The special steps involved in hospital audit are stated below:
1. Verification of Bills
Vouch the Register of patients with copies of bills issued to them. Verify bills for a selected period with the patients’ attendance record to see that the bills have been correctly prepared. Also see that bills have been issued to all patients from whom an amount was recoverable according to the rules of the hospital.
2. Checking Cash Collection
Check cash collections as entered in the Cash Book with the receipts, counterfoils and other evidence for example, copies of patients bills, counterfoils of dividend and other interest warrants, copies of rent bills, etc.
3. Collection of Revenue
See by reference to the property and investment Register that all income that should have been received by way of rent on properties, dividends, and interest on securities settled on the hospital, has been collected.
4. Donations
Ascertain that legacies and donations received for a specific purpose have been applied in the manner agreed upon.
5. Reconciliation of Subscription
Trace all collections of subscription and donations from the Cash Book to the respective Registers. Reconcile the total subscriptions due (as shown by the Subscription Register and the amount collected and that still outstanding..
6. Proper Authorization
Vouch all purchases and expenses and verify that the capital expenditure was incurred only with the prior sanction of the Trustees or the Managing Committee and that appointments and increments to staff have been duly authorized.
7. Government Grants
Verify that grants, if any received from Government or local authority have been duly accounted for. Also, that refund in respect of taxes deducted at source has been claimed.
8. Reporting of Discrepancies
Compare the totals of various items of expenditure and income with the amount budgeted for them and report to the Trustees or the Managing Committee significant variations which have taken place.
9. Entries in Stock Register
Examine the internal check as regards the receipt and issue of stores; medicines, linen, apparatus, clothing, instruments, etc. so as to insure that purchases have been properly recorded in the Stock Register and that issues have been made only against proper authorization.
10. Depreciation
See that depreciation has been written off against all the assets at the appropriate rates.
11. Investment Registers
Inspect the bonds, share scrip, title deeds of properties and compare their particulars with those entered in the property and Investment Registers.
12. Physical Inventories
Obtain inventories, especially of stocks and stores as at the end of the year and check a percentage of the items physically, also compare their total values with respective ledger balances.
