TONASKET – The North Valley Hospital District Board received the results of its 2010 audit and approved its preliminary budget for 2012 at its Thursday, Nov. 10, board meeting.
Shar Sheaffer of Dingus, Zarecor and Associates of Spokane Valley, a public accounting firm specializing in rural health care, provided an overview of the firm’s audit of the NVH 2010 financial statements, with Brandi Pritchard of the Washington State Auditor’s Office listening via telephone.
“What you have is an unqualified opinion,” Sheaffer said, “which is the highest opinion you can have … that your financial statements are fairly presented.
“What this means is that you have management here that helped us through this process, and we appreciate that, and that does their job. Which is to get financial information back to you guys, the board, so you can make your decisions based on that.”
Highlights of the audit included the fact that revenue, listed at $16.25 million, was up 6.7 percent from the previous year, while expenses ($17.01 million) rose just two percent. Salary and wages, which in 2009 consisted of 65 percent of expenses, had dropped to 62 percent.
While that resulted in an operating loss of nearly $760,000, non-operating revenues and capital contributions pushed the overall net income $687,000 into the black. The previous year showed a net loss of nearly $290,000.
“I don’t think that will surprise any of you that that is really good compared to prior years,” Sheaffer said. “All in all you did really well this year, and I hope to see that trend continue going forward.”
The audit report also noted that the hospital’s accounting practices and processes were found to be reasonable in light of the financial statements taken as a whole, while there were no significant difficulties that arose with hospital management or staff during the course of the audit.
The firm did offer some recommendations in terms of policy and procedure to lessen the opportunity for problems in the future. Recommendations included some additional segregation of duties between employees so as to provide a better system of checks and balances with payroll and the mailing of signed checks, cash receipts and patient account access. In some cases computer access was deemed too broad. The audit also recommended an updated inventory of capital assets and an updated disaster recovery plan.
“It does not mean that we found anything that happened inappropriate, or that we’re saying this could happen,” Sheaffer said. “We’re just saying there is room for improvement and tightening control within your organization.”
Chief Financial Officer Bomi Bharucha presented the preliminary budget numbers, which the board approved.
“We are trying to stay mindful of the (legislative) changes coming down,” Bharucha said. “But changes (cuts) to Medicare and Medicaid probably will not affect us until 2013.
“The biggest thing is trying to bring our warrants down to $1 million by the end of 2012 and have them paid off by the end of 2013. There is no slack in our operations budget to pay those down, so it is coming out of depreciation, which means the cost of buying new equipment.”
Bharucha said the hospital is on target to reach its goal of having the warrants – short-term, low-interest loans from Okanogan County to help pay for operating expenses – paid down to $1.5 million by the end of this year. That is down from $3.5 million in June, 2010.
The board also approved a room rate increase for the Long Term Care facility by $10 per day for extended care and $5 per day for assisted living.
There was discussion on the need for redistricting after an assessment of population distribution.
“One of our commissioner’s districts is about 10 percent too low (in terms of population represented), while another is off 20 percent and another 38 percent,” Bharucha said. “It’s advisable, we have a fiduciary responsibility to consider redistricting.”
The redistricting question, which requires the notice of a public hearing, will be considered at the board’s Dec. 8 meeting.
In other business, the board approved the levy certification for 2012 taxes, approved two declaration and disposition statements of surplus property, approved the exploration of purchasing STATS Espresso, and approved the surgery department’s equipment request for a ForceTriad energy platform. Courtesy reappointments for five physicians were approved, and discussion on whether or not to hold the regular board meeting on Dec. 22 was tabled.
The next NVH District board meeting is scheduled for Thursday, Dec. 8, at 7 p.m. in the hospital board room.