Audit flags failures — Hospital finances questioned amid gains
For months, leaders at Weston County Health Services said they lacked confidence in the hospital’s own financial reports.
Now, DZA, a Spokane, Washington-based CPA firm specializing in rural health care, has confirmed the reasons why.
While DZA said the fiscal year 2023 financial statements of Weston County Hospital District, operating as WCHS, were acceptable, it could not say the same for the fiscal 2024 statements.
Daniel Juchau, a senior manager with DZA, told the board at a special meeting on April 1 that the firm issued a “disclaimer of opinion” for fiscal 2024, which means it could not obtain enough evidence to express an opinion.
“This isn’t necessarily saying that the financial statements included here are misstated or that they’re inaccurate,” he said. “It’s saying that we can’t determine if they are accurate.”
He said the hospital’s circumstances that year, which included substantial turnover in management and key personnel, prompted a lack of sufficient internal controls for transaction cycles and account reconciliations. The audit centered around patients’ accounts receivable, net patient service revenue and the classification of expenses. DZA noted that WCHS has since hired and trained people to perform the reconciliation processes, improve financial reporting and retain enough audit evidence.
Board Chair Ann Slagle told the News Letter Journal that she believes the problems stemmed from leadership instability and a failed transition to Sage computer systems.
The breakdown comes as county commissioners prepare to consider initiating dissolution of the hospital district following missed reporting deadlines, raising questions about governance, compliance and the hospital’s long-term stability.
Juchau said DZA issued the disclaimer partly because of time constraints. If WCHS provided DZA with the missing audit evidence, the firm could reissue a report, he said.
The audit findings align with concerns hospital leaders had already begun to raise. In December, administrators said they lacked confidence in previously reported financial data and began pursuing a forensic review to understand the extent of potential irregularities. At the Nov.
20 meeting, the board authorized CEO Cathy Harshbarger to hire Elevate CPA, a firm based in Mesa, Arizona, to
help reconstruct its general ledger and meet state reporting deadlines.
Trustee Kari Drost told the NLJ on April 6 that Chief Financial Officer Paul Maiellano is gathering bids for the forensic audit so the board can proceed with that work after the 2024 and 2025 audits are complete.
County pressure
As reporting issues continued, county commissioners were told by the Wyoming Department of Audit that the county shall move toward dissolving the hospital district under state law, though the district’s attorney, Allison Gee, disputes that interpretation of the laws requiring special districts to report to the department and the hospital district’s inclusion in those statutes. Commissioners indicated they plan to consider a resolution to initiate dissolution on April 7 while continuing discussions with state officials and legal counsel.
Slagle told the NLJ that dissolving the district would directly affect hospital operations.
“If the county commissioners had went ahead and closed us, that would have been catastrophic, but I’m pretty confident that risk is gone,” she said.
She said she expects the district will have the 2025 audit done by the end of June.
Slagle also said the hospital now has a more reliable understanding of its finances, and she has confidence that its current financials areaccurate.
“I’m not saying that we’re in a good financial position,” Slagle said. “We have a better financial picture than we’ve had for quite some time.”
The board approved the 2023 and 2024 audits. Trustees are working to rebuild financial systems, improve internal controls and complete the 2025 audit by early July. Slagle said one of the most important steps has been identifying all required reporting obligations, including all state deadlines.
Ed Wagoner, Weston County Commission’s vice-chairman, said he pleaded for Gov. Mark Gordon’s office to intervene to extend a timeline so the commission can put its resolution on hold.
“My fear is if we lose the funding of the district, the hospital will close,” he said. “The trickle-down effect it would have in our community would be devastating.”