The General Hospital Corporation - Home | Partners · PDF file · 2011-03-14Property and equipment, net 811,864 751,615 Other assets 5,194 4,703 . Total assets $ 3,116,921 $ 2,753,865

The General Hospital Corporation Report on Federal Awards in Accordance with OMB Circular A-133 September 30, 2005 EIN: 042697983

The General Hospital Corporation Report on Federal Awards in Accordance with OMS Circular A-133 Index September 30, 2005

Page(s)

Part I - Financial Statements

Report of Independent Auditors 1

Financial Statements and Notes to Financial Statements 2-28

Schedule of Expenditures of Federal Awards and Notes to Schedule of Expenditures of Federal Awards 29-41

Part IT Reports on Compliance and Internal Controls

Report of Independent Auditors on Internal Control over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards .42-43

Report of Independent Auditors on Compliance with Requirements Applicable to Each Major Program and on Internal Control over Compliance in Accordance with OMB Circular A-I33 44-45

Part ill - Findings

Schedule of Findings and Questioned Costs .46-48

Summary Schedule of Prior Audit Findings .49

Management's Views and Corrective Action Plan 50

Part I

Financial Statements

:1

PricewaterhouseCoopers LLP 125 High Street Boston MA 02110 Telephone (617) 530 5000 Facsimile (617) 530 5001

Report of Independent Auditors

To the Board of Trustees of The General Hospital Corporation

In our opinion, the accompanying balance sheets and the related statements of operations, changes in net assets and cash flows present fairly, in all material respects, the financial position of the General Hospital Corporation (the "Hospital") at September 30, 2005 and 2004, and the results of its operations, changes in net assets and its cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States of America. These financial statements are the responsibility of the Hospital's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these statements in accordance with auditing standards generally accepted in the United States ofAmerica. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free ofmaterial misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In accordance with Government Auditing Standards, we have also issued our report dated January 30, 2006 on our consideration of the Hospital's internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts and grant agreements and other matters for the year ended September 30, 2005. The purpose of that report is to describe the scope ofour testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards and should be considered in assessing the results of our audit.

The accompanying Schedule of Expenditures of Federal Awards is presented for purposes of additional analysis as required by U.S. Office of Management and Budget Circular A-l33, Audits o/States, Local Governments, and Non-Profit Organizations, and is not a required part of the financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, is fairly stated in all material respects, in relation to the basic financial statements taken as a whole.

January 30, 2006

The General Hospital Corporation Balance Sheets September 30,2005 and 2004

(in thousands) 2005 2004

Assets Current assets

Cash and equivalents $ 38,677 $ 11,672 'W$ Investments 307,561 268,846

Current portion of investments limited as to use 358,825 270,447 Patient accounts receivable, net of allowance for bad debts: 2005 - $15,287; 2004 - $19,839 174,744 163,447

Other current assets 99,080 102,780 Receivable for settlements with third-party payers 1,149

.~ Total current assets 978,887 818,341

Investments limited as to use, less current portion 451,387 380,099 Long-term investments 71,239 61,710 Pledges receivable, net, less current portion 12,606 9,051 Interest in the net assets of The Massachusetts General Hospital 785,744 728,346 Property and equipment, net 811,864 751,615 Other assets 5,194 4,703

Total assets $ 3,116,921 $ 2,753,865

Liabilities and Net Assets Current liabilities

Current portion of long-term obligations $ 19,728 $ 17,306 Accounts payable and accrued expenses 87,899 68,315

\10 Accrued compensation and benefits 92,208 87,075 Current portion of accrual for settlements with third-party payers 24,572 27,047 Unexpended funds on research grants 72,039 58,391 Due to affiliates 21,518 21,130

Total current liabilities 317,964 279,264

Other Iiabi Iities Accrual for settlements with third-party payers, less current portion 68,871 80,626 Accrued professional liability 15,416 14,337 Accrued employee benefits 72,854 84,424 Accrued other 17,735 19,886

174,876 199,273

Long-term obligations, less current portion 356,627 370,059

Total liabilities 849,467 848,596

Commitments and contingencies

Net assets Unrestricted 1,646,079 1,309,044 Temporarily restricted 490,723 469,230 Permanently restricted 130,652 126,995

Total net assets 2,267,454 1,905,269

Total liabilities and net assets $ 3,116,921 $ 2,753,865

The accompanying notes are an integral part of these financial statements.

2

The General Hospital Corporation Statements of Operations Years Ended September 30, 2005 and 2004

"


Operating revenue Net patient service revenue Direct academic and research revenue Indirect academic and research revenue Other revenue

$ 1,309,091 390,047 136,851 74,214

$ 1,196,346 374,709 125,218 64,738

Total operating revenue 1,910,203 1,761,011

Operating expenses Employee compensation and benefits Supplies and other expenses Direct academic and research expenses Depreciation and amortization Provision for bad debts Interest

708,748 596,570 390,047

83,151 22,125 18,030

639,361 563,460 374,709

79,685 22,559 13,237

Total operating expenses 1,818,671 1,693,011 '111 Income from operations 91,532 68,000

".

Nonoperating gains (expenses) Income from investments Change in net unrealized gains on equity method investments Gifts and other Academic and research gifts, net of expenses System development funding

Total nonoperating gains, net

66,528 57,337

737 61,565

(32,284)

153,883

46,454

9,705 59,842

(30,531)

85,470

Excess of revenues over expenses 245,415 153,470

Other changes in net assets Change in net unrealized gains on marketable investments Funds utilized for property and equipment Transfers from affiliates, net Other

18 (2,426) 70,641 23,387

50,594 1,215 2,397

Increase in unrestricted net assets $ 337,035 $ 207,676


.,

.J

.~

."

The General Hospital Corporation Statements of Changes in Net Assets Years Ended September 30, 2005 and 2004

(in thousands) Unrestricted Temporarily

Restricted Permanently

Restricted Total

.,

',\'I

,~

-

'I;

Net assets at October 1,2003

Increases (decreases) Income from operations Income from investments Gifts and other Academic and research gifts, net of expenses System development funding Change in net unrealized gains on marketable investments

Funds utilized for property and equipment Transfers from affiliates, net

Change in net assets

Net assets at September 30, 2004

Increases (decreases) Income from operations Income from investments Gifts and other Academic and research gifts, net of expenses System development funding Change in net unrealized gains on investments

Equity method investments Marketable investments

Funds utilized for property and equipment Transfers from affiliates, net Other

Change in net assets

Net assets at September 30, 2005

$ 1,101,368

68,000 46,454

9,705 59,842

(30,531)

50,594 1,215 2,397

207,676

1,309,044

91,532 66,528

737 61,565

(32,284)

57,337 18

(2,426) 70,641 23,387

337,035

$ 1,646,079

$ 417,598

12,854 1,487

37,291

51,632

469,230

25,960 19,745

44,577

(66,541) (2,248)

21,493

$ 490,723

$ 124,102

2,893

2,893

126,995

6,624

(2,967)

3,657

$ 130,652

$ 1,643,068

68,000 59,308 14,085 59,842

(30,531 )

87,885 1,215 2,397

262,201

1,905,269

91,532 92,488 27,106 61,565

(32,284)

101,914 18

(2,426) 4,100

18,172

362,185

$ 2,267,454


4

The General Hospital Corporation Statements of Cash Flows Years Ended September 30, 2005 and 2004


-

I;

..

Cash flows from operating activities Change in net assets Adjustments to reconcile change in net assets to net cash provided by operating activities

Depreciation and amortization Provision for bad debts Net realized and change in unrealized (gains) losses on investments Change in interest in the net assets of The Massachusetts General Hospital

Transfers from affiliates, net Restricted contributions Increase (decrease) in cash resulting from a change in

Patient accounts receivable Other current assets Pledges receivable Accounts payable and accrued expenses Accrued compensation and benefits Settlements with third-party payers Unexpended funds on research grants Accrued employee benefits and other Due to affiliates

Net cash provided by operating activities

$ 362,185

83,151 22,125

(120,500)

(57,398) (70,641) (17,601)

(33,422) 2

143 19,584 5,133

(13,081) 13,648

(12,642) 388

181,074

$ 262,201

79,685 22,559

(88,103)

(88,162) (2,397) (4,108)

(5,751) (15,274)

(1,246) (7,544) 1,320

(2,151) (10,649)

2,097 13,776

156,253

'",

Cash flows from investing activities Purchase of property and equipment Purchase of investments Proceeds from sales of investments Increase in other assets

Net cash used for investing activities

(143,329) (326,475) 239,065

(562)

(231,30 I)

(153,925) (219,425) 227,489

(19)

(145,880)

Cash flows from financing activities Payments on long-tenn obligations Proceeds from long-term obligations Transfers from affiliates, net Restricted contributions

(17,240) 6,230

70,641 17,601

(16,800) 2,730 2,397 4,108

Net cash provided by (used for) financing activities 77,232 (7,565)

Net increase in cash and equivalents 27,005 2,808

Cash and equivalents at beginning of year 11,672 8,864

'elt Cash and equivalents at end of year $ 38,677 $ 11,672


5

The General Hospital Corporation Notes to Financial Statements September 30, 2005 and 2004

(in thousands)

1. Organization and Community Benefit Commitments

The General Hospital Corporation (General) operates an acute-care general hospital established to provide healthcare services to patients primarily from the Greater Boston area as well as New England and beyond. In addition, the General conducts research and provides education for physicians and other healthcare professionals. As such, operating revenue includes those generated from direct patient care, reimbursement of research and educational activities and the revenues related to the operation of the General's facilities. The Massachusetts General Hospital (MGH) is the sole member of the General, The McLean Hospital Corporation (McLean), Massachusetts General Physicians Organization, Inc. (MGPO), The MGH Institute ofHealth Professions, Inc., (IHP), The MGH Health Services Corporation, and North End Community Health Committee, Inc. (NECHe).

Partners HealthCare System, Inc. (PHS) is the sole member of MGH, The Brigham and Women'slFaulkner Hospitals, Inc., The North Shore Medical Center, Inc. (NSMC), NewtonWellesley Hospital (NWH) and Partners Continuing Care, Inc. (PCe). PHS appoints the two physicians who are the members of Partners Community HealthCare, Inc. (PCHI). PHS, together with all of its affiliates, is referred to as "Partners."

The General is a tax-exempt organization under Section 501(c)(3) of the Internal Revenue Code.

Community Benefit The General collaborates with community and hospital partners to build and sustain healthier communities, and to enhance the Hospital's responsiveness to patients and community members from diverse cultural and socioeconomic backgrounds. As such, the General engages in several mission-related activities aimed at maintaining its tax-exempt status. These activities include supporting a broad-based community benefits program, operating essential clinical services, including an emergency room and outpatient clinics serving low-income patients, and providing free or discounted care, in conjunction with a clear charity care policy based on community needs.

The Massachusetts Attorney General's Community Benefits Guidelines require health maintenance organizations and nonprofit acute care hospitals to prepare annual reports documenting the status of their community benefit programs and initiatives. These annual reports serve the important purpose of providing the public with access to useful information about these programs and initiatives. The General has a community benefit planning and service delivery structure and has filed its report separately with the Attorney General.

The General's community benefit program also includes career and workforce development, encouraging students to pursue nursing and other clinical careers, youth substance abuse prevention, and domestic violence intervention. In addition, several community health centers are licensed or affiliated with the General, providing patient access to the General and other Partners' hospitals. The General has invested in these health centers' infrastructure, programming and operation and also helped with relocation, renovation, and other capital requirements.

6

The General Hospital Corporation Notes to Financial Statements September 30,2005 and 2004

(in thousands)

Uncompensated Care The General provides care to all patients regardless of their ability to pay. The cost of providing that care is reflected in the statements of operations. The cost related to those patients, for which the General receives either partial or no reimbursement for healthcare services provided, is summarized as follows:

State Programs Free care services are partially reimbursed to acute hospitals through the statewide Uncompensated Care Pool (UC Pool). A portion of the funding for the UC Pool is paid by hospitals through a statewide hospital assessment levied each year by the Massachusetts Legislature. All acute care hospitals in the state are assessed their share of this total statewide hospital assessment amount ($160,000 in 2005 and $157,500 in 2004) based on each hospital's charges for private sector payers. The General reports this assessment as a deduction from net patient service revenue.

