‘Auditing Not-for Profit Entities and Hospitals Overview: Not-for-profit organizations are types of entities that do not eam profs fr is owners. All of the money eamed by of donated to 2 not-for-profit organization is used in pursuing the organization's objectives and keeping it running. These organizations play @ vital role in building healthy ‘communities by providing critical services that contbute to economic stabilty and mobilty. They alco strongthon communities in a varity of important ways. ‘On the othar hand, according tothe World Health Organization (‘WHO’), a healthcare systom consists ofall organizations, people and actions whose primary interest 1s to promote, restore, oF matin health, ILincludes eforts to mstuance determinants of heath as wel as more direct haath Improving activities which encompasses the pyramid of publicly owned facities that dever persons services. The goal ofa healthcare systom, such as 2 hospital, isto improve heath and heath equity through ways that are responsive, financially fair, and best or most efficient use of avaitablo resources, while achieving inlommediate goals such as greater access to and coverage for effctive hhealin interventions and making sure that provider quality and safety are not compromised, 'As many countsios exporionced economic downtums and threats to public safety duo to pandemic outbreaks and emerging infection diseases, many realized the growing importance of 'NPOs and healtheare — now more than ever, improving the heatth of a nation’s citizens can directy result in economic growth, as there will be more people able to conduct effective activism the worktores, Module Objectives: ‘Know the nature and backaround of the particular specialized industry, + Loam the overviw, statistic, and updates ofthe specialized industry in the Philippine sting; ‘+ dont the diferent audit considerations and trands forthe ncstyNae, Background, and Overview of Specialized Industry “he Philippine eatcar every sytem a cnpes set onions erage provi an ray ofheah sree Its conposod of ho bling tances 1+ Pie gay Sneed though ox band ate wh a ecenbaized management aya ‘rato! ante! ive pong br socal hea iarancr lth gener pe 2. Natina: Daparmort of Hath (DOF) - Speci, retained and ronal hoxptl. ‘modal ee, DOM representa. Lact Lea Goverment Unis [LGUS" -Provnial and date hosp regral heath ‘ts, barangay neath stators. 1+ Prats largsy martt-oanted fogmentd sytem of prot and nn petproviers whee feos ae pos ate pore sees 4. Profit Cones, matketoeted, and nudes vate pacttone, pate dice an aborts 1b. Nepal Nenarmetcal, senceanined, and composed of socmeic gps, ‘ipo opr or endo ‘The VO heath systems tamewak proposes Sk baking locks that. whan ken tgee (2) ges apres heal care oy i a cut, and) pace te tended (ral and outcomes The decuescn wile ts tae wake re cies te Out = Feather jtom overiow on epochs | Pcs ee ee Thott seems Th kOFnANens ano oes shiners roe ann nies arr mesa entDOH serves as the representation of leadership & governance inthis industry. Itis mandatod by the law to provide national policy deetion and develop national plans, technical standards and guidelines of heath. I also provides technical assistance, capacity bulking, and advisory services for disease prevention and contro, as well as supplies medicines and vaccines to its scope. As the lead agency forthe Philippine health caro (EO 119), ts mission is to ensure accessibility and quality fof health care to improve quality of ife ofall Flipines, especialy the poor, aiming to produce bettor hhealin outcomes, more responsive health systems, and more equilable healineare financing. The ‘below diagram shows the branches end scope of DOH. =~, fo In the Philippines, LGUs are responsible for providing basic services (Including heslth ‘orviees) to its subjects as por Republic Act 7160 (Local Government Code of 1991). The delwory land management of heath services will oma trom DOH to locally elected provincial, city, and ‘municspai govemments, This includes four essential health system functions 4. Sonvce provision; 2. Resource generation; 3. Financing; and 4. Stowardship. “These services are classified int (1) linial services for in-patients and (2) ancillary services, which are furthered classified into tee levels, as shown on the next pagefess —feeeercmes [Rae ee — pe — ar = a sam Basinger maser nd governess fan to pa a ‘Serco ilo pen lpi Sel pose heh savon nd ping anal sarees |Soos: peptone ad atrg Wane te The gol lhe mest |. Rase adequate nds rhea ensie at peopl et use need seros: and 2. Make ppl wo ue ath saree ae bie om fancileataophe orinpverhnent ‘ised wih hang pay tte ‘eed on 2012 sakes, the mind sures hin ihy athe goverment oc heath rsraten, pat sees (00, HMOr, eran ole) andra Naty, hers = ‘Dery hgh popaten of at pct (OOP) spending {ad Fipno basco conte to bea be heavert, Sutden at 578% 000. Upon poviaor fading, Be heathcare aarorce sol be auiceny exabhed th the tt mn of aa system-wide deployment and ‘viboion(equtabe), colblsned paced nares, rand