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Transcription

1 CA I.DW ELL PA RISH HO SPITA L SERV IC E DISTRIC T NO.1 C ITIZENS M EDICA l.c ENTER FINA NC IA L STA TEM ENTS A N D SU PPLEM ENTA RY DA TA M A RC H 31,2000 A N D 1999 A ND IN D EPEN DENT A U DITO RS'R EPO RT Underprovisions ofstate law,this reportisa public docum ent.a copy ofthe repolt has been SL,bm itted to the entity and otherappropriate public officials,-ihe reportis a,.,ail~j!:)lt,f,~r2,',;t:li:insl~ecl:ion ~tthe?at()rl Rouge office ofthe I_e(~is!~:~ire Auditorand,w i~ere appropriate,atthe office ofthe parish clerk ofc:oult. Releasel)ate~ "~ -~~)-_

2 CA LDW ELL PA RISH HO SPITA L SERVIC E DISTRICT NO.1 C ITIZENS M ED ICA L C ENTER C O N T E N T S Pa.qe NDEPENDEN T AUDITO RS'REPO RT 1 FINA NCIA L STA TEM ENTS Balance sheets Statem ents ofrevenues and expense.,; Statem ents ofcontributed capital Statem ents ofretained earnings Statem ents ofcash flow s Notes to financialstatem ents N D EPEN DE!NT A U DITO RS'R EPO RT O N TH E SU PPLEM ENTA RY DA TA 13 SU PPLEM ENTA RY DA TA O rganization,history and contro Incom e statem entdetail Departm entalpatientrevenues Departm entalexpenses

3 M INC H EW,RO BINSO N,G A RDNER,LA NG STO N and BRYAN C ERTIFIED PU B LIC A C C O U NTA NTS 2t20 Forsylhe Avenue P.O.Box 4550 M onroe,louisiana GENE E,M INCHEW.CPA A ProfessionalCorporation OSCAR C.ROBINSON,JR.,CPA A ProfessionalCorporation C.DENNIS GARDNER,CPA A ProfessionalCorporation "rlm MY R,L/kNGSTON,CPA A ProfessionalCorporation RUSSELL B.BRYAN,CPA A ProfessionalCorporation "telephone (318) Telecopier (318) NDEPENDENT AUDITO RS'REPO RT To the G overn ing Board Citizens M edicalcenter Caldwe lparish HospitalService DistrictNo.1 Columbia,Louisiana W e have audited the accom panying financialstatem ents ofcitizens MedicalCenter,an enterprise fund ofcaldw ellparish HospitalService DistrictNo.1,State oflouisiana,as ofand forthe years ended M arch 31,2000 and 1999,as listed in the table ofcontents. These statem ents are the responsibility ofcitizens M edicalc'enteis m anagem ent. O urresponsibility is to express an opinion on these financialstatem ents based on ouraudit. W e conducted ouraudits in accordance w ith genera ly accepted auditing standards and "G overn m entauditing Standards"issued by the Com ptro lerg eneralofthe United States. Those standards require thatw e plan and perform the auditto obtain a reasonable assurance about w hetherthe generalpurpose financialstatem ents are free ofm aterialm isstatem ent. A n audit includes exam ining,on a testbasis,evidence supporting the am ounts and disclosures in the generalpurpose financialstatem ents. An auditalso includes assessing the accounting principles used and significantestim ates m ade by m anagem ent,as we las evaluating the overa lfinancial statem entpresentation. W e believe thatourauditprovides a reasonable basis forouropinion. As discussed in Note 1,the financialstatem ents presentonly C itizens M edicalcenter,an enterprise fund ofc aldw e lparish HospitalService DistrictNo.1,State oflouisiana,and are not intended to presentfairly the financialposition ofcaldw e lparish HospitalService DistrictNo.1, State oflouisiana,and the results ofits operations and cash flows ofits proprietary fund types in confom fity w ith genera ly accepted accounting principles. In our opinion,the financialstatem ents referred to above presentfairly,in a lm aterial respects,the financialposition ofcitizens M edicalcenter,an enterprise fund ofcaldwe lparish HospitalServic;e DistdctNo.1,State oflouisiana,as ofm arch 31,2000 and 1999,and the results ofits operations and cash flows forthe years then ended in conform ity w ith genera ly accepted accounting principles. Septem ber21,2000

