## Audit of Hospital

### A. Patient Register and Billing

Step 1 — Patient Register

Examine the register of patients and cross-reference with copies of issued bills
Every admitted/treated patient should have a corresponding bill

Step 2 — Bill Verification

For a selected period, compare issued bills with the patient attendance record
Objective: confirm that all services rendered are correctly recorded and billed

Step 3 — Recoverable Amounts

Bills issued to patients should capture all recoverable amounts (bed charges, surgery, medicines, lab, etc.)
Check that no partial billing has occurred

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### B. Cash Collection

Verify cash receipts against Receipt Counterfoils
Cross-check with other evidence (e.g., copies of rent bills for leased equipment, counterfoil books)
Ensures completeness of income recorded

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### C. Donations and Legacies

Item	Audit Check
Donations	Verify proper authorisation/sanction before acceptance
Legacies	Check documentation — will/legal instrument — and board approval
TDS	Internal check on TDS deducted and deposited on applicable payments

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### D. Registers and Records

Verify all registers are maintained (patient register, pharmacy register, lab register)
Ensure entries are complete, dated, and signed by responsible staff
Cross-tally register totals with financial statements

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### General Note

Hospitals may operate as trusts or societies — auditor must examine the Trust Deed / Memorandum to understand applicable restrictions on fund usage.

Worked example

### Example 1

Example 1 — Billing Completeness Check

Auditor selects 20 patient files from the register for March. For each, they check: (a) admission date and discharge date match the bill period, (b) lab charges, surgery charges, and room rent are all included in the bill, (c) the bill total matches the receipt issued. If 3 patients show lab charges in clinical records but not in bills, the auditor reports under-billing as a control weakness.

### Example 2

Example 2 — Donation Receipt Verification

A hospital received Rs 10 lakh as a donation. Auditor checks: (a) board resolution authorising acceptance, (b) donor's letter specifying purpose (restricted/unrestricted), (c) amount credited to the correct fund (Capital Fund if restricted, General Fund if unrestricted), (d) TDS implications if applicable.

⚠️ Common exam mistakes

Not cross-referencing patient register with issued bills — patients treated without bills is a common revenue leakage point
Missing the check on TDS deducted on salary, professional fees, etc. paid by the hospital
Treating all donations as revenue income without examining whether they are restricted to capital use
Forgetting to verify authorization/sanction before legacy/donation is accepted — unauthorized receipts can create legal and trust-deed compliance issues

Reference:

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