Commonwealth Healthcare Corp. officials blamed Friday software incompatibility for its failure to come up with accurate financial data and reports for the organization's board of trustees.
Corporation COO Esther Muña, also the hospital's chief financial officer, disclosed that the hospital has been using an accounting system that is not suitable for the job, resulting in problems in getting the “right numbers.”
Muña and her team were on the hot seat during Friday's daylong board meeting after vice chair Pete Dela Cruz cited concerns over “inaccurate financial” reports.
According to Muña, the existing accounting system, which is linked to the Department of Finance, gives the hospital a limited latitude in making changes. “We have an accounting system that is not suited for this hospital,” Muña told the board.
CHC is now transitioning to an accrual accounting system. “We've been working with JDE consultant [since October 2012] to help us convert from recognizing expenses when invoices are entered only when funding is available to entering invoices as they are received and expenses were incurred,” she said.
Part of this transition is the reorganization of the accounting department and cross-training of accounting personnel, she added.
To create a whole new system for CHC will cost about $40 million, which Muña described as impossible to raise citing the deep financial constraints of the corporation.
Earlier, Muña failed to give “exact” figures for specific operational expenses of the hospital such as the pending housing allowance for employees.
“The reason we cannot get the exact figure is because we have to put them first in the system and we can't do that [under the existing system],” she explained, admitting that it will take time to fix the accounting system failures.
It was also learned Friday that CHC is experiencing problems in its cost-report processing after Muña discovered that unit managers stopped accumulating reports since the beginning of fiscal year 2012. The necessary accounting process, she discovered, were also eliminated by previous administrators. According to Muña, these reports and processes are necessary.
“If you don't have the data, you can't show Medicare the cost [for reimbursement]. These reports and processes are necessary [as well as the missing reports]. So we have to enter them manually on the system again,” she explained.
Another failure in the existing accounting system is its inaccurate reporting on the hospital's unpaid obligation to the Commonwealth Utilities Corp. To address this, the adjustment needs to be done manually.
The board also learned Friday about the “untimely” posting of records in the medical supply office and unaccounted for or missing records.
Muña and her team were ordered to come up with a comprehensive report on the accounting situation at the board's next meeting on March 7.