Running head: TITULO

Accountability Practices in College, University, and Healthcare Lisbeth Cruz FIN/385 May 28, 2012 Instructor:

Accountability Practices in College, University and Healthcare

Accountability Practices in College, University, and Healthcare According to University of Phoenix this assignment will address the accountability issues in colleges, universities, and health care providers. Also it will explain how accountability practices in government colleges and university differ from reporting practices in private universities. Finally, it will predict how healths care and education may be delivered if government assumed a larger role. Government Health Care Organizations Government health care organizations are accounted for as enterprises. Hence, the accounting treatment is similar to private businesses (Granoff, 2007). As a nonprofit, there are several accountability limitations on government health care institutions. For example, there should be considerable allowance for terrible debts and third party discounts to fees for patient care. Capitation fee revenues are recognized over the period covered instead of the normal accrual system process which it is recognized when the service is provided. Charitable care is not considered revenue. According to FASB, malpractice claims, and other contingencies must be accounted for. Finally, retrospective insurance premiums are recognized as expenses in the period in which they are applicable. Private health care institutions are not subjected to these severe requirements. Health care organizations can present particular difficulties when rated using financial rating tools because their future is so dependent on technological advances and changes in government policy. Colleges and Universities Government colleges and universities are created Not-for-profit report similarly to other Not-for-profit organizations (Granoff, 2007). Government colleges and universities are required to distinguish between operating and no operating revenues and expenses. State appropriations

Accountability Practices in College, University and Healthcare

are counted as no operating revenues. On the other hand a not-for-profit college or university is not required to make such distinctions. Another area of divergence is how tuition and fees, especially because they apply to semesters that overlap between two fiscal years. A government college and university apportion the tuition between the two years whereas a not-for-profit college and university recognize them in the semester in which the bulk of the semester occurs. Grants are generally reimburse grants and are accounted for as other conditional contributions, which are recognized when the allowable cost is incurred. A college and university can be evaluated using standard ratio and financial tools. However, because its survival and growth can depend on items that will not appear in a financial statement any information gleaned from ratios must be taken side- by- side with these nonfinancial items that can affect its future. For example, a universitys standing compared to other schools but there is no way to put this into a financial statement. Role The role in health care and education for government can guide to an increase in accessibility of health care and education as the example the government controlled health care will be more inclusive than present models where only some can afford access to adequate health care but others lack the money to get health care. There is the caveat that government already heavily subsidizes education in the form of student loans and grants. The downside to this is that government is not the most efficient organization in terms of handling money, and there will be inevitable system loss to the bureaucracy. If a government entity was required to follow previously no required reporting guidelines the first problem it must face is the potential for error can be high. There will be problems arising from the shift in accounting methods. For example in the case of colleges and universities there

Accountability Practices in College, University and Healthcare

will be a sudden shift in value as the recognition period for tuition fee goes from divided recognition to recognition where the bulk of the semester occurred. The higher level of government involvement also calls for a greater involvement of the stakeholder, the taxpayer. As more and more money is direct into healthcare providers this money has to be sourced from the stakeholders in government itself; the tax payers. Accountability is the most important aspect of a business success or failure. In order for businesses, universities, health care providers, and colleges to succeed, they have to make sure that all their accountability is correct. A perfect example would be to discuss about is the way they fund their money. If these entities do not know how to take care of their funds, they will fail, and have to file for bankruptcy. This paper explained some accountability issues that colleges, universities, and health providers have. Also explained how accountability practices in government colleges and university differ from reporting practices in private universities. Finally, it predicted how healths care and education may be delivered if government assumed a larger role.

Accountability Practices in College, University and Healthcare

References Granof, M. H. (2007). Government and not-for-profit accounting: Concepts & practices (4th ed.). Hoboken, NJ: John Wiley & Sons.