Intermountain Health Care Inc. planned to file a formal complaint with Salt Lake City Police detectives Thursday after an internal audit revealed that $400,000 has been embezzled from the company coffers.
An unnamed IHC executive resigned last week following discovery that the money was missing. He was an assistant vice president in the company's accounts receivable department.Company officials believe the embezzlement took place through small payments over a period of 1 1/2 to two years by submitting and obtaining payment on phone invoices.
`It was a very cleverly designed, very cleverly covered scheme on the part of someone who knew the system very well," Steven D. Kohlert, IHC senior vice president, said Wednesday.
Kohlert declined to identify the executive, who has not yet been charged with any crime. However, he said police were notified Wednesday of the embezzled funds.
IHC officials became aware of the alleged thefts after a 1990 audit revealed improprieties.
"After completing an internal investigation where it became obvious that there had been embezzlement, we notified law enforcement," Kohlert said.
None of the $400,000 has been recovered, and Kohlert said "we doubt any can be recovered."
However, Kohlert said IHC is insured for the stolen funds, and the financial loss will not directly impact patient costs or services provided by the non-profit corporation.
"There will be no general impact on the public other than all of us have to carry insurance to protect us from this type of thing, and that's built into the cost of everything we do," Kohlert said.
Based on their initial investigation, IHC officials believe only one employee was involved. But the company's internal probe will continue.
"This is the first time that anything like this has ever happened to us. We will look carefully into the situation and find out how it did happen," Kohlert said. "Obviously there is a hole that someone discovered that we have got to plug. So we will have to make some adjustments in terms of our internal controls."
"It's difficult for the organization. We feel compassion for the individual who made this very serious mistake," Kohlert said. "Yet, obviously we have to proceed ahead to do what has to be done."
IHC, Utah's largest health-care corporation, owns or manages 19 of the state's 54 hospitals, as well as medical facilities in Idaho and Wyoming.