2018 Audits are Complete; Strategic Decision Making Underway

A forensic and certified independent audit, both ordered by Springfield Medical Care Systems’ (SMCS) Board of Directors and shared with the State of Vermont’s Agency of Human Services, provide important information as we consider the necessary changes that will help our system move toward a strengthened financial outlook.

The forensic audit, conducted by the BerryDunn accounting firm, reviewed documents including bank statements, check disbursements, credit card statements and payroll distributions, from October 2017 through December 2018. Auditors also talked to employees inside our organization. Auditors found no evidence of funds being used improperly, such as for personal gain.

Our Boards ordered this audit to explore and review records and review and implement improvements to internal controls, so we can continue providing quality care to this community. The forensic audit does show that, at times, former leadership did not report to our Board all of the information that was needed to make strategic decisions. That is something we are fixing.

In order to safeguard our assets, the forensic audit suggests that the Board and leadership review internal controls, training, and the Board’s investment policies, which all agree must be addressed. Governance and financial management are among the priorities as decisions are made for our organization’s future.

It’s important to note that the audit did not reveal anything that could have affected patient cae. We will implement changes necessary to help get us back on solid financial footing.

The full audit of SMCS was also conducted by BerryDunn and covers the time period ending September 30, 2018. It shows a significant operating loss and also provides specific guidance to leadership about financial challenges.

This is the audit information we were expecting. Since the Quorum team arrived and we began working through the data, we had a good sense of the numbers we were dealing with and what it will take to reverse the financial trends. The audit confirms what we believed to be the case – increased patient revenues did not exceed the growth in expenses which led to a low cash position.

The audit shows that approximately two-thirds of SMCS’s loss was due to increases in employee benefit costs. It also shows SMCS provided approximately $2 million in charity care for members of the community.

The auditors noted that SMCS provided the auditors with all of the sufficient and appropriate evidence in order to complete their examination.

This audit information will prove valuable as we complete the difficult, but necessary job of working with the community to secure the financial future of this organization.

 

Joshua Dufresne, MBA
Acting Chief Executive Officer
Springfield Medical Care Systems

Michael Halstead
Interim Chief Executive Officer
Springfield Hospital