Via today's N-G:
The county's nursing home is in even worse shape than it appears, a University of Illinois accountancy professor said.
Rachel Schwartz, who edits a scholarly journal on accounting practices, is serving as an unpaid consultant to the county board. She said Tuesday that data supplied to the county on Champaign County Nursing Home finances paints a rosier portrait than documents filed with the state.
The nursing home is asking for a $592,000 loan from the county at its Thursday meeting. Treasurer Dan Welch has said the county can't afford any more such loans.
Schwartz has looked through invoices – public documents – and found that the nursing home relies more on contract services for nursing and other therapies than budgets suggest. She said the facility uses a hybrid of accounting practices that reduces transparency.
From what Schwartz has seen, she said expenses are recorded as they are paid, while revenues are reported as the service is provided.
Speaking less technically, Schwartz said that financially, the nursing home "is dying."
Discuss.
She said the facility uses a hybrid of accounting practices that reduces transparency.
From what Schwartz has seen, she said expenses are recorded as they are paid, while revenues are reported as the service is provided.
Calling that a "hybrid" of accounting practices is quite kind. Matching expenses to the revenues they produced is a key
standardprinciple in accounting. Someone needs to answer for this practice. (Maybe there is a good reason for doing this, but I would sure like to hear it.)another thought: it is very important to know when this mismatching practice started. The accounting period when it was first used will show a much better "profit" than normal - and that "profit" will have been totally fabricated.
I am hesitant to comment,,,,,since some think I am clueless about nursing homes,,,,,but I will take a stabe at it, Prof, Schwartz, I am sure is very good in her field,,,,,but this betrays a basic lack of understanding about the way nursing home function,,,,,,,the A/R is a very complicated process,,,with many factors to take into account,,,,one example is a residents payment status can change several times in one month, example two,,,,,so many different methods of payment etc, I do not think for minute any hanky panky had occured, not for a minute, maybe they need to update their methods,,,,but as I have said before, running a nursing home is a complicated business, I may think Buffenbarger is not the best person to run one,,,,,but I will stick up for him if anyone thinks the books are bad on purpose, Enough from me,,,,,months ago I offered to do for free, what they are getting ready to pay out 180 grand a year for,,,,so no more free advice. Oh for the record,,,as bad as it seems there now,,,,I could clean it up in about 9 months,,,,,with some help from people I would select, no brag just a fact.
the A/R is a very complicated process,,,with many factors to take into account,,,,one example is a residents payment status can change several times in one month
I don't doubt that - and I also don't want to say this is intentional deception without hearing a possible explanation.
However, unless there is some rule to prohibit it, I can't understand why you would accrue your AR/revenues but not accrue your AP/expenses. Apparently the professor couldn't understand why either.
They used to hae some very good people in the bookkeeping dept,,,,,when I was the group care worker at Public Aid they could call me any time, and I would work close with them to get it right, heck sometimes when a person went in and out and in out of the hospital several times in one day, which happens in that business, you can imagine the mess. One free clue as to why, the home is not the master of its own fate,,,,they are dependent on someles entering the proper codes,,,,someome submitting the paperwork in Springfield for payment,,,,,,,then waiting for payment, someone has to be on top of it every day,,,,it is a job and half,,,,,and they never paid the ladies enough , at least not when I was involved,,,When I took over the group care load, now this was years ago,,,,I had to catch every nursing home in Champaign county up from a huge backlog,,,,I did it,,,,,but it was not much fun, I can explain it verbally much better than I can write it, all it all works anyway,,,,and give me a chalk board and a piece of chalk........but no one cares enough to listen.
The concern I expressed is not so much about the receivables as it is about payables. For example, the county's financial reports for fiscal year 2007 (available on the county auditor's web site) show contract nursing service of $899,350.16 in the "Actual This Year" column. If you look at the 2007 cost report that the nursing home files with the state of illinois (available at http://www.hfs.illinois.gov/costreports/) you will find on page 20 that the total for contract nursing is actually $1,277,848. The first number is the amount paid during FY 2007 (for services rendered during 2006 and 2007), while the second is the costs incurred for services rendered during FY 2007. Clearly, to make informed decisions in real time one would need the costs incurred not the cash paid.
In case you are wondering whether this is the only account with that problem, check the contract therapy accounts. On the county's statements they appear as professional services under three departments (Physical Therapy, Occupational Therapy, and Speech Therapy) adding up to $342,875 in FY 2007. The cost report filed with the state shows contract therapy at $573,753.
Rachel Schwartz
Thankyou sincerely for the clarification.......that does shed a different light on the subject,,,,but there will always be a wacky looking difference in A/R., and A/P in the nursing home business,,,you know I think if a group of us volunteered our different areas of expertise,,,,you would not need that consulting firm.
