Monday, December 22, 2014

Adding more pieces to the Singing River puzzle.

Want more proof that the Jackson County Board of Supervisors and Chancery Clerk were completely negligent in their duties to oversee the Singing River Health System? JJ obtained the Singing River audits for the last five years through a public records request.  See for yourself the operating loss or profit that is stated in each audit.  These audits were submitted each year to the Supervisors and Chancery Clerk.

Operating Income (Revenue - Expenses for Jackson City Council members)
2007: $21.3 million (p.10 of 2009 audit)
2008: $25.8 million (p.10 of 2009 audit)
2009: $10.4 million (p.10 of 2009 audit)
2010: $1.6 million (p. 11 of 2010 audit)*
2011:  $12.1 million (p.10 of 2012 audit)
2012:  $2.3 million loss. (p.10 of 2012 audit)
2013:  $30.6 million loss (p.16 of 2013 audit)

The county officials are not health-care experts.  However, they do have an oversight responsibility for the hospital and completely abdicated said responsibility.  There should have been no Singing River surprises over the last six months as the complete picture was spelled out in these audits.  Audits that were submitted every year to the Chancery Clerk and the Supervisors.  The Chancery Clerk is supposed to be the auditor for the county.  How  seriously did he take that responsibility.  County officials could have asked questions.  They could have ordered an independent evaluation of Singing River finances.  However, they just took the reports and put them on the shelf next to the 1985 budget binder. 

Kingfish note: Why exactly was Chris Anderson hired at Mississippi Baptist Health Systems?  Did the board even bother to review the financial performance of Singing River before it hired the current CEO?  Why did the board of MBHS hire a CEO when his most recent executive performance included a $30 million loss?  Here is the press release posted on the MBHS website upon his hire:

Chris Anderson, FACHE, CPA, has joined Baptist Health Systems as Chief Executive Officer. For the past 16 years, Anderson has served as the CEO of Singing River Health System in Pascagoula, Miss. He began his career at the KPMG Peat Marwick office in Jackson, Miss. working with many of the large hospitals in the state.

The appointment follows a comprehensive, national search by the Baptist Health Systems’ Board of Trustees, which began last fall. Board Chairman Kane Ditto called the move a very important and exciting one for the system as it continues its mission of providing high quality healthcare guided by its Christian faith.

“Chris has a proven track record of success in leading a multi-hospital, not-for-profit health system,” added Ditto. “Baptist employees and physicians took an active role in working with the board in searching for our new CEO. Many of them interviewed Chris personally and provided important feedback, which contributed to the decision of hiring him.”

Does a $30 million loss qualify as a "proven track record" for success?

*Key year. Expenses shot up from $300 million  in 2008 to $366 million in 2010.  2012 expenses were $382 million.  $82 million increase in four years.   Expenses fell to $376 million in 2013.


Anonymous said...

It's sad that this is not really surprising.
We're so numb to favoritism and corruption that when stuff like this is reported, it's no big deal.
Why is it no big deal? Because these instances are small fractions of the bigger pie.

Anonymous said...

>>Why did the board of MBHS hire a CEO when his most recent executive performance included a $30 million loss?

I am not defending anyone, but that 2013 audit was late in coming out. By law it is not due until March of the following year. The JCBOS got it in late June 2014.

Kingfish said...

Fair enough. But there is still a $2.3 million loss on the books.

Kingfish said...

Now that I think about it, most sizable organizations such as this one get quarterly financial statements and preliminary drafts of audits.

Anonymous said...

Looks like someone ignored the check engine light at SRHS.

Maybe Supervisor McKay and the rest of the bunch in Jackustan County will be able to figure out if someone forgot the oil drain plug at the last oil change.

Anonymous said...

Not defending anyone either, but KF - the fact that there was a $2.3 million loss the previous year should also be taken in view of $20+ million profit over the three previous years. One bad year - while not good, isn't a deal killer.

Now, considering a loss in 2013 that more than offsets three years profit - that's a big deal.

I would assume that Baptist had no knowledge of the 2013 performance (or lack thereof.) But - now they do. And they know that SRHS under the direction of Wilson wasn't paying into the pension fund for three years prior to his move to Jackson. So the question is - what does Baptist do now? My bet is nothing.

Anonymous said...

KF, the Miss. Code specifically states that all information regarding community hospitals (county-owned) is excluded from the Public Records Act, with the sole exception of an annual financial statement which must be filed with their respective county's BOS by March of the following year. In other words, there is no draft, preliminary or even quarterly financial statement given to the BOS (i.e. the owner) of the community hospital.

Something has got to change in that statute in order to make things more transparent.

Kingfish said...

You're right about the quarterlies. Brain lock.

However, the MBHS board could have asked him for his copies. He could have said no as well. ;-)

Anonymous said...

Are we looking at financials that show tens of millions in income that the CEO and others knew would not ever be incoming ? Once CEO Holland announced that at least $88 million was going to be written off from previous years do these financial statements have to be restated? I do not see how previous years financials could possibly be correct based on the statements of the new CEO.

Anonymous said...

Ask yourself why no one has stated the obvious. At some point failing to state the facts becomes concealing the facts.

