New leaders at KVH respond to audit
Lou Marzeles
News Editor
While a newly released state audit on Klickitat Valley Health (KVH) reveals some improprieties, the facility's freshly installed management asserts that their organization is on a new and sound course.
Philip S. Hanna took over as interim Chief Executive Officer at KVH just three months ago, while Leslie Hiebert, a Goldendale native, has been the new Chief Financial Officer for all of three weeks.
Both officers reviewed findings by the Washington State Auditor's Office on KVH, released on Feb. 27 of this year and reflecting events at KVH during the year 2006. Independent auditors were at the hospital last week conducting new inspections to bring the audits current for years 2007 and 2008.
"There were errors identified, and they've been corrected by the board," Hiebert said of the report. "We will move forward to ensure that, to the best of our ability, they won't occur again. But people do make mistakes. From my perspective, coming into this position, knowing that mistakes were rectified is a good thing."
"That audit was done for the year 2006," Hanna said. "Clearly there were policies and procedures that were not followed as they should have been. In some cases, the internal controls weren't what they should have been."
Hanna and Hiebert were commenting on the audit's finding that three primary problems occurred at KVH during 2006. The audit found that KVH internal controls over payments were compromised, controls over contracts and agreements were inadequate, and lastly that a KVH employee practiced nepotism and violated conflict of interest policies.
The violations cited included: employees using company credit cards for unauthorized, undocumented, or sometimes personal expenses of $5,600; an undocumented reimbursement expense of $93 by an employee; unauthorized cell phone expenditures; improper exercise of authority by a previous CFO and CEO, particularly in regard to unauthorized commitments to contracts; and conflict of interest in the form of nepotism practiced by a prior CFO who supervised an employee with whom he was living. The audit was facilitated by private research conducted by Delbert Brown, a Goldendale resident who became aware of some improprieties and launched a lengthy personal investigation. Virtually all of Brown's findings were corroborated by the state audit.
Hanna thinks that the audit's timing, coming out this year and covering the year 2006, puts unrealistic demands on him and his staff. "How can Leslie and I, in all honesty, respond to something that happened in 2006?" Hanna asked. "You might say, give me all the details, and we can't do that. We weren't here, and we're relying on the recollections of other people of things that happened three and a half years ago.
"From my perspective and from I've seen in audits over the years, there's nothing in this audit that I would consider staggeringly bad," Hanna said. "It points out that there was a conflict of interest: a supervisor was engaged to a person being supervised. That situation doesn't exist any more. And the lack of some appropriate policies has been corrected by policies that we have brought to the board and they have approved."
Hanna identified KVH's key responsive needs as determining material weaknesses in the system based on the audit, and what actions were needed to address these. "To my sense, there's nothing in this document that hasn't been addressed," he said. "However, we're going back and using this document to double check and make sure that everything is in place the way it needs to be so that irregularity doesn't exist.
"We don't want to understate anything," Hanna continued. "But our primary responsibility here is to take care of the community. The most important thing is, can we provide accurate and timely information to our patients and give them the best care we can? Do we want to do better, such as in the matter of the $93? Yes. But our monthly expenses total about a million dollars, so we need to keep all this in perspective. Now, there are some other things pointed out, too. A former CEO took her spouse with her on travel, and some of his expenses were paid for on her hospital credit card, and repaid to the card. That was loaning public money for a private purpose, and you shouldn't do that. We've gone back and clarified that policy so that people understand that you don't that."
Hanna and Hiebert arrived at KVH from very different routes. Hanna is the son of a rural hospital administrator and grew up, literally and figuratively, in rural hospitals. Hiebert grew up in Goldendale, went to work in Montana and Idaho, and 20 years later returned to her home town.
"I worked in public accounting for three years, in Montana," Hiebert said. "Then I worked for a non-profit organization in Idaho, providing long-term care and assisted living. I did that for 14 years, CFO for 12 and CEO for two. And now I'm here.
"I still have family here, so when the position opened, I started getting calls-you know, the CFO job is open here in Goldendale. This is home. It's always been home. I love the area, and I love the people."
Hiebert stated that being home also has the important benefit of contributing to something that makes a significant difference in the community. "I wanted to work in an industry that has a purpose," she said. "And it may not be that in finance you're not providing direct care, but you're in a program that does make a difference. That to me is fulfilling."
