Unsigned Citizen Complaint: $2 Million Hospital Fund

This finding describes the process with time lines regarding the Hospital Capital Outlay Trust Account and the transfer of funds into the Operating Cash Account. The Hospital Capital Outlay Trust Account had built up funds from accumulated surpluses of previous years in the aggregate amount of $1,051,311.64 and increased by $11,419.77 interest for a total of $1,062,731.41 and was closed at the end of the last fiscal year as a part of implementing GASB34. The Board of Directors of Trinity Hospital on September 13, 2001 with David T. Hughes, Administrator and Billie Miller, Supervisor present acted on a resolution #5(j) to ‘Approve a Transfer of Cash in Hospital Capital Outlay Trust Account into the Operating Cash Account’. When this transfer actually occurred per Journal Entry #01-307 dated 10/31/2001, a mistaken double entry appeared in the County’s books wherein two (2) credits were inadvertently recorded each amounting to $1,062,731.41 for a total of $2,125,462.82. This error, which was immediately corrected, appeared as a momentary $2 Million HOSPITAL FUND, which was not correct, but may have led to the belief that there was over $2 million in the account when actually there was slightly over $1 million (see attachment Trinity County Journal Entry JE #01-307 dated 10/31/2001). CONCLUSION #1: The Grand Jury is satisfied that all procedures were followed concerning the transfer of $1,062,731.41 cash from the Hospital Capital Outlay Trust Account into the Operating Cash Account. The Grand Jury recognizes that some confusion may exist as a result of an inadvertent double posting within the County financial records (see Journal Entry sheet attached), which has led to some puzzlement regarding the question by some citizens about the, “…missing or incorrectly used Hospital funds ($2 million)’.

This finding describes the process, time lines, and procedures of the County’s handling of Hospital funds and specifically whether or not the funds were a State allocation. The Finance and Administration committee sent many letters (see above) and received answers explaining that the Hospital Capital Outlay Trust Account accumulated surpluses and interest of prior years of operating the Hospital in the amount of $1,062,731.41. On September 13, 2001 at a regular open Board of Directors meeting a unanimous vote was taken to transfer the funds to the Operating Cash Account per accounting procedure GASB34. CONCLUSION #2: The Grand Jury is satisfied that all procedures were followed concerning the transfer of $1,062,731.41 of cash in the Hospital Capital Outlay Trust Account into the Operating Cash Account. There were no special State funds specifically used.