Hospitals are reimbursed for free care under a prospective, two-tiered reimbursement system whereby certain hospitals, most of whom have a high proportion of free care and government funding, are guamnteed 85% to 88% of their projected free care costs. All other hospitals, including the General, received a pro rata share of the remaining funding, equal to 64% of their fiscal year 2005 projected free care costs. The estimated cost of free care exceeded the amount projected by the state for the Geneml, resulting in an actual reimbursement percentage, excluding the assessment payment to the Pool, of 53%.

In addition, payments received from the "traditional" Medicaid Program, reflected in net patient service revenue, do not cover the estimated cost of care provided.

Years Ended Septem ber 30,

2005 2004

Free Care and Medicaid Cost of services provided $ 200,456 $ 183,545 Net assessment payment to UC Pool 16,911 17,184 Net reimbursement from UC Pool and Medicaid (127,709) (105,658)

Net cost of Free Care and loss on Medicaid $ 89,658 $ 95,071

Bad Debts In addition to free care and inadequate funding from Medicaid, there are significant losses related to self-pay patients who fail to make payment for services rendered or insured patients who fail to remit co-payments and deductibles as required under the applicable health insurance arrangement. The provision for bad debts represents revenues for services provided that are deemed to be uncollectible. The estimated cost of these bad debts was approximately $6,938 and $8,195 for 2005 and 2004, respectively.

7


(in thousands)

2. Summary of Significant Accounting Policies

Basis of Accounting The accompanying financial statements have been prepared on the accrual basis of accounting. The General follows the accounting policies and practices of PHS and these statements should be read in conjunction with the PHS consolidated financial statements.

Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Significant estimates are made in the areas of patient accounts receivable, investments, accruals for settlements with third-party payers, accrued professional liability and accrued compensation and benefits.

Fair Value of Financial Instruments The fair value of financial instruments approximates the carrying amount reported in the balance sheets for cash and equivalents, investments, investments limited as to use, interest in the net assets ofMGH, patient accounts receivable, pledges receivable and accounts payable, except for longterm obligations which is disclosed in Note 6.

Cash and Equivalents Cash and equivalents represent money market and highly liquid debt instruments with a maturity at the date of purchase of three months or less.

Investments In 2005, the General modified its policy regarding pooled investments. These investments represent units in a partnership (Note 3) and are recorded on the equity method of accounting at fair value, with the change in net unrealized gains and losses included in excess of revenues over expenses. Separately invested investments (marketable investments) are measured at fair value generally based on quoted market prices with the change in net unrealized gains and losses excluded from excess of revenues over expenses. If the General had adjusted its previously issued financial statements for the year ended September 30,2004, the impact of this policy modification was to increase excess of revenues over expenses by $50,862.

Investment income or loss (including realized gains and losses, interest, dividends, and endowment income distributions) is included in excess of revenues over expenses unless the income or loss is restricted by donor or law. Investment income or loss is reported net of investment related expenses.

A write down in the cost basis of securities is recorded when the decline in fair value of certain investments has been judged to be other than temporary. Depending on any donor imposed restrictions on the underlying investments, the amount of the write down is reported as a realized loss in either temporarily restricted net assets or in excess of revenues over expenses, with no adjustment in the cost basis for subsequent recoveries in fair value.

8


(in thousands)

Partners has an endowment spending policy for pooled endowment funds. A fixed distribution rate is determined each year for spending which will come from either income and/or net accumulated gains in market value.

Investments Limited as to Use Investments limited as to use primarily include assets whose use is contractually limited by external parties and assets set aside by the Board of Trustees (or management) for identified purposes, over which the Board (or management) retains control and may, at its discretion, subsequently use for other purposes. Certain investments corresponding to deferred compensation are accounted for such that all income and appreciation (depreciation) is recorded as a direct addition (reduction) to the asset balance and corresponding liability balance.

Patient Accounts Receivable The General receives payments for services rendered from federal and state agencies (under the Medicare and Medicaid programs), managed care payers, commercial insurance companies, and patients. Patient accounts receivable are reported net of contractual allowances and reserves for denials, uncompensated care, and doubtful accounts. The level of reserves is based upon management's assessment of historical and expected net collections, business and economic conditions, trends in federal and state governmental and private employer health care coverage and other collection indicators.

Derivative Instruments Derivatives are recognized as either assets or liabilities in the balance sheet at fair value regardless of the purpose or intent for holding them. Changes in the fair value of derivatives are either recognized in excess of revenues over expenses or net assets, depending on certain factors, including whether the derivative is speculative or being used to hedge changes in fair value or cash flows.

Interest in the Net Assets of The Massachusetts General Hospital MGH holds investment assets for the benefit of the General. Since MGH is the sole member of the General, these organizations are financially interrelated. Accordingly, the General recognizes its interest in the net assets of MGH and adjusts that interest for its share of the changes in the net assets of MGH. Changes due to gifts, investment income (including realized gains and losses) and unrealized gains and losses are recognized in nonoperating activity.

Property and Equipment Property and equipment is reported on the basis of cost less accumulated depreciation. Donated items, exclusive of transfers from related organizations, are recorded at fair market value at the date of contribution. All research grants received for capital are recorded in the year ofexpenditure as a change in net assets. Property and equipment is reviewed for recoverability whenever events or changes in circumstances indicate that its carrying amount may not be recoverable. Depreciation of property and equipment is calculated by use of the straight-line method at rates intended to depreciate the cost of assets over their estimated useful lives, which generally range from three to forty years. Interest costs incurred on borrowed funds during the period of construction of capital assets are capitalized, net of any interest earned, as a component of the cost of acquiring those assets.

9


(in thousands)

Other Assets Other assets consist of long-term receivables and deferred financing costs. Deferred financing costs are amortized over the terms of the related obligations. The carrying value of other assets is reviewed if the facts and circumstances suggest that it may be impaired.

Compensated Absences In accordance with formal policies concerning vacation and other compensated absences, accruals of approximately $38,875 and $35,485 were recorded as of September 30, 2005 and 2004, respectively.

Unexpended Funds on Research Grants Research grants received in advance of corresponding grant expenditures are accounted for as a direct addition to investments limited as to use and unexpended funds on research grants.

Self-Insurance Reserves The General is self-insured for employee healthcare, disability, workers' compensation and certain other employee benefits. These costs are accounted for on an accrual basis to include estimates of future payments for claims incurred.

Net Assets Permanently restricted net assets include only the historical dollar amounts of gifts, which are required by donors to be permanently retained. Temporarily restricted net assets include gifts, and income and gains on permanently restricted net assets which can be expended but for which restrictions have not yet been met. Such restrictions include purpose restrictions where donors have specified the purpose for which the net assets are to be spent, or time restrictions imposed by donors or implied by the nature of the gift (capital projects, pledges to be paid in the future, life income funds) or by interpretations of law (gains available for appropriation but not appropriated in the current period).

Realized gains and losses are classified as unrestricted net assets unless they are restricted by the donor or law. Unless permanently restricted by the donor, realized and unrealized net gains on permanently restricted gifts are classified as temporarily restricted until appropriated for spending by the General in accordance with policies established by Partners and the Massachusetts Management ofInstitutional Funds Act. Net losses on permanently restricted endowment funds are classified as a reduction to unrestricted net assets until such time as the market value exceeds book value. Unrestricted net assets include all the remaining net assets of the General. See Note 12 for further information on the composition of restricted net assets.

Gifts and Grants Unconditional promises to give cash and other assets to the General are reported at fair value at the date the promise is received. Conditional promises to give are recognized when the conditions are substantial1y met. The gifts are reported as either temporarily or permanently restricted support if they are received with donor stipulations that limit the use of the donated assets. Donor-restricted contributions whose restrictions are met within the same year as received are reported as unrestricted gifts in the accompanying financial statements.

10


(in thousands)

Gifts of long-lived assets with explicit restrictions that specify use of assets and gifts of cash or other assets that must be used to acquire long-lived assets are reported as additions to temporarily restricted net assets if the assets are not placed in service during the year.

Grants and contracts are recognized as unrestricted revenues as the related expenditures are incurred. The General recognizes indirect cost recoveries at predetermined rates for U.S. Government grants and contracts and negotiated rates for other grants and contracts.

Statement of Operations All activities of the General deemed by management to be ongoing, major and central to the provision of healthcare services, training and research activities are reported as operating revenue and expenses. Other activities deemed to be nonoperating include unrestricted gifts (net of fundraising expenses), net change in unexpended academic and research gifts, change in net unrealized gains and losses on equity method investments, investment income (including realized gains and losses) and system development funding. System development funding represents payments made to PHS for corporate expenses and to support clinical and other initiatives provided by PHS for the benefit of the System. Academic and research gifts largely consist of donor contributions to the entity (and the related investment income including realized gains and losses) designated to support the clinical, teaching or research efforts of a physician or department as directed by the donor.

The General recognizes changes in accounting estimates for net patient service revenue and thirdparty settlements as new events occur, as more experience is acquired or as additional information is obtained. Changes in third-party settlement estimates are generally amortized into income over a period not to exceed five years. During 2005 and 2004, adjustments to prior year estimates resulted in an increase to income from operations of $23,692 and $21,968, respectively.

The statements of operations include excess ofrevenues over expenses. Changes in unrestricted net assets which are excluded from excess of revenues over expenses include changes in unrealized gains and losses on marketable investments, transfers of assets to and from affiliates and contributions of long-lived assets (including assets acquired using contributions which by donor restriction were to be used for acquisition of such assets). In 2005, the General altered its practice of accruing for a certain nonvested employee benefit. This benefit will now be recognized on a pay-as-you-go basis. Accordingly, the liability previously recorded has been eliminated. This adjustment has been reported as an increase to unrestricted net assets.

Net Patient Service Revenue The General maintains agreements with the Centers for Medicare and Medicaid Services (CMS) of the United States Department of Health and Human Services (DHHS) under the Medicare Program, The Commonwealth of Massachusetts under the Medical Assistance Program (Medicaid) and various managed care payers that govern payment to the General for services rendered to patients covered by these agreements. The agreements generally provide for per case or per diem rates or payments based on allowable costs, subject to certain limitations, for inpatient care and discounted charges or fee schedules for outpatient care. Certain "pay for performance" contracts also provide for payments that are contingent upon meeting agreed upon quality and efficiency measures.

11


(in thousands)

Net patient service revenue is reported at estimated net realizable amounts from patients, thirdparty payers, and others for services rendered and includes estimated retroactive revenue adjustments due to future audits, reviews and investigations. Retroactive adjustments are considered in the recognition of revenue on an estimated basis in the period the related services are rendered, and such amounts are adjusted in future periods as adjustments become known or as years are no longer subject to such audits, reviews, and investigations. Contracts, laws and regulations governing the Medicare, Medicaid, and the uncompensated care pool programs (Note 1) and managed care payer arrangements are complex and subject to interpretation. As a result, there is at least a reasonable possibility that recorded estimates will change by a material amount in the near term. A portion of the accrual for settlements with third-party payers has been classified as long-tenn because such amounts, by their nature or by virtue of regulation or legislation, will not be paid within one year.

Charity Care The General provides either full or partial charity care to patients who cannot afford to pay for their medical services based on income and family size. Charity care is generally available to qualifying patients for medically necessary services. The General reports certain bad debts related to emergency services as charity care. Charity care is reported at gross charges with an offsetting allowance, as there is no expectation of collection. Accordingly, there is no net patient service revenue related to charity care.

Other Revenue Other revenue includes royalty income, cafeteria sales, rental income, parking income, and certain outpatient phannacy income.

Reclassifications Certain amounts in the 2004 financial statements have been reclassified to confonn with the 2005 presentation. The General no longer reports certain investment income as a component ofother revenue. All unrestricted investment income (including realized gains and losses), except for trustrelated income and certain endowment distributions, is reported as nonoperating revenue.

3. Investments and Investments Limited as to Use

Investments are either separately invested or included in pooled investment funds. The Partners HealthCare System Pooled Investment Accounts (Partnership) is structured as a single general partnership composed of four investment pools, with PHS and substantially all of its affiliates participating in the pools as partners. Each partner's interest in the Partnership is based on its underlying investments in one or more of the four separate pools. Amounts included in the investment pools are accounted for using the market value method whereby each partner is assigned a number of units based on the market value of the assets of a pool at the time of entry of the funds into the pool. Current market value is used to detennine the number of units allocated to additional amounts placed in a pool and to value withdrawals from a pool. Income from investments of the pools, including realized gains and losses, is allocated on a unitized basis to a partner based on the partner's share of units in a pool.

