FLORIDA HEALTH SCIENCES CENTER, INC. - Florida Auditor General

FLORIDA HEALTH SCIENCES CENTER, INC.

Consolidated Financial Statements and Reports as Required by

the Uniform Guidance and Chapter 10.650, Rules of the Auditor General

September 30, 2016

(With Independent Auditors¡¯ Report Thereon)

FLORIDA HEALTH SCIENCES CENTER, INC.

Table of Contents

Page

Independent Auditors¡¯ Report

1

Consolidated Financial Statements:

Consolidated Balance Sheets

3

Consolidated Statements of Operations and Changes in Unrestricted Net Assets

4

Consolidated Statements of Changes in Net Assets

5

Consolidated Statements of Cash Flows

6

Notes to Consolidated Financial Statements

7

Supplementary Information

Independent Auditors¡¯ Report on Internal Control over Financial Reporting and on Compliance

and Other Matters Based on an Audit of Financial Statements Performed in Accordance

with Government Auditing Standards

36

Independent Auditors¡¯ Report on Compliance for Each Major Federal Program; Report on

Internal Control over Compliance; and Report on Schedule of Expenditures of Federal

Awards Required by the Uniform Guidance

38

Independent Auditors¡¯ Report on Compliance for Each Major State Project; Report on Internal

Control over Compliance; and Report on Schedule of Expenditures of State Financial

Assistance Required by Chapter 10.650, Rules of Auditor General

40

Schedule of Expenditures of Federal Awards

42

Schedule of Expenditure of State Financial Assistance

43

Notes to Schedules of Expenditures of Federal Awards and State Financial Assistance

44

Schedule of Findings and Questioned Costs

45

KPMG LLP

Suite 1700

100 North Tampa Street

Tampa, FL 33602-5145

Independent Auditors¡¯ Report

The Board of Directors

Florida Health Sciences Center, Inc.:

Report on the Financial Statements

We have audited the accompanying consolidated financial statements of Florida Health Sciences Center, Inc.

(the Center), which comprise the consolidated balance sheets as of September 30, 2016 and 2015, and the

related consolidated statements of operations and changes in unrestricted net assets, changes in net assets

and cash flows for the years then ended, and the related notes to the consolidated financial statements.

Management¡¯s Responsibility for the Financial Statements

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

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

Auditors¡¯ Responsibility

Our responsibility is to express an opinion on these consolidated 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 consolidated financial statements are free from material

misstatement.

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

consolidated financial statements. The procedures selected depend on the auditors¡¯ judgment, including the

assessment of the risks of material misstatement of the consolidated financial statements, whether due to fraud

or error. In making those risk assessments, the auditor considers internal control relevant to the entity¡¯s

preparation and fair presentation of the consolidated 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 entity¡¯s 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 consolidated financial statements.

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

audit opinion.

Opinion

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

the consolidated financial position of Florida Health Sciences Center, Inc. as of September 30, 2016 and 2015,

and the changes in its net assets and its cash flows for the years then ended in accordance with U.S. generally

accepted accounting principles.

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.

Other Reporting Required by Government Auditing Standards

In accordance with Government Auditing Standards, we have also issued our report dated December 20, 2016

on our consideration of the Center¡¯s 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 Center¡¯s internal control over financial reporting and compliance.

December 20, 2016

Certified Public Accountants

2

FLORIDA HEALTH SCIENCES CENTER, INC.

Consolidated Balance Sheets

September 30, 2016 and 2015

Assets

2016

Current assets:

Cash and cash equivalents

Short-term investments

Current portion of assets limited as to use

Patient accounts receivable, net of allowance for uncollectible

accounts of approximately $146,055,000 in 2016 and

$151,072,000 in 2015

Inventories

Prepaid expenses and other current assets

$

2015

51,278,736

30,072,781

5,841,688

139,672,990

30,074,677

14,268,961

124,053,051

24,883,012

54,648,271

117,060,965

22,957,391

28,215,272

290,777,539

352,250,256

755,260,855

516,807,744

2,522,199

8,658,406

702,214,691

484,203,366

3,482,843

7,783,915

$ 1,574,026,743

1,549,935,071

Total current assets

Assets limited as to use, less current portion

Property and equipment, net

Investments in joint ventures

Other assets

Liabilities and Net Assets

Current liabilities:

Accounts payable

Accrued expenses

Current installments of long-term debt

Estimated third-party payor settlements

$

Total current liabilities

Long-term debt, excluding current installments

Other liabilities

Total liabilities

Net assets:

Unrestricted

Temporarily restricted

Permanently restricted

Total net assets

See accompanying notes to consolidated financial statements.

3

94,555,267

114,382,047

9,207,721

72,223,273

112,429,933

108,273,503

8,309,721

84,613,236

290,368,308

313,626,393

375,820,040

98,527,250

381,246,302

115,456,316

764,715,598

810,329,011

792,802,912

15,592,702

915,531

723,492,696

15,200,543

912,821

809,311,145

739,606,060

$ 1,574,026,743

1,549,935,071

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