Caritas Christi acknowledges overstatement of revenue

BOSTON -- Caritas Christi Health Care released a statement May 8 acknowledging that an accounting discrepancy has overstated Caritas’ consolidated revenue for the fiscal year that ended September 30, 2006 and the first quarter of 2007.

The revenue discrepancy, which primarily involves the recognition of revenue by the Caritas Physician Network, initially was identified by the corporate staff of Caritas in late 2006 as they consolidated Caritas Physician Network’s year-end 2006 financial results.

“While our findings are preliminary and could change as the review continues, we estimate that revenue overstatements were in the range of $3.4 to $4.0 million for 2006 and $5.0 to $5.5 million in the first quarter of 2007,” the statement says.

Caritas Christi Health Care reported profits of $38 million in 2006 on total revenues of $1.2 billion and profits of $6.4 million on total revenues of $307 million for the first quarter of 2007.

According to the statement, an independent certified public accountant was engaged to conduct an extensive analysis of this matter to determine the nature, extent and impact of the overstatement.

“We view any misstatement of financial performance to be a matter of serious concern and remain focused on rapid and thorough examination and resolution of this matter. Our core health care business is sound and continues to generate an operating margin,” Bob Guyon, chief financial officer said.

“Contemporaneous with our review into this matter, Caritas Christi is conducting a full review of internal controls at the Caritas Physician Network. We remain committed to providing complete and accurate financial information and will take the steps necessary to be sure such problems do not occur again,” he said.