4 CALDW ELL PARISH HO SPITAL SERVICE DISTRICT NO.1 CITIZENS M EDICAL CENTER BALA NC E SHEETS M ARC H 31,2000 AND 1999 ASSETS CURRENT ASSETS Cash on hand and in banks (Note 2) Accounts receivable -patients -netofa low ance for unco lectible accounts of$3,362,208 and $2,488,563 (Note 3) Acco unts receivable -fiscalintermediaries (Note 3] O theraccounts receivable Inventoriesofsupplies (Note 4) Prepaid expenses Totalcurrentassets $ 1,023,289 $ 272,253 3,114,515 25,219 1,457, , ,177, ,339 1,493, , $ $ PROPERTY AND EQUIPMENT (Note 1) Land Building and fixed equipm ent Majormovable equipment M inorm ovable equipm ent Less: Accum ulated depreciation O THER ASSETS Reserve fund (Note 5) The Notes to FinancialStatem ents are an integralpart ofthis statem ent.

5 Page 2 LIABILITIPS AND FUND BALANCE CURRENT LIABIt.ITIES Accounts payable Accrued expenses Notes payable -currentm aturities Accounts payable -fiscalinterm ediaries $ ,179, ,088 91, Totalcurrentliabilities $ 1,723,240 $ 1,620,055 LO NG -TERM LIABILrrlES Notes payable -less currentmaturities (Note 6) Totalliabilities $ 2,306,943 $ 2,247,055 CONTRIBUTED CAPITAL (Note 7) 2,494,192 2, RETAINEr)EARNING S Accum ulated earnings 4,075, ,877,036 $ The Notes to FinancialStatem ents are an integralpartof this statem ent.

6 Page 3 CALDW ELL PARISH HO SPITAL SERVICE DISTRICT NO.1 CITIZENS M EDICAL CENTER STATEM ENTS O F"REVENUES AND EXPENSES For The Years Ended M arch 31,2000 A nd 1999 Patientservice revenues Nursing service Nursing service -observ ation Pharm acy IV solutions M edicaland surgical Laboratory Radiology O perating room Anesthesia Blood Inhalation therapy Physicaltherapy Em ergency room Recovery room EKG's M onitors EEG 's/em G 's O ncology/hem atology Tota A low ances and unco lectible accounts Contractualadjustments M edicare and M edicaid Free Care Otheradjustments Provision forbad debts M edicaid indigentrevenue Reim bursem entofuncom pensated cost M edicare disproportionate share revenue 4 (1,047,101) Netpatientserv ice revenues The Notes to FinancialStatem ents are an integralpartofthis statem ent.

7 Page 4 CALDW ELL PARISH HO SPITAL SERVICE DISTRICT NO.1 CITIZENS M EDICAL CENTER STATEM ENTS O F REVENUES AND EXPENSES For The Years Ended M arch 31,2000 And 1999 O perating expenses Salaries C ontractpersonnel Supplies Postage and freight Professionalfees Physician fees (W eekend) M aintenance Dues and subscdptions Continuing education Travel M edicalpurchased service Equipm entrental M isce laneous Telephone Blood Licenses and perm its Food Utilities Purchased laundry Co lection service Legaland audit Insurance Em ployee benefits Payro ltaxes Depreciation Total Operating profit(loss)before otherincome and deductions O theroperating incom e and deductions Sales tax revenue Interestearned M isce laneous incerne Cafeteria incom e Clinic Interestexpense $ 450,000 20,251 78, ,628) $ $ 495,910 Netincom e $ $ The Notes to FinancialStatem ents are an integralpartofthis statem ent.

8 Page 5 CALDW ELL PA RISH HO SPITAL SERVICE DISTRICT NO.1 C ITIZENS M EDICAL CENTER STATEM ENTS O F CO NTRIBUTED CAPITAL. For The Years Ended M arch 31,2000 And Balance -t)eginning Balance -ending $ $ $ $ 2, STATEM ENTS O F RETAINED EARNING S For The Years Ended M arch 31,2000 And 1999 Retained E:.arnings Balance -beginning Netincome (loss) Balance -ending The Notes to FinancialStatem ents are an integralpartofthis statem ent.