lon anwrerments and pet ‘conpensabonayment “systems. There ae non (eogephe dapany the satbity of puke fat Eiko () Doce: te Baroe (OFTON,B) Nore Deplent Progen (NDP) nd (ral Heh Mee accent Progen S0MEP) arenty, the woes 1 hosptaerti. Mites abla ‘compos the maj ef enployes at 1 (publ), en Seishin fares (1 on pate sc), modal echt (50% mpube sck), and doctors (0% in ‘Sth cces} Oly 20% he ae Relea worse ve be ue seco excan2araverted tan dain phenomencn, whe ney eansed muses ar nae fe employment and {hove oundepieducin ober medel please, dock, detat, med ecole Meare on he acnas lo mediene and ecology, fe county has 3s even dtbton heme ugh ruses 601% sappy) hsp (2.7%) and ce dibs (10.2%) uch { goremenetapansos (08). Tete lx regain on aon plarracessainueaceatea, Tobyigtasnce and mart entabn song. Caner Act 188 afr ‘irplance al neds opus ube Heal oman apd eosurch bo excep oe ‘taster devlopmanin he Neateate ust ‘Sense dev isthe ost vile nto fay hel ster of wich te ate an st ‘mantan eqatyin eat etcmes ne ub seco a hss anced tough tases, been ' pea at ocala haba love a al case eric Shou be ee lr Be clzes at ‘hapunt cl ewe Near. the pias sar, oe athe pelt and on lt prondre. His ‘raat en anther re OOP schemes, sutanecHMO semen andy be lnged etal {or froigh grants. The Goyam fe leh shows ho standard hesptal pocosies and sovicn ‘bain tate bin he patenpbie| Lo > Fue :Soucuring pil process, Bed on Hes (2009,pecatsts Delay ot Dayna For atectleicaly-ehancedhealbae stem. EM roves the above operatons map foc aate nations 0 apple, Update & Sainte ofthe Specazed dustry in the Philippine ‘As of Decebet 2019, re are aroun 3 pvt hsp in he Pipes and 29 pubic hospi clg to L272 bespae nan. Shown below ae Uwe Gatbuion of serve ponders prep =» li joe‘mong tess, thr 13 new spel hospi n NOR: ed blow 1. Govern soca hoes Or Jose Fabete Memaral Hospita ang Center of he Papin Nona Cantar Mart Het atonal Chee Hoop! Nona Kney and Transp ae Phippin Cir’ Medial Contr Pipi Hear Caner esearch nit for Topical Mens 1 SanLazae Hepat 2. Prva pei ssa 2 Quezon tte St Chistian Hoel Urlgy Canter fe Pipes 4. VT Mast Hosp slesAs of 2012, these institutions are dominantly funded through private sources at P325.5 billion, ~ see table below. According to Worid Bank, 4.6% of the Philippine GDP is attributable to healthcare industry, but global average is at 10.2%. In. 2020, the household final consumption expenditure for health in the Philippines was valued ‘at approximately §48 billion Philippine pesos. The household spending on health has increased overall and was highest in 2020. ‘The majority of funding for universal healtheare comes from the DOH and PhilHieatth budgets, the former of which has fluctuated in the last half decade. The department's total budget jumped from P87bn ($1.73bn) in 2015 to P112.3bn ($2.23bn) in 2016, but then fell to P85.3bn ($1.900n) in 2017. Funding recovered to P108.1bn ($2.11bn) in 2018, before dipping once again to P97.Tbn ($1.94bn) in 2018 and recovering slightly to reach P100.6bn ($2.00bn) in 2020. The 2020 ‘igure accounted for 2.5% of the enfie federal budget and some 0.5% of GDP. Philealth, for its part, saw a budget of P71.4bn ($1.4bn) for the year, on par with 2018. In light of the Covid-19 pandemic, the federal budget for 2021 ~ approved in December 2020 = raised the DOH's allocation t0.a record F203. bn (S4bn), vile the budget for PhilHealth remained at P7 1.4bn ($1.4bn). Key Market Trends ‘+ The impact of COVID-19 on demand and information dissemination ‘An important part of the pandemic response was the adoption of technology solutions, facilitating access to care and knowledge sharing. Towards that end, the use of smartphone apps to monitor and contain the virus increased during the crisis. In April 2020 the Department of Science and Technology (DOST) developed an app that provides information on Covid-19-related research and services, including efforts to secure and distribute test kits, personal protective equipment and disinfectants. The private sector and universities also deployed apps for contact tracing, voluntary symptom logging and community monitoring. For example, WeTrace was created by a DOST- funded start-up and is used for patient mapping, case reporting and location tracking. The government of Cebu has made it mandatory in the province.