12

The General Hospital Corporation Notes to Financial Statements September 30,2005 and 2004 ,. (in thousands)

The composition of investments and investments limited as to use is as follows:

Cost

September 30, 2005 Gross Gross

Unrealized Unrealized Gains Losses

Fair Value

'. Pooled investments

Invested cash equivalents Equities U.S. Government, domestic and foreign fixed income securities

Private partnerships and other Accrued interest and dividends

$ 92,894 298,502

306,728 325,738

2,753

1,026,615

$ 74,363

5,558 71,504

151,425

$ (3,598)

(3,150) (309)

(7,057)

$ 92,894 369,267

309,136 396,933

2,753

1,170,983

~ Separately invested Invested cash equivalents Equities U.S. Government and domestic fixed income securities

1,233 4,509

12,287

18,029

1,233 4,509

12,287

18,029

$ 1,044,644 $ 151,425 $ (7,057) $ 1,189,012

'. Pooled investments Invested cash equivalents Equities U.S. Government, domestic and foreign fixed income securities

Private partnerships and other Accrued interest and dividends

Cost

$ 52,707 252,369

313,652 252,493

3,370

874,591

September 30, 2004 Gross Gross

Unrealized Unrealized Gains Losses

$ $ 46,261 (2,518)

11,929 (457) 37,054 (444)

95,244 (3,419)

$

Fair Value

52,707 296,112

325,124 289,103

3,370

966,416

Separately invested Invested cash equivalents Equities U.S. Government and domestic fixed income securities

Other

1,157 5,678

7,866 3

(18) 1,157 5,660

7,866 3

14,704

$ 889,295 $ 95,244 $

(18)

(3,437) $

14,686

981,102

'11

13


(in thousands)

The fair value and gross unrealized losses of investments and investments limited as to use, with a fair value less than cost, that are not deemed to be other-than-temporarily impaired at September 30, 2005 are as follows:

Less than 12 Months 12 Months or Greater Gross Gross

Fair Unrealized Fair Unrealized Value Losses Value Losses

.. Pooled investments Equities $ 41,376 $ (3,046) $ 24,969 $ (552) Fixed income 137,130 (1,993) 58,592 (1,157) Private partnerships and other 2,679 (81) 2,880 (228)

$ 181,185 $ (5,120) $ 86,441 $ (1,937)

Securities with unrealized losses are reviewed each quarter to determine whether these investments are other-than-temporarily impaired. This review considers factors including the anticipated holding period for the investment and the extent and duration of below cost valuation. For specific securities, these factors include evidence of continuing debt service payments and prospects for principal repayment (fixed income), the age of investment relative to historical valuation patterns (private equity), and historical market volatility, prospects and price trends of individual securities relative to industry peers (equity). Based on management's evaluation of investments with a fair value less than cost at September 30,2005, no other-than-temporary impairment was determined to have occurred.

Investments and investments limited as to use are recorded at fair value in the balance sheet as follows:

September 30, 2005 2004

'. Current assets

Investments $ 307,561 $ 268,846 Current portion of investments limited as to use 358,825 270,447

666,386 539,293

Investments limited as to use, less current portion 451,387 380,099 Long-term investments 71,239 61,710

$ 1,189,012 $ 981,102

14

'il


(in thousands)

Investments limited as to use consist of the folIowing at fair value:

September 30, 2005 September 30, 2004 Current Long-Term Current Long-Term Portion Portion Portion Portion

Internally designated funds Reserved for capital expenditures $ 116,562 $ $ 121,830 $ Unexpended academic and research gifts 417,750 351,986

Other 168,100 15,197 89,478 10,690

284,662 432,947 211,308 362,676

Externally limited funds Unexpended funds on research 72,039 58,391 Professional liability trust fund 18,440 16,283 Held by trustees under debt and other agreements 2,124 748 1,140

74,163 18,440 59,139 17,423

$ 358,825 $ 451,387 $ 270,447 $ 380,099

15


(in thousands)

Investment income and gains (losses) from cash and equivalents, investments (including long-tenn) and investments limited as to use are comprised of the following:

• Years Ended Septem ber 30,

2005 2004

Unrestricted Dividends and interest income $ 18,856 $ 21,507

it Endowment income distributions, net of reinvested gains 20,673 14,306 Net realized gains (losses) on investments

Trading gains 88,585 59,050 Other than temporary impainnent (1,632) (386)

Change in net unrealized gains on equity method investments,

.,. net of recoveries on endowment funds

Total investment activity included in excess

57,337

of revenues over expenses 183,819 94,477

Change in net unrealized gains on marketable investments 18 50,594

Total unrestricted investment activity 183,837 145,071

Temporarily restricted Dividends and interest income 6,158 4,688 Endowment income distributions (19,653) (19,131) Net realized gains (losses) on investments

Trading gains 39,581 27,332 Other than temporary impainnent (126) (35)

25,960 12,854

Change in net unrealized gains on investments Equity method investments 44,607 Marketable investments 37,692 Recoveries on endowment funds (30) (401 )

44,577 37,291

'i Total temporarily restricted investment activity 70,537 50,145

$ 254,374 $ 195,216

Investment income included in operations for the years ended September 30, 2005 and 2004 was $3,412 and $2,397, respectively. Investment income included in academic and research gifts, net of expenses for the years ended September 30, 2005 and 2004 was $56,542 and $45,626, respectively.

16


(in thousands)

4. Pledges Receivable

Pledges receivable represent unconditional promises to give and are net of allowances for uncollectible amounts. Pledges are recorded at the present value of their estimated future cash flows. Pledges collectible within one year are classified as other current assets and total $11,874 and $15,572 as of September 30,2005 and 2004, respectively. Estimated cash flows due after one year are discounted using published treasury bond and note yields that are commensurate with estimated collection risks. The blended discount rate was 4.2% and 2.8% for 2005 and 2004, respectively. Pledges are expected to be collected as follows:

September 30, 2005 2004

Amounts due Within one year $ 15,502 $ 17,339 In one to five years 13,855 10,468 In more than five years 1,426 1,289

Total pledges receivable 30,783 29,096

Less: Unamortized discount 1,868 659

28,915 28,437

'. Less: Allowance for uncollectibles 4,435 3,814

Net pledges receivable $ 24,480 $ 24,623

5. Property and Equipment

Property and equipment consists of the following:

September 30, 2005 2004

Land and land improvements $ 3,698 $ 3,682 Buildings and building improvements 1,056,881 768,529 Equipment 290,356 287,267 Construction in progress 44,973 236,941

1,395,908 1,296,419

Accumulated depreciation (584,044) (544,804)

Property and equipment, net $ 811,864 $ 751,615 ,ill

Depreciation expense for the years ended September 30,2005 and 2004 was $83,080 and $79,612, respectively. Interest costs, net of interest earned, aggregating $0 and $4,436 were capitalized in 2005 and 2004, respectively.

For the years ended September 30,2005 and 2004, fully depreciated assets and assets purchased with federal research funds with an original cost of $51 ,925 and $79,945, respectively, were written off.

17


(in thousands)

6. Long-Term Obligations

Long-tenn obligations consist of the following:

September 30, 2005 2004

Notes payable to Partners HealthCare System, Inc. Partners Capital Framework Loan, variable interest rate of 4.50% and 4.36% at September 30, 2005 and 2004, respectively, final maturity in 2033 $ 325,520 $ 335,961

Massachusetts Health and Educational Facilities Authority (Authority) Revenue Bonds

MGH issue Series F, average interest rate of 6.25%, final maturity in 2012

Partners HealthCare System issue Series P, variable interest rate of2.75% and 1.69% at September 30,2005 and 2004, respectively, final maturity in 2012

46,984

3,851

46,918

4,284

Capital lease obligations

376,355

202

387,365

Less current portion 19,728 17,306

$ 356,627 $ 370,059

The Partners Capital Framework Loan bears interest at a variable rate based upon the weighted average cost of Partners debt, reset annually, effective October I.

The Authority issued $150,000 Revenue Bonds, Capital Asset Program, Series P to PHS, from which a $100,000 loan commitment was made to PHS and $25,000 loan commitments were made to both The Brigham and Women's Hospital, Inc. (BWH) and the General. Under the Capital Asset Program, qualified PHS affiliates may borrow funds to finance eligible projects. Loan repayments are expected to be recycled throughout Partners until final bond maturity in 2027. The Series P loan to the General is collateralized by a lien on the unrestricted gross receipts of the General and MGH on a parity with their outstanding indebtedness.

The Authority'S Series A, B, C, D, E and F Bonds issued on behalfof Partners and Series P loan are unsecured general obligations of PHS, supported by guarantees from BWH, MGH and the General which may be suspended under certain conditions. PHS guarantees payment ofNWH and NSMC Authority bonds. BWH, MGH and the General have also provided suspendable guarantees of the perfonnance by PHS on the NWH and NSMC guarantees.

18


(in thousands)

The MGH Series F Revenue Bonds are collateralized by a lien on the unrestricted gross receipts of the General and MGH. The General is jointly and severally liable with MGH for the total amount of the Series F Revenue Bonds, portions of which have been recorded directly by MGH and Spaulding Rehabilitation Hospital (Spaulding). MGH was fonnerly the sole corporate member of Spaulding. At September 30,2005, Spaulding was obligated for $7,480 of the Series F Revenue Bonds.

The Authority Revenue Bond Agreements contain certain covenants, including a minimum debt service coverage ratio and limitations on additional indebtedness and asset transfers.

Aggregate maturities and payments of long-tenn obligations during the next five years are as follows: 2006 - $19,728; 2007 - $20,811; 2008 - $22,069; 2009 - $22,354 and 2010 - $23,622.

The fair value of long-tenn obligations was approximately $384,082 and $396,781 as of September 30, 2005 and 2004, respectively. The fair value is estimated based on quoted market prices for the same or similar issues.

Interest expense approximates interest paid, net of capitalized interest, during the years ended September 30, 2005 and 2004.

7. Commitments

Leases The General has noncancelable operating leases for certain buildings and equipment including operating leases for certain office and research space between the General and Massachusetts Biomedical Research Corporation (MBRC). MGH guarantees the payment by the General of certain obligations under the MBRC leases and the President ofMGH, or his designee, serves exofficio as one of three members on the Board ofTrustees ofMBRC.

19

..lj


(in thousands)

MBRC is a related party but is not controlled by the General, and therefore not consolidated within these financial statements. A significant portion ofMBRC's operating results are generated from the operating leases with the General. Summarized financial data for MBRC as of and for the years ended September 30,2005 and 2004 is as follows:

Years Ended September 30,

2005 2004

.~ Total operating revenue $ 43,724 $ 43,329 Total operating expenses 32,960 33,327 Income from operations 10,764 10,002 Increase in unrestricted net assets 18,441 16,188

September 30, 11 2005 2004

Current assets $ 68,846 $ 58,920 Total assets 248,722 250,929 Current liabilities 36,676 36,712 Total liabilities 161,751 182,399

.~ Unrestricted net assets 86,971 68,530

Rental expense under operating leases approximated $88,260 in 2005 and $81,716 in 2004, including expense under the MBRC leases of $41,751 and $41,396 in 2005 and 2004, respectively.

Minimum future lease commitments under noncancelable leases, including a total commitment of $426,214 on the MBRC leases, for the next five years and thereafter are as follows:

Operating Leases

2006 $ 89,690 2007 87,777 2008 86,167 2009 83,821 2010 75,344 Thereafter 529,907

Total lease payments $ 952,706

Two of the lease agreements with MBRC provide for scheduled rent increases which are being recognized on a straight-line basis over the remaining lease term.

20


(in thousands)

8. Pension and Postretirement Healthcare Plans

Substantially all employees ofMGH and its affiliates are covered under The Massachusetts General Hospital Cash Balance Retirement Plan (MGH Plan), a noncontributory defined benefit pension plan. Benefits under the MGH Plan consist of annual allocations to participants' accounts based on the participant's age, years of service and salary. Interest is credited to participants' accounts annually at market rates.

