Note: This article not only includes comments about the blog mentioned, but a list of all the fiscal accountability problems of the North Lake County Hospital District caused by the current Board majority, who we think should all resign, and our recommendations for improvement.
vj
The local Lake County blog, Right Side of the Lake, written by Don Magruder and assorted ghost writers (they never sign them) continued its support of the current majority of the Board of Trustees of the North Lake Hospital District who have taken NO ACTION to improve financial oversight of spending.
The Board minority, consisting of Marilyn Bainter and newly elected Fran Grossi, want more oversight on how the funds are spent, and in some cases, have become so frustrated with the lack of oversight they have called for elimination of the tax.
Since the current Pro-spending Board majority ( aka the No-Accountability Gang - there are four of them, just like the James Younger gang had four members in the nearby photo) has refused to create a website with public records on the spending, etc. WE have created this website to explain the issues: http://northlakecountyhospitaldistrict.com/ . There is also a Facebook page at FixLakeTaxes .
Below are the most recent "opinion" articles from the Right Side blog, which continue to say that the two local Hospitals should continue to receive over $10-million in tax funds without mentioning the lack of oversight on 1) how the funds are spent (no rules), and 2) no accounting method to allow direct tracking of the funds to ensure they were only spent on acceptable objectives.
The IMPORTANT action for readers is to read all the comments, which primarily focus on the lack of funding oversight and challenging the authors on their presumption that indigent care indeed is indeed a valid reason for the spending.
Oct. 28th, 2010 - The most important vote - READ the Comments
Nov. 18th, 2010 - Why Don Magruder supports the Hospitals - Be sure to read the comments.
Our Conclusion:
In all his diatribes about "supporting the working people" and the Hospital spending, Magruder conveniently leaves out the facts that:
- 57 of Florida's 67 Counties have no similar hospital tax.
- There is a pending lawsuit, initiated by Marilyn Bainter, to shut down the District because it does not meet Florida Constitution requirements. (One is that half the North Lake District never got a chance to vote on the law - it was run through a backdoor deal...).
- Magruder claims that existing financial audits of the Hospitals should be accepted as adequate oversight. As a professional internal auditor, I can say that is ludicrous. The audited financials are consolidated and do not break out the separate income from the tax and related spending. They need separate fund accounts like government uses for grants, where only the related revenues and approved spending are calculated, with separate checking accounts, etc. If Mr. Magruder had a financial partner in part of his lumber business, you better believe they would have separate accounting systems to track revenues and expenses to show profit and loss for the partnership operations. Even the Walt Disney foundation that gives out grants to local children's charities has many rules about acceptable and prohibited spending, and separate accounting and reports. Why is it so hard for the Board majority to implement this?
- Both recipient hospitals, Leesburg and Waterman, are non-profits. One of the tradeoffs to get non-profit status from the IRS is the responsibility to absorb the cost of indigent care. Thus they already should be paying for it from current operational income, and why are Lake County taxpayers supposed to also be taxed $10-million - maybe that money went to the $5-million facelift of Leesburg's Hospital, or went to help build the Villages Hospital (which benefits Sumter County, not Lake County), or it went to the parent company of Waterman, or the high salaries they receive?
- No mention is made of the fact that the County Government also is spending ANOTHER $5-million for local indigent care. They run several clinics for those without adequate income. In my opinion, if voters really wanted the Hospital Tax to continue, they would get better return on the funds by givng the funds to the County Health Dept. for distribution, rather than the local Hospitals.
- Most of the Board majority have direct or past connections to the two local Hospitals, and there is NO CONFLICT OF INTEREST document required of them.
- The regulations that established the Tax District and rate of 1 mill were pushed through many years ago without any clear definitions or rules on how the funds were to be spent. Only a vague term, "for continued Hospital Services..." was used, thus spending could be for employee trips to Paris, France, and there are no rules prohibiting that. A more practical "rule" would be that funds could not be spent for travel, new copy machines, or building renovations, but none exist, and the current Board majority has never tried to establish their own rules to limit where spending takes place.
- The regulations also did not mandate a separate accounting system for the taxpayer funds so all spending could be tracked and verified. Thus even if there were rules that said the funds could not be used for newspaper advertising, or gold plated name tags, there is no specified accounting procedures to verify funds were NOT spent on prohibited expenses.
We have published many reasons why the Hospital Tax District regulations need to be beefed up, but the Right Side blog ignores all those issues.
Our Recommendations:
The Hospital Board needs to:
1) have monthly, public hearings on each area of spending,
2) define acceptable spending rules, and publish them by June, 2011, and
3) define the need for a separate accounting system to ensure the ability to verify where the funds were spent, and
4) hire a forensic auditor (not CPA) to ensure spending meets the new requirements, and
5) implement a rule that all Board members must fill out a conflict of interest statement, and provide a financial disclosure document to ensure there are no conflicts.
6) initiate a request for modifications to the existing local law with the Lake County Legislators to modify the existing regulation to allow selection of ANY rate between 0 OR 1 mill , rather than the current regulation which only allows either 0 (zero) OR 1 mill (and nothing in between ). The modifications should also include the above recommended spending rules and the requirement for separate accounting systems and forensic audit review (just like grants). The modified law should require the mentioned conflict of interest policy and required financial disclosure forms. It should also include a 10-year sunset provision, where a new vote by the taxpayers is required every 10 years to support or reject the tax.
7) initiate a referendum for North Lake Taxpayers to approve, or reject continuation of the Hospital District and the tax thorugh the adoption of a law including the above improvements. The voters have not been allowed to vote on the tax in 20-30 years, and it is time for another vote.
Final Opinion
Until the above actions are completed, it is my opinion that the current Board majority is NOT representing the interests of the taxpayers, and they need to resign right now so Board members willing to implement oversight are elected or appointed.
Mr. Magruder needs to start recognizing his emotional support of Hospital spending needs to be modified to support it AFTER the above recommendations are implemented. Just because he believes in income re-distribution and taxing locals to pay for services he believed in, maybe some taxpayers have other priorities for their funds, and deserve public hearings and votes on the issue at least once every 10 years.
vj
