Council questions finance officials over Gracedale nursing home's unaudited results and transfers; controller urges patience until external audit

County council members extensively questioned finance officials about the fourth‑quarter unaudited financial statements and the fiscal condition of Gracedale nursing home. The discussion focused on large variances between budgeted and actual transfers, ARP fund movements, intergovernmental transfer accounting, and whether funds earmarked for bonuses were redirected.

Council member Steve Gofredo asked why $20 million appeared to differ in investments and repeatedly pressed for detail about transfers into Gracedale. Finance director Mr. Baron and other administration staff cautioned that the quarterly statements were "unaudited" snapshots and said audit adjustments can change figures materially. Officials pointed to receivables for Medicare and Medicaid and changes in the IGT timing as major drivers of year‑end variance.

Committee members cited audited 2023 numbers for Gracedale showing a 2023 operating loss of $27,803,007 and asked why budgeted transfer‑in of $11,220,290 in 2023 differed from an actual transfer‑in reported as $14,940,640—a difference of $3,720,350. Administration staff said ARP funds and bookkeeping movements between the general fund and Gracedale (including ARP receipts that initially entered the general fund) contributed to those differences and that some transfers were phased. For 2024 unaudited results, committee members noted an unaudited operating loss shown as $8,518,993 despite a $0 transfer‑in budget line; the administration said some transfers and receivables were recorded that will be reconciled in the external audit.

Council members repeatedly asked whether any of the moved monies had been used for staff retention bonuses; finance staff deferred, saying they would not pre‑empt the external audit and recommended waiting for audit detail. One council member said, "Could any of that money came from the money that we set aside for bonuses?" and the administration replied that the question should be addressed in the audit.

Administrators explained that Gracedale accounting follows a rolling 18‑month view for IGT reconciliation and that the state changed IGT timing from an 18‑month to a 12‑month mechanism in late 2023–early 2024, which disrupted comparability. Speakers noted Gracedale census improved to "over 490" the morning of the meeting and that a higher census increases receivables as services are provided before reimbursement. Several council members said the size of Gracedale’s operations and the use of ARP funds to cover operating shortfalls warranted more targeted audit attention; one council member urged the controller's office to prioritize a deeper audit of Gracedale.

No formal votes were recorded on these questions during the meeting. Finance staff repeatedly advised council members to await the external audit for reconciled numbers before drawing conclusions.