MGH also provides subsidized healthcare benefits for retired employees of the MGH and its affiliates on a self-insured basis. These benefits are administered through an insurance company and are accounted for on the accrual basis, which includes an estimate of future payments for claims incurred. The accrued postretirement benefit obligation for the General is not funded. The corresponding liability for the General at September 30,2005 and 2004 was $38,625 and $38,547, respectively.

Certain professional staff employed by MGH and its affiliates who hold appointments at the Harvard Medical School, as well as certain administrative staff, participate in the MGH Academic Annuity Plan, which is a defined contribution plan. MGH and its affiliates contribute to the plan a percentage, as defined by the plan agreement, of each participant's annual compensation.

MGH and its affiliates use a measurement date of June 30 for their defined benefit and postretirement healthcare benefit plans.

The total expense allocated to the General consists of the following:


2005 2004

Defined benefit plan Defined contribution plan Postretirement healthcare benefit plan

$ 26,969 17,468 4,630

$ 49,067

$ 22,785 15,548 3,418

$ 41,751

21


(in thousands)

Benefit Obligations

Postretirement Defined Benefit Plan Healthcare Benefit Plan

Change in Benefit Obligations 2005 2004 2005 2004

Benefit obligations at beginning of year $ 899,210 $ 822,083 $ 58,453 $ 49,419 Service cost 53,626 47,864 831 617 Interest cost 57,170 52,256 3,560 3,000 Assumption changes 59,458 6,019 Actuarial (gain) loss 32,223 8,849 7,884 9,798 Benefits paid (36,622) (31,842) (4,642) (4,381)

Benefit obligations at end of year $ 1,065,065 $ 899,210 72,105 $ 58,453

~\

The accumulated benefit obligation for the defined benefit pension plan at the end of2005 and 2004 was $981,678 and $829,131, respectively.

Postretirement Weighted-Average Assumptions Used to Defined Benefit Plan Healthcare Benefit Plan Determine End of Year Benefit Obligation 2005 2004 2005 2004

Discount rate 5.75% 6.25% 5.75% 6.25% Rate of compensation increase

Professional staff 6.02% 6.02% N/A N/A Other than professional staff 5.05% 5.05% N/A N/A Healthcare cost trend rate for next year N/A N/A 10.0% 9.0% Rate to which the cost trend rate is to decline N/A N/A 5.0% 5.0% Year that rate reaches the ultimate trend rate N/A N/A 2011 2009

Assumed healthcare cost trend rates have a significant effect on the amounts reported for the healthcare plans. A one-percentage-point change in assumed healthcare cost trend rates would have the following effect:

One-Percentage-Point One-Percentage-Point Increase Decrease

Effect on postretirement benefit obligation $ 2,820 $ (2,556)

22


(in thousands)

Plan Assets

Postretirement Defined Benefit Plan Healthcare Benefit Plan

Change in Plan Assets 2005 2004 2005 2004

Fair value of plan assets at beginning of year $ 911,674 $ 769,998 $ $ Actual return on plan assets 133,101 144,695 Employer contributions 36,608 28,823 4,642 4,381 Benefits paid (36,622) (31,842) (4,642) (4,381)

.~~ Fair value of plan assets at end of year $ 1,044,761 $ 911,674 $ $

MGH and affiliates' defined benefit plan weighted-average target asset allocation ranges for 2006 as well as actual allocations, by asset category for 2005 and 2004, are as follows:

Target Percentage of Plan "4!I Allocation Assets

Asset Category 2006 2005 2004

Domestic equity securities 14%-34% 23.2% 25.9% Foreign equity securities 7%-27% 22.3% 17.8% Fixed income securities 3%-23% 12.8% 20.8% Less market sensitive strategies 20%-40% 25.4% 23.2% Inflation protection strategies 6%-26% 16.3% 12.3%

100% 100% 100%

Less market sensitive investments include hedge funds employing long/short equity, diversified arbitrage and absolute return strategies, which in the aggregate are expected to generate positive returns on a consistent basis. Inflation protection strategies include investments in real estate assets/commodities, equity securities of commodity related companies and inflation protection bonds.

The investment objective is to achieve the highest reasonable total return after considering (i) plan liabilities, (ii) funding status and projected cash flows, (iii) projected market returns, valuations and correlations for various asset classes, and (iv) Partners' ability and willingness to incur market risk. Partners' Investment Committee actively manages plan assets in order to add incremental returns by manager selection and asset allocation (increasing/decreasing allocations within allowable ranges based on current and projected valuations).

23


(in thousands)

Expected Cash Flows Infonnation about the expected cash flows for the defined benefit and postretirement healthcare benefit plans follows:

Defined Benefit Postretirement

Plan Healthcare Benefit Plan

Expected employer contributions 2006 $ 46,400 $ 5,744

Medicare Subsidy

Expected benefit payments (receipts) 2006 $ 93,100 $ 5,744 $ 2007 72,000 5,991 (500) 2008 77,500 6,097 (500) 2009 76,800 6,155 (494) 2010 78,300 6,136 (482) 20 II and thereafter 398,500 29,058 (2,081 )

24


(in thousands)

Net Periodic Benefit Cost

Postretirement Defined Benefit Plan Healthcare Benefit Plan 2005 2004 2005 2004

Service cost $ 53,626 $ 47,864 $ 831 $ 617 Interest cost 57,170 52,256 3,560 3,000 Expected return on plan assets (72,324) (67,494) Amortization of

Prior service cost (credit) (331) (471) (20) 78 Unrecognized net (gain) loss 314 160 613

Net periodic benefit cost $ 38,455 $ 32,315 $ 4,984 $ 3,695

Weighted-Average Assumptions Used to Postretirement Determine Net Periodic Pension and Defined Benefit Plan Healthcare Benefit Plan Postretirement Cost 2005 2004 2005 2004

Discount rate 6.25% 6.25% 6.25% 6.25% Expected return on plan assets 8.25% 8.25% N/A N/A Rate of compensation increase

Professional staff 6.02% 6.02% N/A N/A Other than professional staff 5.05% 5.05% N/A N/A

Healthcare cost trend rate for this year N/A N/A 9.0% 10% Rate to which the cost trend rate is to decline N/A N/A 5.0% 5.0% Year that rate reaches the ultimate trend rate N/A N/A 2009 2009

Partners considers multiple factors in establishing a multi-year projected return assumption for its benefit programs. These include, but are not limited to: its current asset allocation policy and target ranges by asset class; asset valuations; historical and projected rates of return by asset class, historical and projected correlations among asset classes; the opportunity to exceed passive index returns via active management through a combination of manager selection and alternative weightings among and within asset classes, and Partners historical performance experience.

Assumed health care cost trend rates have a significant effect on the amounts reported for the health care plans. A one-percentage-point change in assumed health care cost trend rates would have the following effect:

One-Percentage-Point One-Percentage-Point Increase Decrease

Effect on service and interest cost $ 182 $ (164)

25


(in thousands)

9. Professional Liability Insurance

The General insures substantially all of its professional and general liability risk on a claims-made basis in cooperation with PHS affiliates and other organizations in the Greater Boston area through a captive insurance company, Controlled Risk Insurance Company Ltd. (CRICO). The policy covers claims made during its term, but not those occurrences for which claims may be made after expiration of the policy, except for certain tail liabilities which CRICO has assumed on an occurrence basis through December 31,2005. Management intends to renew its coverage on a claims-made basis and has no reason to believe that it will be prevented from such renewal.

The General and PHS follow an accounting policy ofestablishing reserves to cover all professional liability claims incurred but not reported to the insurance company as of the end of the year (tail liability), excluding the tail liability assumed by CRICO. These reserves have been estimated by consulting actuaries on a discounted basis using an interest rate of 5.75% and 6.25% at September 30, 2005 and 2004, respectively. PHS has assumed the obligation for any unasserted malpractice claims of the General not covered by CRICO for claims incurred in 1998 and prior, while the General has assumed the obligation for claims incurred after 1998.

Management is not aware ofany claims against PHS or the General or factors affecting CRICO that would cause the expense for professional liability risks to vary materially from the amount provided.

10. Transactions with Affiliates

The General received fund-raising, investment management, legal, financial and administrative services from PHS and MGH of$160,456 and $147,591 in 2005 and 2004, respectively. The General also purchased certain teaching and administrative services from and provided support to

.." PHS affiliates, which amounted to $45,201 and $41,202 in 2005 and 2004, respectively. The General provided certain administrative services and support primarily to PHS and affiliates, which totaled $19,391 and $15,885 in 2005 and 2004, respectively. For the years ended September 30, 2005 and 2004, Spaulding and FRC, Inc. received payments from the General of $5,200 and $5,700, respectively, as additional reimbursement for patients transferred from the General and cared for at Spaulding and FRC, Inc. All services among these affiliated corporations were

;~ reimbursed on an estimated cost basis.

26

-----


(in thousands)

During 2005 and 2004, the General transferred funds to, and received funds from, certain affiliated corporations. These equity transfers are reported separately as changes in net assets and are excluded from excess of revenues over expenses. Amounts transferred were as follows:


2005 2004

Transfers (to) from MGH $ 69,041 $ 2,664 MGPO 1,198 370 PHS 402 (637)

Transfers from affiliates, net $ 70,641 $ 2,397

11. Concentration of Credit Risk

Financial instruments that potentially subject the General to concentration of credit risk consist of patient accounts receivable, pledges receivable and certain investments. The General receives a significant portion of its payments for services rendered from a limited number of government and commercial third-party payers, including Medicare, Medicaid, Blue Cross and Blue Shield of Massachusetts, Harvard Pilgrim Health Care and Tufts Associated Health Plan. Pledges receivable are due from multiple donors. Investments, which include government and agency securities, stocks and corporate bonds, and private partnerships and other investments are not concentrated in any corporation or industry or with any single counterparty. The General has not historically incurred any significant credit losses outside the normal course of business.

12. Restricted Net Assets Tt

Restricted net assets are available for the following purposes:

September 30, 2005 2004

(\it Temporarily restricted Charity care $ 92,858 $ 81,676 Buildings and equipment 25,632 82,706 Clinical care, research and academic 372,233 304,848

$ 490,723 $ 469,230

Permanently restricted Pledges to be paid in the future $ 1,918 $ 2,230 -Investments to be held in perpetuity 128,734 124,765

$ 130,652 $ 126,995

27

•.~


(in thousands)

13. Functional Expenses

Total operating expenses by function are as follows:


2005 2004

Healthcare services $ 1,129,272 $ 1,042,986 Research and academic 526,898 499,927 General and administrative 162,501 150,098

$ 1,818,671 $ 1,693,011

14. Contingencies .$

The General is subject to complaints, claims and litigation which have risen in the nonnal course of business. In addition, the General is subject to reviews by various federal and state government agencies to assure compliance with applicable laws, some of which are subject to different interpretations. Recently, governmental review of compliance by healthcare institutions, including the General, has increased.