9 CALDW ELL PARISH HO SPITAL SERVICE DISTRICT NO.1 CITIZENS M EDICAL CENTER Page 6 STATEM I=NTS O F CASH FLOW S ForThe Years Ended M arch 31,2000 A nd 1999 CASH FLO W S FRO M O PERATING ACTIVITIES Netincome (loss) Adjustments to reconcile netincome to netcash provided by operating activities: Depreciation expense Interestexpense Interestincom e: Sales tax revenue (Increase)Decrease in: Patientreceivables Otherreceivables Prepaid expenses Inventories Increase (decrease)in: A ccounts payable AccnJed expenses Accounts payable -fiscalinterm ediaries TotalAdjustments NET CASH FLO W S FRO M O PERA TING ACTIVITIES CASH FLO W S FRO M NO N-CA PITA L FINA NC ING A CTIV ITIES Sales tax revenue co lected CASH FLO W S FRO M CAPITAL AND RELATED FINANCING A ctivities Proceeds from long-term borrow ing Proceeds from sale ofequipm ent Purchase ofequipm ent Additions to buildings and grounds Principalrepaym ents Interestpaid Transferto Reserve Fund NET CASH USED IN CAPITAL AND RELATED FINA NC ING A C TIV ITIES CASH FLOW S FRO M INVESTING ACTIVITIES Receiptofinterestincom e NET INCREASE (DEC'REASF)IN CASH AND CASH EQUIVALENTS CASH AN[)CASH EQ UIVALENTS -BEG INNING O F YEAR CASH AN[)CASH EQ UIVALENTS -END O F YEAR The Notes to F-'inancialStatem ents are an integralpartofthis statem ent. $ 58,024 $ 431 (101,957 (81,190 (110,181 (71,628 (3.774

10 Page 7 CALDW ELL PARISH HO SPITAL SERVICE DISTRICT NO.1 CITIZENS MEDICAL CENTER NO TES TO FINANCIAL STATEM ENTS ote 1 Sum m ary ofsianifieantaccounting P A ccounting M ethods Citizens M edicalcenteris the enterprise fund ofthe Caldw e lparish HospitalService DistrictNo.1 Accordingly,these statem ents are prepared on the accrualbasis ofaccounting and include only the assets liabilities,revenues,and expenses pertaining to the operations ofthe Hospital. Cash and ~~ash equivalents include cash on hand and due from banks nventories ofsupplies and m inorequipm entare valued atthe originalorlatestinvoice price A l properties and equipm ent are show n at their original cost less accum ulated depreciation. Depreciation is provided on a straight-line m ethod overthe estim ated usefullives. Equipm entincludes assets acquired underce pitallease of$118,617 wfh accum ulated depreciation of$98,100 and $89,306 atm arch 31,2000 and Depreciation charges totaled $241,868 for2000 and $216,389 for1999. The Hospitalroutinely leases facilities and m edicalequipm entunderoperating lease arrangem ents from various leasing companies.the approxim ate annuallease expense ofoperating leases was $119,509 for2000 and $50,392 for 1999 including $15,355 in m inim um rentalpaym ents each yearunder noncance lable leases. Included in com m itm ents are am ounts undera five yearagreem entw hereby the Hospitalagrees to purchase chem istry slides on a pertestbasis and the vendorw illfurnish certain laboratory equipm ent, m aintenance,reagentsand the chem istry slides atan estim ated annualcostto the Hospitalof$104,000. In addition th e Hospitalis furnished equipm entand services to perform CT Scan undera five yearagreem ent atan annualcostofapproxim ately $99,000. Charges to M edicare and M edicaid patients are included in revenues atstandard rates and prices.the diference betw een these charges and the am ounts actua ly received from these tw o agencies are show n as contractualadjustments. ncom e Tax M atters The Hospitalis an enterprise fund ofthe C aldw e lhospitalservice DistdctNo. ofthe State oflouisiana and,accordingly,exem ptfrom incom e tax. 1,a politicalsubdivision Use ofestim ates The preparation offinancialstatem enls in conform ity w ith genera ly accepted accounting principles requires m anagem entto m ake estim ates and assum ptions thatafectthe reported am ounts ofassets and liabilities and disclosure ofcontingentassets and liabilities atthe date ofthe financialstatem ents and the reported am ounts ofrevenues and expenses during the reporting period. Actualresults could differfrom those estim ates.

