social insurance frameworks v. a District healing facility

Increased Enforcement Hospital criminally obligated for not making fitting credentialing move for restoratively pointless strategies (i.e. peer survey has money related effects) Hospitals and authorities are in charge of guaranteeing the foundation's understandings are not "sham" Increased doubt with respect to devastation of reports

Compliance Programs In the spotlight because of: Regulatory oversight Corporate honesty assentions Federal Sentencing Guidelines Auditors Public Accountability Appropriate balanced governance

U.S. Sentencing Guidelines Seek to support successful consistence programs Sentencing gauges now more extreme because of late outrages Recent Advisory Group Report - Small associations ought to have a consistence program, however less formal program is satisfactory

Board's Role-OIG Resource April 2003 by Office of the Inspector General and American Health Lawyers Association The goal is "to be an instructive apparatus for social insurance sheets and panels, with an attention on consistence issues " Relates to Board obligation of request and data frameworks

OIG/AHLA Board Resource Based on the Caremark case (not Washington) which held that a Board part's commitment incorporates an obligation to endeavor in accordance with some basic honesty to guarantee that a corporate data and announcing framework, which the Board finishes up is sufficient, exists

Reliance on Management The Board has the privilege to depend on administration's data given that the data can sensibly be esteemed solid ; generally, a chief is committed to make inquiries and acquire answers until any worries are palatably tended to Duty to ask emerges in light of the interesting truths and conditions

Board Due Diligence Sets out a progression of inquiries proposed to help Boards survey the substances of their organization's consistence program The "recommended" inquiries for Board individuals will most likely turn into the base inquiries

Structural Due Diligence "Basic" inquiries identify with how the consistence program is composed: Who runs the consistence program, who do they answer to, and how regularly and in what detail? What are its objectives and inalienable constraints and how are those impediments tended to? What assets are allotted and would they say they are sufficient?

Operational Questions Operational inquiries identify with the corporation's: Code of Conduct Policies and methods and consistence foundation Measures to avert, react to and report infringement

Board Education Should be subject of Board training and activity Will turn into a "standard"? The primary concern: CEO ought to guarantee the Board comprehends the Compliance Program, and guarantee strategies are set up to react to consistence issues Status of Compliance Officer is raised

Board's Role Be educated and make inquiries Assess and verify that the Compliance Officer has adequate work force and money related assets to completely actualize Compliance Program, including association wide preparing Require reports on material administrative and industry advancements Make a record - knowledge of the past is 20/20

If Issues Develop? A consistence plan is insufficient The force of the press is wonderful Get the terrible realities out there and apologize Engage your Board and association

The Future? Sarbanes-Oxley ideas extended and connected to healing center regions? Extended/reinvigorated understanding of "knowing" infringement of laws? Narrowing of "carefulness"? Potential new enactment

A Proactive Response Focus on the best possible pu