28

The General Hospital Corporation Schedule of Expenditures of Federal Awards Year Ended September 30,2005

RESEARCH AND DEVELOPMENT AND RESEARCH TRAINING

Research and Development Direct Programs

Department of Health and Human Services

National Institutes of Health

Maternal and Child Health Federal Consolidated Programs

Adolescent Family Life Research Grants

Biological Response to Environmental Health Hazards

Applied Toxicological Research and Testing

Oral Diseases and Disorders Research

Human Genome Research

Research Related to Deafuess and Communication Disorders

Research and Training in Complementary and Alternative Medicine

Mental Health Research Grants

Alcohol Research Programs

Drug Abuse Research Programs

Mental Health Research Career/Scientist Development Awards

Biomedical Imaging Research

Comprehensive Medicine

General Clinical Research Centers

Biomedical Research Technology

Research Infrastructure

Cancer Cause and Prevention Research

Cancer Detection and Diagnosis Research

Cancer Treatment Research

Cancer Biology Research

Cancer Centers Support Grants

Cancer Research Manpower

Health Cancer Control

Cell Biology and Biophysics Research

Heart and Vascular Diseases Research

Lung Diseases Research

Blood Diseases and Resources Research

Arthritis, Musculoskeletal and Skin Diseases Research

Diabetes, Endocrinology and Metabolism Research

Digestive Diseases and Nutrition Research

Kidney Diseases, Urology and Hematology Research

Extramural Research Programs in the Neurosciences and Neurological Disorders

Biological Basis Research in the Neurosciences

Allergy, Immunology and Transplantation Research

Microbiology and Infectious Diseases Research

Pharmacology, Physiology, and Biological Chemistry Research

Genetics and Developmental Biology Research and Research Training

Population Research

Center for Research for Mothers and Children

Aging Research

Vision Research

Medical Library Assistance

Department of Mental Health

Fogany International Research Collaboration Award

Research Treatmenl and Educational Programs on Lyme Disease in the United States

Bioterrorism Training and Curriculum Development Program

Subtotal - National Institutes of Health

Federal

CFDA

Number

93.110

93.111

93.113

93114

93.121

93.172

93.173

93.213

93.242

93.273

93.279

93.281

93.286

93.306

93.333

93.371

93.389

93.393

93.394

93.395

93.396

93.397

93.398

93.399

93.821

93.837

93.838

93.839

93.846 93847

93.848

93.849

93.853

93.854

93.855

93.856

93.859

93.862

93.864

93.865

93.866

93.867

93.879

93.929

93.934

93.942

93.996

Total

Federal

Expenditures

$ 479,214

186,625

630,592

238,118

447,640

438,946

1,754,699

2,533,851

16,816,909

221,971

4,327,111

8,179

7,432,015

521,602

1,667,999

467,372

10,304,703

2,914,977

3,735,197

14,076,295

10,918,421

183,251

919,940

4,217,529

539,400

13,186,554

5,011,617

2,350,712

4,727,798

15,549,221

10,141,004

5,898,101

32,719,197

340,153

10,572,302

19,551,864

15,688,711

2,307,805

3,689,299

6,106,017

15,001,539

2,512,113

168,1 I I

127,191

25,830

229,444

251,887,479

The accompanying notes are an integral part of the schedule of expenditures of federal awards.

29

340

i.

i~

~

~

~

The General Hospital Corporation Schedule of Expenditures of Federal Awards, Continued Year Ended September 30, 2005

Federal

CFDA

Number

Total

Federal

Expenditures

RESEARCH AND DEVELOPMENT AND RESEARCH TRAINING (CONT.)

Research and Development Direct Programs (conI.)

Other Department of Health and Hwnan Services

Food and Drug Administration Research

Health Services Research and Development Grants

Centers for Disease Control and Prevention Investigations and Technical Assistance

Refugee and Entrant Assistance Discretionary Grants

Assistance for Torture Victims

HIV Demonstration, Research, Public and Professional Education Projects

Substance Abuse and Mental Health Services Administration

93.103

93.226

93.283

93.576

93.604

93.94\

93.958

S 299,134

2,550,275

42,673

77,424

325,590

114,841

2,514

Subtotal - Other Department of Health and Human Services 3,412,451

Consumer Products Safety Commission 12.181 27,216

Subtotal - Consumer Products Safety Commission 27,216

Department of Agriculture 10.206 383

Subtotal - Department of Agriculture 383

Department of Defense

Office of Naval Research

United States Army

United States Air Force

Space and Naval Warfare Systems Command

12.300

12.420

12.630

12.910

86,367

19,181,321

4,870,394

129

Subtotal - Department of Defense 24,138,211

Department of Education 84.305 6,539

Subtotal - Department of Education 6,539

Department of Energy 81.049 71,024

Subtotal - Department of Energy 71,024

Department of Homeland Security 97.002 9,081

Subtotal - Department of Homeland Security 9,081

Department of lust ice 16.729 755,806

Subtotal - Department of lustice 755,806

Department of the State 19.300 1,790,008

Subtotal - Department of the State 1,790,008

Department of Veterans' Affairs 64.019 241,299

Subtotal - Department of Veterans' Affairs 241,299

National Aeronautics and Space Administration

Aerospace Education Services Program 43.001 608,071

Subtotal - National Aeronautics and Space Administration 608,071

National Science Foundation

Engineering Grants

Mathematical and Physical Sciences

Biological Sciences

Education and Human Resources

Biological Sciences

National Science Foundation - Miscellaneous

47.041

47.049

47.074

47.075

47.076

47.050

199,485

324,238

1,115,523

526,913

5,703

21,806

SubtOlal - National Science Foundation 2,193,668

Total Research and Development Direct Programs 285,141,236

The accompanying notes are an integral part ofthe schedule of expenditures of federal awards,

30


Federal Total CrDA Pass-Through rederal

Number Number Expenditures

RESEARCH AND DEVELOPMENT AND RESEARCH TRAINING (CONT.) Research and Development Passed Through from Other Organizations DepaJ1ment of Health and Hwnan Services

National Institutes ofHealth New England Organ Bank 93 IH390TOO123-03 $ 62,790 Advanced Precision Engineering 93.121 IR43DEOI4803-0IAI 17,300 Beth Israel Deaconess Medical Center 93.213 IROIAT002454-01 18,306 Harvard Medical School 93.242 ROIMH63951-02 106,970 Dartmouth College 93.266 RO IHS009804-06 1,630 Boston University 93.286 ROIEBOO0756-03 36,857 University ofCalifornia 93.333 5MO IRR00827-30 478,294 Radianse, Inc. 93.389 2R44RRO 18076-02 141,036 Children's Hospital of Philadelphia 93.846 5RO IAR42396-09 181,282 Dartmouth College 93.866 PO lAG 19783-03 7,299 Brigham & Women's Hospital 93.110 5R40MC0248-03 45,456 Georgetown University 93.110 6 U93 MCOO I00-06 170 Genex Technologies, Inc. 93.114 5R43ESO 12360-02 377,844 Harvard University 93.114 2ROI ES097 18-05 264 Metabolon 93.114 I R43 ESOI3646-01 17,190 Brigham & Women's Hospital 93.121 5POIDE14388-04 173,420 Forsythe Institute 93.121 ROIDE016370-01 3,704 University ofColorado 93.121 5ROIDE12998-05 79,616 University of North Carolina 93.135 U48CCU409660-10 (7,282) Harvard Medical School 93.157 1D43HP04083-03 45,826 Harvard Pilgrim Health Care 93.172 RO IHG002085-05 29,766 University of Rochester 93.172 various 57,587 Boston University 93.173 5U19DC03610-09 155,069 Boston University Medical Center 93.173 7PO IDC0361 0-05 31 Kay Elemetrics Corp. 93.173 2R42DC005678-02A I 136,744 Massachusetts Eye & Ear Infirmary 93.173 5R21 DC006071-02 41,278 Northeastern University 93.173 5RO IDC0523 7-04 110,912 Physical Sciences, Inc. 93.173 5R44DC004533-03 34,189 Dana-Farber Cancer Institute 93.213 5U 19AT002022-02 217 Harvard Medical School 93.213 R2IATOOI871 (2,078) New England Research Institute, Inc. 93.213 5UOI ATOO0210-02 37 Beth Israel Deaconess Medical Center 93.226 5ROIHS10152-03 (1,865) Brigham & Women's Hospital 93.226 various 132,744 Harvard Medical School 93.226 various 131,219 Harvard School of Public Health 93.226 various 34,890 University ofCalifornia 93.226 1RO 1HS 13915-01 37,072 Brandeis University 93.242 1RO 1MH66836-0 IA I 131,170 Brigham & Women's Hospital 93.242 lROIMH069732-0IAI 51,858 Harvard University 93.242 various 24,040 Harvard Medical School 93.242 5ROIMH43518-13 (2,827) Harvard University 93.242 various 251,999 Johns Hopkins University 93.242 5ROIMH50214-08 56,320 Techen, Inc. 93.242 1R43MH6 7365·0 I 94 Toureltes Syndrome 93.242 1RO 1MH070802-0 I (14,282) University of Minnesota 93.242 5P20MH57180-04 (30) University of PiItsburgh 93.242 NOIMH60013 1,021 University of Texas 93.242 NOIMH90003 318,288 Yale University 93.242 various 163,519 Harvard School of Public Health 93.266 lU5IHA02522-01-00 79,535 Boston Medical Center 93.273 5R01AAI3216-05 15,929 Boston University 93273 5R37AA07112-18 169,703 McLean Hospital 93.273 5UIOAA11756-08 (56,608) RTllntemational 93.273 101,910 Harvard Medical School 93.279 ROIDA11558-07 111,510 Kennedy Krieger Institute 93.279 5R21 DA 15898-03 23,623 McLean Hospital 93.279 various 4,002 Mayo Clinic Rochester 93.281 5ROIGM28835-24 67,892

The accompanying notes are an integral part of the scheduIe of expenditures of federal awards,

31

The General Hospital Corporation Schedule of Expenditures of Federal Awards, Continued Year Ended September 30,2005

Federal Total CI'DA Pa..-Through Federal


RESEARCH AND DEVELOPMENT AND RESEARCH TRAINING (CONT.) Research and Development Passed Through from Other Organizations (conl) Association of American Medical Colleges 93.283 U36CCU319276 $ 211,356 Association of Public Health Laboratories, Inc. 93.283 U60-CCU3030 19-15 10.671 Association ofTeachers of Preventive Medicine 93.283 TS-0620 255.903 Beth Israel Deaconess Medical Center 93.283 various 233,388 Harvard School of Public Health 93.283 various 50,649 Brigham & Women's Hospital 93.286 various 199,910 Robin Medical, Inc. 93.286 5R44EBOO1483·02 49,536 Boston University 93.287 5ROJ EBOO1550-03 154,145 New England Research Institute, Inc. 93.361 5ROINR05154·04 17,400 University ofCalifornia, San Francisco 93.36\ 5ROI NR0525-04 29,420 Boston University 93.371 (655) University ofCalifornia 93.371 various 1,131,872

Breathquant 93.387 R42HL074415-02A I 7,272 Fox Chase Cancer Center 93.393 IROICAI09332·01 96.643 Harvard College 93.393 5ROICA075971-07 9,089 Harvard School of Public Health 93.393 5ROICA74386-08 242.729 Northeastern University 93.393 5R33CA084641·04 310 University ofSouthern California 93.393 IUOICA098758-01 184,051 Brigham & Women's Hospital 93.394 various 149,246 Dana-Farber Cancer Institute 93.394 IROICA114465-01 6,370 Harvard Medical School 93.394 various 627,924 Massachusetts Institute ofTechnology 93.394 ROICA97966-01 45,853 American College of Radiology Imaging Network 93.395 5UO ICA080098-04 130,466 Ascension Technology Corporation 93.395 IR41CA115112·01 345 Beth Israel Deaconess Medical Center 93.395 IR2ICA97730-0IAI 36,284 Brigham & Women's Hospital 93.395 ROICA108633·01 20,305 Cancer And Leukemia Group B Foundation 93.395 UIOCA31946 39,357 Dana·Farber Cancer Institute 93.395 various 315,245 Johns Hopkins University 93.395 5UO I-CA62475-09 681 University of Alabama 93.395 5UOICA070019-09 (6,703) University of Alabama, Birmingham 93.395 SUOICA070019·09 (3,136) University ofChicago 93.395 UIOCA37447 3.194 Wake Forest University 93.395 R21 CA 104427 17,921 Beth Israel Deaconess Medical Center 93.396 5POI CA92644-03 254,261 Brigham & Women's Hospital 93.396 UOICA08430\-06 3,484 Dana-Farber Cancer Institute 93.396 various 283,304 Mt. Sinai School of Medicine 93.396 2ROICA085214·06 192,460 Ohio State University 93.396 7ROICA085139-03 203,602 University of North Carolina 93.396 5UOICA84314·05 ( 135) Beth Israel Deaconess Medical Center 93.397 various 367,502 Brigham & Women's Hospital 93.397 various 1,320,465

Dana-Farber Cancer Institute 93.397 various 2,809,326

MD Anderson Cancer Center 93.397 5P50CA83639-05S2 81,377

Boston University 93.398 5R25CA91958-03 30,875 American College of Radiology Imaging Network 93.399 UI0CA21661 3,088

Aurora Optics, Inc. 93.399 2R44CA76913-02A I (12,387)

Brigham & Women's Hospital 93.399 5UOI CA86381·05 . 186,597

Center For Survey Research 93.399 2ROICA86257-05 30,051 Dana·Farber Cancer Institute 93.399 vanous 151,122

