The University of Hawaii's medical school should revise the way it handles contracts with health care organizations that provide services and training, according to a report released yesterday by state Auditor Marion Higa. Audit urges changes
in med school contractingThe problems hurt the UH school's
cash flow, the state auditor saysBy B.J. Reyes
Associated PressThe financial audit of the John A. Burns School of Medicine uncovered, among other items, deficiencies in contract management that "negatively impacted" the school's cash flow.
All 28 contracts negotiated during the fiscal year ending June 30, 2002, were signed and executed after their start dates, according to a summary of the audit.
As a result, school faculty incurred expenses of about $2.3 million before providers could be billed.
"The school's cash flow was negatively impacted, and interest that could have been earned on the amounts outstanding was lost," the audit summary said.
Robert Nobriga, the medical school's chief financial officer, noted that the report found no instances of noncompliance with legal requirements.
The main factor in the deficiencies, Nobriga said, was the "highly manual and time-consuming nature of preparing the budget, as well as the high turnover of staff."
He said administrators agree with many of the recommendations and have begun taking steps to address the auditor's concerns.
Those steps include the development of an automated procedure for financial reporting that is expected to ease the budget preparation process.
The audit also found that contractors were not billed in a timely manner, further costing the school revenue that could have been earned from interest had the money been collected on time.
The auditor's report recommended that the medical school revise the way it handles contracts by beginning services only after an agreement has been finalized and reviewing billing procedures.
Additionally, the audit found that the medical school did not comply with university policies on conflicts of interest by not enforcing requirements for faculty members who perform outside work.
A "significant portion" of disclosure forms required by faculty who perform outside work were either incomplete or were not filed in a timely manner, the audit summary said.
Nobriga said medical school Dean Edwin Cadman would issue annual reminders as part of his efforts to make administrators more accountable for faculty who perform other work.
"Basically, we just need to be more stringent and aggressive in making our faculty comply with those requirements," Nobriga said.
University of Hawaii
