Kevin Holland is finally leaving Singing River Hospital. What Gives?

Tuesday a week ago Slabbed was leaked that Singing River CEO Kevin Holland would either be resigning or be fired at the following day’s Board of Trustee meeting. Slabbed put out a tweet on the subject which we were asked to subsequently delete – you had to be there to win. Sure enough Karen Nelson would break the news on Thursday that Holland was leaving and that gets me back to the head-scratcher on being asked to delete the Tweet that Holland would be leaving because the fact that segments of the Jackson County Board of Supervisors were unhappy with Holland’s job performance has been very well reported in both the newspapers serving the area. Looking back at the events of last week there was something else going though which a perusal of Mississippi Electronic Courts revealed:

Notice of Depo CA by Slabbed on Scribd

But before we examine the context of Chris Anderson’s upcoming deposition we need to circle back to Karen Nelson’s account of the FY 2016 audit:

Singing River Health System dropped from a Level 2 to a Level 3 trauma rating when it cut back on neurological services, and the hospital system is no longer majority owner of its two outpatient surgical centers.

But Chief Financial Officer Brian Argo told Jackson County elected officials on Monday that the health system is cutting costs and is continuing toward financial recovery with a profitable year.

Argo went over the annual independent audit, this year by Dixon Hughes Goodman, which confirms the county hospital system ended the fiscal year on Sept. 30 with a positive bottom line of $5.1 million.

Looking at the audit report linked above I’m not sure where the $5.1 million dollar number comes from but I did see about a third of the consolidated net income was derived from the sale of assets inside a not for profit “blended component unit” called “SHRS Ambulatory Services“: Continue reading “Kevin Holland is finally leaving Singing River Hospital. What Gives?”

Guest Post: Cisco Aguilar’s Full Remarks before Jackson County Supervisors July 6, 2015

JCBOS Meeting
07/06/2015

Good Morning.
During the last meeting Mr. McKay, as well as two current hospital employees, showered high praise on Mr. Holland and the “new” Administration at the helm of Singing River Health System. We must now respectfully but wholeheartedly disagree with their appraisal.

Our problem with the current leadership is that it is following in the footsteps of the old one, using the same methods that produced the colossal fiasco the System is now in. In fact, most of the top leaders have not changed at all, as six out of the seven voting trustees are the same ones who actually presided over the entire debacle.

After all, it was Kevin Holland who on March 31, 20141 sought to lull us into complacency claiming that the pension plan was safe and sound on the heels of an incredible $88 million “accounting adjustment” announcement.2

It was also Mr. Holland who, with the support from other current Administration members3 and with the approval of the Board of Trustees, attempted on November 29, 2014 to eliminate the burdensome pension plan overnight, writing off SRHS obligations to the pension participants, as well as their future livelihood guarantees, with the stroke of a pen and no true hint of remorse.4

Seven months later, secrecy and deception continues to reign sovereign at SRHS, as evidenced by the struggle everyone is enduring to shine light on what actually happened to bring about this disaster.5

Continue reading “Guest Post: Cisco Aguilar’s Full Remarks before Jackson County Supervisors July 6, 2015”

Former SRHS CEO Chris Anderson is a CPA/CEO so let’s try to think like one

Since transparency is still sorely lacking over at Singing River Health and because I rolled out my working theory why the events surrounding this man made financial disaster have unfolded in a certain way we have to take a step back and look at the big picture. And to do that we must think like former CEO Chris Anderson, the man with all the answers.

To understand how the disaster unfolded most good Certified Fraud Examiners will tell you to “think dirty” and what it meant by that term is that the “frauditor” must 1. Understand how the perpetrator thinks by attempting to walk the proverbial mile in the perp’s moccasins which leads to 2. Gaining a possible understanding the motivations which lead to the disaster. This specialty is essentially the intersection of the social sciences with the accounting and finance that was originally pioneered by legendary sociologist/criminologist Donald Cressey, a name that has been mentioned a few times previously on this website.

