HomeMy WebLinkAbout1978 & 1977
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FLOW M9MORIAL HOSPITAL
REPORT ON EXAMINATION OF FINANCIAL. STATEMRNTS
YEARS ENDED SEPTEMBER 30.1978 AND 1977
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Towhe Ross & Co,
February 8, 1979
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Board of Directors
{ Flow Memorial, Hospital
Denton, Texas s
f We have examined the balance shoots of blow 6lamorial Hospi-
tail, a political subdivision of the State of Texas, as of
September 30, 1978 and 1977, and the related statements of revenues
and expenses and changes in fund balances and changes in finanoial
position for the years then ended, Our examinationv were made in
. accordance with generally accepted auditing standards and, accord-
ingly, included such tests of the accounting records and such other
auditing procedures as we considered necessary in the oiroum-
' stances.
in our opinion, the financial statements referred to above
present fairly the financial position of Flow Memorial Hospital at
c September 30, 1978 and 1977, and the results of its operations and
the changes in its financial position for the ears th
j conformity with generally accepted accounting principles applied on
f`~kG / L'Oss 5Y n
Certified Public Accountants
V ~ 2001 ARYAN TOWER • SUITE 2400 • DALLAS, TEXAS 76201- (214) 741.3663
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. FLOW MMRIAL HOSPITAL
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BALANCE; $HN1BT8
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LY BI
Se Ces~tbar 30
UNRESTRICTED FUND
CURRENT ASSRTSt
Cash, including certificates of deposit CURRENT is payable
of $126,061 (1978) and $120,821 (1977) $ 136,316 $ !37,559 Aoaounts payable
Receivables, less estimated ianoollect- Accrued expenses
J'. ibles and allowanoes of $330,000 (1978) Current maturities of to
and $2500000 (1977) 1,688,825 11432,391
Inventories 151,084 159,045 TOTAL CURRENT t,I
Prepaid expenses and other assets 8 40_.870
LONG-TERM DEBT, lass out•ke
TOTAL CURRENT ASSETS (Note C)
2,0571866 117690865
LAND, BUILDINGS, AND EQUIPMENT, lose aocumu- FUND BALANCE (Nate D)
lated depreciation (Note g) 3,0~ 9~ 0j91 3,330 524
5x118,2, 5..100,38,
RQ_.. T uND
CASH
330 FUND BALANCE
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See notes to financial statements,
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LIABILITIES AND FUND B----=9-LANCES
e tember q ,y
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6eptem_ b~30 s
W, A
Z 6 LIMED FUND
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CURRENT LIABILITIESf
316 $ 137,559 Accounts payable i
Accrued expenses $ 721,460 $ 580,273
Current maturities of long-term debt 157,746 170,797
25 1.432,391 4 40. 00
84 159,045 TOTAL CURRENT LIABILITIES
1 40 n 0 9210025
- 791,570
LONG-TERM 099T, 1090 current maturities
~66 1,769,865 (Note C)
' FUND BALANCE (Note D) 630,741 673,752
3 52 3,596,490 3,535,067
5 148 267 5 10 3899
L--...=2 3 0 FUND BALANCE
$ 441 2 330
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FLOW MEMORIAL HOSPITAL
. STATEMENTS OF REVENUES AND EXPENSES
f AND CHANGES IN FUND BALANCES
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YEARS ENDED SEPTEMBER 30 1978 AND 1977
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} 1978 1977
~ ~ R CTED ND S
1 UNRESTRICTED P and" UNRESTRICTED
FUND Equipment Renovation FUND all m
l ~I PATIENT SERVICE REVENUE $ 71049,326 $ - $ - $ 5,667,575
I{ Allowances and contraoting agency $ -
adjustments (1,385+057) - - f 892,,.1,050)
: 30664,269 4,775,525
1 OTHER OPERATING REVENUE 144,476 37$
5,808+745 -
41920,903
OPERATING EXPENSM
Nursing services 1,990,926
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Other 2,071,799 20 348
Generalreervioegal services - - 1,0729,701
I General and administrative 656834 1+160, - i,b69,844
-
Depreciation +834 - 603,381 -
Interest 278472 - - 2600701
47,733
26,203 M
6~ 206, 691 - -
- 715
OPERATING LASS ( 397,946) ( 466,282)
NONOPERATING REVENUEt
Unrestricted contributions (Note E) 399,841 - - 366,823
