III. Hear report and if necessary take action on Financial Statements and Independent Auditor's Report from Condley and Company for Fiscal Year Ended 9/30/2015
IV Discuss and if necessary take action on proposal from Interbank to restructure and renew existing loans.
Rough transcript of the auditor's talk. Will update this with the materials when I get copies.3 main sets of documents.
Past adjustments are adjustments we don't post... If we had any disagreements, letter to management. Health care continues to be challenging and reiumbursement has real challenge, UPL up and down, electronic health incentive winding down. Without some of those things will be really tough.. Looking at one year, here, I will compare it to prior years.
p 1. Clean opinion, highest level. p 2. emphasis paragrapth. Basically, your financial position, liabilities over assets, lot of that is because some debt coming due, losses. Other funds potential property tax funds, not sure when or if it comes, hopefully it comes soon, will that transpire? p 3-7. Required section, summary of activity over the year. p 8 and 9 statement consolidated look, includes 501a, nothing on nursing home. Current assets cash 300,000 last year was 600,000. Cash position is negative 130. Cash position has decreased. AR -past years had significant adjustments. what are you really collecting? Inventory decreased a little over 100k. Other current assets, 1.5 depreciation this year, that will continue to decrease. Total 24 mil to 22.2 million total assets decreased. p 9 current liabilities. 1 million 143 bank debt, renovations. 149 . Technically that is due within a year. Bonds payable, includes schedule of payments. Outstanding checks, AP, increase 600,000. notes payable increased, new money was a line of credit (500,000) that's what debt increased. 17.9 liabilities, 18 increased. Current ratio needs to be over 1, right now it's .16. interfirst debt came on the books and it was due. p 10 consolidated, if you look back to p 31 and 32, first column is hospital, then nursing home is 501a (p 32) -deficits are occurring on 501a. You may get ancillary services from the hospital for the 501a. Can you reduce this? A lot of dollars that you're spending on the 501a. back to p 10 revenues patient days were down 7% case mix so much better that average revenue per visit was higher. Very positive change. Other operating revenues. Big difference here is electronic health record incentive payments, half a million dollars that that decreased, cash out of the system. UPL if you net it, about 10,000 difference. Operating expenses decreased, theone that went up is salaries, salaries when up on 501a, hospital stayed pretty flat. That's most of your increase in operating expenses. Back to 501a. Operating loss of 5 million dollars, last year it was 4, really 600,000 difference between the years operating loss. Tax revenues increased a little bit. Miscellaneous actually increased 180,000. Some of that was when set up payments on payroll. Net deficits over expenses. p 11. For a district, you really need to combine top two line items. Decreased about 700,000. Without that, would be 500,00 in the negative. Notes, p 13., p 16. New standards coming out, recent accounting pronouncements. All leases will be booked as an asset or liability (equipment leased). Standard out deals with reporting standards for not for profit and health care entities, may change cash flow formats. p 18. Capital assets. 194 renovations, 42,000 is security cameras, Description of notes and due dates. p 19 and 20. Bond, and bond maturity schedule. 315,000 matches current liabilities. Note 14. Challenges wth financial position and plan already in place, tax rates to increase, renewal of debt, reduction expenditures.
2nd report. Report to the board,communications. p 3 and 4 nothing unusual here. Audit adjustments p 7 -in previous years this has been a lot longer, down to a few adjustments each year. Credit balances transferring from asset to liability. Classified one cash clearing account, purpose was gone, just liabiliy left. Take expense column less revenues, most depreciation. ONly adjusted depreciation on 501a. p 8 uncorrected adjustments, didn't post but still want to show, nothing material. Most will affect the balance sheet side. At end of report is detail as far as representations from management back to us.
Third report, comments 3 levels of comments. Controlled efficiency, significant,then material. Sig or mat requires a report in writing, but auditors do all 3 in writing. Revenue-some timing differences on when it was being posted. p 2. One pay increase for an officer, want to make sure you have documentation for it, don't consider it fraudulent. 403b deferrals. Dept of labor has been really adament about this. That's a big deal, really needs to be paid as soon as you can segregate it from regular payroll but no longer than 15 days. 3 instances ... fixed assets saw significant deficiency. adjustment for 600k for depreciation. Work with Becky to make sure correct. non-cash event, up to you all as to significance. Financial position, we talked about these things, get system back to where it should be, bulding a cash reserve for the future.
Question: none from board. All voted to accept the report
Rough transcript of loan part
Reynolds: 4 notes at Interbank. Pay those on monthly basis, matured in May. Had some discussion with the bank from time to time, bank came to us last monday, Martin of Stephenville, asked to make an appointment and see me. Had talked as a group and came with a recommendation and proposal, on 2 notes paid monthly, they would reamortize over 5 years, note payment 2000 less than what currently paying, monthly paying about 10,050, renew till February 2017. In Feb 2017 will receive another payment for taxes, so some tax revenue coming in. Not sure what will be from Luminant. Propose that other two loans which had matured, jan and febe, will refinance, monthly payment, total for all notes about what we're paying currently. They understood some of the issues and wanted to be a bank supporting the local hospital. Authorize me or Ron to authorize these notes on our behalf.
During the meeting, I asked for a copy of the auditing report from one of the auditors and was glad to follow along on that document as I was recording. Hilariously, one of the employees, I believe her name is Ladonna Green, came running up to me after the meeting and told me to give it back. I was surprised, since of course these meetings are open meetinga and these records are available to everyone. She said, in a pretty rude way, that I could get it through an open record. I said, okay, that's what I'll do then, although technically, I absolutely believe she was out of line (Unlike Ron Hankins, who goes around saying he'd like to punch people in the mouth, I don't have a desire to get in an alteraction, even with a woman who, amazingly, is apparently the Human Resources Director at the hospital) . I've written a complaint letter to the Attorney General, as to whether, if someone attending a meeting is given a handout, they can't keep it. (If she couldn't, being an employee, that's between her and her boss, not me) Ray Reynolds then told me that he was happy to get the materials to me, and would do so right away, so I have put in an open records request tonight for all the materials that were referenced by the auditing firm.As a side note, this will NOT happen again. Next time I will record Ms Green attempting to go outside her authority in an open meeting for a public hospital and say NO as she has no authority for those irrational actions against a citizen attending a government meeting.
Update 5/27/2016. Since I had still not gotten the materials, I went in to inspect them, as per both the hospital bylaws as well as Hospital and Safety code for 286. Here are the 3 parts of the auditing report. 1 2 3
Ron Hankins Waldo update.
PS. Heard informally that again this last week GRMC wasn't able to pay admin and the doctors on time until today
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