harris county hospital district, dba harris health system ... · pdf fileharris county...

of 65 /65
HARRIS COUNTY HOSPITAL DISTRICT, dba HARRIS HEALTH SYSTEM, A COMPONENT UNIT OF HARRIS COUNTY, TEXAS Financial Statements February 28, 2017 and February 29, 2016 (With Independent AuditorsReport Thereon)

Author: phungnguyet

Post on 23-Mar-2018

220 views

Category:

Documents


5 download

Embed Size (px)

TRANSCRIPT

  • HARRIS COUNTY HOSPITAL DISTRICT, dba HARRIS HEALTH SYSTEM,

    A COMPONENT UNIT OF HARRIS COUNTY, TEXAS

    Financial Statements

    February 28, 2017 and February 29, 2016

    (With Independent Auditors Report Thereon)

  • HARRIS COUNTY HOSPITAL DISTRICT,

    dba HARRIS HEALTH SYSTEM,

    A COMPONENT UNIT OF HARRIS COUNTY, TEXAS

    Table of Contents

    Page(s)

    Independent Auditors Report 12

    Managements Discussion and Analysis (Unaudited) 314

    Financial Statements as of and for the years ended February 28, 2017 and February 29, 2016:

    Statements of Net Position 1516

    Statements of Revenues, Expenses, and Changes in Net Position 17

    Statements of Cash Flows 1819

    Notes to Financial Statements 2058

    Required Supplementary Information

    Schedule of Changes in the Systems Net Pension Liability and Related Ratios (Unaudited) 59

    Schedule of Employer Contributions (Unaudited) 60

    Schedule of Actuarial Data for Defined Benefit Pension Plan (Unaudited) 61

    Schedule of Funding Progress of Other Postemployment Benefit Plan (Unaudited) 62

  • KPMG LLP is a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (KPMG International), a Swiss entity.

    KPMG LLP811 Main StreetHouston, TX 77002

    Independent Auditors Report

    The Board of Trustees

    Harris County Hospital District, dba Harris Health System:

    We have audited the accompanying financial statements of the business-type activities and the aggregate

    discretely presented component units of Harris County Hospital District, dba Harris Health System

    (the System), a component unit of Harris County, Texas, as of and for the years ended February 28, 2017 and

    February 29, 2016, and the related notes to the financial statements, which collectively comprise the System s

    basic financial statements as listed in the table of contents. We did not audit the financial statements of the

    Harris County Hospital District Foundation, a discretely presented component unit, which represents 10.8%,

    30.5%, and 0.1% of the 2017 and 14.2%, 24.2%, and 0.3% of the 2016 assets, net position, and revenue of the

    aggregate discretely presented component units, respectively. Those financial statements were audited by

    other auditors whose report thereon has been furnished to us, and our opinion, insofar as it relates to the

    amounts included for the Harris County Hospital District Foundation, is based solely on the reports of the other

    auditor.

    Managements Responsibility for the Financial Statements

    Management is responsible for the preparation and fair presentation of these financial statements in

    accordance with U.S. generally accepted accounting principles; this includes the design, implementation, and

    maintenance of internal control relevant to the preparation and fair presentation of financial statements that are

    free from material misstatement, whether due to fraud or error.

    Auditors Responsibility

    Our responsibility is to express opinions on these financial statements based on our audits. We conducted our

    audits in accordance with auditing standards generally accepted in the United States of America and the

    standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller

    General of the United States. Those standards require that we plan and perform the audit to obtain reasonable

    assurance about whether the financial statements are free from material misstatement. The financial

    statements of the Harris County Hospital District Foundation and Community Health Choice, Inc. were not

    audited in accordance with Government Auditing Standards.

    An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the

    financial statements. The procedures selected depend on the auditors judgment, including the assessment of

    the risks of material misstatement of the financial statements, whether due to fraud or error. In making those

    risk assessments, the auditor considers internal control relevant to the entitys preparation and fair presentation

    of the financial statements in order to design audit procedures that are appropriate in the circumstances, but

    not for the purpose of expressing an opinion on the effectiveness of the entitys internal control. Accordingly, we

    express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and

    the reasonableness of significant accounting estimates made by management, as well as evaluating the overall

    presentation of the financial statements.