+ Telemedicine/Remote consultations ‘With many Flipinos now coneemed about their health but unable to go to hospitals because of the lockdawn or fears exposure tothe coronavirus disease there, a number of medical companios and indiwdual doctors have offrad their services online or through phone calls. (ABSCBN Nows, 2020) + Health Insurances and Government Subsidies ‘8. The Bayanihan fo Heal as One Act, also known as Republic Act No. 11469, has provided cftcal support to healthcare workers (HCWS) valianty containing the spread of tho coronavirus pandomic, nthe forms of urgently needed equipment and hazard pay, as well as additonal colleagues to bolster thor ranks. Officially {enacted from March to June 2020, the Bayenihan to Heal as One Acts @ crucial ore inative ofthe Department of Health (DOH) o respond o the needs of HCW. . Tho Dopartment of Health (DOH) roported that it has dolivred checks to the families of healthcare workers who perished due to COVID-19, oF those who Contracted a severe form ofthe disease, pursuant to the Bayanihan to Heal As One ‘Act. Seid law orants public and private healtheare workers who contract severe ‘COVID-19 infection whilo in the ine of duty to 2 P 100,000 compensation, and one mnilion pesos (P1,000,000) to the family of any health worker who may die while fighting he COVID-19 pandemic. + Internet of Things (loT) and Blockchain on Healthcare Information Management ‘Systems, ‘One of the major probioms that a national health system face isthe lack ofa unifod cnical data ‘management There is not the appropfiale tachnological and administrative inftastucture for a ‘nid patent medical history, presonptons, laboratory tests oF therapeutic plan. The integration ‘and impiementaton of a blockchain network as a complementary technology to the existing information systems is proposed by several studies, so reliable and effective information ‘management could bo provided by a hoalthcaro organization or the national heaitncaro system. ‘Audit Considerations Industry Challenges: ‘= Impact of COVID 19 pandemic on healtheare workforce © High tumover heatneara workforce can have an adverse effet in the delivery of ‘services, were the rao of nurses to patients ere low such that nurses experience “bumed- ou© High oast of training, mentoring and coaching now and experienced personnel in tems of monetary and ime spent; © Creating work environment where employees are encouraged to pursue goals Is ‘mote important then providing competiive pay is challenge. Leadership and govemance - Prevalent inherent risks that we inelude in our objectives (or assertions) are: © prevention of ost revenues, © to protect against fraudulent claims inthe biling activites, © to guard against reimbursements deficiencies on documentations and, © to check requencies or opportunites for reembursabies. ‘On heath insurances: Comtuption allegations on the Philippine Health Insurance Corporation, which has been helping finance COVID-19 testing and treatment inthe country, has been ‘ockod with allogations of fund mismanagomont and overpncing ‘Accounting for donations, grands, and subsidios © On May 22, the Phiippines Charity Sweepstakes Office (PCSO) announced [WS$0,000,000 in funding to 87 govormment hospitals to support procuroment of ‘medical doviees, equipment and supplies to combat COVID-19. These funds are part ‘0 a larger USS60 milion package, the bulk of which goes to PhiHoalth (the national healthcare system) and to cover hospital costs for COVID-19 patients. Both a challenge and an opportunity, risk on disruption of blookchain technology can be ‘counted 5 one of the industry challenges as well, Existing DOH Information Gathering ‘Systems are allegedly computerized but are stil highly reliant on outdated paper and pen -systoms in the frontines. Blockchamn technology's applications on healthcare systems has a ‘eet potential in distupting eFHSIS, PIDSR, SPEED, CimicSys, and PhilHealth dashboard,Key Audit Procedures: 1. Healthcare Financing 4 Secureldetermineinquire about the “Yate structure of fees" and expenses, plus is sharing scheme with Medical Professionals, resident or constant (non-esident), Including specialist. >. Ascertaininguire about the “discount policy” for n-house/out-patients and how It affects the biling and settlement ‘¢. Review concessionaire agreements and sharing schemes. 4. Procedures for SSSIPhil health chimsideductions, application of rect card payments and utiizaton of medial insurances4MOs. 2. Mecical PPE, Products, and Technologies PR Establish oF check intemal controls on procurement / purchasing of assets, ‘medicines, importation of sophisticated (state-of the-art) medical equipment, storage Cf “inventory items and its issuances, policy on clothing & provisions and ‘consumables. 1b. Procedures on the [year-end] observance of inventory countInformation and Research - Determine sources of funds for the purpose assessing the ‘officacy of paricutar modication Leadership and Governance ~ secure Minutes or excespis on financial transactions relating to PPE, Investments, and fnancial powers (sianing authority and limits). ‘Service Delivery a. VAT & EWT impact on medical professionals concoming professional fe2s, room rentals (for clini) and segregation / set-up entries in bilings and settlements, sale ‘of medicines both to in-patenis administration and out-patient purchases. . For propor orientation, visit tho hospital clint and obsorve how each section ‘operatos. Observe procodures. © There is aivays a document tigger point before the procedure i performed ‘Operational audits, safety & complance audits, and other considerations. 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Dimaculangan, Specialized Industry Summit 2021