Following a report on Delta Health System’s finances, which showed negative net income of $13.2 million year-to-date, the Washington County Board of Supervisors voted Monday to pass a order declaring that DHS was in financial difficulty and employed senior staff. political adviser Samuel Odle and Bose Public Affairs Group to conduct an investigation and analysis of the financial situation of DHS.
The report included all DHS medical facilities and groups and was submitted by DHS Acting CEO Iris Stacker at last Monday’s regular BOS meeting.
Prior to Stacker’s report, there had not been one submitted since February 2022 by his predecessor Scott Christensen, which encompassed the months of October, November and December 2021.
Of the negative $13.2 million, DHS – The Medical Center has a net income of negative $334,000; Northwest Regional Medical Center in Clarksdale has a net loss of $3 million; Highland Hills Medical Center in Senatobia has a net loss of $2.2 million; and DHS medical groups including Washington County, Clarksdale and Senatobia have a combined net loss of $7.6 million year-to-date.
The BOS decision to allow an audit and analysis of DHS finances, as owners of the community hospital, was investigated by council attorney Willie Griffin as well as an investigation into the power to remove a director of the hospital board.
“I was researching this and found that the supervisory board does not have the power to remove a member of the board. Now there is the power to dissolve the board of directors of the company. hospital, but you can’t remove an individual board trustee,” Griffin told BOS. “You can dissolve the hospital board and that will have the effect of removing them, but I don’t recommend you to do.”
However, Griffin found that the board had legal latitude to pursue other actions with respect to the hospital board after reviewing related opinions written by the Mississippi Attorney General.
“There is authority under Mississippi Code Section 41-13-15 that authorizes this board to employ professionals and move without the authority of the hospital board or CEO to determine financial and related hospital conditions,” he said.
As such, he recommended that the council take action in view of his authority in accordance with Miss. Code 19-3-69, which essentially sets forth the right of the BOS to hire certified public accountants and other professionals to conduct an investigation and analysis of the hospital’s financial conditions, operations, and related programs.
Griffin also clarified to the BOS that while they had already retained the services of a professional consultant, they had not given authority to proceed, which would be done through passage of the order.
Before engaging these services, the BOS had to conclude in its minutes that “the finances and operations of DHS are in an unknown state.”
The order goes on to state, in part, “The Board deems it necessary and in the best interests of Washington County to order an immediate investigation and determination of the financial condition, operations, and related programs.”
The order provides that the DHS Board of Directors will cooperate and make available to Odle and Bose, their employees and associates and any records or documents necessary for the analysis.
As indicated in its order, the elements required to perform the analysis include, but are not limited to, the last three financial years of the financial statements and the most recent cumulative financial statements with balance sheet; the last two years of external budget audits; Last 12 months of Board of Directors, Finance Committee and Audit Committee minutes; the most recent Joint Commission Accreditation of Health Organization (JCAHO) inspection report; any other external reports in the last 12 months made by public bodies; summary of ongoing disputes; information about any ongoing external government agency or recipient action; and any other records the Consultants deem fair and appropriate.
District 1 Supervisor Lee Gordon was personally assured by Stacker, whom he considered “the key part” of the process, that she and the DHS board would work collectively and voluntarily with BOS until the end. of the audit and thereafter.
District 4 Supervisor Mala Brooks said after speaking with three members of the hospital’s board of directors, “they are fully prepared to move forward.”
His feelings were similar to Gordon’s in that their goal is to work in conjunction with the hospital board and provide the necessary support.
“I want to let the hospital board do their job and hold them accountable a little bit harder than they have in the past…I just want to make sure we work together. I think we would be more accomplished that way,” Brooks added.
Gordon moved a motion to adopt the order and Brooks seconded the motion, which was carried by a unanimous BOS vote.