Gcnex Technologies, Inc. 93.399 R43CAI08207 42,963

Harvard Pilgrim Health Care 93399 5U 19CA079689-06 87,181

Lynntech, Inc. 93.399 IR43CAI03268-01 38,512

National Childhood Cancer Foundation 93.399 5UIOCA098543-0 I 33,838 Northwestern University 93.399 5U IOCA030969-21 3,254 National Surgical Adjuvant Breast and Bowel Project Foundation 93399 PFED20-DAN-03 382 Physical Sciences, Inc 93.399 2R44CA96243-02 52,979 Armtech, LLC 93837 IR43DK047761-0 I I Sloan Kettering Institute 93.399 UO ICA 105492-0 I 48,414 University ofCalifornia, Irvine 93.399 5U54CA I05480-02 151,068 University ofColorado Cancer Center 93399 5RO ICA068099-06 29,182

The accompanying notes are an integral part of the schedule of expenditures of federal awards,

32


Federal Tota' CFDA Pass-Through Federal



Research and Development Passed Through from Other Organizations (cont)

Beth Israel Deaconess Medical Center 93.837 5POIHL43510-10 S (22,313)

Boston University Medical Center 93.837 various 162,043 Brigham & Women's Hospital 93.837 various 95,984 Case Western Reserve University 93.837 NO I-DK06-2203-09 253,151 Children's Hospital 93.837 P50HL067669 37,294 Diametrx 93.837 5R42DK005596-04 40,123 Eukarion, Inc. 93.837 I R41HL073596-01 26.946 George Washington University 93.837 5NOIDK062204-05 12,388 Giner, Inc. 93.837 N44-DK-32535 14

Gwathrne, Inc. 93.837 ROIHL49574-05 (15)

Medical College of Ohio 93.837 IUOIHL715560-01 134,158

Oregon Health & Science University 93.837 IROIHL070132-01-AI 33,735

University ofArizona 93.837 UOIHL65594 39 University ofPittsburgh 93.837 IRO IHL07 5038-0 I 1,496

University ofTexas 93.837 5ROI DK058369-04 179 Boston University 93.838 RO IHL6540 1-02 (5,998)

Carolinas Medical Center 93.838 IROIHL074384-01 17,933 Columbia University 93.838 IROIHL075476-01 28,513 Harvard School of Public Health 93.838 5ROIHL60710-05 70,591 Harvard University 93.838 2RO IHL046690-09 (26)

Boston University 93.846 R1AR43434-05 (I) Center for Blood Research 93.839 5POI HL05956 1-08 332,194 Dana-Farber Cancer Institute 93.839 5UO 1HL69249-04 24,882 Lynn Tech, Inc. 93.839 IR41HL075696-01 85,094 Candela Corporation 93.846 IR43AR0491 09-01 AI 6,841

Danmouth College 93.846 various 109,422 University ofCalifornia 93.846 NOl-AI-15416 961,389 University OfCalifornia, San Francisco 93.846 NOI-AI-15416 360,062 Brigham & Women's Hospital 93.847 various 59,535 George Washington University 93.847 5UOIDK061230-03 824,892

Harvard Medical School 93.847 5POI DK056246-05 170,986 Harvard Pilgrim Health Care 93.847 5ROIDK6074 1-03 7,957

Joslin Diabetes Center 93.847 5RO IDK064568-03 17,897

University ofConnecticut Health Center 93.847 5R37DK32949-22 150,737

Harvard Medical School 93.848 152084-0127 42,656 University of Pennsylvania 93.848 5ROIDK59961-02 1,030 Boston University 93.849 5ROIDK62270-02 49,884

Brigham & Women's Hospital 93.849 IROIDK66017-01 36,960

Union Biometrica Tech 93.849 R42DK5 5964-0 I (1,718)

University of Alabama, Birmingham 93.849 5UOIDK63788-03 54,303

University ofCalifornia, Los Angeles 93.849 5ROIDK35423-15 (1,389)

Boston University 93.853 5ROINS17950-20 260

Boston University 93.853 various 324,582

Boston University Medical Center 93.853 various 527,603 Brown University 93.853 5RO INS44834-02 (3,751)

Children's Hospital 93.853 various 326,493

Columbia University 93.853 various 28,495

Doty Scientific 93.853 2R44NSO 1127-02 146,531

Harvard School of Public Health 93.853 5ROINS32324-07 (4,228)

HhmilHmslDfhcc 93853 53000234 73,893 Johns Hopkins University 93.853 IROINS042607-01A2 36,811

Mayo Clinic Rochester 93.853 RO INS28492-11 2,471

Mayo Foundation 93.853 ROINS39987-0 I (243)

Medical College of Georgia 93.853 5ROINS38455-02 66 Northwestern University 93.853 5ROINS37912-05 (14,606) Spaulding Rehabiliation Hospital 93.853 1R21 NS045410-01AI 18,174

Techen, Inc 93.853 2R44NS044785-02 82,988 Techen, Inc. 93.853 IR43NS044785-01 172 Tourenes Syndrome Association 93.853 5RO INS40024-03 917,984

University of Medicine and Dentistry, New Jersey 93.853 5ROINS038384-05 40,809

The accompanying notes are an integral part of the schedule of expenditures offederal awards.

33


RESEARCH AND DEVELOPMENT AND RESEARCH TRAINING (CONT.) Research and Development Passed Through from Other Organizations (cont.)

University of Medicine and Dentistry, New Jersey

University of Alabama, Binningharn University of California University of Caufornia, Los Angeles

University of Cincinnati

University of Iowa University of Rochester University of Rochester

Wake Forest University Washington University

Yale University

University of Massachusetts

Columbia University

Harvard Medical School McLeao Hospital

Beth Israel Deaconess Medical Center

Bioscale, Inc. Brigham & Women's Hospital

Center for Blood Research Children's Hospital

Dana-Farber Cancer Institute

Harvard Medical School Joslin Diabetes Center

Los Alamos National Laboratory

Massachusetts Institute of Technology

University of Alabama, Binningharn

University of California, San Francisco

University of Chicago: Immune Tolerance Network University of Florida

University of Minnesota

Brigham & Women's Hospital Dana-Farber Cancer Institute

Harvard Medical School Nanophanna

New York University School of Medicine

Northeastern University Rush-Presbyterian-St Luke Medical Center

University of Alabama, Binningham University of Maryland

University of North Carolina, Chapel Hill University of Texas Medical Branch

Brigham & Women's Hospital

University of California, San Diego


Children's Hospital

Cincinnati Children's Hospital Medical Center

Kennedy Krieger Institute

University of Massachusetts

University of Michigan University of Rochester Wake Forest Scbool of Medicine

Yale University

Boston University Brigham & Women's Hospital Harvard Division on Aging Harvard Medical School

Hebrew Rehabilitation Center for the Aged Research and Training [nstiMe

Univeristy of Minnesota University of California, San Diego University of Minnesota

Federal CFDA

Numher

93.853

93.853

93.853 93.853

93.853 93.853 93.853

93.853 93.853

93.853

93.853

93.854

93854 93.854 93.854

93.855

93.855

93.855 93.855

93.855 93.855

93.855

93.855

93.855

93.855

93.855

93.855 93.855

93.855

93.855

93.856 93856 93856

93.856

93.856

93.856 93.856 93.856

93.856

93.856

93.859

93.862

93.864

93.865

93.865 93.865

93.865

93.865

93.865

93.865 93.865

93.865 93.866

93.866 93.866 93.866

93.866

93.866 93866 93866

Total Pass-Through Federal

Numher Expenditures

1U0 INS04397 5-0 I $ 34 5ROINS043789-03 171,783

IUOINS042372-OIAIR 49,934 HHSN278200441003C 104,273

ROI-NS39512 84,790 5RO 1NS040068-04 17,972 5RO INS35284-04 13,589 5ROINS42240·04 46,233 5ROINS34447-09 110,446 5UOINS32228-09 464

IROINS044876-01A2 442 5RO INS38194-05 I RO INS39258-04 664

5ROINS37141-04 80 various 571,047

5ROIAI50987·04 238,898 IR43AI07050-O 1 2,387 IUO 1Al63623-01 442,787 IPOIAl52343-04 327,917 5POI AI50157-05 313,614 5POlAI29530-13 5,627

PROTOCOL NISO I (15,174) various 894,367

IR2IAlI05542-01 21,243 R21AI006731-01 81,684

NOI-AI-15440 26,148

various 937,197 NO IAI095300 (20 I ,636)

various 191,030 lROIAI063274-01 98,993

UI9AI02006 214,968 various 175,959 various 1,573,578

R4IAl05921-01 (320) 7ROI AI044628-05 247,119

R21 Al059483 32,843 5PO 1AJ055793-03 89,784

5 UOI AI041530.06 (2,357) R21AI42181-06 152,555

various 39,386 IPOIGM066312-01A2 81,706

5PO 1GM61354-03 431,715

U5412303-22 7,542

5RO 1HD4029 1-03 (31,628)

5ROIHD041531-02 620 POIHDI3021 421,481

5RO IHD39276-02 (38,942) POIHD05515-36 95,301

IPO 1HD044232-0 1 20,664 U1911D35466-07 29,037 POIHD21 187-04 131,804

various 434,660 ROIAG09661-11 59,981

various 1,993,372 5 P 60 AG0055 12-13 43

vanous 20,067 5P60AG088 I2-13 8,647

PO IAG 15453-05 (16,400) 5RO lAG022381-03 385,263

PO 1AG 15453-04 1,371


34

,~

•

.,.

,.

it

it


Federal

CFDA

Number

Pass-Through

Number

Total

Federal

Expenditures


Research and Development Passed Through from Other Organizations (cont.)

University of Washington

Eukarion, Inc.

Massachusetts Eye & Ear Infirmary

Schepens Eye Research Institute

University of Texas Brigham & Women's Hospital

Children's Hospital

Columbia University

Dimmock Community Health Center

93.866

93.867

93.867

93.867

93.867

93.879

93.879

93.886

93.928

various IR41EYOl5028..QI

RO IEYO 11309..07

IROJEYOl4812..QI

R24EY12877

IU54LM008748-01

NOI-LM-3-3515

5R01AG07370-15

6H97HAOO 176-03-02

S 33,517

6,234

155,752

33,091

3,820 191,859

102,463

(39,386)

755

Subtotal - National Institutes of Health 33,1 [3,367

Department of Commerce

UMass Dartmouth - National Textile Center II DOC02-07400 (5,365)

Subtotal· Department ofCommerce (5,365)


Office of Naval Research

Center for Brain Sciences & Metabolism 12.300 5UOIAGI0483 49,125

Department of Army Research and Material Command

Boston University Medical Center



House Ear Institute

Livedata, Inc.

Science Research Laboratories, Inc.

