The "Audit Report"
The audit report is official and there is good news and bad news.
The auditors specifiacally stated the hospital and everyone helping on the audit were very cooperative throughout the process. That is the good news.
Now the bad news. The audit did show nearly $2 million dollars in accounting errors in addition to the $11.5 million dollars previously reported.
Nearly two thirds of this was due to uncollectible debts that were placed on the revenue side as collectible. The other nearly one third of this total had to do with bonds not being recorded at fair market value resulting in a reduction of net assets.
The auditors also provided the administration with suggestions and critique on the current accounting practices and needs for improvement.
It is true that these deficits found in the current and previous audit are not cash payments the hospital has to make. That is because the money was already spent.
The problem is that for the past several years, the revenue side of the accounting has been overstated by nearly $13 million dollars. Yes, bonuses were also based on these overstated revenues. Since budgets and what is being spent is based on projected revenue, it means that we already spent nearly $13 million dollars more than we were able to bring in over the past 3-4 years. This is why cuts are being made. We now have to somehow pay for what we already spent plus pay for the ongoing expenses all while having less revenue coming in.
When will the problem end?
***Special thanks to the cartoonist for use of her cartoon. Please visit her site at www.mchumor.com
posted by Anonymous at 5:55 AM
26 Comments:
"We now have to somehow pay for what we already spent..."
Only if this shortfall was covered by incurring some type of debt or through increasing short term liabilities -- payables, accruals etc., which must now be brought back into line.
If possible, could you post the financials here?
how about $80 million dollars in new bonds with a portion of it going back into the caufers to keept the numbers looking good for the Bond insurer.
I'd say that is debt and something that must be "brought back into line"
Where are the critics trying to blame this on HB??
I'll bet we here from them soon
I wonder who benefitted the most for the overstated revenues in relation to bonuses? Should they be held responsible and pay this back to Floyd County? Where does the buck stop?
Who do you think benefitted the most. The CEO!! His bonuses were directly tied to the supposed profits.
He should be fired and required to reimburse the hospital.
We could then afford a few more nurses.
This whole thing is a scam and the CEO needs fired!!!!!!!!!!!!!
Just checking.
Regarding the statement: "This whole thing is a scam and the CEO needs fired!!!!!!!!!!!!! "
And yet... the CEO has not been fired. Why do you suppose that might be? Could it be that you don't fully understand what happened or what is required to fix it?
He's still there because the hospital board has lacked a spine and were, emphasizing were, his hand picked cronies. This is just like the VPs and anyone in a position of power at the hospital.
How many times has the board turned over since he has been there? Are you saying that he has "hand-picked" all the board members in the past 15 or 16 years who have renewed his contract, given him raises and helped him build the incredible facility we have today? Get in touch with reality and quit griping all the time. You will live longer and your spouse and friends will like you better.
If we fire him, we still have to pay have several millions or hundreds of thousands of dollars, in severance pay. He had this set up in his contract, while he had his friends on the board. I don't remember how it was worded. Sorry.
Do you define an incredible facility as one that is missing 13 million dollars, is way understaffed with health care professionals and overstaffed with administrators who are Hanson puppets?
Up until this year, the board only had 7 members. Hanson only needed 4 to always have the majority.
Yes he hand picked them and wined, dined, and bought them gifts, booze and outings.
How far is your nose up his butt???
Talk to past and present county commissioners. You know nothing about how board members were selected.
I would love to know what the CEO bonuses are?? Is that public information?? I really hope people responsible for these huge accounting errors pay for their mistakes.I don't care if they do get fired.
You hope the people responsible for these accounting errors pay for their mistake?
That remains to be seen. Two of the three that should be held accountable are still working at the hospital! Both the Director of Finance and the CEO. How either can demand any respect from other hospital leaders or their employees is outlandish.
It was posted that the director of finance was going to get a bonus, is this true? Let us make sure we all understand clearly, you as the Director of Finance are unequivocally involved in the mismanagement of hospital finances for years resulting in a multimillion-dollar mishap and you get a BONUS?
The third employee in this three ring circus the ex-CFO, resigned in December. Come to find out the financials were not the only area he mismanaged. He should have to return any severance money to the hospital towards his multimillion dollar accounting errors. But hey, maybe they both forgot that
assets = liabilities + owner's equity.
I wonder who benefitted the most for the overstated revenues in relation to bonuses? Should they be held responsible and pay this back to Floyd County? Where does the buck stop?
Everyone at the hospital benefitted as they all received a bonus. Some more than others.
I think we all can see now why the CFO is no longer with the hospital.
As a part time hospital employee, I will gladly give back my bonus.I think the CEO and the "wonderful" VP's should do the same.
There have been several comments from folks saying that others don't know how the system supposedly works at the hospital. The bottom line at any place of business is is the financial bottom line. FMHHS is 13 million dollars in debt. The people who are responsible are the administrators not the footsoldiers of the hospital, ie. nurses, aides, laundry people. They shouldn't be the ones losing their jobs for the mistakes of the fat cats. I say off with the heads of the fat cats.
Your comment: "FMHHS is 13 million dollars in debt." proves that you don't know what you are talking about. The amount of "debt" has never been a question or even a problem. Organizations frequently take on debt to finance acquisitions or new construction--just as the hospital has done. The financial issue has to do mostly with uncollectable billings. Estimating "receivables" is always somewhat of a guessing game and, in this case, the guesses were off a great deal.
12:08's comment looks like a typical administrator type answer.
Anon 12:08's comment may look like a typical administrator type comment and it may be from one. However, it does not change the fact that their response is correct.
Their estimations where way off and cost the hospital loads and they gained personally by way of bonuses. They should be held accountable and fired.
Money was borrowed in terms of the bonds for the new construction based on these erroneous "guesses" of the hospital's financial situation. And it was grossly inaccurate, now the organization is in over it's head.
Is it true that the Finance Director received a bonus for acting as interim CFO? Was she truly rewarded for trying to explain the financial mess that the hospital is in?
The Director of Finance should be ashamed of herself for accepting a bonus for nothing but throwing the ex-CFO under the bus. How she has kept her job is beyond many of her fellow Directors and her direct reports. Its a shame.
Loss of the JCAHO accreditation was a shame, and no one lost their job over that.
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