New hospital CFO says books fixed; county warns it will follow Department of Audit on noncompliance districts
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Summary
Paul Nailano, the hospital’s new CFO, told the commission he has reconciled roughly 18 months of financial records in 50 days and expects to submit the audit to reviewers soon (board noted March 7 target). Commissioners said they will follow any Department of Audit direction regarding noncompliance districts and underscored concern about tight finances and Medicaid-related issues.
The board heard an update from the hospital’s newly hired chief financial officer and an update on the county’s noncompliance districts and impending state review.
Paul Nailano, introduced to the commission, said he had rectified roughly 18 months of accounting records in his first 50 days and that staff were two days away from submitting the hospital’s audit package to a third-party reviewer. Nailano said, “That should happen no later than March 7,” and told commissioners the books had been cleaned up and new processes put in place.
Commissioners pressed on audit implications for noncompliance districts after staff said the Department of Audit has signaled that some districts may be required to dissolve if they cannot meet reporting requirements. One commissioner said the board must “do what the Department of Audit says,” noting that the county’s options are constrained by state audit rules.
Hospital and county officials told the board they had engaged legal counsel and the state auditor’s office for guidance and emphasized the hospital’s improved revenue cycle management but acknowledged the organization remains tight financially because of mill-levy shortfalls and Medicaid-related liabilities.
Next steps: the hospital expects to submit audit documents to the external reviewer in the coming days; commissioners and staff will follow any formal Department of Audit directives and said they will return to the board with updates if the state requires structural changes to districts.
