Health Net 1999 Annual Report Download - page 27

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Report of the Audit Committee of the Board of Directors
of Foundation Health Systems, Inc.
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 R ichard J. Stegemeier, each of whom is an independent outside director.
In fulfilling its responsibilities in 1999, 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 both the independent
auditors and also with the chief auditor of the Company’s Internal Audit Department, thereby providing full and free
access to the Committee.
Earl B. Fowler, Chairman
Audit Committee
February 29, 2000
Report 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 subsidiaries (the
“Company”) as of December 31, 1999 and 1998, and the related consolidated statements of operations, stockholders’
equity, and cash flows for each of the three years in the period ended December 31, 1999.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 material
misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and significant estimates made by management,
as well as evaluating the overall financial statement presentation.We believe that our audits provide a reasonable basis for
our opinion.
In our opinion, such consolidated financial statements present fairly, in all material respects, the financial position of
Foundation Health Systems, Inc. and subsidiaries at December 31, 1999 and 1998, and the results of their operations and
their cash flows for each of the three years in the period ended December 31, 1999 in conformity with generally accepted
accounting principles.
Los Angeles, California
February 29, 2000
FOUNDATION HEALTH SYSTEMS, INC. 25