Where Did the Money Go? Charley Thomas on the Glen Rose Medical Center/Somervell County Hospital Authority Board


Where Did the Money Go? Charley Thomas on the Glen Rose Medical Center/Somervell County Hospital Authority Board

30 January 2010 at 10:45:15 AM


I take exception to the headline in last week’s Glen Rose Reporter regarding the financial situation of the Glen Rose Medical Authority. I do not fault the newspaper or its reporter because she simply wrote the sugar-coated version of the hospital’s situation as presented by management to the Authority Board.
I base my comments on the actual financial statements and not the “pablum” fed to the Authority Board.
The real facts are this:
The operating bank account is overdrawn per books by $50,000 at December 31, 2009.
The Hospital owes about $1.2 million in accounts payable and my guess is that some suppliers have put the hospital on C. O. D. basis because they are having difficulties collecting from the Hospital.
The balance sheet reflects $800,000 in “other receivables”—some of which may not be collectible.
The required capital improvements fund apparently has not been restored and, appears to be used to keep the operating account balance at the bank from showing as overdrawn.
According to the auditors, all bank accounts have not been reconciled though the out of balance condition has been reported before. For Heaven’s sake, how can you run a business if you don’t know how much money you have in the bank?
Based on the Hospital’s own numbers, substantially all of the December profit was made up of “other income” of $390,000, which is likely one-time grant money and designated only for restricted usage.
The Authority’s budgeted deficit for this year is more than $1 million. Where will this come from? Would you believe likely out of the taxpayers’ pockets.
I have three strong recommendations to the Authority board and the County Commissioners.
First, insist on an outside audit of the operations for the period from October 1, 2009 to December 31, 2009, and the Balance Sheet as of December 31, 2009. How in the world can the Authority Board know what assets it is getting or all the obligations it is assuming without some assurances that they understand the whole picture? If the Board cannot rely on the accuracy of financial statements and internal control, it cannot make the most prudent policy decisions
Secondly, the underlying problems go beyond the financial statements and have to do with the decisions of day-to-day executives and management. I strongly urge the Board to engage an independent consulting firm, experienced in hospital operations, to do an in- depth review of the entirety of the organizational structure and operations of the Hospital, Nursing Home, and the so-called “501a Corporation”.(I would point out that the “501a  Corporation” since inception, has drained about $1.6 million of cash away from the other entities) . We should be seeking outside, unbiased advice rather than solely relying on our own knowledge and spending huge amounts of taxpayer money.
Finally, discussions regarding further capital improvements and major changes in operations (such as the nursing home and rehabilitation operations ideas presented to the Authority Board) should be deferred pending completion and final payments for the present construction projects, the operational audit recommended above, as well as a decision whether a change in management is to be made.

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