Journal-Times (Grayson, KY)

February 19, 2014

Health department income dropped drastically

By Joe Lewis - Staff Writer
Journal-Times

Feb. 19, 2014 — The recently-published audit of the Little Sandy District Health Department says the the organization’s financial practices are in order.

Lynette Schindler, a public accountant from Pikeville, performed the independent review of the health department’s finances.

In her remarks, she states that her firm found no issues with the department’s money-handling policies.

“During our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses,” said Schindler.

The audit does highlight, however, a significant shortfall in revenues collected versus revenues projected for the fiscal year ending last June 30.

The department budget projected total revenues of $2,434,263 but the actual figures show that only $1,951,049.69 was collected -- a shortfall of $483,213.31.

The majority of that loss can be attributed to a sharp decline in Medicaid reimbursement. The original budget projected $835,818 in Medicaid funds from the federal government, but the department only received $372,466.16 in actual payments.

The Medicare shortfall alone was $463,351.84, which made up 95 percent of the department’s total budget deficit.

Even with the massive decrease in federal funding, the department was still able to stay above water financially due to heavy personnel and program cuts.

Only $1,890,944.43 of the total revenues were spent, which left $60,105.26 in surplus funds in the health department’s coffers at the end of the fiscal year.

This audit period covers the fiscal year that began July 1, 2012 and ended June 30, 2013. That means the department’s current financial issues were not addressed in the audit report.

Numerous health department officials have gone on the record stating that they believe there will be an even further decrease in Medicaid reimbursements this fiscal year.

Both the Carter County Board of Health and the Little Sandy District Board of Directors also have publicly stated that they do not know the full financial impact of the Affordable Care Act.

The health department’s current fiscal year ends June 30 but an audit of the organization’s financial statements will likely not be available until early 2015.

Joe Lewis can be reached at jlewis@journal-times.com or by telephone at 286-4201.