On Dec. 30, 2013, the results of the Washington State Auditor’s Audit of North Valley Hospital were released. The web site is: http://www.sao.wa.gov/auditreports/auditreportfiles/ar1011058.pdf. The report stated NVH did not follow state procurement laws concerning work done at public entities. From the report: The District started a project to remodel the hospital building’s second floor with an estimated cost of approximately $180,000, and intended to use day labor for most of the work. However, after starting the project the District found it had to bring systems up to current health and building code standards. To date, the project is approximately 80 percent complete, and has capitalized costs of approximately $419,000.
The District did not formally bid the project as required, and exceeded its statutory authority when using day labor costing approximately $47,000, and acting as the project’s general contractor. Further, the District did not comply with other public works laws when it:
- Procured architectural services costing approximately $10,000 without evidence that a competitive negotiation process was used.
- Used contractors without obtaining evidence that prevailing wages were paid, obtaining performance bonds, or meeting retainage requirements.
- Didn’t receive certification from the Washington State Department of Revenue,
- Employment Securities Department or Department of Labor and Industries that all taxes had been paid in full.
This involved the violation of six RCW’s, as per the report!
The results are:
The District cannot demonstrate it received the best price for its public works project, and that it provided for fair competition. The District could be responsible for the wages and benefits to workers paid less than the established prevailing wage rates. The District could also be held responsible for claims arising under the contract or payment of taxes due to the state that the contractor did not pay.
In short, the taxpayers will get to eat it again!
The response from the District was interesting. The usually very vocal CEO couldn’t be reached for comment. Another Administration member stated that the project was complete, contradicting the 80% in the audit! The District also said that training is being provided.
Quite frankly, we’re not paying for on the job training, especially at these prices! And once everyone is properly trained, will there be another pay increase to go with that? I will mention that the Washington Association of Public Hospital Districts has a website and page, http://www.awphd.org/Publications/resources_cr.aspx that contains all you need to run a Hospital District, including a Commissioner Guide, Financial Reporting & Board Responsibility, a Guide to PHD Political Activities, a Legal Manual, an Introduction to Public Hospital District Governance, CEO Evaluation Forms, etc. Additionally, where was the legal council?
In the private sector, violating even one of the RCW’s mentioned would bring severe personal penalties. However, since this was all done in the magical public sector, the offenders are not held personally responsible, and all monetary costs are just to be absorbed by the taxpayer.
President Harry Truman had a sign on his desk that said, “The buck stops here.” Since NVH claims to operate in complete transparency, as one of those who got and will get to eat it again, I expect a full disclosure of who, what when and where concerning all aspects of this violation of the public trust, and in a prompt fashion!