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Audit shows $1.4M accounts receivable and six-figure losses at county nursing homes
Summary
An auditor told the Vernon County Board that Vernon Manor and Vernon Acres ran operating losses in 2022 and that Vernon Manor has $1.4 million in accounts receivable, prompting trustees to start a feasibility study and collections effort.
Marissa Powers of audit firm Johnson Block presented the 2022 audit for two county-owned long-term care funds, telling the Vernon County Board that Vernon Manor (VM) and Vernon Acres (VA) both posted operating losses in 2022 and that VM carried a large accounts receivable balance.
"Vernon Manor has an A/R balance at the end of 2022 of $1.4 million," Powers said, adding that VM had an operating loss of $844,000 in 2022 while VA posted a $314,000 loss. Powers noted that part of the A/R increase can be attributed to staffing and billing delays and that when bills are judged uncollectable an expense called "bad debt" reduces the A/R account (the audit recorded $165,000 and $160,000 in bad debt in 2021 and 2022, respectively).
Supervisor Henry cautioned the board to keep context in mind, noting a recent health emergency affected many facilities, but urged more aggressive collections. Chair Lorn Goede and other supervisors probed whether the County has the right mix of private-pay versus public-pay residents; Powers said government-owned facilities may have limits on refusing publicly funded residents and that delayed Medicare paperwork has worsened revenue timing.
The Board heard that VM showed $4.5 million in assets and long-term liabilities of $3.1 million, with a reported cash deficit of about $2.8 million covered by county reserve cash; VA showed $6.7 million in assets, long-term liabilities of $4.8 million and a $500,000 cash deficit. Administrative Coordinator Cassandra Hanan reported year-to-date operating losses through October of approximately $346,000 for VM and $341,000 for VA.
Trustees and the Board have responded with operational steps: adoption of a new admissions policy, hiring an outside collections agency and commissioning a feasibility study to develop options and recommendations for the facilities' future. The Administrative Coordinator said the feasibility RFP was released the day before the meeting.
Next steps: Board members asked that the Board of Trustees monitor monthly financials and requested follow-up reporting; the feasibility study is intended to outline strategic options and will be brought forward when complete.
