The Upper San Juan Health Service District Board of Directors met in regular session Tuesday night and, among other things, approved an outside audit of its financial statements for the years ending Dec. 31, 2009 and 2008. The consulting and accounting firm, Chadwick, Steinkirchner, Davis & Co., P.C. of Grand Junction, Colo. performed the audit.
Without wading too deep in detail, a letter to the auditors by district management, dated June 7, 2010, maintained that district financial statements were “fairly presented,” and, “in conformity with U.S. generally accepted accounting principles.”
The district also acknowledged its responsibility in adopting sound accounting policies, establishing and maintaining effective internal control, and preventing and detecting fraud. It also identified and disclosed all laws, regulations and provisions of its contracts and grant agreements relevant to the financial statement amounts, including provisions for reporting specific activities in separate funds.
In providing accountants with all necessary materials to facilitate the audit, the district affirmed the following:
• All financial records, related data and district meetings minutes have been provided.
• There have been no communications from regulatory agencies concerning noncompliance with, or deficiencies in, financial reporting practices.
• There have been no material transactions not properly recorded in accounting records underlying the financial statements.
• We have no knowledge of any fraud or suspected fraud by management, employees with significant roles in internal control, or others where fraud could affect the financial statements.
• The district has no plans or intentions that will affect the carrying value or classification of assets, liabilities or equity.
• There are no real or possible violations of budget ordinances, laws and regulations, provisions of contracts and grant agreements, tax or debt limits, and any related debt covenants that should be disclosed in the financial statements or considered for recording a loss contingency.
• There are no unasserted claims or assessments that must be disclosed.
• The district has satisfactory title to all owned assets, with no liens or encumbrances, nor has any asset been pledged as collateral, except as disclosed.
While the above is but a partial list of all that the district provided its accountants, the accountants ultimately responded with comments suggesting the district was fully compliant with all laws and regulations, and that there were no significant areas of concern.
“We encountered no significant difficulties in dealing with management in performing and completing our audit,” a portion of the final report stated.
In their evaluation of district accounting practices, the accountants reported, “No new accounting policies were adopted and the application of existing policies was not changed during 2009. We noted no transaction entered into by the District during the year for which there is a lack of authoritative guidance or consensus. There are no significant transactions that have been recognized in the financial statements in a different period than when the transaction occurred.”
Auditors also reported that, “There were no misstatements detected as a result of audit procedures and corrected by management that were considered material, either individually or in the aggregate, to the financial statements taken as a whole.”
Though not an actual assessment of district financial stability, the rather mundane report did describe an organization with good, comprehensive accounting policies, even if it didn’t offer a symbolic “pat on the back.”
In respect to actual district finances, the monthly Finance Committee Report showed that July 2010 shattered records in a number of areas. For instance, total patient revenue rose from $1.10 million in July 2009 to $1.15 million this July. Net patient revenue increased by $12,000 over last July, while payroll and benefits increased from $378,00 in June to $429,000 last month. Outpatient ER and clinic visits were all up, as were emergency services (ambulance) calls.
According to committee personnel, “… even considering seasonality, it’s clear that we’re continuing to grow.”
The report also showed dramatic increases in year-to-date non-operating revenue, mill levy funding and “other” revenue. The only apparent slip was in grants and donations, which, when accounting for a $160,000 adjustment made last fall, may actually be another gain.
All in all, a clean audit and glowing financial report suggest the district, its hospital and rural health clinic are on solid ground.
In other district business (during its July meeting), the board of directors voted to change the name of Pagosa Mountain Hospital to “Pagosa Springs Medical Center.” Presumably, the change will more adequately incorporate all the facility’s various components, including the hospital, clinic, diagnostic services and wellness center. According to hospital CEO Brad Cochennet, the new name will take effect sometime later this year.
Just prior to Tuesday’s adjournment, the board swore in new board member Jerry Baker. Baker replaces director Bob Scott, who resigned in May to pursue other community interests.
With an extensive background in banking and finance, Baker first visited Pagosa Springs in 2001. He and his wife liked what they saw, bought a lot, built a home and moved here fulltime, following his 2008 retirement.
With a B.S. and M.B.A. in marketing, Baker most recently served as president and CEO of First Horizon National Corporation and First Tennessee Bank. He is now a CEO Coach with Building Champions, Inc. Given his broad management and financial expertise, he will be an asset to the district.