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More on the Glen Rose Medical Center Slush Fund

5 September 2014 at 11:03:40 AM

As readers know, I have been writing about the 501a (doctors) slush fund for some years now, most recently after the Somervell County Hospital District Board voted 4/3 to ignore following the 501a written contract that requires, among other things, that monies optionally given to the 501a upon request and approval, be afterwards accounted for. Frankly, I was shocked when watching the video from the August 21 2014 meeting  to see that not only did the board vote against this, but the unruly crowd clapped and cheered. Taxpayers may or may not agree with my opinion, but why in the world HAVE a legal contract that is signed and is attested to an auditor is correct and followed if you're going to sneer at it? Better to get rid of the contract or REDO the contract so that GRMC can just out of hand go GIVE money to the 501a without receipts. Oh, wait, that's what Ray Reynolds and Michael Honea are doing. 

I did wonder this. The whole arrangement of Somervell County taxpayers optionally giving money to the 501a came about during the transition from GRMC being a private hospital to being one under the court run by an appointed hospital authority board. An auditor at the time explained to the court that there would be times that the doctors might need additional money and the Somervell County Commissioners Court would be approving that money (again, according to the terms of the 501a contract). Part 1 Video Part 2 Video  (I was in attendance at that meeting and video recorded it) As noted by the auditor, 501a is not part of the hospital but does have an agreement with them. OSA/Shortfall money had to be requested and the auditor explains why this may be necessary from time to time BUT IT NOT REQUIRED. Here is the agreement with the 501a, look at Schedule C on page 15

I wondered 4 years ago just how much money is being talked about, were the amounts consistent, etc? Here's one of the Open Records Requests I did for January-Feb 2010 for the OSA; notice that the amounts vary. What would happen, at least, initially, is that a representative from the hospital, Gary Marks, or later, Ray Reynolds, would come before Somervell County Commissioner Court asking for the shortfall money to be paid back that the hospital had approved to the 501a. At some point, don't recall when, Mike Ford allowed the authority board to come only every so often for *settle-up* money rather than having to come every month to the commissioners court. In the Somervell County Auditors Report for 2011, the county lists this money as *supplemental operations support". I asked John Curtis, my county commissioner at the time about this. 

Is the amount referenced here the Glen Rose Medical Center beg money? Means there ought to be a check transaction (or more than one) for that money, yes? Regardless, Somervell County budgeted certain funds for operation of the hospital and GRMC couldn't run it without an additional $927,319 bucks.

Meantime, I asked a county commissioner whether he knew if there were such reports. He told me he didn't know that the hospital authority ever asked for additional money, couldn't recall ever voting about it and had not ever seen any reports. I was kind of surprised by this. It's one thing for me to ask for a report that might not exist anywhere and quite another for the people responsible for overseeing our taxpayer money not to ask for a report, or for an appointed board not to supply it. That would also mean that in the last 2 years or so that GRMC never came publicly into court to ask for additional money in full view and knowledge of taxpayers. But it might be that the commissioner simply doesn't recall this happening. He also was not aware that the Somervell County Hospital Authority had taken out a $50,000 loan for improvements and personnel payments for Pecan Plantation-did this never come up in commissioners court? (The related question is: is this part of Somervell County Hospital District's debt?)  Never in a report? Assuming that is 1, why would this not be fully transparent?

Here's an audio example of Ray Reynolds explaining, on May 27 2010 about the reiumbursement money and *settleup* money to the appointed Somervell County Hospital Authority Board. 

I did an open records request on July 2 2013 asking how much money had gone out to the 501a. Here, at the top of this post was Brian Watts, county auditor's, reply. You'll notice that Mr Watts indicates that one must subtract out other vendors, such as State Comptroller or PSM Consultants, etc to get a total on how much money went for OSA. 

Most recently, last week I asked Mr Watts about just how Somervell County had budgeted for the OSA. Remember, as per the 501a agreement, the money is entirely optional, must be approved and accounted for, and there is NO requirement that ANY money be given extra to the doctor's organization. Mr Watts said 

Regarding the budgeting issue, I do know that the County included an expected amount of direct support (subsidy) for the hospital and showed that amount on the annual approved budgets in line items 010-423-402 and 010-423-570.  You can review prior year budgets on our public website for specific budgeted amounts.  Should the amount requested be greater than the amount in the approved budget, a budget amendment would have been presented to the Commissioner’s Court and approved BEFORE any funds were paid and shown on the meeting agenda in accordance with State law.

Of course, now there is a Somervell County Hospital District and Glen Rose Medical Center is no longer under Somervell County Commissioners Court purvue, so the following information is about how the money was budgeted AT THE TIME WHEN GRMC was under the county, Payments to GRMC Mr Watts, again.

