ACL Success Story – Healthcare – Vestas Wind Systems


Baystate Health Inc.

Immediate audit insights identifies US$2.5 million in lost revenue and saves US$18 million in cost-avoidance

“ACL gives us the ability to quickly and accurately provide information about our corporate control environment.”

Gail Hormats, Manager, Audit Services, Baystate Health Inc.

Company Profile

Baystate Health is the parent corporation of an integrated health care system that includes two medical centers, three hospitals, more than 80 primary and specialty care medical practices, and a variety of outpatient facilities and programs across western Massachusetts. With headquarters in Springfield, MA, Baystate Health operates 783 beds in three facilities and employs over 10,000 people.


For more than a decade, ACL data analytics has been a focal point in the Baystate Health audit plan. The Audit Services team uses custom analytics to test a wide variety of transactions across the organization. Three members of the Audit Services team have earned the ACL Certified Data Analyst (ACDA) designation – the highest level of ACL technical proficiency and professional expertise in the industry. As Baystate’s data volumes began to grow, the auditors needed faster data processing and the ability to schedule analytics at regular intervals. ACL Analytics Exchange (AX) was the perfect solution to build on the audit team’s existing achievements, while providing a higher level of automation and efficiency.

Implementation and Planning

After implementing the AX technology, Baystate auditors began automating data investigations in several key areas. A new daily Accounts Payable (AP) test looks forward to find potential duplicates up to four days before the payments are made. The analytics run overnight to search for matches on vendor names, dates, invoice numbers and other similarities. The next morning, AP staff members determine whether flagged exceptions are true duplicates, make appropriate corrections to their system, and send a report back to Audit Services indicating how they’ve handled the exceptions. The audit team then uses the ACL reports and feedback data to fine-tune the filtering parameters and ensure the analytics are working as intended.

Baystate auditors also use AX technology to perform access testing on financially significant applications and sensitive electronic medical records. The team receives a quarterly HR data file on all employees and a separate file for all Baystate physicians. The auditors test these files against access records to find duplicate entries, dormant accounts, or terminated employees who still have system access. A report is then sent to system administrators, who must demonstrate how they’ve corrected the exceptions and send their changes back to the audit team. The powerful AX server makes it simple to schedule and automate these analytics. There’s no need to manually kick off analyses, and business-specific controls can be handed off to stakeholders, leaving Audit Services free to monitor remediation activities and make technical changes as necessary.

“ACL enables us to regularly perform risk-based investigations in business areas that might otherwise be audited every five or ten years.”

Gail Hormats, Manager, Audit Services, Baystate Health Inc.

Other ACL analytics target healthcare-specific revenue processes. Baystate auditors have developed a unique analytic process that compares data between physician and hospital billing systems to pinpoint lost revenues. To date, this testing has focused on the Cardiac Catheter Lab, where finding and correcting problems has a significant financial impact. The ACL script required the team to understand data from two very different systems and create flags to identify where data that should be identical in both systems differed between the systems.

The Audit Services team prioritizes its ACL projects based on a comprehensive risk assessment across financial, compliance and business indicators. Auditors also work closely with individual departments and oversight groups to refine their investigations – a collaborative approach that ensures the analytics reflect real-world processes.


In just two years, the ACL continuous auditing program has recovered a total of US$2.5 million in lost revenues. The analytics have also saved approximately US$18.5 million in cost-avoidance – a calculation based on preventing duplicate payments and correcting inaccurate billing functions.

With the powerful Analytics Exchange platform, the audit team can quickly and repeatedly provide assurance on the Baystate control environment. The team has full data coverage to identify revenue, access and compliance problems, and fix issues that could cost the organization considerable time and money. ACL’s broad reach gives this team of nine auditors the ability to monitor a US$2 billion-dollar organization and regularly test areas that could only be audited every five years with manual techniques.

The team also uses ACL software to support analysis work for the company’s external auditors. They conduct annual searches for unrecorded liabilities based on materiality, and perform a monthly General Ledger roll forward. The custom ACL script tests GL transactions to ensure properly rolling up to match the trial balance. An Accounts Receivable analysis also validates the accuracy of the financial group’s AR data aging report.

Next Steps

The healthcare industry has many specific audit challenges, but corporate business areas such as AP, AR and GL present universal controls issues. The audit team plans to expand its coverage across all Baystate general business processes and expand its healthcare- specific revenue testing. Armed with toplevel ACL knowledge, the flexible AX platform and strong business relationships, the Baystate audit team is ideally positioned to deliver outstanding assurance to this growing health services organization.

Wednesday, May 1, 2013 In: Client Success Stories, Hot Topics Comments (None)

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