Berger Health System - Ohio Auditor of State

1 Berger Health SystemFinancial ReportDecember 31, 2013 88 East Broad Street, Fifth Floor, Columbus, Ohio 43215 3506 Phone: 614 466 4514 or 800 282 0370 Fax: 614 466 4490 Board of Governors Berger Health System 600 North Pickaway Street Circleville, Ohio 43113 We have reviewed the Independent Auditor s Report of the Berger Health System , Pickaway County, prepared by Plante & Moran, PLLC, for the audit period January 1, 2013 through December 31, 2013. Based upon this review, we have accepted these reports in lieu of the audit required by Section , Revised Code. The Auditor of State did not audit the accompanying financial statements and, accordingly, we are unable to express, and do not express an opinion on them.

2 Our review was made in reference to the applicable sections of legislative criteria, as reflected by the Ohio Constitution, and the Revised Code, policies, procedures and guidelines of the Auditor of State , regulations and grant requirements. The Berger Health System is responsible for compliance with these laws and regulations. Dave Yost Auditor of State May 30, 2014 This page intentionally left blank. Berger Health SystemContentsReport Letter1-2 Management's Discussion and Analysis3-12 Financial StatementsStatement of Net Position13 Statement of Revenues, Expenses, and Changes in Net Position14 Statement of Cash Flows15-16 Component Units - Combining Statement of Net Position17-18 Component Units - Combining Statement of Revenue, Expenses.

3 AndChanges in Net Position19-20 Notes to Financial Statements21-40 Report on Internal Control Over Financial Reporting and on Complianceand Other Matters Based on an Audit of Financial StatementsPerformed in Accordance with Government Auditing Standards41-42 Schedule of Findings and Questioned Costs43-45 Independent Auditor 's ReportTo the Board of GovernorsBerger Health SystemReport on the Financial StatementsWe have audited the accompanying financial statements of the business-type activities and the aggregatediscretely presented component units of Berger Health System (the " System "), a component unit of theCity of Circleville, Ohio, as of and for the years ended December 31, 2013 and 2012 and the relatednotes to the financial s Responsibility for the Financial StatementsManagement is responsible for the preparation and fair presentation of these financial statements inaccordance with accounting principles generally accepted in the United States of America.

4 This includesthe design, implementation, and maintenance of internal control relevant to the preparation and fairpresentation of financial statements that are free from material misstatement, whether due to fraud s ResponsibilityOur responsibility is to express an opinion on these financial statements based on our audits. Weconducted our audits in accordance with auditing standards generally accepted in the United States ofAmerica 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 andperform the audits to obtain reasonable assurance about whether the financial statements are free frommaterial misstatement.

5 An audit involves performing procedures to obtain audit evidence about the amounts and disclosures inthe financial statements. The procedures selected depend on the Auditor s judgment, including theassessment of the risks of material misstatement of the financial statements, whether due to fraud orerror. In making those risk assessments, the Auditor considers internal control relevant to the entity spreparation and fair presentation of the financial statements in order to design audit procedures that areappropriate in the circumstances, but not for the purpose of expressing an opinion on the effectivenessof the entity s internal control. Accordingly, we express no such opinion.

6 An audit also includes evaluatingthe appropriateness of accounting policies used and the reasonableness of significant accountingestimates made by management, as well as evaluating the overall presentation of the financial believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis forour audit our opinion, the financial statements referred to above present fairly, in all material respects, therespective financial position of the business-type activities and the aggregate discretely presentedcomponent units of Berger Health System as of December 31, 2013 and 2012 and the changes in netposition and its cash flows for the years then ended, in accordance with accounting principles generallyaccepted in the United States of the Board of GovernorsBerger Health SystemOther MattersAccounting principles generally accepted in the United States of America require that the management'sdiscussion and analysis, as identified in the table of contents, be presented to supplement the basicfinancial statements.

7 Such information, although not a part of the basic financial statements, is requiredby the Governmental Accounting Standards Board, which considers it to be an essential part of financialreporting for placing the financial statements in an appropriate operational, economic, or historicalcontext. We have applied certain limited procedures to the required supplemental information inaccordance with auditing standards generally accepted in the United States of America, which consistedof inquiries of management about the methods of preparing the information and comparing theinformation for consistency with management's responses to our inquiries, the basic financial statements,and other knowledge we obtained during our audit of the basic financial statements.

8 We do not expressan opinion or provide any assurance on the information because the limited procedures do not provideus with sufficient evidence to express an opinion or provide any Reporting Required by Government Auditing StandardsIn accordance with Government Auditing Standards, we have also issued our report dated May 9, 2014 onour consideration of the System 's internal control over financial reporting and on our tests of itscompliance with certain provisions of laws, regulations, contracts, grant agreements, and other purpose of that report is to describe the scope of our testing of internal control over financialreporting and compliance and the results of that testing, and not to provide an opinion on the internalcontrol over financial reporting or on compliance.

9 That report is an integral part of an audit performedin accordance with Government Auditing Standards and should be considered in assessing the results ofour 9, 2014 2 Berger Health System A Component Unit of Circleville, Ohio Management s Discussion and Analysis Berger Health System Management s Discussion and Analysis 3 This section of Berger Health System s (the System ) annual financial statements presents background information and management s discussion and analysis (MD&A) of the System s financial performance during the year ended December 31, 2013. This MD&A includes a discussion and analysis of the activities and results of the primary government entity, Berger Hospital, and its component units of Pickaway Health Services (PHS), Pickaway Professional Services (PPS), and Berger Health Foundation (BHF).

10 This MD&A should be read together with the financial statements included in this report as the financial statements present the primary government entity and component units using the methods described in Statements No. 14, The Financial Reporting Entity, and No. 39, Determining Whether Certain Organizations Are Component Units, issued by the Governmental Accounting Standards Board. System Highlights Initiated the Building On Tradition capital campaign to fund single patient rooms, raising $ million in the first five months. Awarded Top Performer on Key Quality Measures from the Joint Commission for the second year in a row. Continued successful implementation of electronic medical records receiving full eligible Meaningful Use incentive dollars for our use of the technology.