After reviewing the attached documentation it appears that Glen Rose Medical Center (GRMC) would provide a “Cash Position Report” to the Commissioners Court who would then approve payment to GRMC from the county’s general fund.  These payments came from line item 010-423-402 (Hospital Admin Fees).  It seems the purpose of these funds in the county’s budget was for “operational support”, or in other words a direct subsidy to GRMC.  In addition to these amounts, the county also collected and remitted payments of the debt service requirements for the 2008 Certificates of Obligation.

While the payment of funds from the county was made via a formal request from the administration of GRMC, it became the responsibility of GRMC to fully account for these payments by presenting the total of direct and indirect subsidy on their financial statements as “county contributions” under the revenue section of GRMC’s audited financial statements with a notation informing the financial statement reader (from the 2012 GRMC audit report):

“Support from Somervell County was received through the use of the hospital facility and through cash contributions with a combined total of $1,439,933 in support received from the County for the year ended September 30, 2012. (09/30/2012 GRMC Audit Report Page 5)”

The process employed by the county during that time was to provide financial support to GRMC and then GRMC would then direct funds to cover its various obligations such as the obligations in the Management Services and Healthcare Agreement dated January 1, 2010 between Somervell County Healthcare Authority and Glen Rose Healthcare, Inc.  Somervell County appears to not be a direct party to that agreement and therefore adherence to the specific requirements of that document would not have been a direct obligation of Somervell County.

With that being said, Somervell County would have simply relied upon the outside auditors of GRMC to record the contributions by Somervell County correctly and requested a copy of that audit report for our records.  This is our normal procedure when we provide direct operational support to other entities such as the Somervell County Committee on Aging or The Transit System, both of which we continue to support from our general fund.

In summary, the Commissioners Court would budget a certain amount to subsidize GRMC, and we provided those funds at their request to meet the financial needs of GRMC up to the amount authorized by the Commissioners Court.

So, to boil it down, Somervell County had budgeted for payments to GRMC, to include projected shortfall money, and put this under a general account for the hospital. It appears that the authority board created its own named Cash Position and Funds Request Policy  in the January 2010 meeting. These requests for cash, as shown in the example from the PDF, above. Therefore, Somervell County did not itself apparently look into whether or how these OSA requests were done but simply paid them out based on GRMC presenting them to be paid. 

Saying that it would not be immediately obvious to taxpayers that their tax money was going to pay a 3rd party doctor's organization for extra money that GRMC approved. That's presumably one good reason to have had a representative of the county, a commissioner, sit in on the board to make sure there was full transparency for the taxpayer.

As on this example, you'll notice that there are summary amounts for Glen Rose Healthcare Inc: Check Register, Payroll Transfers, Electronic Fund Transfers, with a total showing 224,839 Total GRNC Cash Disbursements. Now, it may be that Somervell County Commissioners Court never asked for the detail on exactly what those amounts represented, but that certainly should be something that Ray Reynolds could supply.

Readers will recall that when I did an open records request in August 2013  asking requisitions and after-the-fact reports showing how OSA money was spent (per the 501a management agreement SIGNED BY RAY REYNOLDS, Section C) , that I was told no written requisitions existed.

I was stopped cold in my tracks- imagine, NO WAY TO TRACK MONEY IN DETAIL? NO WAY TO KNOW IF THE REQUEST WAS EVEN LEGITIMATE?  From Section C of the management agreement.

Drill this down and you will understand why I was so taken aback when GRMC told me they had NO written documents about the OSA. Also, "OSA may ONLY be used to pay necessary and reasonable operational expenses of the Physician Group". Well, how are you going to KNOW if the Physicians Group doesn't supply the justification? So how DID the doctors get the money? Because, according to GRMC, Michael Honea filled up the account when he saw it was running low. (like a gas tank!) 

Let's just say that that county didn't track these amounts in detail but relied on GRMC's Ray Reynolds to tell them an aggregate number. Doesn't that assume that the appointed (and later temporary) board that was in place would have known and ASKED FOR these records? Apparently not. I filed a complaint about this in September 2013.

You may, as a taxpayer, be fine with no accountability for your money to a PRIVATE organization. Remember when Glen Rose City Council, including Darrell Best, voted to give Land of the Dinosaurs $80,000 WITHOUT  A CONTRACT (for which the auditor said an investment was not legal) or when Best voted to give 4b money to the Glen Rose Chamber of Commerce of which he was president at the time? I believe there are a LOT of us that give a hoot about our tax money, particularly since it is not. like an investment, something we do voluntarily. I voted for certain people to be on the Somervell County Hospital Board to be fiscally conservative and accountable and hope that the 4 that voted to ignore a written contract somehow come to their senses in the future. 





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