When a group of consultants pitched a plan to move Cooper Green Mercy Hospital’s administration and assets to a health care authority last September, Commissioner George Bowman told his colleagues on the commission that the consultants were not costing the county a penny.
But that wasn’t true.
In several meetings in recent months, Bowman has insisted that the hospital sends every invoice to the full commission for approval, but Bowman knew that was not true, either.
In short, he lied.
Just days after that committee meeting, Bowman’s office directed Cooper Green administrators to pay almost $85,000 from a hospital discretionary fund that the four other commissioners did not know existed. In a contentious and almost prosecutorial commission meeting Tuesday, Bowman said he had directed the payments, although hospital administrators indicated in the meeting that it had been someone from Bowman’s office who gave the directive, not the commissioner himself.
Since taking office in 2010, all county commissioners have favored moving the indigent care hospital to the control of a health care authority with an appointed board of health care professionals controlling its operation. Republican lawmakers have also pushed for a similar plan, and some Democrats in the legislature have said they were open to the idea.
But during the meeting last year, the commission was spooked by Bowman’s urgency, which at times seemed almost like panic. When commissioners asked Bowman for more time to consider the proposal, Bowman pushed back, insisting the county not delay a transfer. It was during that meeting on September 20 that Bowman said the consultants were not charging for their work.
In fact, the consultants had already invoiced the county on August 8, more than a month before that meeting. A day after the meeting they were paid. Pollock Financial Group received $60,000 from one of the funds and Castle Oak Securities received just shy of $25,000, commissioners have since discovered.
When Bowman told his colleagues last September that the studies for a health care authority were not costing the county, neither of the consultants nor any hospital administrators present in the meeting corrected him.
During the commission meeting Tuesday, Bowman argued that the entire commission had authorized the hospital to pay for the consultants on Sept. 27. On that day, the commission passed a resolution directing Cooper Green CEO Sandrall Hullett to formulate a new business plan for the hospital. That authorized Hullett to make the payments, Bowman said.
But that timeline is impossible, Commission President David Carrington quickly pointed out. Even if Bowman was correct that the commission authorized the payment, then it made the authorization more than a week after the checks were cut. Regardless, the resolution Bowman pointed to included no authorization to spend money, Carrington said.
Under questioning from Carrington, Hullett said the hospital had been doing its business planning in-house until Bowman directed Cooper Green to use those specific consultants.
The county commission authorized Cooper Green’s discretionary fund in the 1980s, but knowledge of it was later lost as elections changed the makeup of the commission. An investigation into the hospital’s finances by Deputy County Manager Walter Jackson discovered the fund about a month ago, and since then the county manager’s office has tried to determine how it was used.
For the most part, the fund has been used for small expenditures, including gift baskets for employees of the month and furniture for hospital staff. Much of its funding came from donations and grants to the hospital, county officials said Tuesday.
According to Carrington, those kinds of expenses should have been included in the hospital’s general fund, and Commissioner Joe Knight accused the hospital of using the fund to hide grant money and donations from the county.
In the last year, the hospital spent about $1.1 million from the account, which he called a hospital “slush fund.”
“So basically this fund was used to circumvent the commission?” Knight asked. Cooper Green CFO John Garrett said it was not.
Throughout the questioning by the other commissioners, Bowman frequently interjected, calling the meeting a “witch hunt.”
“It appears that you are looking for a smoking gun that does not exist,” Bowman said.
When the other commissioners ignored Bowman, he interrupted them again, asking if he was invisible.
“I must be,” he said after, again, not getting a response.
Commissioner Sandra Little Brown said the dispute was why the county needed a professional manager to take charge of it affairs.
“I thought until Friday that Cooper Green didn’t write any checks, then I found out that wasn’t true,” Brown said.
Broke and Busted
For Cooper Green, the inquiry into the discretionary account was not the only issue before the commission Tuesday. The county manager’s office had discovered more than $9 million of capital needs for the hospitals, far more than the $3.5 million reported weeks ago. Without an immediate infusion of cash from the county’s general fund, the hospital faces being shut off by its vendors.
About $3.5 million of past-due invoices were older than 90 days, Jackson told the commission.
The commission voted 3-2 to give the hospital $3.6 million. Commissioners Carrington, Brown and Bowman voted for the resolution. Commissioners Joe Knight and Jimmie Stephens opposed it.
Explaining his vote, Carrington said that the hospital had $3.6 million in unpaid invoices at the beginning of the fiscal year, when the county manager took office. It would be up to Petelos’ office to get the hospital’s budget balanced, he said.
Stephens and and Knight said they could not vote to give the hospital more money until its finances were transparent and its budget balanced.
Jackson told the commission that the hospital had been on track for a $14 million deficit for the fiscal year, but cuts being made by the hospital and county manager’s office should be able to produce a balanced budget for 2013.
The timing of the hospital’s financial blunderings couldn’t be worse for the county as it is asking the Alabama Legislature to approve the Alabama Financially Distressed Counties Relief Act, which would reinstate an occupational tax for the county to right itself financially.
“We’re trying to work out a solution to the whole deal and then this — this is not going to be pretty,” Knight said.