11 Page 8 CALDW ELL PARISH HO SPITAL SERVICE DISTRICT NO.1 CITIZENS M EDICAL CENTER NO TES TO FINANCIAL STATEM ENTS Note 2 C ash in B an Atyear-endsthe carrying amountofcitizensmedical(;enters deposits (checking,savings and certifica tes ofdeposits)were asfolows: C arrying am ount Bank balance $ 1,105,084 $ 349,782 $ 1,191,235 $ 300,417 The am ounts deposited in individualbanks and the fairm arketvalue ofinvestm ents pledged as security forthe deposit.,;are as fo low s: Deposits Citizens Progressive Bank $ Hom eland FederalSavings Bank Caldwe lbank 409,078 $ 527, , , Securities Pledged -FM V Citizens Progressive Bank FederalHom e Loan Bank -note FederalNationalM ortgage Association -note Hom eland FederalSavings Bank FederalNationalM ortgage A ssociation Note G overnm entnationalm ortgage A ssociation II A m 1Pool FederalNationalM ortgage A ssociation A rm Pool St.Tanlm any Parish LA Rec Dist Caldwe lbank None 395, , ,563 33, , In addition to the above listed pledged security deposits in each bank are secured by $100,000 offederal depositinsurance. AtM arch 31,2000,Citizens M edicalcenterhad $153,467 in unsecured deposits at Caldwe lbank. AtM arch 31,2000,the security pledged by Citizens Progressive Bank and Hom eland FederalSavings Bank is held by FN BI:3Investm ent. Note 3 Accounts Receivable Accounts receivable -other costreim bursem entfrom the adjustmentsfrom the Medica re includes $686,049 and $1,047,101 for2000 and 1999 foruncom pensated M edicaid Program and $450,000 and $-0-for2000 and 1999 volum e Program.

12 Page 9 CALDW ELL PA RISH HO SPITA L SERVICE DISTRICT NO.1 CITIZENS M ED ICAL C ENTER NO TES TO FINANCIAL STATEM ENTS Note 3 Accounts Receivable (Continued A ccounts payable -fiscalinterm ediaries representthe balance ow ed the program s on currentyearcost reports. A low ance for unco lectible accounts include provisions for bad debts,charity ca re and contractual adjustments.charge-ofs and adjustmentsto the alowance isasfolows: FiscalYearEndina M arch 31 Bad debts Charity care M edica re and m edicaid contractualadjustments O ther Bad debts C harity care M edica re and m edica id contractualadjustments O ther Note 4 Inventories Inventories consisting ofsupplies and m inorequipm entare as fo low s atm arch 31 M edicaland surgica l Laboratory X-ray Pharm acy bietar~j Respiratory therapy

13 Page 10 CA LDW ELL PA R ISH H O SPITA L SERV IC E D ISTR IC T NO.1 C ITIZENS M EDICAL C ENTER NO TES TO FINANCIAL STATEM ENTS The Certificate Resolution adopted by the Board ofcom m issions ofhospitalservice DistrictNo.1of the Parish ofcaldwe l,state oflouisiana to authorize the issuance ofthe Certificate ofindebtedness provided thata Reserv e Fund be established in the amountof$67,700 to be retained solely forthe purpose ofpaying principaland intereston the certificates as to w hich th ere w ould otherw ise be default. The Reserv e Fund w ilrem ain on depositw hile the certifica tes are outstanding. W ith interestadded,th e accountbalance was $81,794 atm arch 31,2000. Note 6 Lono-Term Debt Long-term debtconsists ofthe fo low ing Insta lm entnote payable on data processing system due in 60 rnonthly paym ents of$1,103 including principaland interestat8.15%. $ 52,896 Insta lm entnote payable on m edicalequipm ent purchase dated ,due in 60 m onthly paym ents of$1, including principaland interestat6.75% Taxable certificates ofindebtedness Series 95,dated Novem ber6,1995,payable in 20 sem iannualinsta lm ents beginning on M ay 1,1999 w ith interestatan indexed prime rate less 25 basic points(.25% )notto exceed 12% perannum incurred to constructand equip a physicians ofice building,payable from a pledge and dedication of the excess ofannualrevenue ofthe districtabove statutory,necessary and usualcharges Less currentm aturities Less interest

