Audit finds coding and record‑keeping failures at Laguna Honda gift fund; health department and commission promise policy changes and refunds

The Board of Supervisors Government Audit and Oversight Committee heard a detailed compliance audit of the Laguna Honda Hospital patient gift fund on March 24, 2011. The audit, conducted by the City Services Auditor (CSA) in the Controller’s Office, covered donations and expenditures from November 1, 2004, through June 30, 2010, and used a statistical sample (95% confidence level) that yielded 324 tested transactions.

Tanya Lettichu of the Controller’s Office said the audit examined 22 subaccounts (17 patient‑related, 4 staff‑related and one earned interest holding account) and found that the overall fund balance declined from about $2,150,000 to $1,720,000 over the audit period (a decline of approximately $430,000, or about $72,000 per year). Annual donations averaged about $115,000 during the period, with a notable drop of roughly $75,000 in fiscal years 2008–09 attributed to the economic climate.

The audit identified two broad problem areas: donation/expenditure coding errors and record‑keeping gaps. Auditors reported that donations intended for patients were sometimes recorded to staff‑development subaccounts because receipt tags were coded incorrectly; the audit team tested all 50 recorded transactions into staff accounts totaling $192,483 and found $37,319 (19%) were…