First up are a few requisite disclosures. Dating back to November of last year I’ve had the pleasure of meeting many fine folks from over in Jackson County with connections to either the hospital system or County Government and the resultant communications with this group have a painted a picture of CEO Anderson that I thought was rich in its depth and color that also came with some analysis that is out of this world in my opinion.  Important to note is that the totality of what I’ve been told by multiple parties (many with but some without a dog in the hunt) about Anderson is actually fair to the man, who has been the villain of choice for the media covering this disaster, Slabbed included.

The most frequent adjective mentioned to me concerning Anderson is Continue reading “Former SRHS CEO Chris Anderson is a CPA/CEO so let’s try to think like one”

If you’re not reading SRHS Trustee Scott Taylor’s blog…..

Then those of you that get part of your daily news on Slabbed are really missing out. First off I want to give Taylor a WordPress platform tip so that the posts and comment time stamps are expressed in local time. From your dashboard go to “settings”, then click “general” on the sub-menu. On your general settings tab change the timezone to “UTC-5” from the drop down menu. You can thank me later.

On Sunday, Taylor posted his take on the Board of Supervisor’s recent Public Relations push with legal consultant Billy Guice on the point for the Sups. The post was good but the comments to Taylor’s post, as is often the case on an interactive website, are out of this world and I think are a must read.

My personal opinion is most everyone on the outside looking in at the Singing River financial disaster without a financial dog in the hunt, especially informed financial observers spot the self-serving duplicity in how both the Supervisors and the SRHS Board of Trustees are trying to frame the management perpetrated accounting fraud which lays at the heart of financial crisis that grips the hospital.

At its most basic, both the Sups and the SHRS Trustees are trying to scapegoat the former auditors and the retirees for the bad business practices and fraudulent  financial reporting which occurred under former CEO Chris Anderson’s and CFO Mike Crews’ watch at the helm of SRHS. It is a shame the old time practice of tarring and feathering has gone out of style because I can think of five Supervisors (Stupidvisors in RFP speak) that deserve a good tarring, feathering before being run out of town on a rail. These are strong words but I am an informed financial observer so the bullshit is easy to spot. Let’s start with April Havens over at the Mississippi Alabama Press:

Jackson County supervisors this morning announced they are suing KPMG, Singing River Health System’s former audit firm whose work led to a disastrous $88 million accounting adjustment.

Supervisors today hired attorney Billy Guice on a contingent fee basis to represent the county in its suit against the audit firm.

KPMG has been the scapegoat of choice for both the SRHS Board when the financial fraud (though it was not reported as such by the Mississippi Alabama Press) first came to light back in March, 2014 as County Comptroller Josh Eldridge, reportedly a CPA that previously worked for the State Auditor’s office took point for the Sups spinning the management perpetrated financial fraud just days after Chris Anderson abruptly left Singing River Health for Baptist in Jackson:

“It’s a large adjustment,” county Comptroller Josh Eldridge said.

Board attorney Jessica Dupont noted, however, that the county doesn’t know of a current lawsuit.

The health system is county-owned, and the county backs its debt, but county tax dollars do not fund the system’s operations. The county has five mills pledged in case the health system ever defaults on its debt, but Eldridge noted the system is “not even close” to default.

That tune has since changed with regard to the bonds being in default, such condition also present when Eldridge made those initial statements. Now back to Jackson County’s announcement that they were suing KPMG as Guice literally beclowns himself before the financial and auditing community as he lists two grounds for the suit:

Last week, Guice said the audits did not appropriately disclose the state of the pension in the annual audits. That information should have been presented in the audit highlights at the beginning of the document, he said.

Instead, the most important information was buried in the “notes” section at the end of the audit, he said.

Now at this point I’m going to put on my professional hat as a CPA/Auditor but I’m going to express the concepts in the language used by an 8 year old so that maybe some of this sinks in with the Stupidvisors, who I would highly encourage to run  by their in-house financial expert Josh Eldridge.