The average member of the public probably won't understand the financial statements. They may want some explanations for the following which has not been discussed in public by the media and other elected and appointed officials involved.

The public (including all the involved decision makers) has always had access to the SRHS financial filings. This includes the filings which document that the pension fund has not been funded in recent years.

The magnitude of the approaching SRHS retirement plan implosion should have been clear to those with an accounting or financial background who examined these filings.

>>However, the MBHS board could have asked him for his copies. He could have said no as well. ;-) <<

At which point (or at any time before) anyone (not just MBHS board members, but anyone) could have accessed the financial filings at EMMA.

The Municipal Securities Rulemaking Board operates an online database called EMMA (Electronic Municipal Market Access.) "EMMA is the official repository for information on virtually all municipal bonds, providing free public access to official disclosures, trade data and other information about the municipal securities market."

The financial reports at EMMA are required to be disclosed to ensure fair trading in municipal bond primary and secondary markets. That information can be accessed for free, no registration is required at that site.

Example: MBHS 2012 financial filing from EMMA

Example: SRHS Basic Financial Statements and Schedule September 30 2012 and 2011"

Just to be clear, below are a few things which could have been seen if someone had looked at the SRHS filing linked above:

On page 42 and 43 of the SRHS pdf as part of "Notes to Basic Financial Statements" appears

(9) Pension Plan
.(a) Funding Policy
.(b) Annual Pension Cost and Net Pension Liability
.(c) Three-Year Trend Information
.(d) Schedule of Funding Progress-Required Supplementary Information

Among the details to notice:

9(a) "The contribution requirements of employees and the System are established and ay be amended by the System's board of trustees. Employees contribute 3% of their annual salary (maximum salary amount of $250,000 for each of the calendar y3ears 2012 ans 2011) to the Plan. The System contributes the remaining amounts necessary to fund the Plan at an actuarially determined rate." (Except when they don't? How does this happen? Who knew?)

9(c) Three years of System zero pension Plan contributions show in the table. Fiscal years ended September 30, 2010,2011, and 2012. Net pension liability increased from $8,237,219 for FY 2010 to $24,263,831 for FY 2012.

9(d) The retirement plan was reportedly actuarially valued on October 1, 2009,2010, and 2011.
The table shows growing shortfall between the actuarial value of the plan's assets and the actuarial value of the plan's liabilities (Actuarial accrued liability-AAL) for the three years.

Plan Assets less than AAL:
For October 1,2009: (22,524,124)
For October 1,2010: (43,463,424)
For October 1,2011: (58,930,244).

The Funded ratio decreased from 86.7% to 77.0% to 70.6% for these years.

The reported shortfall as a percent of covered payroll increased from 20.1% to 36.0% to 48.8% between FY 2009 and FY 2011.

Kingfish said...

Yup. I missed it. Should have thought of EMMA when I saw the bond issue as I've used EMMA statements and posted them here before. Thanks. Comment of the month.

Anonymous said...

The second link at 9:22 pm is incomplete.

Working link should be SRHS Basic Financial Statements and Schedule September 30 2012 and 2011 at EMMA

Anonymous said...

Who actually owns the bonds? Have the bonds decreased in value because of the financial problems at SRHS?

Anonymous said...

The bonds probably have not decreased in value (I didn't check) because they are guaranteed by the taxpayers of Jackson County. Taxes would be raised if necessary to pay off the bonds. The mills are probably set aside ready to assess and collect as a tax increase. The bondholders will be paid in full no matter what happens to SRHS.

Anonymous said...

Chris Anderson is not innocent. He saw this coming at least two years prior to his quick exit from Singing River Health System. His many trips to Jackson opened the door at Baptist. Baptist hired him before the $88 million dollar loss was reported to the SRHS Board of Trustees. He never had to answer to them because he left. Timing is everything and Chris Anderson had a three week window to run out and apparently had an offer on the table at Baptist. Everyone is asking why did Baptist hire him? My best guess is that they did not know about this until it was too late and he had already signed their contract at Baptist. Someone should study the timing of his exit. The date of the resignation letter/email, the new audit firm report revelation, and the public announcement on day one of Kevin Hollands stepping into the shoes of Chris Anderson as CEO. Lets not forget the silent exit of the SRHS CFO, Mike Crews. These dates are very important. We have a big cover-up and someone needs to answer to the tax payers of Jackson County and employees of SRHS.

Kingfish said...

Check back on this site in about oh, 45 minutes.

Anonymous said...

Please do not forget also that from 2009-2012 they sent statements to each employee telling them exactly how much the employee had contributed to the plan and how much the hospital had contributed on their behalf.....when they had not fully funded the plan (2009) and when they put nothing in it at all!

Anonymous said...

The reason expenses rose $82,000,000 in four years is that Chris Anderson was not minding the ship. He was more concerned in planning his career and his move to bigger and better. My feeling is that he used funds designated for the retirement plan to cover up for the increase in expenses and reduction in bottom line profit. It has already been mentioned that statements were sent to all employees in 2009, 2010, and 2011 that indicated that money was put into the retirement plan when in fact it was not. All of these statements were signed by Mr. Anderson. Because of his actions several hundred retirees are in fear of losing their retirement. It is a very sad situation that could have been avoided if the Health System would have made its contributions to the retirement plan.

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