Morton General Hospital needs to strengthen internal controls over its operations and financial reporting, according to the Washington State Auditor’s Office.
The Auditor’s Office examined the Lewis County Public Hospital District’s books from the 2013 calendar year and addressed three issues that amounted to one finding in a financial audit report released March 2.
“We identified the following deficiencies in internal controls over financial reporting that, when taken together, represent a significant deficiency in controls,” the report says.
Auditors said, for the year it examined, the district did not have an adequate duty segregation or oversight and monitoring in its accounting systems, or monthly bank reconciliations; it also doesn’t have an effective process to guarantee the amounts reported on its financial statements by the certified public accounting firm it contracts with are accurate; and it lacks an effective review process to ensure amounts reported on the financial statements by the accounting firm are prepared as required by state law for a government body.
Current CEO Seth Whitmer, who wasn’t employed by the hospital in 2013, said the finding comes as a result of issues that were never addressed by the previous management.
“(The auditors) had brought these up in the past repeatedly, now they’re still seeing these problems haven’t been corrected so they’re issuing a finding,” he said.
Several of the five people serving on the hospital's board of commissioners were around in 2013, but not one member of the board responded to requests for comment.
The report said the hospital’s previous managers did not “prioritize nor dedicate sufficient resources, such as oversight and review, to ensure controls over its accounting systems and financial reporting was adequate.”
It also pointed to a “significant amount of turnover in the past several years.”
The report didn’t point to any significant financial statement errors, but it said the lack of internal controls opened the door for mistakes and irregularities that might have gone undetected by management in a timely fashion.
The hospital has still had issues with employee turnover, but Whitmer has since said the hospital has hired a new chief financial officer who will review the district’s financial activities and ensure the accounting firm’s entries are correct.
“We feel we have the people in place. We can address those issues,” he said.
Lewis County Treasurer Arny Davis, who was elected last November, said the Treasurer’s Office has historically taken a hands-off approach to the hospital but he plans to change that.
“I’m being proactive, requesting financials on a quarterly basis and they’re required to provide the Treasurer’s Office notice 30 days in advance of incurment of any debt,” he said.
The hospital last had two findings in 2005, when it received one on its accountability audit and another financial audit. It received a management letter in 2012 and 2011 for financial statements.