The “front part” of the audit is called “Management Discussion and Analysis“. You see boys and girls, in an audit there are two teams. One team is called management. The boys and girls that belong to Team Management work at the hospital. These people include doctors and nurses that cure your bobos and hurts. It also includes the boys and girls that manage the hospital. The other team is called the “auditors” and that team includes the boys and girls that make sure the Hospital reports its cures of bobos and hurts accurately for everyone most everyone for just a few people to see.

Now back to grownup talk for the professionals that read this website. Continue reading “If you’re not reading SRHS Trustee Scott Taylor’s blog…..”

Let’s think dirty and get to the bottom of what’s driving the Jackson County Sups

I heard the catch phrase “think dirty” many years ago at a course given by Dennis Dycus (along with the now politically incorrect “three b’s and a d”) and it came to mind as I followed the coverage of the Jackson County Sups telling the SRHS retirees to shut up at Monday’s meeting and today’s resulting editorial at the Sun Herald declaring the only remaining recourse the retirees have at this point is at the ballot box. It was a conclusion that Slabbed New Media reached as a matter of editorial policy three weeks ago when I wrote the following:

Just a thought but if I were one of the dedicated retiree picketers I’d strongly consider scheduling some days at the county courthouse to force the Sups to come clean on everything Billy Guice has found.

Now back to thinking dirty.  Slabbed revealed the first big clue to the big picture on March 11th when “No one can serve two masters…” A SRHS Conflict of Interest Series Part 1 was published and SRHS Trustee Scott Taylor revealed the fundamentally interest conflicted position he occupied trying to engage the plan participants on behalf of the very organization that had tried shafting them just a few months earlier. When pressed in comments by Cisco Aguilar Taylor melted down and that was an important data point.  You see folks Scott Taylor was appointed to the Singing River Trustees by Supervisor John McKay not to help the retirees. He was appointed by McKay to help McKay win reelection by making the Singing River problem go away.

Then bad news Friday, April 10th, 2015 arrived:

SRHS releases financial statements, announces job cuts ~ Brad Kessie

The SRHS PR spin was evident in the WLOX headline as there should have been no equivalency between the release of the 2014 year end and new job cuts related to continuing losses. Of course that did not stop CEO Kevin Holland from sticking to those ridiculous PR talking points blaming the auditors for a management perpetrated financial Continue reading “Let’s think dirty and get to the bottom of what’s driving the Jackson County Sups”

Liars and Crooks are easily spotted……

It is a long interview and there is copious amounts of BS early on when SRHS CEO Kevin Holland tries covering for his predecessor but overall Doug and Dave did a good job honing in the real issues at play on News Watch This Week. Most interesting is Holland tacitly admits that SRHS chose construction projects over honoring its promises to its retirees.

WLOX.com – The News for South Mississippi
Continue reading “Liars and Crooks are easily spotted……”

Comment Bump: Here’s more culture of corruption for ya Stacey. ;-)

I would argue that the audit approach of the Office of the State Auditor, Financial Audit and Compliance Division, County Audit Section with regards to non-compliance with GASB 61 is fundamentally flawed:

The Financial and Compliance Audit Division, the largest division in the agency, is divided into five sections: Education Audit Section, State Agency Audit Section, County Audit Section, Electronic Data Processing (EDP) Audit Section and Report Processing Section. This division is responsible for conducting and overseeing audits of public entities.

Facebook Photo | SRHS Queen Stephanie Barnes Taylor
Facebook Photo | SRHS Legal Services Queen and Chief Compliance Officer Stephanie Barnes Taylor

The audit and inherent risks contained in the County audit is at owned hospital component units for those counties that have them, as they are magnitudes larger financially than the primary government. They have also been allowed to operate in secret by law, which is a red flag in my opinion in terms of fraud risk assessment. As a matter of Governmental GAAP, this would be one of the basic reasons GASB 34 (now GASB 61) was promulgated as the overall financial risk would lie with the larger entity, oftentimes a “component unit” whose failure would cause far more financial carnage than the failure of the primary government. We’re seeing this play out over in Jackson County right now.

