Health Net 1998 Annual Report Download - page 31

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F O U N DAT IO N HEALTH SYSTEMS, I N C. 2 9
R e p o r t of Independent Auditors
To the Board of Directors and Stockholders of
Foundation Health Systems,Inc.
Woodland Hills,California
We have audited the accompanying consolidated balance sheets of Foundation Health Systems,Inc. and subsidiari e s
(the “ C o m p a ny”) as of December 31, 1998 and 1997,and the related consolidated statements of operations,stock-
holders’equity, and cash flows for each of the three years in the period ended December 31,1998.These financial
statements are the responsibility of the Company’s management.Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing standards.Those standards require
that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of
m a t e rial misstatement.An audit includes examining, on a test basis, ev i d e n c e supporting the amounts and disclosures in
the financial statements.An audit also includes assessing the accounting principles used and significant estimates m a d e
by management, as well as evaluating the ove rall financial statement presentation.We believe that our audits provide a
re a s o n a ble basis for our opinion.
In our opinion,such consolidated financial statements present fairly, in all material respects,the financial posi-
tion of Foundation Health Systems,Inc. and subsidiaries at December 31,1998 and 1997, and the results of their
operations and their cash flows for each of the three years in the period ended December 31,1998 in conformity
with generally accepted accounting principles.
Los Angeles,California
March 31, 1999
R e p o rt of the Audit Committee of the Board of Dire c t o r s
The Board of Directors of the Company addresses its oversight responsibility for the consolidated financial statements
through its Audit Committee (the "Committee").The Committee currently consists of Gov. George Deukmejian,
Thomas T. Farley, Earl B. Fowler (Chairman) and Richard J. Stegemeier, each of whom is an independent outside
director.
In fulfilling its responsibilities in 1998, the Committee reviewed the overall scope of the independent auditors’
audit plan and reviewed the independent auditors’ non-audit services to the Company.The Committee also exercised
oversight responsibilities over various financial and regulatory matters.
The Committee’s meetings are designed to facilitate open communication between the independent auditors
and Committee members.To ensure auditor independence, the Committee meets privately with the independent
auditors providing for full and free access to the Committee.
Earl B. Fowler, Chairman
Audit Committee
March 31,1999