West Penn Allegheny Health System said that it would adjust its fiscal 2008 balance sheet after overstating its accounts receivable by an estimated $67 million. The Pittsburgh-based system said in March that it would review accounting methods to verify that the growth in accounts receivable that has occurred over the past nine months is accurate, as well as to verify that the implementation of new technology that impacts how charges are captured has not caused inaccuracies in the revenue-recognition process, according to financial records.
In a news release announcing the $67 million adjustment, West Penn officials called the figures preliminary and said that its not yet known whether the system will adjust prior years financial statements. The systems balance sheet, as of June 30, will also include another $6 million adjustment related to goodwill and noncompetition agreements, according to the news release.
The struggling system, which reported an operating loss of $15.6 million on revenue of $1.1 billion for the nine months that ended in March, reorganized its top leaders in May after hiring Christopher Olivia to succeed Jerry Fedele as president and chief executive officer in March. Fedele resigned in 2007 over unresolved differences with West Penns governing board. -- by Melanie Evans