The difference in managing by the numbers and being a slave to them

Once I advised a client that was planning their cash flow needs for the coming year that should the business achieve a DSO of under 30 days then it could reduce its Trade Receivables outstanding by over 40% in dollar terms. Because of the nature of the contracts and their terms, the subject business was able to reduce both its DSO and trade receivables thus the amount of cash required to finance “the turn” was greatly reduced.  This folks is called managing by the numbers and it not only works, but is typically the hallmark of the way best in class organizations are managed.

And by way of comparison we have this from the past weekend:

SRHS mess: Board minutes shed light on financial troubles, but meetings secret ~ Karen Nelson and Anita Lee

The hospital received a waiver from bond covenants and was able to finalize the audit June 21, according to the trustees’ minutes. The county did not receive the audit until July 9 — more than four months after the deadline. Crews told trustees he had negotiated a bond covenant allowing Singing River to have 55 days’ cash on hand, as opposed to 60, by Sept. 30. Crews reported to the board Sept. 25 that 56 days’ cash was on hand, but it was likely to decrease to 51 days when payroll was run later in the week.

So they would comply with bond covenants, Crews and Anderson suggested the board allow them to establish a line of credit for up to $5 million at Merchants & Marine Bank. Trustees unanimously approved the request. The Board of Supervisors also had to approve an increase in Singing River’s borrowing authority, according to a trustees’ resolution attached to the minutes.

This of course does not count the multiple refunding of bonds previously issued beginning in 2008 per my perusal of EMMA. So what was accomplished from a money standpoint by these gyrations? First off a local bank made some money because credit facilities are not free. So beyond paying a banker what did the financial engineering accomplish?

The financial management on display at SRHS is that of rank amateurs pretending to wear big boy pants and that brings me to Frank Corder’s piece today at YallPolitics:

All of Mississippi should study up on what’s happening in Jackson County at Singing River Hospital

The SRHS Board of Trustees needs to be replaced, each and every one.

4 thoughts on “The difference in managing by the numbers and being a slave to them”

  1. The Singing River Health System appears now to be spinning out of control with current management being chased by the Jackson County Board of Supervisors, who are both being chased by all of the current and past employees in what appears to be circular financial suicide. If the employees sue they risk ending up involved in a bankruptcy proceeding and if they do not sue they risk ending up involved in a bankruptcy proceeding. I really find it appalling how the employees have been treated. What is obvious is the fact that the SRHS people were working hand in hand with the Supervisors to keep the employees in limbo until the pension plan was being terminated so to limit what legal action the employees could take. Once the termination was in effect all obligations that the System had to contribute for both past and present obligations was zeroed out.These elected,appointed and hired people involved are all sneaky bastards that should be ashamed of their actions.The employees are sure to suffer in the end.With both local newspapers hammering away there is no place for these weasels to hide. Even Frank [email protected] Ya’ll Politics has blasted them with both barrels in one of the best posts he has ever produced. I think it is past time for the latest Gulf Coast gang to hold a press conference and come totally clean instead of hiding behind closed doors to further this scheme that is sure to hurt so many in the community. Another point of interest is the information published about all of the real estate they own, lease and lease to others. CEO Holland stated that they do not know what all they have and was forming a committee of some of the trustees to figure it all out. Now is this not totally absurd? This is just further proof that the wrong people are in charge,on the board of trustees or maybe even serving as elected officials over in Jackson County. In my opinion this is another land scam getting ready to boil over for the taxpayers to clean up with about 5mils in new taxes.

    1. Luckily for the folks in Jackson County 2015 is an election year. What I know about the salient law is exceeded only by what I don’t but it seems to me an enterprising lawyers, given the fact fictitious account statements were mailed, could think of a cause of action that would make the plan participants at least partially whole.

      That said as you point out a lawsuit could push SRHS into Chap 9 but it is very possible that is where SHRS is going anyway.

      Those land deals are intriguing because when I think of public bodies in Jackson County doing real estate speculation I think of the outhouse, especially since no one in upper management seemed to know anything about them except for the departed CEO.

      The continued lack of transparency at the Hospital and Board of Sups is both astounding and highly disturbing.

  2. From comments made to the news media, it appears to the public that not only are the Jackson County Board of Supervisors inept, they are liars.

    They remind me of the 3 monkeys; see no evil, hear no evil and speak no evil.

    At present, John McKay is mostly quiet; that is really strange from Mr. Blow Hard, Mr. Free Boat Rides from DMR and Mr. Big Supporter of Scott Walker, and the list goes on. I hope Beat 5 remembers these facts in the next General Election.

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