1. Lawson Roadshow Preparing for July 1 st May 21, 2009

2. Agenda Lawson Project Overview: Phase One and Phase Two Implementation of Phase One: Presentation by Deloitte Experts Purchasing thru USC: Presentation by Clare Hansen Medical Finance: Questions and Answers Session Communications and Training Schedule 2

3. Lawson Project Overview 3

4. 4 Lawson General Ledger Data will feed from GE/Centricity (IDX), WEBBA (AIS) and University Payroll (AISC2000) into Lawson to enable consolidated financial reporting for USC Clinical Departments. Lawson Asset Management Existing assets will be converted in detail, via the corporate asset transfer agreements, and will follow the University capitalization policy. New assets will be identified at the time of purchase and subsequently recorded in Lawson. Lawson Human Resources Basic employee demographic data will be interfaced from University HR system (AISC2000). Standardized procurement process using USC Purchasing Services Automated transfer of revenue information from IDX to Lawson General Ledger July 1 st Implementation: Phase 1 Roll Out

5. 5 Lawson Procurement An online procurement system including automated order placement, workflow- enabled approvals, PO creation, goods/services receipts, accounts payable Opportunity to develop jointly with the hospital for one medical purchasing process flow for all clinical locations Lawson Accounts Payable Streamlined check creation process for patient refunds Lawson Budgeting and Planning Will enable annual budget process to be done in Lawson and feed directly into the University budget and payroll systems Provides enhanced tools and analysis for clinical budgeting Lawson Activities Management Will enable tracking of financial entities at a greater level of detail than available in the GL, e.g., by physician Lawson Receivables / Billing Used to track non-IDX receivables and billings Future State: Phase 2 Functionality

6. 6 Phase I Phase 2 Reporting System Only All check disbursement thru USC Purchasing thru USC Payroll thru USC Revenue billed thru IDX Transactional System Process transactions thru Lawson Cash Basis Reporting USC expense systems are cash basis No practice-wide collection data available July 1 to value gross charges Accrual Based Reporting Lawson procurement will create use of Accounts Payable IDX install of Contracts Manager will assist in charge valuation Evolving Functionality

7. 7 Final Product: A Hybrid General Ledger

8. USC/WEBBALawson PayrollIntegrated Financial Reports Cash ManagementPurchasing System of RecordPatient Refunds (Illustration of Final User Environment as of FY11) 8

9. What’s Changing? 9

10. 10 Today Tomorrow Practice Plans maintain their own general ledger using various systems and software. Medical Finance will maintain the Practice Plans’ general ledgers. Journal entries and month end closing will be performed by Medical Finance. Practice Plan personnel will be able to: Access Inquiry screens to view account activity Access Reporting screens to generate standard Balance Sheet and Income Statement reports Practice Plans write checks to pay expenses and other bills. Practice Plans will submit check requests through WEBBA, and USC AP/Disbursement will make the payment. Some of the changes you can expect in Finance (1 of 2)

11. 11 Today Tomorrow Some Practice Plans invoice physicians for a portion of the clinic overhead. Practice Plans will cover the cost of approved clinic expenses, and can internally cost allocate expenses to physicians for expenses, if part of the incentive plan. Doctors will not be writing checks to the practice to cover expenses. Practice Plans record and track assets in various ways. Assets purchased by the Practice Plans will be maintained in Lawson by Medical Finance according to USC asset management policies. Practice Plans can conduct inquiries and run reports to view activity. Some Practice Plans use accrual basis accounting and some use cash basis accounting. USC Care Medical Group, Inc. will use cash basis accounting for the first year. Accrual based financials will be available after phase 2 of install. Some of the changes you can expect in Finance (2 of 2)

12. WEBBA – Lawson Accounting Crosswalk of Terminology WEBBALawson DepartmentGL Company AccountAccounting Unit Object CodeAccount Lawson Accounting Unit Structure Fund Group (XX) 88 Department (XXXX) 1234 Division or Billing Area (XXXX) 5678 Cost Center (XXXX) 0000 Note: Cost Centers default to ‘0000’ All IDX Revenues and Expenses from WEBBA will post to default Cost Centers 12

13. 13 The Lawson Hierarchy has 17 separate GL companies, one for each practice.

14. 14 Sample Department Integrated Financial Statement showing non-clinical and clinical accounts.

15. 15 Sample Balance Sheet

16. Implementation of Phase 1: Details from the Experts at Deloitte 16

17. 17 What is being installed? Lawson General Ledger (GL) and Asset Management (AM) modules What is the scope and how will it be used? Cash basis of accounting until experience levels are determined Detailed asset tracking and depreciation capability Organization Chart Structure Establish Chart of Accounts Establish Organization Structure Manage GL Load FY 2010 Budgets Load GL Balance Sheet Beginning Balances Transaction Processing Cash Receipt load to GL from new IDX Cash Receipt load to GL from old IDX Payroll load to GL from University Payroll System Expense load to GL from Webba University System Lawson Finance

18. 18 How will the department use it? The GL system will be a repository of financial data used to provide management with reporting and inquiry The AM system will be used to store detail practice plan assets that will then summarize and interface to the GL What else is in it for you? Standard GL and AM Lawson Reporting and Inquiry capability Standard Configured Lawson Reports to provide Management with reporting at a consolidated or divisional level Automated integration for Lawson modules Lawson Finance

