Weston County hospital board hears clean audit, approves firm to finish Medicare cost reports

The Weston County Hospital District board on Nov. 1 received a fiscal-year 2023 audit from Sean Johnson, a partner at DZA, who said the firm’s opinion was that the financial statements “are fairly stated in all material respects,” an unmodified opinion auditors prefer.

Johnson told the board the statements combine the hospital district and its foundation and explained an "emphasis of matter" about recently adopted accounting guidance for subscription‑based information technology arrangements that requires recording subscription obligations as liabilities and corresponding assets. He said the 2023 audit shows a notable cash decline tied in part to paying off 2015 bonds and that the district recorded an overall loss for the year "a little over $2,300,000." He summarized cash‑flow subtotals showing a net decrease in cash of about $6,300,000.

The auditor said operating revenue dropped roughly 5% from 2022 to 2023 while operating expenses rose about 4%, contributing to the larger operating loss. Johnson also told the board DZA found no material weaknesses or significant deficiencies in internal control testing under government auditing standards and described that portion of the report as "clean." He said the firm identified one compliance finding related to reporting the lost‑revenue calculation for the HHS Provider Relief Fund; the figure filed with HHS did not tie perfectly to the audited financial statements and should be recalculated and resubmitted (management reported a corrective action plan).

Johnson reviewed management advisory comments that recommend adopting written policies and procedures for federal grants and strengthening documentation and review of manual journal entries. He said management had contracted some accounting tasks during a period of turnover, which contributed to audit delays but that the firm had no disagreements with management.

Following the audit briefing, the board received a finance and management update about next steps: five audit adjustments were posted to the general ledger, the district expects a preliminary trial balance for the 2024 audit by the end of December, and Medicare cost reports for fiscal years 2023 and 2024 must be filed electronically by the end of the week. Management said it will reserve any receivable payments tied to cost‑report settlements until final reports are reconciled to avoid spending funds that might later need adjustment.

The board voted to authorize a staff member, Kathy, to sign engagement letters with the firm Durbin to complete the 2023 and 2024 Medicare cost‑report work. Board minutes record the motion was moved, seconded, and approved by voice vote.

Management outlined a set of cost‑control measures the board is pursuing to restore fiscal accountability. Those include freezing nonessential capital expenditures for the remainder of the fiscal year (except projects covered by grants or foundation funds), restricting overtime for nonessential employees (with preapproval required for necessary patient‑care overtime), tightening credit‑card and purchasing controls, implementing pre/post payroll audits, and pursuing a planned recovery of approximately $42,000 of benefits‑related errors.

Officials also reported operational metrics and remedial work: accounts‑receivable days were reported in the mid‑50s (management’s target is 43 days), bad debt was reported at $4,400,000, and efforts to update the chargemaster and sliding‑fee information in clinic and billing statements are under way.

The board ended regular business by voting to move into executive session under statutory authority "16‑4‑45(a)(2)" to discuss personnel, confidential donations and classified information.