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County asks for federal audit

County commissioners this morning called for a federal audit of River Valley Health System’s finances.

Monday, January 29, 2001

County commissioners this morning called for a federal audit of River Valley Health System’s finances.

The executive decision came from commission president Paul Herrell, who said it was on behalf of the taxpayers and former hospital employees.

"I am asking for an immediate federal audit of all sectors of River Valley Health System," he said. "We owe this to the taxpayers of Lawrence County "

The deeper the commission probes into the financial reasons why River Valley closed, "the worse it smells," Herrell said.

The county owns the hospital, but under state law it is operated by a board of trustees.

River Valley, which operates on an estimated $28 million budget, will close Jan. 31. Its new board of trustees made that decision earlier this month, citing continued poor financial health.

The hospital has an estimated $17 million debt and has lost millions in revenue during at least the last two years, officials said.

Some revenue loss has been blamed on federal cutbacks in Medicare reimbursements.

"I don’t know what happened," Herrell said. "But I can’t imagine that kind of debt. We have been asked a multitude of questions. Now, we are asking for the answers. Why is our hospital in debt over $17 million?"

Commissioner George Patterson agreed, adding that the audit is necessary no matter what it finds.

"What we’re looking at is protecting the integrity of everyone concerned," Patterson said.

Herrell said it’s not yet known which federal agency will audit River Valley.

Also, in a phone call to hospital board chairman Jim Weber this morning, Weber supported the move for an audit, Herrell said.

Weber could not be reached for further comment before presstime.