Laguna Honda audit reveals $24,000 in accounting errors and missing documentation

During a recent government meeting, San Francisco County officials discussed significant findings from an audit of Laguna Honda Hospital, revealing critical issues in financial record-keeping and compliance. The audit, conducted by the Controller's Office, identified approximately $24,000 in revenue that had been incorrectly recorded due to simple accounting errors. These errors stemmed from miscoding on receipt tags used to deposit funds into the city's financial system.

Nicholas Delgado from the Controller's Office explained that the discrepancies included funds from various sources, such as checks intended for patient-related activities and income from filming and production companies. Notably, $90,257 in accumulated interest was also misallocated to staff sub-accounts. The audit highlighted that Laguna Honda had already conducted its own internal audit, which addressed some of these issues, but further corrections were still necessary.

In addition to revenue misreporting, the audit uncovered a lack of supporting documentation for 35% of the sampled expenditure transactions. While Laguna Honda provided documentation for 212 out of 324 transactions, the remaining records were unaccounted for, attributed to staff turnover and misplaced documents over the past six years. The audit emphasized the importance of maintaining financial records in compliance with the San Francisco administrative code, which mandates retention for five years.

The findings raised concerns about the hospital's record-keeping practices, which primarily relied on paper documents stored in boxes. Although Laguna Honda has a record retention policy, the inability to locate necessary documents has led to compliance issues. The meeting underscored the need for improved financial management and adherence to regulatory requirements to ensure accountability and transparency in public health funding.

As the county moves forward, officials will need to address these audit findings and implement stronger record-keeping practices to prevent future discrepancies and enhance the integrity of financial operations at Laguna Honda Hospital.