Payroll Theft at Wheaton Franciscan Healthcare - Aug. 1, 2013 - Ascension Wisconsin

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Published on August 01, 2013

Payroll Theft at Wheaton Franciscan Healthcare

Media Contact: Anne Ballentine, 414-465-3605 or 414-331-5345

Glendale, WI - Wheaton Franciscan Healthcare’s Finance Department discovered an irregularity in our payroll deposits that pointed to potential theft by a Wheaton associate. We believe that the situation was limited to a single associate who has admitted to the theft. The individual’s employment with Wheaton has since been terminated.

We have turned the matter over to the Glendale Police Department and will fully cooperate with the investigation. Following the completion of the police investigation, we anticipate that the case will go to the Milwaukee County District Attorney’s Office where formal charges will be considered.

Our investigation determined that a sophisticated process was used to add false hours – mostly Paid Time Off (PTO) hours – to the accounts of random associates, make an immediate payout into her personal bank account for the value of that extra PTO, and then delete the record so that it would not be detected. The payroll accounts of 848 current and former associates were manipulated, though no pay or PTO hours were stolen from the individuals.

Although the amount of the theft is still under investigation, the estimated impact to the Wheaton system was an average of $108,000 per year over multiple years for a total of $1.1 million.

While the majority of the impact fell on the Wheaton organization, there may also be a potential small tax impact for hundreds of associates whose pay was inflated. As an organization, Wheaton Franciscan Healthcare is committed to ensuring that the affected current and former associates do not experience negative financial consequences as a result of this situation. Letters to those affected are in the mail with information on the steps that they will need to take to be compensated for any negative tax implications. We regret that this theft occurred and are doing what we can to minimize the inconvenience to those affected.

We take the integrity of our payroll and other systems very seriously and have already corrected the internal control breakdown that the Payroll Specialist exploited to ensure that this type of situation cannot happen in the future. In addition, we have conducted a full review of internal payroll controls with the support of CHAN and KPMG, our internal and external auditors. This review determined that our current internal controls are strong and effective.

We are disappointed by this breach of trust and appreciate the patience and understanding of those affected. We would also like to thank the Glendale Police Department for its upcoming work on this investigation.

Wheaton Franciscan Healthcare is a Catholic, not-for-profit organization with more than 100 health and shelter organizations in Wisconsin, Iowa, Colorado, and Illinois. The System includes hospitals, medical group physicians, outpatient centers, long-term care, home health, hospice, and a housing ministry.

Hospitals in Southeast Wisconsin include All Saints; Wheaton Franciscan – Elmbrook Memorial, St. Joseph, and Midwest Spine and Orthopedic Hospital and Wisconsin Heart Hospital Campuses; St. Francis; Franklin Hospital; and Midwest Orthopedic Specialty Hospital. The region also includes Wheaton Franciscan Medical Group with more than 350 physicians in more than 50 locations, a network of outpatient centers, three transitional and extended care facilities, Home Health, and Hospice. Wheaton Franciscan Healthcare is also affiliated with United Hospital System in Kenosha.

The System was started by the Wheaton Franciscan Sisters more than 130 years ago and was formally incorporated in 1983. Corporate services offices are located in Wheaton, Illinois and Glendale, Wisconsin.