A meeting to review the Glen Rose Medical Center’s (GRMC) finances for the 2008-09 fiscal year quickly turned into a question and answer session between Somervell County officials and the center’s certified public accountant.
Michael Oatman with Parrish, Moody and Fikes, PC out of Waco presented the auditor’s report to the GRMC Foundation board of trustees and the Somervell County Hospital Authority in a meeting Tuesday morning. Also present were several county elected officials, including County Judge Walter Maynard and Commissioner Lloyd Wirt.
Oatman said material weaknesses in the foundation’s financials have been present since 2006, when the audit report revealed two large weak points.
“Gary and the finance committee made as good an effort as I have seen to make improvements,” Oatman said.
But the improvements were not enough to keep the weaknesses at bay, as the list increased in 2007, totaling seven weaknesses. Those weak spots included “unacceptable and gross errors” in more than 20 of the hospital’s 24 bank accounts, payroll penalties in excess of $20,000 and intercompany accounts that were out of balance by more than $1,000,000.
“The hospital accounting was in alarmingly poor condition,” Oatman said. “The books were in disarray and not ready for audit.”
Oatman said in 2009 the hospital improved by leaps and bounds.
“In 2009 I think you seriously addressed all the material weaknesses,” Oatman said.
The improvements, however, were not enough to curtail questions and comments from the present county officials.
“You did come to us and tell us the hospital could afford (a payment to improve its facilities). I’m going to say, confidently, we wouldn’t have made a $14,000,000 (debt) decision if we had known about this,” Maynard said. “It’s kind of a shock.”
Oatman cited privacy issues in his answer.
“I am professionally prohibited from disclosing the information beyond my client,” Oatman said.
Oatman then showed a slide, which stated factors the hospital needed in order to grow its revenue, many of which did not come to fruition.
GRMC CEO Gary Marks said studies over a five-year period the public accountant used to project future funds could not have predicted the problems that curtailed the foundation’s financial stability.
“Based on that (Oatman) had reason to believe these things were not in place when (he) made (his) projections,” Marks said. “There were a lot of unforeseen issues that impacted management at that time. Historical data is heavily weighted. The future is not what the past is.”
Oatman said he still believed the hospital has the ability to recoup losses over the upcoming years, but it would have to make significant improvements to do so. The two major improvements he suggested were implementing hospital accounting software and building patient base.
“There is growth in the market and you guys have the resources to tap into that,” Oatman said.