OFFICE OF THE INSPECTOR GENERAL

BUREAU OF INTERNAL AUDIT

FLORIDA DEPARTMENT OF CORRECTIONS

Memorial Hospital Jacksonville Contract Audit
Paul C. Decker, Inspector General
Report #A07009

Donald L. Miller, Chief Internal Auditor

May 7, 2007

BACKGROUND
The Department of Corrections’ (DC) health care delivery system is managed by the
Office of Health Services (OHS) and provides comprehensive medical, dental, mental
health, and pharmaceutical services, including: health education, preventative care, and
chronic illness clinics. The scope of these services range from emergency care, to
inpatient hospitalization, to specialty care, as required. To provide emergency, inpatient
and outpatient services for inmates referred by the Utilization Management Department
located at the Reception and Medical Center (RMC), for Fiscal Year 2006-2007, DC
executed contract #S6194 with Memorial Healthcare Group, Inc. d/b/a Memorial
Hospital Jacksonville. Each year DC enters into a new contract with Memorial Hospital
Jacksonville.
Inpatient services are charged at the rate of twenty-nine point three percent (29.3%)
and outpatient and emergency services are charged at the rate of forty-seven point four
percent (47.4%) of the billed charges per Memorial Hospital Jacksonville’s charge
master. During FY 2006-07, DC paid approximately 23 million dollars for health care
services to Memorial Hospital Jacksonville.
OBJECTIVES
The objectives of our audit were to determine whether:
ƒ the procurement of services and execution of the contract is consistent with
applicable laws, rules, and procedures;
ƒ contract payments are in accordance with the terms of the contract and properly
documented;
ƒ the delivery of services is effectively verified and properly monitored by the OHS;
ƒ and internal controls exist to adequately prevent, deter, and detect fraud.

SCOPE AND METHODOLOGY
The scope of this audit included an evaluation of the transactions and business
processes for the current contract in place. We began our assessment of service
delivery, contractor performance, and DC monitoring by touring the secured wing at
Memorial Hospital in Jacksonville and observing the health care services that are being
provided to DC inmates. To facilitate our evaluation of the effectiveness and efficiency
of the internal control structure, we prepared an internal control questionnaire that was
used to interview OHS staff. To ensure compliance with contractual requirements, we
interviewed DC staff, reviewed contractor invoices, and obtained and reviewed
monitoring reports that are used by the department to evaluate contractor performance.
RESULTS OF AUDIT
Our audit revealed that, overall, Memorial Hospital Jacksonville is in compliance with
the terms and conditions of the contract. The procurement of services and execution of
the contract is consistent with applicable laws, rules, and procedures; the internal
control structure that exists is adequate; contract payments are in accordance with the
terms of the contract and properly documented; and the services are verified and
properly monitored by OHS. There are no findings and recommendations for this audit.

This audit was conducted in accordance with the International Standards for Professional Practice of
Internal Auditing as published by the Institute of Internal Auditors. This audit was conducted by
Kimberly Jones and supervised by Paul Strickland. Please address inquiries regarding this report to
Donald Miller, Chief Internal Auditor, at (850) 410-4166.

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