United Healthcare 2008 Annual Report Download - page 108

Report of Management on Internal Control over Financial Reporting as of December 31, 2008
The Company’s management is responsible for establishing and maintaining adequate internal control over
financial reporting as defined in Rules 13a-15(f) and 15d-15(f) under the Securities Exchange Act of 1934. The
Company’s internal control system is designed to provide reasonable assurance to our management and board of
directors regarding the reliability of financial reporting and the preparation of consolidated financial statements
for external purposes in accordance with generally accepted accounting principles. The Company’s internal
control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of
records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the
Company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of
consolidated financial statements in accordance with generally accepted accounting principles, and that receipts
and expenditures of the Company are being made only in accordance with authorizations of management and
directors of the Company; and (iii) provide reasonable assurance regarding prevention or timely detection of
unauthorized acquisition, use or disposition of the Company’s assets that could have a material effect on the
consolidated financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect
misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that
controls may become inadequate because of changes in conditions, or that the degree of compliance with the
policies or procedures may deteriorate.
Management assessed the effectiveness of the Company’s internal control over financial reporting as of
December 31, 2008. In making this assessment, we used the criteria set forth by the Committee of Sponsoring
Organizations of the Treadway Commission (COSO) in Internal Control — Integrated Framework. Based on our
assessment and those criteria, we believe that, as of December 31, 2008, the Company maintained effective
internal control over financial reporting.
Management excluded from its assessment of the effectiveness of the Company’s internal control over financial
reporting the internal controls of Sierra Health Services, Inc. (Sierra) and Unison Health Plans (Unison) which
were acquired by the Company on February 25, 2008 and May 30, 2008, respectively, and are included in the
Company’s consolidated financial statements for the period from the dates of acquisition through year end. Such
exclusion was in accordance with Securities and Exchange Commission guidance that an assessment of a
recently acquired business may be omitted in management’s report on internal controls over financial reporting
in the year of acquisition. Net and total assets of Sierra represented approximately 1% and 6%, respectively, of
the Company’s consolidated net and total assets as of December 31, 2008, and approximately 2% of consolidated
revenues and approximately 4% of net earnings for the year then ended. Net and total assets of Unison
represented approximately 0% and 2%, respectively, of the Company’s consolidated net and total assets as of
December 31, 2008, and approximately 1% of consolidated revenue and net earnings for the year then ended.
Changes to certain processes, information technology systems, and other components of internal control resulting
from the acquisition of Sierra and Unison may occur and will be evaluated by management as such integration
activities are implemented.
98