Westchester calls for Med Center Audit 

By MELISSA KLEIN   THE JOURNAL NEWS   (Original publication: July 27, 2004)

WHITE PLAINS — Westchester County leaders yesterday called for an audit of the fiscally troubled Westchester Medical Center, saying the state comptroller should look at financial statements, reserve funds and expenditures by senior management.

County Executive Andrew Spano and Bill Ryan, the chairman of the county Board of Legislators, made the request for a so-called "forensic audit" in a letter sent yesterday to state Comptroller Alan Hevesi. The letter asks for an audit so that "Westchester taxpayers, who have been called upon to bail out this hospital, can be assured they have an honest representation of what has been going on."
Jennifer Freeman, a spokeswoman for Hevesi, said the office was reviewing the situation. She said the forensic audit called for a more in-depth investigation of records.

The audit request follows an investigation by The Journal News, published Sunday, that examined the medical center's spending on consultants during an ongoing financial crisis that resulted in an $83 million loss last year. The paper found $11.6 million was spent on consultants in less than two years, and one firm, Casas, Benjamin & White, billed the medical center for expenses that included luxury hotels and high-priced airline tickets.

Spano and Ryan also wrote to Gene Capello, the chairman of the medical center's board of directors, asking that the contract with the Casas company be terminated and that the hospital provide a report on the net benefit provided by each consultant that has been hired. One Casas consultant still is working at the hospital.  The letter says the county was given assurances the Casas firm would not be retained.  "Yet, despite this assurance, Casas was given a contract with no spending cap (and obviously, looking at their expenses, with no oversight) to do work that we can only describe as duplicative," the letter says.  The hospital has maintained the Casas firm's expenses were reviewed and the work done by the company was valuable.

The medical center put out a statement yesterday saying the county had been "well aware of our need for and utilization of outside assistance."  "We would actively participate in any additional review," the statement said. "In fact, our finances are annually audited by a certified independent firm and are made public."

Ryan, in a telephone interview, said it was disappointing that the county had come up with ways to help the hospital, and "hospital officers would continue down this road of spending irresponsibly."
"It's so, so disappointing," said Ryan, a White Plains Democrat. "But now we really have to bring the hammer down, and I think it's essential that we bring in Al Hevesi to take a look at what exactly has gone on."
Spano was out of town attending the Democratic convention in Boston and could not be reached for comment, according to Susan Tolchin, his chief adviser.
Spano and Ryan also will look at new appointments to the hospital's board, according to a statement put out by the county. Seven of the 15 seats on the hospital's board of directors are members appointed by the Board of Legislators, subject to the approval of the county executive.

The financial crisis has led to greater oversight of the former county-run hospital by Westchester officials. The county backs borrowing for the medical center, and the hospital's losses contributed to the lowering of Westchester's credit rating earlier this year to below AAA status for the first time in three decades.

The county agreed in April to provide financial assistance to the hospital by not billing it for $10 million in services such as electricity and snowplowing provided on the Valhalla campus. The help came after the medical center brought in an outside consultant, Pitts Management Associates, to run the hospital on an interim basis and agreed that an oversight committee of hospital and county representatives would monitor the work of the Pitts team.
Reach Melissa Klein at mklein@thejournalnews.com or 914-694-5063.

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