Hanna was brought to KVH about three months ago, when an acquaintance who worked for Brim Management, the previous management firm for KVH, let him know that the hospital was seeking a new interim CEO. At the time he was CEO of a small community hospital in southern Ohio. He welcomed the opportunity to come to Goldendale.
"This is what is referred to as a Hill-Burton hospital, built in the 1950s," Hanna said of KVH. "It's one of hundreds, if not thousands, of rural hospitals built from legislation which made monies available to rural communities to build hospitals. KVH is a public hospital district in Klickitat County."
Hanna claimed that rural hospitals are much more demanding-and fulfilling-than urban ones. "There's such a service element to a rural hospital, more so than for urban," he stated. "That's the environment I grew up, that the hospital was a key service element in the community. The rural hospital serves the community. It's more difficult in rural communities than in larger urban areas. We don't have nearly as much money, we don't have all the resources immediately available, so everybody involved in rural health care has to do a lot more."
Heibert too sees a unique perspective to a small community health facility. "From my perspective, we are a small facility, but we're here to serve the community," she said. "We're a public hospital district, and we want to serve. We want to help our friends and neighbors, and truly that's the way it is-you can walk down the hall here and you know people. The hospital district is for the community. It's your hospital."
That theme is echoed in Hanna's statement about the central message he wants the community to know about KVH. "For one thing, we want to do everything better," he stated. "We want to do everything we can to serve you. We know we're not perfect. We're interested to know how you feel about things, what you think about things, what's important to you. That's a reason why we have two outside people, who have nothing to do with the hospital, involved with our strategic planning.
"A lot of people think that health care happens in a closed room, and not many people know what's going on. This is our effort to change that, to say that what we do can stand the light of day. We want the community to be involved in the process."
Road debate draws crowd to council
Andrew Christiansen
Reporter
The comments were sometimes heated and sometimes constructive during Monday night's continuation hearing on a Transportation Benefit District (TBD) for Goldendale.
A large crowd of concerned citizens was in attendance with 11 people giving testimony, all but one speaking against the notion of a $20 vehicle tab tax. Many of those commenting were not opposed to raising funds for roads, but preferred a method they deemed to be more fair.
Suggestions were made to impose a tax on fuel or increase sales tax. There were comments made that suggested the city is not efficiently using funds they currently collect, and many felt there should be a public vote on the issue, perhaps even public vote on a menu of fund raising options.
A .2 percent sales tax is allowed under TBD rules, but requires a vote of the people. Also addressed by the law, but not discussed, is a provision that allows a toll to be collected on some roads, also following a vote by the public.
At the conclusion of the evening the council seemed to agree that more options need to be considered before they take action. In particular, the ability of the city to impose a fuel tax was unknown and would be looked into by city administrator Larry Bellamy for the next meeting.
In other street related matters, the Council approved amending the contract with Pioneer Surveying and Engineering to include the street, curb, gutter, sidewalk and storm sewer installation on East Court, East Allyn, East Burgen and Academy, King and Schuster streets. The company is working on a current contract for installation of water line improvements by Jim Smith Construction.
The announcement that Goldendale would receive $1 million from Community Development Block Grant funds makes it possible to do the full road and sidewalk repair in the east central area. Smith's crew recently ran pipe across East Broadway and was working on King St. on Monday. Bellamy provided a general accounting of funds for the street repair. The cost of the project is $2.4 million, of which $400,000 comes from the rural development loan that is currently funding the water line improvements, approximately $300,000 from an excise tax fund derived through the sale of the energy plant, about $200,000 from the one-half percent sales tax, about $500,000 from a general obligation bond, and $1 million from the recently awarded Community Development Block Grant. The contract to do the work must be awarded by Sept. 1.
In other business, the Council set June 15 as a date to meet with officials of Puget Sound Energy over a proposal to annex 141.5 acres into the city, and an economic development loan was granted to Woody Lovelace who will reopen Elwood's Meats. The Council also passed a resolution without dissent, setting water use efficiency guidelines for the city.