€ Miscellaneous q7+658) _ X093 -
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370 18 -
EXCESS OF EXPENSES OVER REVENUES ( 451763) - - ( 87,364)
OTHER CHANGES IN FUND BALANCESa
Gifts, bequests, and grants (Note E) - 16 297 290
! Interfund transfers 71186 7 186)
452,2,47
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NOT CHANGE IN FUND BALANCES ( 38,577) 9,111
W 364,883 .1016
FUND BALANCES, beginning of year
(Note D) 3163500671 21330 3,24 1 1
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FUND BALANCES, and of year (Note D) Q4=9164=92 1, 4 1 ~ LWOW, L.3
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See notes to financial statements,
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1977
1978 RE TRI TED D
an TOTAL ALL FUNDS
R TED N UNRESTRICTED
an
p Equipment Renovation 1979
ui men Renovation FUND - _ S 7,049x326 $ 51667,575
5,667►575 $
' 45.0.1
2 050) - {1,3851057) { 892,
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4,775o525
4,775,525 - 5,664,269
_ 144,476 78
- x_378
4, 91 ~..r:.--. 5,848_ 745 .4 , 91~-.-0 903
- - 6880348
1,688,348 w 2,071,799 L1,728,70'1
i 1,728,701 - Y 1,1,60x727 1,069,844 i
1,0691844 - 656,834 603,388 1
603,388 278,672 260►701
260x701 - 47 33 26►2Q3 i
26, 243
- - 66 06,691 5 377
397,946) ( 466,262)
466,282) - "
399,841 366,823
366,823 - 47-,658) 12_,495
eeee_ } - - 318 915 352,L83 37 ,
i---°-8) r 43r763) ( 87,364)
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29x753 34,970 160297 64,723
16,297 4 2 2 7 ,(2 84) 423 6 ) "
1,169 {388,693 { 29,466) f 22,641)
9,111 " 364,883
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2 330 3 270 1 4 19161 388 6 3 3-7-L-3 3,66qt-
- _ c 3,607►931 $ 3,631,3.9.7
3 6 3 2 310
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FLOW MEMORIAL HOSPITAL
STATEMENTS OF CHANGES IN E'INANCIAL POSITION
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UNRESTRICTED FUND
Year ended September 30
SOURCE OF FUNDS,
:,i Hospital operations,
Operating lose 8(3974946) 466,282)
i De reaiation 278,672 260001
Other non-cash expenses - 5~ 5t76q
Funds used by Hospital
( operations
( ( 63410? 2050581)
Nonoperatinq revenues 352,183 370j9
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1 Funds provided by Hospital operations
and nonoperating revenues 288,673 173037
Transfers from Restricted Funds 7,186 452,247
Increase in long-term debt, less
current mater ties - 557,_2x8
r 2 9 1,92.842 ~
xi APPLICATION Or FUND9t
Additions to property, plant, and
J equipment (not)
Decrease in Jongg- term debt 94,303 10209,318
current maturltles, lees
' 43,011 -
137_,314 _ _I t 209,318
INCREASE (DECREASE) IN WORKING CAPITAL 18 545 26,676)
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CHANGES IN WORKING CAPITAL COMPONENTSt
Increase (decrease) in current
assetot
Cash 8( 1,243) 8( 278#087) J
Receivables 256,434 637,168
+ Inventories ( 7,961) ( 30,451)
Prepaid expenses and other assets 40,771 8,664
Due IrOtd Plant Renovation Fund - ( 24,3@4)
28~ 8j ~1 , 3120910
Increase (decrease) in currant
liabilitiest
Accounts payable 141,187 368,271
Accrued expensom ( 13,031) ( 27,815)
j i Current :Maturities of long-term
debt
,---1,320 S W)
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s4 C 26, j7f)
990 notes to financial statements,
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FLOW MEMORIAL HOSPITAL
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED SFPTEMSER 30, 1978 AND 1977
A. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIESt
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1. General
In 1971, the City of Denton, Texas and the County of Denton,
Texas by mutual resolut;;on reorganized Flow Memorial, Hospital to
c operate under the authority of Texas Civil Statute Article
No. 4499(i)-1 aq a joint city-oounty hospital board, without taxing
j powers, and to be designated as Denton County-City of Denton, Texas
( I Hospital Board. I
The Hoard is composed of seven memberst four appointed by
the Commissioner's Court of Denton County, and three appointed by
the City Council of the City of Denton.