14 Page 11 CAI_DW ELL PARISH HO SPITAL SERVICE DISTRICT CITIZENS M EDICAL CENTER NO TES TO FINANC IAL STATEM ENTS Note 6 Lona-Term Debt (Continued The Hospitalhas the fo low ing annualcom m itm ents,non-cancelable capitalized leases and operating leases Year O perating Leases and O ther C om m itm ents C apita Leases Long-Term Debt Thereafter $ 81,516 $ $ 91,589 04,522 11,161 22,020 17, no0 $ $ $ nterestpaid forthe pedods and w as $44,444 and $71,628,respectively Note 7 C ontributed C aoita The residents ofcaldwe lparish ata specialelection held in the Parish on Saturday,April2,1977, authorized the issuance of$2,300,000 public im provem entbonds secured by one percentsales and use tax forthe purpose ofconstructing,acquiring,extending,im proving,equipping,and/orfurnishing a hospitalfor the Parish. The tax-secured bonds bearing an average interestrate of perce ntwere sold atpar. The constru ction program w as com pleted and the Hospitalopened on February 14,1980. Atthe com pletion ofthe constru ction program,the fo lowing item s w ere transfened to the books ofthe Hospitalfrom the construction accounts: Site cost Building and fixed equipm ent Cash forpurchase ofequipm ent $ 26,902 2,065, ~ 2,494,192 Note 8 C ontinqentliabilities The Hospitalis cu rently negotiating settlem ents w ith tw o providers ofhealth care service s forcharges biled the Hosl:,italunderservice contracts in excess ofthe am ounts accrued in the financialstatem ent. M anagem enthas taken exception to the charges and believes a settlem entce n be negotiated w ith no additionalliability to the Hospital.

15 Page 12 CAt.DW ELL PARISH HO SPITAL SERVICE DISTRICT CITIZENS M EDICAL C ENTER NO TES TO FINANCIAL STATEMENTS Note 9 Concentration of CreditRisk CitizensMedicalCenteris a forty (40)bed hospitallocated in Columbia,Louisiana. The Hospital extends creditto patients in the area w ho are substantia ly dependenton M edicare and M edicaid program s forhealth care coverage. A ccounts receivable are unsecured.

16 M INCHE'W,RO BINSO N,GARDNE:R,LANG STO N and BRYAN CERTIFIED PUBLIC ACCO UNTA NTS 2120 Forsythe Avenue P.O.BOX 4550 Monroe,Loulslana GENE E.M INCHEW,CPA A ProfessionalCoq~oration OSCAR C.ROBINSON,JR,CPA A ProfessionalCorporation C.DENNIS GARDNER,CPA A ProfessionalCoq)oration TIM MY R.LANGSTON,CPA A ProfessionalCoq)oration RUSSELL B.BRYAN,CPA A Profession~=lCoq)oration Telephone (318)323~ 481 Telecopier (318) NDEPENDENT AUDITO RS'REPO RT O N THE SUPPLEM ENTARY DATA To the HospitalService DistrictBoard Caldw e lparish HospitalServ ice DistrictNo."1 C itizens M edical(;enter The accom panying additionalfinancialinform ation as listed in the table ofcontents is presented forsupplem entary analysis purposes and is notconsidered necessary fora fairpresentation ofthe basic financialstaternent. O urexam ination ofthe basic financialstatem ents forthe years ended M arch 31, 2000 and 1999,w hich is presented in the firstsection ofthis report,w as m ade forthe prim ary purp ose ofform ulating an opinion on these statements.this additionalinformation has been subjected to the applicable auditprocedures w e perform ed in ouroriginalexam ination ofthe related basic financial statem ents. In ouropinion,the supplem entary financialinformation is fairly stated in a lm aterialrespects in relation to the basic financialstatem ents taken as a w hole. Septem ber21,2000

