Image Size 4” x 10.33” Audit Entrance – Alameda Health Partners Prepared by the Moss Adams Health Care Group July 8, 2020
Audit Committee Thank you for your continued engagement of Moss Adams LLP, the provider of choice for health care organizations. We are Alameda Health pleased to present our audit plan for Partners, Alameda Health Partners, a component A component unit of Alameda Health System unit of Alameda Health System, for the year ended June 30, 2020. We would also like to discuss current-year developments and 2 auditing standard changes that will affect our audit. We welcome any questions or input you may have regarding our audit plan and we look forward to working with you.
Agenda 1. Team Image Size 2. Communication with Those Charged with Governance 6” x 3” 3 3. Accounting Standards Update 4. Other Information 5. Appendix – Industry Focus
Your Dedicated Team Brian Conner John Feneis Engagement Partner Engagement Senior Manager 4 Kate Jackson Other Team Members : Concurring Partner Lisa Schick Audit Senior
Image Size Communication with Those 6” x 3” Charged with Governance
Required Communications to Those Charged with Governance Auditor’s responsibility under U.S. generally accepted auditing standards and Government Auditing Standards NOW Planned scope and timing of audit Significant audit findings 6 Qualitative aspects of accounting practices Difficulties encountered in performing the audit LATER Corrected and uncorrected misstatements Management representations Management consultations with other independent accountants Other audit findings or issues
Our Responsibility To express our opinion To perform an audit in accordance To consider internal To communicate findings on whether the financial with generally accepted auditing control over financial that, in our judgment, are statements prepared by standards issued by the AICPA and reporting as a basis for relevant to your management with your Government Auditing Standards designing audit responsibilities in oversight are fairly issued by the Comptroller General procedures but not for overseeing the financial 7 presented, in all material of the United States, and design the the purpose of reporting process. However, respects, and in audit to obtain reasonable, rather expressing an opinion we are not required to accordance with U.S. than absolute, assurance about on its effectiveness or design procedures for the GAAP. However, our whether the financial statements are to provide assurance purpose of identifying other audit does not relieve free of material misstatement. concerning such matters to communicate to you or management of internal control. you. your responsibilities.
Audit Process Internal Analytical Substantive Controls Procedures Procedures • • • Review of information Revenues and expenses Confirmation of account 8 systems and technology balances • Trends, comparisons, and • expectations Vouching to supporting documentation • Representations from attorneys and management • Examining objective evidence
What is Materiality? How it is calculated: • Using certain quantitative (e.g., total assets) and qualitative The amount of a factors (e.g., covenants, expectations, or industry factors) misstatement that could influence the economic It is used to identify: decisions of users, taken • on the basis of the Significant risk areas financial statements. • 9 Nature, timing, extent, and scope of test work • Findings or misstatements
Significant Audit Areas Internal controls over financial reporting Valuation of patient accounts receivable Recognition of net patient service revenue 10 Recognition of professional services agreement revenue Valuation of medical malpractice and other self insured liabilities
Consideration of Fraud How we gather information to identify fraud-related risks of material misstatement: • Brainstorm with team • Conduct personnel interviews • Document understanding of internal control • Consider unusual or unexpected relationships identified in Auditors must consider planning and performing the audit fraud to “improve the 11 likelihood that auditors Procedures to be performed: will detect material • Examine general journal entries for nonstandard transactions misstatements due to • Evaluate policies and accounting for revenue recognition fraud in a financial • Test and analyze significant accounting estimates for biases statement audit.” • Evaluate the business rationale for significant unusual transactions
Deliverables We will issue the following reports: • Audit report on the financial statements of Alameda Health Partners as of and for the year ended June 30, 2020 • Report to those charged with governance Communicating required matters and other matters of interest • Report to management and the audit committee Image Size Communicating required internal control related matters 6” x 3” identified during the audit 12 Nonattest services: • Assist in drafting of the financial statements and related footnotes of Alameda Health Partners
Timeline May 2020 • Planning meeting with management • Interim audit procedures (including test of implementation Week of June 8, 2020 of internal controls) July 8, 2020 • Entrance meeting with audit committee Week of September 21, 2020 • Final fieldwork procedures for financial statements 13 • Discuss draft financial statements and auditor’s reports Mid October 2020 with management. End of October 2020 • Audit committee approval of statements and exit meeting End of October 2020 • Finalize auditor’s reports.
Our Response to COVID-19 The COVID- 19 pandemic has touched all aspects of our lives. We’re here to guide you to the information and resources you need no w and provide strategies for the changes to come. We’ll support you as you rebuild and help you take advantage of rising opport unities. NAVIGATE REBUILD THRIVE • • Strategize needs and be aware of what’s to • Stay up to date with guidance and support to Take steps to bolster your workforce and help combat uncertainty come organization We ’ll connect you with the right - • • Reach out to your Moss Adams professional resource, either within the greater Evaluate additional service needs, such as with any questions on the most current Moss Adams team or through our the following: updates and advisements various industry contacts 14 - Capital sourcing - Process - Cloud tools improvement • Review Moss Adams announcements that ARTICLE - Cost segregation - Outsourced finance - How to Weather COVID-19 Market provide tax and regulatory relief - Enterprise resource accounting Volatility planning - R&D tax credits - Strategies to Reduce Cybersecurity ALERTS - Estate and - Risk assessment Risks - CARES Act Overview: Implications succession planning - State and local tax - Business Recovery Plans Prepare for for Business Taxpayers - Financial planning - Transactions Disruption - CARES Act: Implications for Tax- - Forecasting services - Confront Reduced Operating Cash Exempt Organizations - IT security and Flow - New Tax Credit Opportunities for cybersecurity Employers Impacted by COVID-19 H E L P I N G Y O U A D A P T T O U N C E R T A I N T I M E S Find more information and resources here: https://mossadams.com/covid-19-implications
Image Size 6” x 3” Accounting Update
New Accounting Standards Fiduciary Activities Establishes criteria for identifying fiduciary • activities of all state and local governments. [GASB STATEMENT NO. 84] • Key areas of focus: • Whether a government is controlling the assets of the fiduciary activity • Beneficiaries with whom a fiduciary relationship exists • Identification of fiduciary component units and 16 postemployment benefit arrangements that are fiduciary activities The effective date was postponed by one year • through the issuance of GASB Statement No. 95 in May 2020. Effective for Alameda Health Partners beginning • July 1, 2020.
New Accounting Standards Leases Increases the usefulness of financial statements • and establishes a single model for lease accounting. [GASB STATEMENT NO. 87] • Key areas of focus: • Recognition of certain lease assets and liabilities previously classified as operating leases • Recognized as inflows and outflows of resources based on payment provision of contract 17 • Single Model – Foundational principle that leases are financings of the right to use an underlying asset The effective date was postponed by 18 months • through the issuance of GASB Statement No. 95 in May 2020. Effective for Alameda Health Partners beginning • July 1, 2021.
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