The Bermuda Hospitals Board had to write off more than $1 million in unpaid bills in 2002 due to “serious and pervasive accounting and financial management problems”.

In Auditor General Larry Dennis' annual report, published yesterday, he again criticised the BHB's financial control structures.

As well as the writing off of unpaid bills, due to poor admissions procedure, billing and pursuit of non-payment, he identified problems with cash-flow, billing and asset control.

“For many years, I have commented on serious and pervasive accounting, financial control and financial management problems,” said Mr. Dennis in his report covering the financial year up until the end of March 2002.

“Many of these problems have remained unresolved year-after-year despite promises to address them.

“The 2002 audit, however, detected the beginnings of improvements in this regard.

“Addressing fully the cumulative effect of so many years of neglect, however, will take time and sustained effort.”

Mr. Dennis was critical of BHB's cash-flow strategy, where it delayed payments to suppliers and deferred capital payments to make up for “systematic problems in the control and collection of patient billings”.

He also revealed that there had been a 20-page report detailing errors in billing or even treatments that had not been charged for.

“The longer that billings remain inaccurate or treatments remain unbilled, the more difficult billing becomes,” his report continued.

As well as writing off $1,140,000 of patient bills, collection agents recovered only 17 per cent of bills sent to them for collection and, worryingly, the BHB had received $102,000 in payments that could not be matched to specific invoices.

The Board response was: “These figures illustrate the effect of staff problems experienced and the difficulties inherent in collecting patient billings. Weekly meetings of collection staff are now being held and efforts are being intensified to ensure that indigent patients are identified and loopholes are being reviewed.”

Mr. Dennis also expressed concern over the issue of credit cards to staff, with some approving their own monthly statements and others charging personal expenses on their cards - an illegal practice.

One employee was even issued a credit card without first being asked to sign a credit card agreement, the report revealed. “While improvements were noted, the 2002 audit revealed continued recording and control problems relating to inventories of supplies, eligible employees not being enrolled in the pension plan, cash and back accounts, accounts payable, computer systems documentation, disaster recovery and business resumption planning, and patient comfort funds,” the report concluded.