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Healthcare Services Group Overstates Profit Nearly Nine Percent

Services firm restates net income a year after DuDil flagged revenue recognition concerns.

May 10, 2023

Healthcare Services Group (HCSG), an operator of housekeeping, laundry, linen, facility maintenance, and dietary service departments for nursing homes and other healthcare facilities, did not accurately account for accrued vacation costs in prior periods.

In revising results for the quarter ended March 31, 2023, Healthcare Services Group:

—Overstated Operating income $1.4 million, or 8.69%
—Overstated net income $1 million, or 8.67%

The company says the errors are not material.

In May 2023, DuDil warned Healthcare Services Group may have recognized uncollectible revenue after the company appeared to tighten its revenue recognition policy following a spike in bad receivables.

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