University of North Carolina

University ofCalifornia, San Francisco

Wayne State University

12.420

12.420

12.420

12.420

12.420

12.420

12.420

12.420

12.420

DAMDI7-0101-0026

DAMDI7-98-J-8611

DAMD I7..03-1..0708

DAMD17..Q1-I..Q710

W81 XWH..Q4-C-00 15

DAMDI7..Q2-C-0125-337

DAMD 17-03-2-0052

DAMDI7..Q2-1-0638

DAMD17..Q2-1-0693

(5,806)

(39,624)

35,052

140,950

(6,560)

(36,126)

(6,295)

278,473

442,524

Office of the Secretary of Defense

Massachusetts Institute of Technology 12.630 FA9550-04-1-0046 77,245

Defense Advanced Research Projects Agency

Sciperion, Inc. 12.910 DRP5-MASSGEN (6,272)

Subtotal - Department of Defense 922,686

Deparment of Energy

Harvard Medical School

The Mind Institute

81049

81049

ED-FG02-ER63445 106,876

1,414,032

Subtotal - Department of Energy 1,520,908

Department of Education

Spaulding Rehabillation Hospital 84.133 HI33A021934 30,490

Subtotal - Department of Education 30,490

National Aeronautics and Space Administration

National Space Biomedical Research Institute

Wyle Laboratories, Inc

43001

43001

NCC9-58-U

NAS9-97005

(2,447)

1,583

Subtotal - National Aeronautics and Space Administration (864)

National Science Foundation

Duke University

Northeastern Umversity

47.074

47.074

NSFI017

EEC-998682I NSF 281,626

10,185

Subtotal - National Science Foundation 291,811

Total - Research and Development Pass-Through Programs 35,873,033

Total Research and Development 321,OJ4,269


35

II

,~

;I

',t



Research Training Direct Programs



Oral Diseases and Disorders Research

Research Related to Deafness and Comnllmication Disorders

Research and Training in Complementary and Alternative Medicine

Drug Abuse Scientist Development Award for Clinician Scientist, Development

Awards and Research Scientist Awards

Mental Health Research CareerlScientist Development Awards

Mental Health National Research Service Awards for Research Training

Discovery and Applied Research

General Clinical Research Centers

National Center for Research Resources

Cancer Research Manpower

Heart and Vascular Diseases Research

Lung Diseases Research

Blood Diseases and Resources Research

Arthritis, Musculoskeletal and Skin Diseases Research

Diabetes, Endocrinology and Metabolism Research

Digestive Diseases and Nutrition Research

Kidney Diseases, Urology and Hematology Research

Extramural Research Programs in the Neurosciences and Neurological Disorders

Biological Basis Research in the Neurosciences

Allergy, Immunology and Transplantation Research

Microbiology and Infectious Diseases Research

Pharmacology, Physiology, and Biological Chemistry Research

Genetics and Developmental Biology Research and Research Training

Center for Research for Mothers and Children

Aging Research

Vision Research

Grants for Training in Primary Care Medicine and Dentistry

Fogarty International Research Collaboration Award

International Research and Research Training

Other Department of Health and Human Services

Agency for Health Care Policy and Research - Health Services Research and

Development Grants

Subtotal - Other Department of Health and Human Services


United States Army

Subtotal - Department of Defense

Total Research Training Direct Programs

Research Training Passed Through from Other Organizations



Harvard School of Public Health



Children's Hospital

American Psychiatric Association

American Psychiatric Institute for Research & Education

Judge Baker Children's Center




Federal

CFDA

Number

93.121

93.173

93.213

93.277

93.281

93.282

93.286

93.333

93.389

93.398

93.837

93.838

93.839

93.846

93.847

93.848

93.849

93.853

93.854

93.855

93.856

93.859

93.862

93.865

93.866

93.867

93.884

93.934

93.989

93.226

12420

93.154

93.157

93.186

93.186

93.242

93.242

93.242

93.286

93.286

93.395

Total

Pass-Through Federal

Number Expenditures

$ 374,791

146,238

361,776

905,381

3,080,777

437,983

58,330

255,859

388,774

3,739,016

2,751,880

903,603

523,487

414,722

2, I02,425

1,666,414

1,389,529

2,961,334

(1,866)

770,658

2,114,005

769,400

59,973

600,385

893,440

164,043

160,508

89,345

133,339

28,215,549

121,62\

121,621

533,913

533,913

28,871,083

ID43TWO 12565-04 51,630

D34-HP04083-03 73,611

2T32HPII001-17 105,243

various 88,745

5T32MHI9126-11 12,380

5T32MHI9126-15 49,233

5T32MH 16259-25/26 157,997

5T32HL07917-04 (13)

5T32EBOOI632-02 120,024

5K08CA120159-02 97,512


36



Research Training Passed Through from Other Organizations (conI.)











Boston University

Vale University



Harvard University

Subtotal· National Institutes of Health

Other Department of Health and Human Services

Massachusetts Institute ofTechnology

Subtotal - Other Department of Health and Human Services

Total Research Training Pass-Through Programs

Total Research Training

Total Research and Development and Research Training

OTHER PROGRAMS

Passed Through from the Commonwealth of Massachusetts

Department of Agriculture

Food and Nutrition Service

Special Supplemental Food Program for Women, Infants and Children Grant

Subtotal· Department of Agriculture

Department of Justice

Office for Victims ofCrime

Crime Victim Assistance

Subtotal· Department of Justice


National Institute of Health

Coordinated Services and Access to Research for Women, Infants, Children, and Youth

Centers for Disease Control and Prevention-Investigations and Technical Assistance

Refugee and Entrant Assistance - WilsonlFish Program

Family Violence Prevention and Services/Grants for Battered Women's Shelters

Grants to States and Indian Tribes

HIV Prevention Activities - Health Department Based

Preventive Health Services - Sexually Transmitted Diseases Control Grants

Preventive Health Services - Sexually Transmitted Diseases Research, Demonstrations,

and Public Information and Education Grants

Maternal and Child Health Services Block Grant to the States

Subtotal - National Institutes of Health

Total Other Programs

TOllll Federal Expenditures

Federal

CFDA

Number

93.399

93.837

93.839

93.846

93.846

93.853

93.853

93.856

93.856

93.856

93.856

93.865

93.866

93.866

93.895

47.041

10.557

16.575

93.153

93.283

93.583

93.671

93.940

93.977

93.978

93.994

Pass-Through

Number

Total

Federal

Expenditures

T32CA009078·30

5T32DK07754-06

5T32HL07623-17/18

T32AR07098

T32AR07098

5T32NS07484·04

IT32NS048005-01

IK18A1055313-01

various

various

K25A1050436·02

5K 12HDOO0850-20

5P60AG08812-13

various

SD14HPOO192-03

$ 91,890

39,829

88,131

186,910

(35,325)

29,160

55,469

114

53,179

103,894

(2,644)

106,395

7,605

112,421

11,895

1,605,285

EEC-0234I 08 29,679

29,679

1,634,964

30,506,047

351,520,316

481,838

481,838

45,255

45,255

45,890

359,761

82,461

59,986

116,960

63.489

12,734

53.257

794,538

1,321,631

$ 352.841.947


37

The General Hospital Corporation Notes to Schedule of Expenditures of Federal Awards September 30,2005

1.

2.

3.

4.

Summary of Significant Accounting Policies

Basis of Presentation The accompanying Schedule of Expenditures of Federal Awards includes the federal grant transactions of The General Hospital Corporation recorded on the accrual basis of accounting. The information in this schedule is presented in accordance with the requirements ofOMB Circular A133, Audits o/States. Local Governments, and Non-Profit Organizations. Therefore, some amounts presented in this schedule may differ from amounts presented in or used in the preparation of the basic financial statements. Negative amounts represent adjustments or credits to amounts reported as expenditures in prior years. Pass-through numbers are provided where available. In some instances, expenditures listed from individual pass-through entities consist of more than one award.

Facilities and Administrative Costs

The predetermined fixed facilities and administrative cost rates were based on financial information submitted utilizing the method prescribed in OASC-3. The Hospital negotiated and was awarded a predetermined fixed facilities and administrative cost rate for the period October 1, 2003 through September 30, 2005 of 73% for on-site research, and for the period October 1, 2003 through September 30, 2007 of 26% for off-site research. Fringe benefit rates for the period October 1,2003 through September 30,2005 range from 10% to 28%.

Stafford Loan Program

During the fiscal year ending September 30, 2005, the Hospital processed $110,541 in new loans under the Stafford Loan Program (CFDA number 84.032), granted by the Department of Education.

Subrecipients

During fiscal 2005, the Hospital provided to subrecipients in the Research and Development and Research Training Program $38,666,263 as follows. These amounts are included in the accompanying Schedule of Expenditures of Federal Awards:

Acenta Discovery, Inc. $ 73,369 Albany Medical College 3,000 Albert Einstein College of Medicine 268.761 Aloha Technology Groups, Inc. 9,614 Allegheny Singer Research Institute 3,000 American Red Cross 79,894 Association Civil Impacta Salud Y Education 50,368 Battelle 300,182 Baylor College of Medicine, Inc. 157,898 Beth Israel Deaconess Medical Center 2,392,912 Boston Medical Center Corporation 20,614 Boston University 1,121,793 Boston University Medical Center 68,155 Boston VA Research Institute, Inc. 12,383 Brigham and Women's Hospital 3,556,785 Brown University 87,147 Butler Hospital 49,435 Cambodian Mutual Assistance Association 27,500

38

The General Hospital Corporation Notes to Schedule of Expenditures of Federal Awards September 30, 2005

•• Cambridge Health Alliance Caritas St. Elizabeth's Medical Center

$ 163,395 3,000

Case Western Reserve University 3,000 Centre National De La 206,599 Charles Stark Draper Laboratory, Inc. 1,312,583 Charlotte Gastroenterology & Hepatology 1,888 Children's Hospital 325,059 Chulalongkom Univeristy Bangkok Cleveland Clinic Educational Foundation Clinical Applications Labs, Inc. Colorado State University Columbia University

252,155 148,206

1,888 108,386 220,954 I

Community Research Initiative ofNE, Inc. 40,412 Concurrent Technologies Corp. 185,925 Cornell University Medical College 86,683 Cancer Therapy and Research Center Research Foundation 8,138 Dana Farber Cancer Institute 1,053,539 Dartmouth College 229,652 deCode Genetics, Ltd. 241,201 Duke University 632,990 Emory University 33,245 European Organization for Research & Treatment ofCancer 216,645 Fenway Community Health Center, Inc. 40,159 Fred Hutchinson Cancer Research Center 118,991 Gastroenterology Associates 1,888 Georgetown University 266,457 Ghent University 5,115 Gordon Research Conferences 10,000 Gray Cancer Institute 65,230 Greater Boston Legal Services, Inc. 20,000 Habit Management Institute 8,892 Harvard Medical Faculty Physicians 2,311 Harvard University 1,825,254 Harvey Mudd College 40,000 Hebrew Rehabilitation Center for Aged 207,272 Hebrew University Jerusalem 128,660 Hospital for Sick Children 102,379 House Ear Institute 16,455 Impacta Peru 59,372 Indiana University 3,000 Institut Necker 70,000 Institute of Psychology of the Hungarian Academy of Sciences 30,020 International Center for Diarrhoeal Disease Research 265,327 Iowa State University 78,931 Johns Hopkins University 988,048 Joseph Stokes Jr. Research Institute 2,000 Joslin Diabetes Center, Inc. 1,703,765 Kaiser Foundation Research Institute 427,249 Kennedy Krieger Institute 14,265 Lds Hospital 23,889 Los Alamos National Laboratory 232,473 Louisiana State University 277,356 Loyola University 128,504 Massachusetts General Hospital 191,283 Massachusetts Institute of Technology 2,564,008 Mayo Collaborative Services, Inc. 5,285 Mayo Medical Laboratories, Inc. 193 Mclaughlin Research Institute 36,429 Mclean Hospital 270,107 Medical University of South Carolina 16,795 Memorial Sloan-Kettering Cancer Center 90,933 Metabolon, Inc. 58,000 Miami University 112,566 Miriam Hospital 36,707 Mount Sinai School of Medicine 69,686

39

The General Hospital Corporation Notes to Schedule of Expenditures of Federal Awards September 30, 2005

Nankai University National Center for STD/Aids Control & Prevention Ncaids China New England Institutional Review Board New England Medical Center New York University Northeastern University Northwestern University Neurogentics Research Initiative Ohio State University Oregon Health And Science University Physical Sciences, Inc. Ponce School of Medicine Library Portland VA Research Foundation Regents of the University of California Regents of the University of Michigan Research Foundation of State University of NY Rhode Island School of Design Roberts Research Institute Robert Koch Institute Robert Wood Johnson Medical School Rush University Rutgers Univeristy Salem State College Schepens Eye Research Institute, Inc. Scripps Research Institute Semmelweis University Southwest FoundationlBiomed Spaulding Rehabilitation Hospital Stanford University Steinhausen, H.C. Tangdu Hospital China Thomas Jefferson University Hospital Tufts College UCSD University of Massachusetts Medical Center University of Massachusetts University Hospitals of Cleveland University of Alabama University of Alabama, Birmingham University ofBrilish Columbia University of Calgary University of California University of California, Berkeley University of California, Irvine University of Chicago University of Colorado Health Sciences University of Connecticut University of Connecticut Health Center University of Florida University of Goettingen University of Kwazulu University of Louisville University of Louisville Research Foundation University of Maryland, Baltimore University of Massachusetts University of Massachusetts - Dartmouth University of Massachusetts Lowell University of Massachusetts Medical School University of Massachusetts Medical Center University of Medicine and Dentistry University of Michigan University of New South Wales University of Oklahoma University of Oxford

$ 315,848 128,580 193,408

1,950 (2,308)

416,003 110,305 176,292

15,000 75,242

398,239 32,378 67,289 89,915

1,156,334 100,307 441,430

60,000 51,669 81,250 91,537

3,000 1,059

(10,960) 345,378 145,851

10,800 55,471 30,947

703,252 23,150

106,969 3,000

41,940 2,422

15,794 27,956

122,480 176,138 33,765 29,089 57,133

289,006 59,105

237,185 2,000

195,558 5,442

16,909 209,882

44,857 411,320 (23,200)

4,300 145,030 79,214 4,087

31,405 114,064 285,813

70,242 136,386 601,161

83,360 16,524

40

The General Hospital Corporation Notes to Schedule of Expenditures of Federal Awards September 30,2005

University of Pennsylvania University of Pittsburgh University of Rochester University of Texas University of Utah University of Vermont University of Washington University of Texas M D Anderson Cancer Center University of Texas Southwestern Medical Center Vanderbilt University Medical Center Vietnamese American Civic Association, Inc. Vital Solutions, Inc. Vlaams Interuniversitar Inst Voor Biotec Washington University Weill Medical College Whitehead Institute for Biomedical Research, Inc. Wits Health Consortium Yale University

$ 94,380 1,335,169

303,448 774,464

66,893 34,160

787,660 26,273

(626) 36,627 20,000 4,818

60,000 797,053 225,193 387,744

55,627 338,821

$ 38,666,263

41

Part II

Reports on Compliance and Internal Controls

This report is intended solely for the infonnation and use of the Hospital's Board of Trustees, management, federal awarding agencies and pass-through entities and is not intended to be and should not be used by anyone other than those specified parties.

