Ramon Antonio Vargas tells the story behind the story of a determined litigant in former Jefferson Parish CAO Heather Hilliard and her two and a half year journey to justice for the New Orleans Advocate that is good reading as another news story originally broke by Slabbed New Media (here and here) completes its cycle through the news. Looks like I’ll need to shake the tree to see what is happening these days up on 10 at Yenni. 😉
Management’s Responsibility for the Financial Statements
Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation and maintenance of internal control relevant to the preparation and fair presentation of the financial statements that are free from material misstatement, whether due to fraud or error.
You would assume someone that has been in a senior management role at SRHS for as long as CEO Kevin Holland would understand these things but my experience is when the shit hits the fan, the stuffed suits typically pretend they don’t know jack while trying to cover things up and this is indeed the route senior management at SRHS has been taking since last March. Preserving talking points seems to be the paramount concern at SRHS these days and the public money being thrown at the KPMG lawsuit endeavor will be both copious in amount and represent a good example of the wasting of assets, all while management at SRHS tries putting the screws to its own retirees.
The follow up question would have involved something about top management excluding financing arrangements that had been repo’d from the books and the general lack of financial statement disclosures (management’s responsibility for the uninitiated) regarding off balance sheet arrangements with certain area lenders to finance patient balances but since I wasn’t there all we have is Kevin’s word on this that management had no clue their own books were off by $88 million dollars.
The word that comes to mind here is infantilized. What Holland is saying using other words is what you have at SRHS is management that is good enough to collect fat six figure paychecks but also simultaneously completely clueless about their own bookkeeping being off by $88 million dollars. These people, like me are all CPAs to boot. One word folks:
What I will do is leave a road map for the informed observer because the Allowance for Doubtful Accounts does not get off by $88M on its own. In doing so I’m going to disclose both some of what I know and lack in hopes the community here can help me nab an interview with someone that has the answers.
Shoemaker, who left the Singing River system in 2012, told county supervisors that he now holds a leadership position at another healthcare system in the area and has no axe to grind with Singing River. But he said that he also sounded the alarm about the system’s way of understating contract adjustments, stringing along debt that overstated its income, which lead in part to the $88 million shortfall in income the system announced in March.
And folks that has been the 500 pound gorilla in the room that most informed observers see but for which there has been no media reporting. Today that changes and to set things up we need to hop into the Wayback machine and set the dial for March 3, 2014:
Singing River Health System leaders went before the Jackson County Board of Supervisors this morning to say they will likely collect $88 million less on patients’ bills than they expected.
System representatives met with the board during an executive session under “potential litigation” and spoke to the media afterward.
The county’s legal team said the system discussed its bond status with supervisors in the meeting.
For a five-year period ending in 2012, the hospital can expect to collect $61 million less than previously anticipated, CEO Kevin Holland said after the executive session meeting. For 2013, that figure is $27 million.
“We have a substantial amount of patient balances in our system … on past services rendered,” Holland said.
And of course this was mostly discussed in a secret, out of the taxpaying public’s eye under the guise of an executive session to discuss potential litigation. To the extent SRHS hasn’t sued the former audit firm KPMG and crystal balls foretelling the coming retiree suits against the system are the stuff of fantasy, I’m struggling, with the benefit of hindsight, to understand why this discussion was held in an executive session. As I’ve previously opined, KPMG was not sued because there was too much dirty laundry potential. Before I explain why it helps to understand why the above story is nothing more than SRHS/Jackson County Supervisor political spin: Continue reading “A Cornerstone of the Singing River Financial Disaster: Management perpetrates an accounting fraud”