Audit shows progress but two material weaknesses remain; board approves March financials

The Hospital Authority Board voted to approve March financial statements and received an audit update showing progress but two lingering material weaknesses in internal controls.

Finance presenters said March revenue was approximately $2.6 million over budget driven by outpatient volume, with outpatient revenue exceeding budget by about $3.7 million while inpatient revenue was down roughly $1.0 million. Revenue deductions exceeded budget by about $5.0 million, including a $2.9 million increase in bad debt and roughly $2.0 million in uninsured discounts; expenses totaled about $14.9 million, $1.6 million over budget. Accounts receivable closed at $22.2 million and current liabilities were about $44.6 million. Staff also reported a $3.3 million reconciliation processed with Meharry Medical College that brought accounts current.

Audit lead Dr. Plackovich told the board the audit covering July 1, 2024–June 30, 2025, was completed on March 31. From four material weaknesses identified in the prior year, two have been corrected (lease right‑of‑use accounting and certain Medicare settlement deferrals); two repeat items remain: patient accounts receivable and revenue recognition, and the financial statement close process. "Our goal is not to have any material weaknesses as we experience this next audit," Dr. Plackovich said, noting the organization has hired a new controller, accounting manager and payroll staff and implemented new payroll and accounts‑payable systems as part of an accounting infrastructure reset.

The board approved the financial statements by voice vote; no roll‑call tally by name was provided in the meeting record.