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26 Inventories
Inventories, consisting primarily of pharmaceuticals and I
E eupplies, are stated at the lower of cost (first-in, first-out
method) or market.
3, Third-Pagty Rate Adjustments
I ' Revenuos which totaled $2,298,000 and $1,753,000 for the
years ended September 30, 1978 and 1977, respectively, wero
r received from federal and state governments under provisions of
public Law 89-97, Title XVIIT and Title XIX, known as Medicare and
Medicaid, The 1978 revenue is subject to audit and retroactive
adjustment by third-party payors, Inasmuch as these adjustments
' are subject to final settlement# any difference between the amounts
accrued and the amounts settled is recorded in operations in the E
year of settlement,
J 4, Land, Buildings, and Ecuigment
Land, buildings, and equipment are recorded at cost, or, in
the case of property donated to the Hospital, at the fair market
value at the date of the donation,
Depreciation is calculated using the straight-line method
over estimated useful lives as followei
Land improvements 3 - 15 years
"J Buildings 15 - 35 years
Furniture and equipment 3 - 27 years
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FLOW MEMORIAL HOSPITAL
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NOTES TO FINANCIAL, STATEMENTS (CONTINUED)
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i , YEARS ENDED SEPTEMBER 301 1978 AND 1977
A, SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)t
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k«, 5. Contributions
Contributions which have been restricted as to their use by
the donor are credited directly to the fund balance of the
Restricted Funds, At the time the funds are expended for the {
i purpose specified by the donor, the related fund balance is trans-
ferred to the Unrestricted Fund, Contributions which are not i
{ f j designated for a specific purpose by the donor are recorded as
nonoperating revenues in the Unrestricted Fund. The Hospital "does
1 + not record the fair value of contributed services received since no
objective basis is available to measure the value of such services,
6. Pension Plan
The Hospital sponsors a money purchase pension plan covering
all employees over twenty-five years of age with at least one !
year's continuous service, Plan participants are required to
contribute two percent of base salaries and the Hospital five j
rat'. ( percent. The hospital's policy is to fund the five percent oontri-
y ution currently► reduced by any nonvested participant forfeitures,
k )t.., There were no pension costs for 1978 as a result of nonvested
participant forfeitures, Pension costs for 1977 totaled $34,579
j and were included in operating expenses.
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7. Income Taxes
The Hospital is exempt from federal income taxes as a
political subdivision of the State of Texas under Section 115 of
the Internal Revenue Code of 1954.
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8, Trusteed Funds
d Special funds have been established by the Hospital pursuant
to certain requirements of the Denton County - City of Denton,
Texas Hospital Board Revenue Bond indenture (Note C), These
special funds, which are administered by a trustee, totaled $22,849
in 1978 and $10061 in 1977 and are included in other assets,
) 4, Recla~,sificationg
Certain reclassifications have been made in the
September 301 1977, financial statements to conform to
September 30, 19781 classificaticns,
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FLAW MEMORIAL HOSPITAL
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
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YEARS MDED SEPTEMBER 30 1978 AND 1977
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B. LAND, BUILDINGSr AND EQUIPMENT:
Land, buildings, and equipment consist c the followings
September $0
j Land and improvements $ 132,586 $ 132,586
Buildings 2,835,225 2,823,767
Furniture and equipment 2,.996,950 219766#667
51964,661 5,933,020 i
Less accumulated depreciation 2 8 7 ,74270 2#602j602,~496
3490091 3 330 524
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C. LONG-TERM DEBT:
Long-tern debt consists of:
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Bonds:
Series 1975, due July 1# 2000 $ 290,000 0 290,000
Series 1975-A, due July l# 1994 2@01000 2901000
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.a 970#000 570,000 ;
Equipment notesa 5-6$ 102 5 1 1441,„$2 3
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672,661 714,252
Less current maturities 41.1$20 4.0,500
630 4l 3 752
During 1975s t1%e Hospital began a project to expand and