17 Page 14 CALDW ELL PA RISH HO SPITAL SERVIC E DISTRICT NO.1 C ITIZENS M EDICAL C ENTER M ARCH 31,2000 O RG ANIZATIO N,HISTO RY AND CO NTRO L, C itizens M edica lc enter,a 40-bed hospital located in C olum bia,louisiana, began operation February 14,1980. Itis ow ned and operated by the C aldw e lparish HospitalService DistrictNo.1,a political subdivision ofthe State oflouisiana. The Disbict is gevem ed by the HospitalServ ice District Board w hose m em bers atm arch 31,2000 w ere JO E TYLER LEO N BASCO HI-NRY BY RD C HAIRM AN VIC E-C HA IRM A N TREASURER MARY NO RRIS BARBARA DAVIS

18 Page 15 CALDW ELL PARISH HO SPITAL SERVICE DISTRICT NO.1 CITIZENS M ED ICAL C ENTER INCO M E STATEM FNT DETAIL ForThe Years Ended M arch 31,2000 A nd 1999 DEPARTM ENTAL PATIENT REVENUES PatientService Revenues Nursing service Nursing service - observ ation Pharm acy IV solutions M edicaland surgica l Laboratory Radiology O perating room Anesthesia Blood Inhalation therapy Physica ltherapy Em ergency room Em ergency room - physician fees Recovery room EKG 's M onitors EEG 's Nuclearm edicine Ultra-sound CT Scan O ncology/hem atology Sleep study noatient O uidatient Total Inpatient O utoatient Tota Totals

19 Page 16 CALDW ELL PA RISH HO SPITAL.SERVIC E DISTRICT NO.1 C ITIZENS M EDICAL CENTER INCO M E!STATEM ENT DETAIL For The Years ['nded M arch 31,2000 A nd 1999 DEPAR'IM ENTAL EXPENSES SUPPLIES, FI-E'S SUPPLIES, FEES A ND O THER AND 03"HER SALARIES EXPENSES TOTAL SALA RIES EXPENSES TOTAL Pharm acy IV solutions M edicaland surgical Laboratory Radiology O perating room A nesthesia Blood Inhalation therapy Physica ltherapy Em ergency room EKG EEG CT Scans Ultra sounds N uclearm edicine A dm inistration Dietary Housekeeping Nursing service M aintenance and plant M edicalrecords Purchasing Laundry and linens Transportation O ncology Physicians O fice Totals

20 Page 17 CALDW ELL PARISH HO SPITAl_ SERVIC E DISTRICT NO.1 C ITIZENS M EDICAL C ENTER DEPA RTM ENTAL STATEM ENT O F INCO M E -CLINIC For The YearEnded M arch 31,2000 PatientService Revenue O fice visits Hospitalvisits Nursing hom e visits O therprocedures and supplies $ 224, ,357 2, Less: NetIncom e Contractualadjustments Provisions forbad debts $ 493,888 $ 97,550 23,355 $ 120,905 $ 372,983 O perating Expenses Salades O fice supplies and expense C ontractservices Travel,education and dues M edicalsupplies and expense Rentalequipn'lent Utilities Telephone M aintenance Em ployee benefits insurance Advertising $ $ 314,860 $ 58,123 OtherIncome and (Deductions) $ 1,866 NetIncome (t_oss)

21 CALDW ELL PARISH HO SPITAL SERVIC E DISTRICT NO.1 CITIZENS M EDICAL CENTER REPO RT O N CO M PLIANCE AND O N INTERNAL CO NTRO L O VER FINANCIAL RE:PO RTING BASED O N AN AUDIT O F FINANCIAL STATEM ENTS PERFO RM ED IN ACCO RDANCE W ITH G O V ERNM ENT AUDITI FINANCIAL STATEM ENTS