The resolution sets goals for the city to reduce distribution system loss to 10 percent or less by 2010 and reduce consumption per equivalent residential unit from 560 gallons per day to 543 gallons per day by 2015. The resolution meets the state Municipal Water Law requirements. Evaluation of progress and public education are also required.
Len Crawford gave a report on the Goldendale Regional Home and Garden Show. The committee collected a great deal of demographic information from those who attended, which will held direct advertising dollars for next year's show. Vendors have already begun to sign-up for next year's show which is scheduled for April 16-18. The next regular Council meeting is set for May 18, at 7 p.m.
WSU preliminary budget reduction plan cuts Goldendale center
Washington State University will cut about 370 jobs, eliminate several academic programs and reorganize some administrative units as part of its preliminary plan to reduce its budget by 10.38 percent or about $54 million for the upcoming biennium.
The job losses will be felt on all four of the university's campuses and on research and extension units statewide. Of those jobs, 165 represent unfilled positions; the remaining 206 jobs are currently filled and will be eliminated. The university employs more than 6,200 people statewide. A complete unit-by-unit breakdown of the budget reductions is available at the Budget Office Web site.
"In making these reductions, we have tried to be strategic in preserving academic and research quality. Especially in these difficult budget times, we cannot be all things to all people. We believe these cuts will, to the greatest extent possible, position us to emerge from this economic crisis as a stronger university," said Elson S. Floyd, president of Washington State University.
"These cuts are painful and difficult for our university community. Excellent employees will lose jobs. Worthwhile programs will be reduced or eliminated. But we have an obligation to balance our budget in the face of unprecedented budget cuts and this plan will allow us to fulfill that requirement," Floyd said. He said that the university plans to provide at least a 90-day notice to permanent staff who are given notice of separation.
The release of the preliminary budget will be followed by a month of discussion among the campus community and various stakeholder groups regarding the provisions of the plan. WSU leaders expect to finalize the plan around June 1. The budget will go into effect when the new biennium begins July 1. Academic programs slated for elimination include the sport management program, the Department of Theatre and Dance, the Department of Community and Rural Sociology and the major in German. Students currently majoring in those fields will be provided access to courses to allow them to complete their degrees, but new students will not be admitted.
Under the budget plan, the IMPACT Center will close, university advertising expenditures will be virtually eliminated, the university's nine learning centers in communities around the state will close, Beasley Coliseum on the Pullman campus will be run on a self-supporting basis without state funding, the travel services and accounts payable offices will be consolidated and general custodial and maintenance services will be reduced.
An earlier news release from the University mistakenly stated that Extension offices would be consolidated. That is not in the current plans. However, Extension would take one of the larger hits in the proposed budget, losing $3,140,707. Only WSU Vancouver is slated to lose more. In addition, another $2,080,307 would be cut from the Agricultural Research Center budget.
The learning center in Goldendale is one of the locations that would be cut under the plan.
According to Tim Shatraw, the center typically has 10-15 students taking courses for WSU credit and several community college students who utilize the center. There are also 15-20 GED certificates earned through the center each year. The center is staffed by Shattraw and Ava Van Velsor.
The budget-cutting process left some areas of the university largely unscathed. The budget of the College of Nursing was not cut, and the university's contribution to the WWAMI medical education program was not reduced. "The nursing and WWAMI programs are central to our collaborative efforts to educate medical professionals, who fill a particularly urgent need in rural areas," Floyd said.
Extension's budget shows elimination of 20.1 currently filled administrative professionals, and 9.9 tenured or tenure track faculty. Another 3.1 non-tenure track faculty are slated to be cut and 8.9 vacant positions will not be filled.
The Agricultural Research Center will lose 16.9 currently filled positions and 9.9 vacant positions. Among the specific research areas to be reduced are research into minor crop integrated pest management, and biomass feedstocks and anaerobic digestion projects operated in partnership with the Washington State Department of Agriculture.
The university cuts could have been worse as the $54 million represents about half of the 22 percent cut set by the state budget. The other $54 million will be compensated by $15.7 million federal stimulus dollars and a 14 percent increase in tuition.
According to WSU, resident undergraduate tuition would increase $870 from $6,218 to $7,088 per year. All Washington four-year public universities will have a 14 percent tuition increase.
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