Audit: ECMC sale will cost $503M

[steven]

Erie County Comptroller Mark Poloncarz has "serious questions" about the fiscal operations and administration at Erie County Medical Center based on an audit report released Monday.

The audit examined the period from Jan. 1, 2005 to June 30 this year, specifically to find whether the medical center and the county met their obligations under the 2004 agreement that converted ECMC to a public benefit corporation. It also looked at ECMC's advertising expenditures, the cost of the sale to the county and the internal controls in the hospital's accounts payable.

But ECMC officials said they found little of significance in the audit, calling it politically motivated and adversarial rather than professional and helpful.
"This isn't a performance audit; it's a headline hunt that the comptroller chose to release at a particularly sensitive time in the negotiations to form a new health-care model for this region. Why is the comptroller trying to make ECMC look bad at this particular time?" said hospital spokesman Thomas Quatroche. "We trust questions will be asked of the comptroller about his motivation and timing."
According to Poloncarz:

• Despite beliefs that the county will soon shed financial responsibility for the hospital, the sale of ECMC is expected to cost at least $503 million through 2033 under current agreements.

• Due to temporary state restrictions, nearly all of $26.3 million of capital subsidies provided to ECMC by the county have not been spent or released, and are accruing interest to the benefit of ECMC.

• ECMC officials concealed a payment for advertising to influence the findings of the state Commission on Healthcare Facilities in the 21st Century and to avoid a possible public disclosure of the expenditure through the state Freedom of Information Act.

• ECMC's internal controls are weak and unreliable in several areas. In addition to the questionable ad payment, auditors found that senior management overrode internal controls and failed to document actions as required by medical center by-laws and the approval of a special executive compensation package for senior management for which there is no evidence of full board approval. In addition, questions exist regarding the proper recording of complete board meetings minutes, leading to questions about the propriety of certain hospital actions and activities.

• ECMC has consistently violated reporting requirements to the County as contained in the sale agreement, as well as at one point terminating its customary practice of providing monthly board and committee meeting minutes and financial data and reports to the county and County Legislature.

• The county has been compelled by the state to make more than $14.6 million in unbudgeted payments to ECMC under a Medicaid intergovernmental transfer mandate with additional future payments likely in future years.

http://www.bizjournals.com/buffalo/s...l?surround=lfn

[bflonum1fan]

I think that this Public Benefit Corporation was just another one of Giambra's accounting tricks.

Come on ! Selling the ECMC to a newly conceived public benefit corporation ? That's like me going bankrupt and then changing my name.

This kind of chicanery has been going on way too long around here.