Memorial Regional Health receives clean audit report
March 27, 2018
CRAIG — An independent review of Memorial Regional Health's 2017 and 2016 accounts ended with a declaration of a "clean audit" by independent auditors Stockman Kast Rayan + CO.
"The audit was fantastic. The financial department at the hospital does an amazing job," said MRH Board of Trustees Chair Todd Jourgensen.
Auditor Mike Rowe presented the audit report to the board Thursday, March 22.
Auditors found that:
• All significant transactions recognized in the proper period.
• Significant account estimates reasonable in relation to financial statements.
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• No significant difficulties in dealing with management in performing the audit.
• No financial statements misstatements were identified in connection with the audit.
• No disagreements with management.
• No separate internal control report was issued as no significant deficiencies in internal control were noted.
Rowe noted MRH has experienced significant growth during the year.
In 2016, there was an operating loss of a little less than $942,000, compared to a 2017 profit of a little more than $369,000, according to MRH CEO Andy Daniels.
Almost $10 million in growth from 2016 to 2017 contributed to the positive bottom-line.
"We are growing, and to grow, you have to make a profit," Jourgensen said. "It goes to show you what a good CEO can do for the hospital."
Auditors also reviewed and tested MRH's compliance with the Colorado Indigent Care Program.
Out of 27 attributes tested, four compliance exceptions related to eligibility, and one compliance issue related to billing were identified.
It's not unusual for health care providers to have CICP specific compliance exceptions, Rowe said.
A corrective action plan will be filed, because the exceptions represented an error rate greater than 10 percent.
Auditors also reviewed MRH's compliance with the covenant of their loan with the U.S. Department of Agriculture — a loan obtained to refinance the HUD note used to build The Memorial Hospital on Hospital Loop Road.
Auditors found MRH was in compliance and had met the debt service coverage ratios and days cash on hand required by the USDA.
The board is still awaiting a 2017 cost report.
"Cost reports are similar to filing income taxes," Daniels said. "This is filed once a year with Medicare or Medicaid to determine if the hospital was over or underpaid."
The filing was complicated due to the conversion of MRH to Rural Health Care Clinic status. The firm preparing the report still has time to complete it before the annual deadline.
"In general, we had a decent year," Daniels said.
Contact Sasha Nelson at 970-875-1794 or snelson@CraigDailyPress.com.