January 30, 2006

..~

43

PricewaterhouseCoopers LLP 125 High Street Boston MA 02110 Telephone (617) 530 5000 Facsimile (617) 530 5001

Report of Independent Auditors on Compliance with Requirements Applicable to Each Major Program and on Internal Control over Compliance

in Accordance with OMB Circular A-133

To the Board of Trustees of The General Hospital Corporation

Compliance We have audited the compliance of the General Hospital Corporation (the "Hospital") with the types of compliance requirements described in the U.S. Office of Management and Budget (OMB) Circular A133 Compliance Supplement that are applicable to each of its major federal programs for the year ended September 30, 2005. The Hospital's major federal programs are identified in the summary of auditor's results section of the accompanying schedule of findings and questioned costs. Compliance with the requirements oflaws, regulations, contracts and grants applicable to each of its major federal programs is the responsibility of the Hospital's management. Our responsibility is to express an opinion on the Hospital's compliance based on our audit.

We conducted our audit of compliance in accordance with auditing standards generally accepted in the United States of America; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; and OMB Circular A-133, Audits ofStates, Local Governments, and Non-Profit Organizations. Those standards and OMB Circular A-B3 require that we plan and perform the audit to obtain reasonable assurance about whether noncompliance with the types of compliance requirements referred to above that could have a direct and material effect on a major federal program occurred. An audit includes examining, on a test basis, evidence about the Hospital's compliance with those requirements and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion. Our audit does not provide a legal determination of The Hospital's compliance with those requirements.

In our opinion, the Hospital complied, in all material respects, with the requirements referred to above that are applicable to each of its major federal programs for the year ended September 30, 2005. However, the results of our auditing procedures disclosed instances of noncompliance with those requirements, which are required to be reported in accordance with OMB Circular A-B3 and which are described in the accompanying schedule of findings and questioned costs as items 05-1 and 05-2.

44

Internal Control over Compliance The management of the Hospital is responsible for establishing and maintaining effective internal control over compliance with the requirements oflaws, regulations, contracts and grants applicable to federal programs. ill planning and performing our audit, we considered the Hospital internal control over compliance with requirements that could have a direct and material effect on a major federal program in order to determine our auditing procedures for the purpose of expressing our opinion on compliance and to test and report on the internal control over compliance in accordance with OMB Circular A-133.

Our consideration of the internal control over compliance would not necessarily disclose all matters in the internal control that might be material weaknesses. A material weakness is a reportable condition in which the design or operation of one or more of the internal control components does not reduce to a relatively low level the risk that noncompliance with applicable requirements of laws, regulations, contracts and grants caused by error or fraud that would be material in relation to a major federal program being audited may occur and not be detected within a timely period by employees in the normal course of performing their assigned functions. We noted no matters involving the internal control over compliance and its operation that we consider to be material weaknesses.

This report is intended solely for the information and use of the Hospital's Board of Trustees, management, and federal awarding agencies and pass-through entities and is not intended to be and should not be used by anyone other than those specified parties.

January 30, 2006

45

Part III

Findings

... The General Hospital Corporation Schedule of Findings and Questioned Costs Year Ended September 30,2005

I. Summary of Auditor's Results

Financial Statements

Type of auditor's report issued Unqualified

:$ Internal control over financial reporting

Material weakness(es) identified? __ yes l no Reportable condition(s) identified not considered to be material weaknesses? __ yes l none reported

~ Noncompliance material to financial statements noted? __ yes l no

Federal Awards

Internal control over major programs Material weakness(es) identified? __ yes l no

.;J Reportable condition(s) identified not considered to be material weaknesses? __ yes l none reported

Type of auditor's report issued on compliance for major programs Unqualified

Any audit findings disclosed that are required to be reported in accordance with Circular A-133, Section .5 1O(a)? ..-X.- yes __ no

Identification of major programs

~ Research and Development and Research Training Various CFDA numbers

Dollar threshold used to distinguish between Type A and Type B programs $3,000,000

Auditee qualified as low-risk auditee? __ yes lno

II. Financial Statement Findings

None

~

46

The General Hospital Corporation Schedule of Findings and Questioned Costs Year Ended September 30,2005

III. Findings and Questioned Costs for Federal Awards

05-01 Reporting

OMB Circular A-II 0 Section 51 requires that annual reports are due 90 calendar days after the grant year; and quarterly or semiannual reports are due 30 days after the reporting period. In addition, Section 52 requires that the Financial Status Report (FSR) for each project or program be submitted no less frequently than annually, and the awarding agency will determine the frequency of the report.

Of the 213 NIH FSRs due in fiscal year 2005, we noted that 36 were submitted late on an average of 53 days. In the prior year, we noted that of the 193 NIH FSRs due in fiscal 2004, 58 were submitted late on an average of 74 days.

Recommendation We recommend the Hospital continues its focus on improving timely completion and submission of FSRs to ensure that required reports are filed in accordance with grant terms and OMB Circular A-II0.

Management's Views and Corrective Action Plan Following these findings are management's views and corrective action plan.

05-02 EquipllJent

OMB Circular A-II 0 Section 34 requires organizations to maintain accurate equipment inventory records. In addition, organizations are required to perform a physical inventory of federally funded equipment at least once every two years and reconcile the results to the equipment records. During the fiscal year, the Hospital performed the bi-annual equipment inventory.

At the time of our fieldwork, the results of the Hospital's physical inventory had not yet been reconciled to the equipment records. However, the Hospital identified a total of 42 exceptions of the total 326 assets selected as part of the inventory process of which 19 exceptions relate to the 184 federally funded assets selected.

When testing a sample of 30 assets from the complete equipment listing and a sample of 30 assets from specific locations, we noted the following exceptions:

Of the 30 items selected from the equipment listing:

• I item could not be located (CFOA #93.853);

• 3 items were not tagged (CFOA #93.846, 12.420, 12.300);

• 2 items had an incorrect tag number compared to the tag numbers on the physical asset (CFOA #93.866); and

• 1 item had the same tag number as ~oted on the physical asset, but the physical asset had a different model number than noted in the equipment listing (CFOA #93.395).

47

The General Hospital Corporation Schedule of Findings and Questioned Costs Year Ended September 30,2005

Ofthe 30 items selected from the physical location within the Hospital, 3 items were not found in the listing.

We also selected 10 current year federal equipment purchases and noted agreement between the inventory reviewed and the information included on the inventory tag located on the asset.

Recommendation We recommend the Hospital review and enhance as needed its current policies and procedures for maintaining complete and accurate equipment inventory records as required by OMB Circular A110. The results of the Hospital's fiscal 2005 inventory and the exceptions we noted in our testing should be reconciled to the Hospital's equipment inventory listing and general ledger.

Management's Views and Corrective Action Plan Following these findings are management's views and corrective action plan.

48

The General Hospital Corporation Summary Schedule of Prior Audit Findings

Finding 04-1 Reporting

OMB Circular A-110 Section 52 requires submission ofa Financial Status Report ("FSR") to the sponsoring agency according to the terms set forth by the grant or contract agreement. The National Institutes of Health's Grant Policy Statement Part II (131), "Financial Reports," requires that a Financial Status Report must be submitted within 90 days of the end of the grant's award period or budget period, if annual submission is required.

Of the 193 NIH FSRs due in fiscal year 2004, PwC noted that 58 were submitted late. In addition, of the 6 quarterly reports reviewed on grants from other federal awarding agencies (3 for Army and 3 for Department of Justice), all were submitted late.

PwC also noted that while the Hospital maintains a tracking mechanism for all federal financial status reports due and tracks submissions for NIH awards, there is no formal tracking of the timeliness of report submissions of non-NIH awards.

Status See current year finding 05-01 and corrective action plan. The fiscal 2004 corrective action plan was implemented. The Hospital noted significant improvement during fiscal 2005. The Hospital will continue to work toward the goal of further decreasing the number of late submissions by focusing on improving systems and monitoring transactions.

Finding 04-2 Service Centers

The cost principles for hospitals, OASC-3, section III item B38 concerning service centers requires that service center costs charged to federal awards be based on a rate that is designed to recover only actual costs ofproviding the service to the federal awards, and the rates should be applied on a nondiscriminatory basis between federal awards and other users of the service center. PwC noted that in 2004, Partners developed a comprehensive policy concerning service centers which was in the process of being implemented. PwC tested three service centers. One of the three, the PET service center, was relatively small, with revenues from federal sources of approximately $419 thousand in fiscal 2004. PwC noted no indication that the rates charged were discriminatory against federal awards, nor did PwC note any indication that the rates were designed to recover more than cost. However, PwC noted that the support for the rates charged at PET was several years old, and had not been updated in several years.

Status The corrective action plan was implemented. There is no similar finding in the current year. The Hospital continues to implement the policy for service centers. In accordance with the Hospital's policy, the Director of Core Facility Operations and Business Planning in Partners Research Management conducted a financial review of the PET service center. The review included preparation of a detailed business plan and updated rate analysis.

49

• ..

Management's View and Corrective Action Plan '4 for the Fiscal Year Ended September 30, 2005

05-1 ReportingAn integrated

health care system As the auditors noted, the number of late reports decrease from fiscal year FY2004 founded by (30.1%) to FY2005 (16.9%) and was maintained at 4.4% during the second half ofFY05.

Additional staffing was approved in the FY05 and FY06 budgets for Partners Research Brigham and Management. The additional resources helped to alleviate some of the accumulated

Women's Hospital stress on staffing and systems and contributed to improvement in the on time submission rate. The Hospital will continue to work toward the goal of further decreasing the

and number of late submissions by focusing on improving systems and monitoring

Massachusetts transactions.

General Hospital _

05-02 Equipment

The Hospital agrees with the auditors' recommendations. The Research Space Management Department will work on enhancing current policies and procedures related to equipment inventory as required by OMB Circular A-ItO. The updates to the policy and procedures will be completed by the end of the third quarter FY06.

The bi annual physical inventory was conducted by Research Space Management using a statistical sampling approach. The inventory was completed in early October 2005. The process of reconciling the results to the equipment inventory system and the general ledger is ongoing and should be completed by the end of the second quarter FY06.

. \ci-Jao/oSDate

Research Management

c-----'.-------"---'-~~'----'-----

oh Fl cial Director

Research Management

Partners HealthCare System, Inc, 50 Staniford Street, Suite 10lH, Boston, MA 02114-2554

Tel: 617 726-3651, Fax: 617726-3246! 617 726-27%

Documents

The General Hospital Corporation - Home | Partners · PDF file · 2011-03-14Property and equipment, net 811,864 751,615 Other assets 5,194 4,703 . Total assets $ 3,116,921 $ 2,753,865