The Influence of Audit and Hospital Council on Financial Statements’ Results in Slovenian Hospitals

Tatjana Horvat and Darko Cander
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Tatjana Horvat: University of Primorska, Slovenia
Darko Cander: Health Center of dr. Adolf Drolc Maribor, Slovenia

Management, 2019, vol. 14, issue 2, 137-149

Abstract: This study focuses on the connection of frequency of monitoring financial statements by internal auditors and by hospital councils with the efficiency of operations in Slovenian hospitals. The aim of the hospital is not making profit; however, it has to be economical to operate, which means that it must generate a surplus of revenues over expenditures, which is reflected in the annual financial statements. The financial statements are the responsibility of management. Founder of the hospitals is Republic of Slovenia, all the founder’s rights and obligations are exercised by the Government of the Republic of Slovenia. In Slovenia there are 26 public hospitals (the population) and they are divided into ten general hospitals, seven specialist hospitals, five psychiatric hospitals, two maternity hospitals and two clinical centres. The State budget and the Health Insurance Institute of Slovenia (HIIS) are the main sources of public financing Slovenian hospitals. Sources of financing hospitals are also evident in annual financial statements of each hospital. In the study, the 25 Slovenian public hospitals (the sample), which mostly represent Slovenian health system, have been analysed. We collected data with the survey questionnaire and from their published financial statements for 2014. For testing two hypotheses, we used contingency table and Chi- Square test. The results showed that the frequency of internal audits is not connected with the efficiency of operations in Slovenian hospitals, but the frequency of hospital council’s supervision is connected with the efficiency of operations. Hospitals with more often monitoring of results in financial statements by hospital councils have surpluses in revenues (making profit). Findings suggest to focus on quality not only on frequency of internal audits and to propose to hospitals with surpluses in expenditures to have more often monitoring by hospital councils. Findings suggest to hospitals to focus on quality of planning revenues and costs. The paper suggests to health policy makers to develop hospital’s corporate governance. The effective corporate governance in hospitals, with clear responsibilities of managers, auditors and councils, might effects on fiscal stability of the health system and the balance between all hospital’s stakeholders.

Keywords: internal audit; management; financial statements; income statement; hospitals (search for similar items in EconPapers)
Date: 2019
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DOI: 10.26493/1854-4231.14.138-149

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