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Nashville General Finance Report: Cerner Implementation, State Funding Uncertainty and Cash‑on‑Hand Concerns
Summary
Board heard December financials showing a monthly loss linked to Cerner implementation and higher expenses; uncertainty about a roughly $10 million state supplemental payment and low cash reserves prompted requests for further analysis.
The Hospital Authority Board reviewed December financial statements and a proposed fiscal‑year 2026 budget at its Feb. 27 meeting, where finance staff and board members highlighted implementation costs from an electronic health record conversion, uncertainty about state supplemental payments and lower-than-desired cash reserves.
Controller Mark Moran reported that December revenue was about $23 million for the month and net revenue roughly $12.6 million; expenses were approximately $3.4 million higher than revenue for the month, a loss Moran attributed in part to Cerner implementation-related costs. He told the board contract labor associated with the Cerner rollout accounted for approximately $1.3 million of the increased expenses and salaries were roughly $900,000 higher than the prior year for the month discussed.
Moran and others told the board that a previously expected state supplemental payment — described in board discussion as about $10 million tied to a revised pool or formula — remained uncertain. Finance staff said they had been told by the state to expect an update in March but could not confirm amount or timing; one board member said the authority should assume the money could be treated as a one‑time supplemental and not budget on it as recurring revenue.
Finance committee members said the hospital’s unrestricted cash balance at December month‑end was about $5.3 million and that the authority’s target is a 90‑day cash position. Board members asked for a cash‑flow projection through June 30, 2025, and a sensitivity analysis showing impacts if state supplemental funds are lower than assumed.
The board reviewed a proposed budget for fiscal 2026. Chief Financial Officer Dr. Blackledge presented a proposed city subsidy request of $66 million to support operations in 2026 and said the proposed budget would reduce projected expenses versus the current projection, producing a modest net income in the proposed budget. The board voted to approve the 2026 budget and to forward the city subsidy request to the mayor and council; members said the request may be revised pending state‑funding clarifications.
Board members and staff also discussed steps to improve month‑to‑month financial reporting, address repeated audit adjustments, and control contract labor and other expense categories where overspending has occurred.