iioprovq Its existing building and medical facilities. Finonaing of
1 hhe project was accomplished by a 9407#410 grant from the Texas
Board of Health Resources under the Federal Hill-Burton program
(Department of Health, Education and Welfare) and the issue of
r7; $5700000 in Denton County City of Denton, Texas Hospital Board
Revenue Bonds. The project was completed during 1977, and the
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FLOW MEMORIAL HOSPITAL
t NOTES TO FINANCIAL STATEMENTS (CONIPINUED
} YEARS ENDED SEPTEMBER 30, 1978 AND 1977
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C. LONG-TERM DEBT (CONTINUE01
assets and related liabilities of the fund were transferred to the
x~ Unrestricted Fund. At September 301 1977, all of the grant money
had been received, and all of the bonds were issued and
" outstanding,
Repayment provisions of the bonds are as follower
series 1975 - The bond agreement calls for scheduled
i rincipal payments aggregating $60,000 during the period
~7uly 1► 1979 through July 1, 1986, in amounts ranging from
` $5,000 to $'10,000 each year. The refrr,inder of the bonds
become callable for redemption beginning July 1, 1987, and
are subject to mandatory redemption each July l thereafter
in amounts ranging from $10,000 to $25,000. The bonds
E bear interest at 6,984 per annum,
Series 1975-A - The first $120400 is payable in equal
,.4 installments on July 1, 1981 and 19820 and bears interest
at 76 per annum. The balance is due at the rate of $20,000
per year, beginning in 1987, and bears interest at 7.756
per annum,
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The related bond agreements contain various restrictive
covenants including limitations on additional long-term debt6 in
addition, the bondholders have a lien on all revenues of the
Hospital.
E Subsequent to September 30, 1978, the Hospital signed a note
for $90,720 payable to a vendor in connection with the purchase of
new radi-caNera equipment, The note, which bears interest at 74
per annum and is collateralized by the new equipment, will be paid
over a period of five years beginning December 1978, E
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} j Included in land, buildings, and equipment is $56,998 in
the bonds Of thattamoue , d$21n681hwasecapiitalized renovation during
fiscal 1977,
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Equipment notes payable are collateralized by equipment with
i A depreciated cost of approximately $95,000 at September 30, 1978.
ucheduled payments on the notes, including interest, are as
follows$ $460682 - 19791 $37,566 - 19801 $23,231 - 1981) $3,789 - d
1982,
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I' FLOW MEMORIAL HOSPITAL
NOTES TO FINANCIAL STATEMENTS CONTINUED
YEARS ENDED SEP'1'EMDER 30 1978 AND 1977
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D. UNRESTRICTED FUND BALANCES
The sources of the unrestricted fund balance are detailed
as follows$
Se tember 30
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$(1,166,829) $(1,128,252)
I I Operations 11696,871 1,696,871 y
County of Denton 393,166 393,166
~..1 City of Denton 240,461 240,461
Flow Estate bequest 20125,281 2,125,281
Federal grants 307 540 40
1i Pledges and gifts - ---•-i""
~r 111 " 3 596 A 0 ~i6_„~__31 F
E. FLOW MEMORIAL HOSPITAL FOUNDATION, INC.$
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4. ~1 Flow Memorial Hospital Foundation, Inc., a tax-exempt no
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for-profit organization, contributed to the Hospital$32'4 12 tn
1978 and 835x323 in 1977Adi iionel aontribu ions of $28,3841in81977
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w7 nanoperating revenue.
)were restricted for the purchase of equipment and were added to the
I Equipment Fund balance.
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F. CONTRIBUTIONSS Texas
The Hospital receives funds from the city of Denton,
and the County of DentonP Texas to Eora1979 thcos of otHospiralrhad
hospital pare. As part o
requested $229,000 and eOi Yeepeatively, from the City and
appr v
County. The county ed onaahelft of athen amount srequestedv on the
~y City has only budget
grounds that support of one half. of the 1toapttalAndohCaun~Yoataxedyy
the citizens of Denton thThegtotal amo ntybudgeted Blythe C
re resents double taxation.
p for fiscal 1979 of $292,000 is app 'the
and County 000
{ i 1978.
j lines than amounts funded by the City and County during andCounty
{ ospital plans to compensate for the decrease in City
Funding through inoreased patient service rate charges during 1979s
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