22 M INCHEW,RO BINSO N,G ARDNER,LANG STO N and BRYAN C ERTIFIED PLIB LIC A C C O UNTA NTS 2120 Forsythe Avenue P.O.Box 4550 M onroe,louisiana GENE E.M INCHEW,CPA A PfofessionarCorporation OSCAR C.ROBINSON,JR.,CPA A ProfessionalCorpo ration C,DENNIS GARDNER,CPA A Prafe.,~sionalCorpo ration TIM MY R,LANGSTO N,CPA A ProfessionalCorpo ration RUSSELL B.BRYAN,CPA A Profe.,~sionalCorpo ration "lelephone (31B)32~4481 "lelecopier (31B) RE'PO RT O N CO M PLIANCE AND O N INTERNAL CO NTRO L OVER FINANCIAL REPO RTING BASED O N AN AUDIT O F: FINANCIAL STATEM ENTS PERFO RM ED IN ACCO RDANCE W ITH G OVERNM ENT AUDITING STANDARDS To the G overning Board Citizens M edicalcenter C aldw e lpad,~h HospitalService DistrictNo.1 State oflouisiana W e have audited the generalpurpose financialstatem ents ofc itizens M edicalc enter,c aldw e l Parish HospitalService DistrictNo.1,as ofand forthe yearended M arch 31,2000,and have issued out"reportth ereon dated Septem ber21,2000. W e conducted ourauditin accordance w ith genera ly accepted auditing standards and the standards applicable to financialaudits contained in G overn m entauditin.q Standards,issued by the Com ptro lerg eneralofthe United States. Com pliance A s partofobtaining reasonable assurance aboutw hetherc itizens M edicalc enter's general purpose financialstatem ents are free ofm aterialm isstatem ent,w e perform ed tests ofits com pliance w ith certain provisions oflaw s,regulations,co ntracts and grants,noncom pliance with w hich co uld have a direct and m aterialefecton the determ ination offinancialstatem entam ounts. However,providing an opinion on compliance with those provisionswas notan objective ofour auditand,accordingly,w e do notexpress such an opinion. The results ofourtests ofcom pliance disclosed the fo low ing m aterialinstance ofnon-com pliance w hich has been corrected. C itizens M edicalc enterfailed to obtain co lateralequalto one hundred perce ntofthe am ountof deposits to theircreditin banks as required by State Statute 39:1225 and 49:321. In O ctober 1999,the Hospitaltransferred $250, into a ce rtificate ofdepositatcaldwelbank and Trust, Columbia,/.ouisiana which resulted in approxim ate $150, in excess ofcolateraland FDIC insurance. Upon renew alofthe six m onth ce rtificate on April14,2000,the non-com pliance w as noted and cortected w ith no financialloss to C itizens M edicalcenter. nternalcontrolo verfinancialredortinq In planning and perform ing ouraudit,we co nsidered Citizens M edica lcenter's intern alcontrolover financialreporting in orderto determ ine ourauditing procedures forthe purpose ofexpressing our opinion on the generalpurpose financialstatem ents and notto provide assurance on the intern al controloverfinancialreporting. O urconsideration ofthe internalcontroloverfinancialreporting would notnece ssarily disclose a lm a ters in the internalcontroloverfinancialreporting thatm ight be m aterialw eaknesses. A m aterialw eakness is a condition in w hich the design oroperation of one orm ore ofthe internalcontrolcom ponents does notreduce to a relatively low levelthe risk thatm isstatem ents in am ounts thatw ould be m aterialin relation to the generalpurpose financial statem ents being audited m ay occurand notbe detected w ithin a tim ely period by em ployees in

23 the norm alcourse ofperform ing theirassigned functions. W e noted no m atters involving the internalcontroloverfinancialreporting and its operation thatw e considerto be m aterial w eaknesses. This report is intended forthe inform ation ofthe auditcom m ittee,m anagem ent,and federal aw arding agencies and pass-through entities. However,this reportis a m a terofpublic record and its distribution is notlim ited. Se Y tem ber21, - J ' 2000 /