ESH seeking a CFO

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On Monday, April 5, at a special Hospital Commission meeting where Chair Tyson Burden, Treasurer Kent Turner, Secretary Jean Reed, and commissioner April Griffith met for two minutes, a unanimous decision was made to begin the search for a Chief Financial Officer. Turner made the motion to “begin a procurement process to acquire an independent contractor as a virtual CFO.” Turner stated the contractor must have experience with Medicare, Medicaid, and medical cost reporting.

Newly selected CEO Angie Shaw was not present. In November 2020, commissioners stated that selection of a CFO would be a decision afforded the CEO, however commissioners have now decided to address this directly.

In the last quarter of 2020, Scott Stone of Stone Financial gave notice of termination of the financial services contract held with ESH. Last November commissioners requested an extension of Stone Financial’s services for 60 days beyond December 31, 2020.

Through an agreement with Stone Financial and CPA Brent Seay, those services were provided in the first quarter of 2021. Since the extension of the financial services contract has expired, the commission has taken former Chair John House’s recommendation to search competitively to fill the CFO position. House resigned from the board in December, and commissioner Michael Merry resigned on April 2.

In three and-a-half-months, from December 2020 to mid-March 2021, hospital operations lost $672,656. This amount is essentially half of what the commission has left since saving up the lease income it earned before deciding to operate the hospital directly. The hospital is not generating enough income through its critical access ER to accommodate expenses. 

In December 2020, the commission approved $232,000 for operations. Without this help the hospital alone showed a net loss of $141,488. The contribution OK’d by the commission was provided in three deposits: $45,000 on Dec. 11, $87,000 on Dec. 17, and $100,000 on December 23. These remittances took the hospital’s savings from $1.54 million to $1.2 million.

In January 2021 there were no contributions by the commission, but the net loss of operations was even greater than the previous month, at $202,082.

In February 2021 there were no payments from the commission, and the net loss of the operations was $77,663. 

The first half of March 2021 shows the hospital had a net loss of $251,423. 

The largest monthly expenses are salaries/payroll and tax/retirement which total about $238,000, plus the ER/Hospitalist services which are about $120,420. Data processing runs over $60,000 which includes MedHost and Patient Logic Eureka.

These three monthly expenses total $418,000, which took up 85 percent of January’s income and 82 percent of February’s income.

February 2021 was the one-year mark of when the city began to operate the facility, and the first anniversary of shifting hospital employees to Arkansas Municipal League benefits.

All financial information was obtained from public reports through FOIA. The Eureka Springs Hospital Operations Profit and Loss reports state, “These financial statements have not been subjected to an audit, review, or compilation engagement, and therefore no assurance is provided.”

Compilation of the most recent reports, January through mid-March, were presumably and with no assurance, conducted by the outsourced CFO services of Stone Financial through CPA Brent Seay for a monthly sum of about $6,500. 

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