Lawson Roadshow Preparing for July 1 st

1. Lawson RoadshowPreparing for July 1st May 21, 2009

2. Agenda 2

3. Lawson Project Overview 3

4. July 1stImplementation: Phase 1 Roll Out • 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

5. Future State: Phase 2 Functionality • 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

6. Evolving Functionality Phase 2 Phase I

7. 7 Final Product: A Hybrid General Ledger

8. Final Product: A Hybrid General Ledger USC/WEBBA Lawson (Illustration of Final User Environment as of FY11)

9. What’s Changing? 9

10. Some of the changes you can expect in Finance (1 of 2) Tomorrow Today

11. Some of the changes you can expect in Finance (2 of 2) Tomorrow Today

12. WEBBA – Lawson Accounting Crosswalk of Terminology WEBBA Lawson 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

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

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

15. Sample Balance Sheet

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

17. Lawson Finance • 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

18. Lawson Finance • 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

19. Lawson will interface with WEBBA and IDX

20. Revenue and Expense Interfaces • 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.

21. Revenue and Expense Interfaces • 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.

22. Human Resources and Payroll Interface • 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.

23. Human Resources and Payroll Interface • 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.

24. Medical Finance Team:Question and Answer Session 24

25. Frequently Asked Questions – Finance (1 of 3) • Will the Practice Plans have access to modify the General Ledger? • No, 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. • What reports will be available in Lawson? • On July 1st, 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 1st, additional reports may be created based on the needs of the Practice Plans and USC Care. • Will we be able to report financial results by physician? • On July 1st, 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. • Can Lawson be used to report all finance activity for the Department? • Yes, in order to create the integrated financial income statement for the department, clinical and non-clinical activities will be interfaced into Lawson.

26. Frequently Asked Questions – Finance (2 of 3) • What 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 30th, the departments will be asked to provide financial details and we will upload beginning balance sheets into Lawson. • How will receivables collected by the Practice Plans after July 1st be paid to USC Care? • Dates of service after July 1st will be remitted under the single USC Care tax ID # and remitted to department USC accounts. For services prior to July 1st, 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. How cash/revenue will flow from banks to USC USC Care B of A Account New IDX Lawson Clinical 88 Account USC Webba 88 Account Direct interface Old Corp Accounts Lawson Clinical 88 Account USC Webba 88 Account Old IDX Download file

28. Frequently Asked Questions – Finance (3 of 3) • How long after July 1st will we need to keep our existing accounting application around to access historical data? • The 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. • When will our accounts be available in WEBBA? • Accounts will be available on June 1st 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. 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. Lawson training will begin June 24th • 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 1st 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 24th and July 1st. • Class size is limited to 15 participants. • Training will take place at HSC.