SCR165

WHEREAS, the Office of the Auditor conducted a financial audit of the University of Hawaii John A. Burns School of Medicine (School) for the fiscal year July 1, 2001 to June 30, 2002; and

WHEREAS, the audit examined the financial records and transactions of the School, reviewed the related systems of accounting and internal controls, and tested transaction systems and procedures for compliance with laws and regulations; and

WHEREAS, deficiencies were found in the internal control practices of the School; and

WHEREAS, the School's administration and management of its contracts with health care organizations that provide training and medical services was found to be deficient; and

WHEREAS, among the deficiencies found were:

(1) Contracts had been signed and executed subsequent to the contract date;

(2) Final reconciliations of the amounts due from health care organizations were not completed in a timely manner; and

(3) Non-compliance with the University's policies and procedures regarding conflict of interest situations involving School faculty occurred; and

WHEREAS, the Auditor's report recommended that the School revise the way it handles contract negotiations with health care organizations, and commence services only after contracts are finalized and executed; and

WHEREAS, the University Clinical, Education, and Research Associates, Inc. (UCERA) is a separately incorporated not-for-profit corporation, which contributes to the School's goal of improving the health care status of the citizens of Hawaii and the Pacific area by supporting the academic mission of the School; and

WHEREAS, UCERA functions as a practice plan for the faculty of the University of Hawaii John A. Burns School of Medicine, providing a vehicle by which clinical revenues can be generated on a limited scale during their non-university, private practice time; and

WHEREAS, the Hawaii Residency Program, Inc. (HRP) is a separately incorporated not-for-profit corporation that coordinates the administration of Hawaii's residency training programs through a joint effort between the School and several of Oahu's major hospitals and medical centers; and

WHEREAS, the financial information of UCERA and HRP was not included in the 2003 financial audit of the University of Hawaii John A. Burns School of Medicine that was conducted by the Office of the Auditor because the School and the University are not financially accountable for these entities; and

WHEREAS, a follow-up audit of the University of Hawaii John A. Burns School of Medicine should be conducted and include an audit of the School's related parties, UCERA and HRP; and

WHEREAS, the Auditor is constitutionally and statutorily responsible for auditing state and county programs, expenditures, and any agencies that receive state funds, and undertakes audits at the request of the Legislature or upon the Auditor's initiative; now, therefore,

BE IT RESOLVED by the Senate of the Twenty-fourth Legislature of the State of Hawaii, Regular Session of 2008, the House of Representatives concurring, that the Auditor is requested to conduct a financial audit of the University of Hawaii John A. Burns School of Medicine and its related parties, the University Clinical, Education and Research Associates, Inc. and the Hawaii Residency Program, Inc.; and

BE IT FURTHER RESOLVED that the Auditor is requested to submit a report of any audit findings and recommendations, including any proposed legislation, to the Legislature no later than twenty days prior to the convening of the Regular Session of 2009; and

BE IT FURTHER RESOLVED that certified copies of this Concurrent Resolution be transmitted to the Governor, the President of the University of Hawaii, the University of Hawaii Board of Regents, the Dean of the University of Hawaii John A. Burns School of Medicine, and the Auditor.

	OFFERED BY:	_____________________________

Report Title:

Follow-up Financial Audit; UH John A. Burns School of Medicine; University Clinical, Education, and Research Associates, Inc.; Hawaii Residency Program, Inc.

THE SENATE	S.C.R. NO.	165
TWENTY-FOURTH LEGISLATURE, 2008
STATE OF HAWAII