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Internal and Metro Audits Substantiate Overbilling, Missing Contracts and Falsified Records at Nashville General
Summary
Internal audit by Crossland and an investigation by the Metropolitan Auditor reported material weaknesses in controls, substantiated overbilling by a valet contractor, contracts that did not reach the board, and instances where records provided to media were altered.
Two separate audit reports presented to the Hospital Authority Board on Feb. 27 identified multiple control failures, billing irregularities and problems in contracting and records handling.
Katie Farris, audit director with Crossland PLLC, reported an unmodified opinion on the hospital’s fiscal‑year 2024 financial statements but noted that auditors found four repeat internal‑control deficiencies: two material weaknesses and two significant deficiencies. Farris said the repeat findings point to an ongoing lack of adequate internal control over financial reporting and that those deficiencies had led to significant adjustments in the audit process.
Lauren Riley, Metropolitan Auditor, reported the results of an investigation that began in April 2024 into allegations of fraud, waste or abuse. Riley said investigators substantiated several allegations, including that the hospital’s contracted valet service billed for roughly 7,000 more hours than the contractor’s time records showed and that about $230,000 in payments were overbilled. Riley said, “There was over 7,000 hours difference and about 230,000 dollars in payments that were made that were overbilled.”
Riley also reported that investigators found six clinical contracts and 16 nonclinical contracts that did not go before the board as required; payments to those contractors totaled roughly $4.6 million. The investigation substantiated that portions of documents provided in response to media public‑records requests had been altered: in five instances vendor signatures appeared on documents sent to the media that were not on the versions on file in contracts management.
Riley said the auditors could not determine whether the failure to present contracts to the board was ordered by a specific individual, and the office did not find evidence directly tying that conduct to the CEO. The report recommended remediation steps and said the Office of Internal Audit will follow up to verify implementation.
Board members said the audit findings are serious and require prompt action. Several members requested immediate briefings at the next meeting with documentation for each contract identified in the internal report, a plan to recover overpayments where possible, and an action plan to address repeat audit findings.
The hospital’s finance and legal teams were asked to work with internal and Metro auditors to compile contract files, reconcile vendor payments and present corrective actions at upcoming board meetings.
