Seeking answers — New CFO flags issues in past reports

Weston County Health Services is engaging an independent forensic accounting firm to review “irregularities” that Chief Financial Officer Paul Maiellano discovered in financial information the hospital had reported to state and federal oversight agencies.

CEO Cathy Harshbarger told the News Letter Journal that Maiellano identified discrepancies in financial data that WCHS had submitted to state and federal oversight agencies before his arrival. The findings suggested inaccurate information had been reported, leading hospital leadership to determine that a forensic audit was necessary. Maiellano notified Harshbarger of the discrepancies, and the two then informed trustee Kari Drost, board chair Ann Slagle and attorney Alison Gee.

The firm will evaluate how extensive the irregularities are, review historical reporting and advise the hospital on strengthening financial controls to ensure compliance with state and federal regulations, according to a press release Harshbarger sent the NLJ on Dec. 9.

“We are currently seeking bids from companies familiar with rural hospital and healthcare,” the release says.

At a special board meeting on Dec. 8, Harshbarger told trustees that WCHS has “some irregularities in our cost report and our audit” and that the hospital must hire forensic auditors to review its finances, going “back as far as we need to,” in order to, “for a final time,” obtain accurate numbers.

“We lack confidence in the reports that we have at this time,” she said.

Drost said at the meeting that she fully supports “whatever needs to be done with a forensic audit or engaging new firms to get us some real numbers.”

“I think it’s far past time that this board has had real numbers and management has had real numbers to be able to work with,” she said. “I’m in favor of moving forward with moving forward.”

Trustee William Curley, Harshbarger and Maiellano agreed, and Drost said she hopes the board will have more information at its next meeting.

“On top of that, I think the board agrees that we’re all completely on board for complete public transparency for what is going to be this outcome,” trustee Ben Roberts said. “As we go forward, it’ll be shared as we legally can.”

According to Harshbarger, the hospital’s plan is to first ensure that all the numbers are accurate and transparent, then confirm that the numbers are compliant with regulations. After that, the hospital will work to understand its financial history.

Maiellano assured the board that November numbers are “looking good” and December numbers will be “great,” based on what he and the outside CPA encountered, aside from accounting-process errors that they have already corrected, such as ambiguity around cutoff times for accounting periods. Addressing those issues now will prevent them from recurring, he said. He said he anticipates that the board may have accurate November financials by its December meeting.

“The board will have a transparent view of the finances that can be backed up by the financial statements,” he said.

The release says that the irregularities relate to actions that occurred before Maiellano started working at WCHS.

“No evidence suggests ongoing mismanagement,” the release says. “The hospital remains financially stable and continues to operate uninterrupted.”

Maiellano said in the release that the hospital’s priority is to maintain trust.

“By bringing these concerns forward immediately and engaging independent experts, we are committed to ensuring transparency, accountability, and the long-term health of our organization,” he said.

WCHS will update the public after the external review and any corrections are complete, according to the release.

“The hospital remains dedicated to responsible stewardship of public resources and to providing high-quality care to the residents of Weston County,” the release says.

Sidebar: Already Auditing

At the board’s Nov. 20 meeting, Maiellano proposed hiring Elevate CPA to help clean up the general ledger so the hospital can meet the deadline for submitting its audit. The board unanimously authorized Harshbarger to hire the firm, which is based in Mesa, Arizona, at a rate of $100 per hour.