Currently in Mississippi, the Auditors office allows the counties to not consolidate their component unit hospitals, Forrest Co and Jackson Co being two examples, with the OSA or private county audit firm expressing adverse opinion on the component unit column of a multi-column financial presentation. The opinion is so complicated as to be next to worthless to all but the CPA practitioner community and lawyers.

To the extent the taxpayer backed financial guarantee related to their hospitals at the county level is material to the Primary government and unrecognized, County auditors are skating on very thin ice from a liability standpoint with such a presentation, which I would argue is fundamentally misleading. I would hope the gang up in Jackson would be having this discussion internally but based on an Anita Lee story from a few months back my guess would be no for reasons I will not elaborate upon. I’d be happy to be proven wrong there.

None of this is a comment bump folks but I needed Mr. Pickering’s attention. I’d like to point out all these cultures of corruption are happening on your charge and watch sir. From chat gres in comments:

Back to SRHS and the compliance department.

Stephanie Barnes Taylor was the Chief of Legal Services and the Compliance Officer for SRHS until 2014.

In 2010 SBT founded The Fruition Group LLC. Continue reading “Comment Bump: Here’s more culture of corruption for ya Stacey. ;-)”

Litigation ain’t easy: A Heather Hilliard / SRHS v KPMG update

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.  😉

Moving right along in other litigation news, it does not appear KPMG is very scared of the lawsuit that Kevin Holland and company at SRHS filed against the audit firm late last week per April Havens.  I really don’t want to throw any wet blankets on this legal matter but based on the wording in the complaint, I think the only people that will make any money from the endeavor will be the lawyers.  I strongly suspect we’ll be seeing a 12(b)(6) motion asking for dismissal from KPMG and the reason such a motion stands a good chance is actually found in the 2013 Audit Report prepared by Horne CPAs in several places but I will highlight two places, the first on pdf page three of the report.

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.

Here is the second place that I mentioned and it is on the very last page of the audit: Continue reading “Litigation ain’t easy: A Heather Hilliard / SRHS v KPMG update”

More dominoes fall: SRHS Outside Counsel Roy Williams retires plus two masters = bad news (Updated)

Let’s start off with April Haven’s latest for the Mississippi Press via RFP in comments:

SRHS attorney Roy Williams retires, effective immediately

Boy the way Glen Miller played
Songs that made the hit parade.
Guys like us we had it made,
Those were the days.

Sorry folks wrong story. Roy Williams is gone and ostensibly passes the SRHS account along genealogically to his son Brett.

Here at Slabbed we’re blessed. I’m talking with several people with detailed knowledge of both the Jackson County political landscape and the SRHS executive suites and that does not count accounting stopping in with us yesterday. Some of these nice people use charitable language saying things like “ethical lines were blurred”, which is a polite of way of saying that certain people are fixing to get into some deep trouble. Anita Lee set things up very nicely:

As it would happen, I know a thing or two about the proper administration of pension plans. The lawsuit at the heart of Anita’s second story should have the desired effect because of the clear cut breaches of fiduciary duty that were created by clear cut conflicts of interest. For instance in this saga we learned that former SRHS Board Trustee Morris Strickland actually was charged with investing trust assets. When I saw that I gasped but then again the lawyers I know that are most knowledgeable of ERISA and trust common law all advise their clients to have an independent plan trustee and investment advisor period, especially in something like a defined benefit plan. At Singing River management and the Board of Trustees took those roles and this brings me back to Mr. Williams and in house SRHS counsel Celeste Oglesby because you wonder what in the blue hell they were thinking allowing such a setup to which mucho liability would naturally attach should things go wrong. Continue reading “More dominoes fall: SRHS Outside Counsel Roy Williams retires plus two masters = bad news (Updated)”