If this is as simple as mixing cash basis and accrual basis accounting practices, then it's inaccurate -- whether intentional or not.
A good friend of mine did obtain the books that were current then, several months back,,,I do know that several people with the state,,,and private have gone over them, state meaning other than public aid or public health. If there is something irregular about them,,then someone is checking them. I do agree contracting someone from out of state when we have some of the best right here in town is not on the surface anyway, quite right. But, why is it thought the MPA will be able to do this better? Of course I realize that the home is like the Titanic in its last few minutes,,,,actually it is a shame your board was not put together months ago, before it reached this level.
Bruce, I am holding in reserve any applause for the CCNH BOD based of present performance; that the board is just a buffer for the CB; and there is no sunset clause in the board's establishment documents so there is no trigger mechanism for the CB to revisit the effectiveness and performance of the BOD, even though the board is to report on a quarterly basis to the CB.
Rachel is accurate that at this point in time no one has any idea what exactly is the financial situation of the home.
Pattsi Petrie
Where was the Auditor Mr. Fabri the last 2 years during this period of time? His only input was - "the nursing home is losing money". It seems clearly that Fabri has conceded he doesn't understand accounting practices, this is why he recruited Schwartz to look at this. So when election time comes around and Fabri is bragging about his nuring home efforts, reflect back on this period of time, when he demonstrated his clear lack of qualifications for this position.
Pattsi, I was trying to be polite:) I try that sometimes:)
Where was the Auditor Mr. Fabri the last 2 years during this period of time? His only input was - "the nursing home is losing money". It seems clearly that Fabri has conceded he doesn't understand accounting practices, this is why he recruited Schwartz to look at this. So when election time comes around and Fabri is bragging about his nuring home efforts, reflect back on this period of time, when he demonstrated his clear lack of qualifications for this position.
Wait ... getting a very knowledgeable volunteer to examine the nursing home books demonstrates that Fabri shouldn't be auditor? Would it be better if he hadn't brought in Rachel Schwartz?
Just to clarify, I am not a member of the board of directors, and Tony Fabri did not recruit me. I am simply a concerned citizen that decided to look at the numbers. All the data I have mentioned are from the web site of the auditor and the HFS website I mentioned above. After I noticed the sharp increase in professional services from 2007 to 2008 I did go to the auditor's office to ask for some clarifications, and with the very able help of Ms. Carol Wadleigh, the chief deputy auditor, I found out that $900,000 are contract therapy services, all provided by a single vendor from Austin Texas.
Just to clarify, I am not a member of the board of directors, and Tony Fabri did not recruit me. I am simply a concerned citizen that decided to look at the numbers. All the data I have mentioned are from the web site of the auditor and the HFS website I mentioned above. After I noticed the sharp increase in professional services from 2007 to 2008 I did go to the auditor's office to ask for some clarifications, and with the very able help of Ms. Carol Wadleigh, the chief deputy auditor, I found out that $900,000 are contract therapy services, all provided by a single vendor from Austin Texas.
Sorry about the misunderstanding. At any rate, your findings are very interesting.
Once again, we find out the Board has not been given accurate information about the nursing home. Last week, county board members were surprised to find out that the nursing home is incurring a $200 a day fine for unresolved violations of state requirements. Now, we find out the board has not been given an account account of finances. But I hear no calls for heads to roll. Why is Buffenbarger still running the place? This sounds like the keystone cops.
More specifically, ONR Inc. is a privately held firm from Austin Texas. We have paid them $342,875 in FY 2007, and the 2008 budgeted amount is $931,404.
As I have done previously, I continue to urge those who are so concerned about the events connected with the nursing home situation, to attend the CB meeting tomorrow evening, being prepared to make a well-prepared statement during public participation. Unless the CB hears from the community, changes will not occur based on past performance of the CB.
Pattsi Petrie
Just a quick thought...whilst on a plane to Washington last week, my seat neighbor and I discussed the nursing home situation. Turns out, seat partner works for a private nursing home corporation, etc. Would there be an interest in having seat partner meet with county board to discuss the purchase of the nursing home. I will not belabor the point, just wondered, if there could be some interest in getting this nursing home off the taxpayers backs. He did appear genuinely interested...thoughts?
it is well past time that someone start having such discussions - at the very least, to know what the current value of the CCNH is
I will not belabor the point, just wondered, if there could be some interest in getting this nursing home off the taxpayers backs. He did appear genuinely interested...thoughts?
If you seriously want an answer, don't post an anonymous post here, e-mail Knott, Weibel, and or Nudo. E-mail addresses are readily available online. Google Champaign County Board.