    We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our

    audit opinions.

  • 2

    Opinion

    In our opinion, the financial statements referred to above present fairly, in all material respects, the respective

    financial position of the business-type activities and the aggregate discretely presented component units of

    Harris Health System, as of February 28, 2017 and February 29, 2016, and the respective changes in financial

    position, and cash flows thereof for the years then ended, in accordance with U.S. generally accepted

    accounting principles.

    Emphasis of Matter

    As discussed in note 2(t) to the basic financial statements, effective March 1, 2016, the System adopted

    Governmental Accounting Standards Board Statement No. 72, Fair Value Measurement and Application. Our

    opinion is not modified with respect to this matter.

    Other Matters

    Required Supplementary Information

    U.S. generally accepted accounting principles require that the managements discussion and analysis and

    supplementary schedules on pages 314 and 5962, respectively, be presented to supplement the basic

    financial statements. Such information, although not a part of the basic financial statements, is required by the

    Government Accounting Standards Board, who considers it to be an essential part of financial reporting for

    placing the basic financial statements in an appropriate operational, economic, or historical context. We have

    applied certain limited procedures to the required supplementary information in accordance with auditing

    standards generally accepted in the United States of America, which consisted of inquiries of management

    about the methods of preparing the information and comparing the information for consistency with

    managements responses to our inquiries, the basic financial statements, and other knowledge we obtained

    during our audit of the basic financial statements. We do not express an opinion or provide any assurance on

    the information because the limited procedures do not provide us with sufficient evidence to express an opinion

    or provide any assurance.

    Other Reporting Required by Government Auditing Standards

    In accordance with Government Auditing Standards, we have also issued our report dated June 29, 2017 on

    our consideration of the Systems internal control over financial reporting and on our tests of its compliance with

    certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that

    report is to describe the scope of our testing of internal control over financial reporting and compliance and the

    results of that testing, and not to provide an opinion on internal control over financial reporting or on

    compliance. That report is an integral part of an audit performed in accordance with Government Auditing

    Standards in considering the Systems internal control over financial reporting and compliance.

    Houston, Texas

    June 29, 2017

  • HARRIS COUNTY HOSPITAL DISTRICT,

    dba HARRIS HEALTH SYSTEM,

    A COMPONENT UNIT OF HARRIS COUNTY, TEXAS

    Managements Discussion and Analysis

    February 28, 2017 and February 29, 2016

    3 (Continued)

    This section of the Harris Health Systems (the System) financial report presents background information and

    managements analysis of the Systems financial results for the fiscal years ended February 28, 2017 and

    February 29, 2016. This section should be read in conjunction with the Systems financial statements, which

    begin on page 15.

    Financial Highlights

    The Systems net position increased approximately $24 million (4.7%) in fiscal 2017. In fiscal 2016, net

    position decreased approximately $197 million (28.0%) due to the implementation of GASB Statement

    No. 68 and a corresponding reduction in beginning net position.

    In August 2016, the System issued $62.8 million Combination Tax and Revenue Certificates of Obligation

    to fund improvements at Ben Taub Hospital in order to maintain the hospitals Level 1 trauma status.

    The Systems tax rate was increased to fund debt service requirements for the Series 2016 Certificates of

    Obligation. In addition, the tax base increased approximately 8.5%.

    Total assets and deferred outflows increased approximately $107 million (7.5%) between fiscal 2016 and

    fiscal 2017 and approximately $6 million (0.4%) between fiscal 2015 and fiscal 2016. The fiscal 2017

    increase is due to increased investments as a result of the funds available from the debt issuance and

    increased ad valorem taxes.

    Long-term debt, including current portion, increased approximately $60 million (21.8%) in fiscal 20