May 2, 2006
Audit Finds “Exceptionally Strong” Internal Financial Controls at Roswell Park Cancer Institute
Hevesi Calls Medical Facility a Model for Other New York State Authorities
Roswell Park Cancer Institute’s strong and effective internal financial controls and actively engaged board of directors make the Buffalo medical facility a model for authorities and public benefit corporations throughout New York State, State Comptroller Alan G. Hevesi said today.
Hevesi visited Roswell Park today to announce the findings of an audit of the institution, a public benefit corporation established under State statute that receives more than $80 million in State funds each year.
“While we have been sharply critical of many authorities and public benefit corporations around New York State, Roswell Park is an example for other entities of how to manage public funds wisely and safeguard against wrongdoing,” Hevesi said.
“Roswell Park is an anchor for Buffalo and Western New York and is nationally-known for the care it provides for cancer patients,” Hevesi added. “Its exceptionally strong systems of internal financial controls and board of directors’ careful monitoring of finances and operations help to ensure that the taxpayer dollars that go to support Roswell Park are well-spent.”
Roswell Park President & CEO David C. Hohn, MD said, “Since it became a public benefit corporation, Roswell Park has worked diligently to implement fiscal policies and systems that ensure oversight at every level, stewardship of funds, the absence of conflicts of interest, and the ability to make timely strategic business and program decisions. The Board, administration, faculty and staff are gratified that Comptroller Hevesi’s report validates this work, and we thank our donors, volunteers and elected officials for their continued support.”
Auditors found a strong system of controls for purchasing at Roswell Park, with formal policies and procedures in place and clearly defined spending limits and approval requirements. All contracts valued at more than $250,000 must be approved by the finance committee of the board of directors and those valued at more than $1 million must be approved by the entire board. “Sole-source” purchases made without a competitive process must include documentation detailing why the item or service was available from only one vendor. Procurement cards, used for smaller purchases and certain travel expenses, reduce paperwork and processing costs.
A review by auditors of contracts and other purchases found no instances where established procedures had not been followed. As a result of audit findings from other public authorities where rules were often ignored, Hevesi has proposed legislation to improve procurement practices and contract oversight for authorities.
Auditors also found strong controls over revenues. Patient accounts were billed accurately and in a timely manner, recorded properly and tracked correctly. Most patient bills are submitted electronically to Medicare, Medicaid and insurance carriers.
Roswell Park’s board of directors is actively involved in overseeing the facility’s operations and receives detailed financial statements and reports on investments, internal audit operations and quality assurance at each board meeting.
“Active involvement by knowledgeable board members is another aspect of Roswell Park’s management that distinguishes it from other public authorities, and I was pleased to learn the extent to which this board is involved in overseeing the institution,” Hevesi said. “Boards of directors provide the primary oversight of authority operations and – as we have seen repeatedly – when nobody is watching, opportunities for mistakes, mismanagement and even corruption increase.”
According to David Zebro, Chairman of the Board of Directors of the Roswell Park Cancer Institute Corporation, “When Roswell Park became a public benefit corporation, we changed the way we do business and entered into a new era of cooperation with the State of New York. Today, we celebrate the successes and wisdom of that vital legislation, and applaud the collective prescience and strategic planning of those visionaries - both at Roswell Park and in Albany - who made this possible. We should all be proud.”
Founded in 1898 by Dr. Roswell Park, Roswell Park Cancer Institute Corporation is a public cancer hospital and research center with 2,500 faculty and staff. The facility had annual operating revenues of $252 million in 2004, including $83 million from the State. Roswell Park is one of 39 cancer facilities in the U.S. designated by the National Cancer Institute as a comprehensive cancer center.