United Healthcare 2006 Annual Report Download - page 112

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ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
None
ITEM 9A. CONTROLS AND PROCEDURES
As discussed in the Explanatory Note preceding Part I, in light of the findings of the WilmerHale Report and the
restatement reflected in this Form 10-K, management re-evaluated the assessment presented in Management’s
Report on Internal Control Over Financial Reporting in the Company’s Annual Report on Form 10-K for the
fiscal year ended December 31, 2005. As reported in a Current Report on Form 8-K filed with the SEC on
November 8, 2006, management concluded that the Company had a material weakness in internal control over
financial reporting solely relating to stock option plan administration and accounting for and disclosure of stock
option grants as of December 31, 2005 and that, solely for this reason, its internal control over financial reporting
and its disclosure controls and procedures were not effective as of that date.
Evaluation of Disclosure Controls and Procedures as of December 31, 2006
The Company maintains disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under
the Securities Exchange Act of 1934) that are designed to provide reasonable assurance that information required
to be disclosed by the Company in reports that it files or submits under the Exchange Act is (i) recorded,
processed, summarized and reported within the time periods specified in SEC rules and forms; and
(ii) accumulated and communicated to the Company’s management, including its principal executive officer and
principal financial officer, as appropriate to allow timely decisions regarding required disclosure.
In connection with the filing of this Form 10-K, management evaluated, under the supervision and with the
participation of the Company’s Chief Executive Officer and Chief Financial Officer, the effectiveness of the
design and operation of the Company’s disclosure controls and procedures as of December 31, 2006. Based upon
that evaluation, the Company’s Chief Executive Officer and Chief Financial Officer concluded that the Company
has remediated the material weakness in internal control over financial reporting relating to stock option plan
administration and accounting for and disclosure of stock option grants and that the Company’s disclosure
controls and procedures were effective at the reasonable assurance level as of December 31, 2006.
Changes in Internal Control over Financial Reporting
During 2006, the Company took the following actions to remediate the material weakness in its internal control
over financial reporting relating to stock option plan administration and accounting for and disclosure of stock
option grants:
• The Board of Directors took the following actions related to the Company’s historic stock option granting
practices:
• Formed an Independent Committee to perform an independent investigation of the Company’s historic
option granting practices from 1994 to 2005. The Independent Committee retained independent counsel,
WilmerHale, which was assisted by accounting advisors and was given full access to Company
documents and personnel. The full WilmerHale Report was posted immediately on the Company’s Web
site and copies were provided to the SEC and U.S. Attorney’s office. The restatement in this Form 10-K
reflects the Company’s analysis of the accounting adjustments necessary to address WilmerHale’s
findings, as well as other accounting adjustments described in this Form 10-K that were not related to the
findings in the WilmerHale Report.
• Formed an independent Special Litigation Committee, consisting of two former Minnesota Supreme
Court Justices, to investigate the claims raised in the shareholder derivative actions and demands related
to the Company’s historic option granting practices. The Special Litigation Committee retained
independent legal counsel, which is assisted by accounting advisors, and was given full access to
Company documents and personnel.
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