19. 19 Lawson will interface with WEBBA and IDX

20. 20 What is the scope and how will it be used? Revenue will be automatically interfaced from the new IDX system to the Lawson GL on a daily basis. This interface will use a crosswalk to map revenue from your IDX Divisions and/or Billing Areas to your Clinical Accounting Units in Lawson. Non-payroll expenses will be automatically interfaced from WEBBA to the Lawson GL on a daily basis. This interface will post purchasing expenses from WEBBA in Lawson. Nonclinical academic and research expenses recorded in WEBBA will also be included. How will the department use it? These interfaces will occur automatically on a daily basis. There is no action needed from the departments to post revenue and expenses in Lawson. Revenue and Expense Interfaces

21. 21 What else is in it for you? These interfaces will allow P/L reporting in Lawson that includes clinical revenue from IDX and expenses from WEBBA. Consolidated Clinical and Non-Clinical reporting will also be possible for each department in Lawson with these interfaces. Revenue and Expense Interfaces

22. 22 What is being installed? The Lawson Human Resources and Payroll modules What is the scope and how will it be used? The Lawson Human Resource and Payroll systems will act as a shadow system to the USC Payroll system. The USC payroll system will send employee demographic, payroll gross wage and general ledger allocation information to Lawson for anyone residing or being paid out of the Clinical Departments at USC. No transactions will be entered into Lawson. The USC system will be the system of record for this data. Updates from USC Payroll to Lawson will be made on a daily and pay period basis. The Clinical pay override process will be built into the Lawson system. How will the department use it? The Lawson system will be used for reporting and for storing Clinical Pay overrides. It has been set up to mirror all USC systems’ data attributes and coding structure. Human Resources and Payroll Interface

23. 23 What else is in it for you? USC Payroll wage expense allocation information will be interfaced to the Lawson GL system and available for income statement reporting. You will be able to review allocations by account in the Lawson GL system and drill back to the Lawson Payroll system to identify the employee wage expenses which account for those amounts. This is not currently available in the USC Webba GL system. The Lawson GL system will store Payroll clinical expense wage allocations by Cost Center, which today is not available in the USC Webba GL system. Workforce analysis and reporting will be available to provide information useful in analysis of headcount, compensation and turnover for the Clinical departments. Human Resources and Payroll Interface

24. Medical Finance Team: Question and Answer Session 24

25. 25 Frequently Asked Questions – Finance (1 of 3) QWill the Practice Plans have access to modify the General Ledger? ANo, changes to the GL will be made by Medical Finance. We are working on procedures for departments to request journals and will communicate them when they are available. QWhat reports will be available in Lawson? AOn July 1 st, there will be two standard reports available: a standard balance sheet and an income statement that includes clinical, non-clinical and combined activity. After July 1 st, additional reports may be created based on the needs of the Practice Plans and USC Care. QWill we be able to report financial results by physician? AOn July 1 st, there will not be a facility in Lawson for reporting results by physician. Expenses can be allocated by cost center for tracking purposes. For Wave 2, currently anticipated to go live February, 2010, the use of Lawson’s Projects and Activities (AC) application is being considered for this purpose. QCan Lawson be used to report all finance activity for the Department? AYes, in order to create the integrated financial income statement for the department, clinical and non-clinical activities will be interfaced into Lawson.

26. 26 Frequently Asked Questions – Finance (2 of 3) QWhat previous balances will be loaded into Lawson? When and how will this take place? ANo historical income statement data will be entered in Lawson. After the corporation books are closed June 30 th, the departments will be asked to provide financial details and we will upload beginning balance sheets into Lawson. QHow will receivables collected by the Practice Plans after July 1st be paid to USC Care? ADates of service after July 1 st will be remitted under the single USC Care tax ID # and remitted to department USC accounts. For services prior to July 1 st, many payors have been billed with the corporations’ tax ID #s and lockbox information. This cash will be remitted by payors to existing corporate banks and lockboxes. A nightly sweep will be performed to transfer the cash to USC Bank of America bank accounts and assigned to the departments clinical accounts.

27. 27 USC Care B of A Account Old Corp Accounts New IDX Old IDX Lawson Clinical 88 Account USC Webba 88 Account Lawson Clinical 88 Account USC Webba 88 Account Direct interface Download file How cash/revenue will flow from banks to USC

28. 28 Frequently Asked Questions – Finance (3 of 3) QHow long after July 1st will we need to keep our existing accounting application around to access historical data? AThe existing corporations will need to issue W-2s in January of 2010. As such accounting systems should be closed at fiscal year end, but available for calendar year end processing. Future access to historical data is up to the department but we recommend 3 years. QWhen will our accounts be available in WEBBA? AAccounts will be available on June 1 st to begin issuance of form requisitions for blanket and one-time P.O.s for fiscal year 2010. Transactions can be posted after July 1, 2009.

29. Communications & Training Schedule 29

30. 30 Two types of communications are planned to keep you in the loop about Lawson. Lawson Email Updates Beginning in early June, Administrators and Chairs will receive a brief email every other week. Content will include updated FAQs, information about the project that is relevant to the practice plans, and actions that need to be taken prior to July 1. The emails will be suitable to share with others in your organization who have questions about how the Lawson implementation will impact them. Roadshow 2 A second Roadshow is planned for mid-June. Content will include details of corporate wind down and asset transfer processes. Lawson screen shots and descriptions of some of the new processes. Training will follow shortly thereafter to teach people how to use the system.

31. 31 Lawson training will begin June 24 th Practice Plan users will attend three hours of classroom training to learn how to navigate in Lawson, to perform inquiries and to request standard and configured reports. Participants will receive materials they can reference after training to help them use Lawson. Access to Lawson will be granted on July 1 st to those who have completed training. The invitation to enroll in training will be sent in early June via email to the system users you identified during your Lawson meeting with the Deloitte consultants. Participants will self-register online. There will be several classes to choose from between June 24 th and July 1 st. Class size is limited to 15 participants. Training will take place at HSC.