Humboldt General Hospital Receives 'Clean' Audit

The Humboldt County Hospital District Board of Trustees received a “clean and unmodified opinion” from auditor CliftonLarsonAllen LLP for Fiscal Year 2017, which is the best type of report that can be received.

The designation is issued when an auditor obtains reasonable assurance that an organization’s financial statements are free of material misstatements.

Daniel Frein, a principal with the firm, told board members it is common for organizations to have material weaknesses, significant deficiencies or general comments, but HGH had no findings for the 2017 fiscal year.

Frein arrived with a team from CliftonLarsonAllen last August to conduct the detailed review of the hospital’s financial information; they returned again in September to complete the audit.

“Each year’s audit is a long process” said HGH Chief Financial Officer Sandi Lehman, who worked with Controller Eddy Davis and CliftonLarsonAllen’s audit team, “but we are really happy with the results.”

“This opinion means we have the right controls in place to ensure the hospital is recording its financial information per the latest standards,” she said.

Frein shared some highlights of the 2017 audit with board members including that HGH has over $13 million in unrestricted assets. HGH ended the 2017 year with 150 days cash on hand; the standard for a Critical Access Hospital is 150 days.

Frein also concurred with the hospital’s goal to reduce its accounts receivable days. That calculation is used to estimate the hospital’s average collection period for services rendered, and illustrates how well a company’s accounts receivables are being managed.

The hospital has already seen a significant drop in those days, from 115 in 2015 to 69 in 2017—a remarkable feat, according to Lehman, considering the hospital must incorporate insurance, Medicare, Medicaid and other coverage factors before resolving a bill.

HGH CEO Art Frable said he was pleased with the FY17 audit results.

The new chief, who has been on the job for less than three months, said, “It’s reassuring to know we have the right processes in place to ensure the financial integrity of the hospital. That is foundational to then ensuring the proper care of our community.”

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