Change in Accounting for Dept. Share of BJH Operating Net

Policies and Procedures - Affiliated Hospitals
Change in Accounting for Dept. Share of BJH Operating Net
(Last Updated 06/28/2000)

Prior to fiscal 1999, the Executive Faculty authorized an allocation of the School share of BJH Operating Net ("Bottom Line Split") for support of the BJC Medical Group (BJC/MG). Effective with fiscal 1998, the Practice Plan Board elected to use the same method for funding the Faculty Practice Plan (FPP). Prior to FY 1999, the total distribution of the BJH Operating Net to clinical departments was reduced by these allocations. The allocations were "taken off the top." As a result, the amounts booked as Affiliated Hospital revenue for each department were understated and, in addition, departments' clinical practice costs were understated since they excluded these two practice-building programs.

Starting in fiscal 1999:

1) the amount of BJH Operating Net recorded as revenue to each department will be increased to the full share amount for the department and,

2) the department's share of the above two allocations, prorated using the same percentages as the BJH Operating Net distribution, will be recorded as a clinical practice operating transfer.

The net for the department on an accrual basis will not change since revenue and transfers will both increase by an equal amount. The distribution formulae have not been changed. The accounting protocols employed in FY 1998 for accruing revenues related to the BJH Operating Net will continue to be used in FY 1999.

Starting in July, 1998, two new entries will be recorded each month as a part of the distribution of BJH Operating Net. For department (or division) number DDDD, the debits described above will be entered against:

12-DDDD-98-68-92999...... "BJC/MG allocation" and

12-DDDD-98-69-92999 ...... "FPP allocation".

The new clinical practice account 12-DDDD-92999 "Clinical Program Transfers" closes to the general (cash) reserve of the department/division.

If you have any questions, please contact your Budget Office representative.

Please send your comments to: FinanceComments@msnotes.wustl.edu