A Miami-Dade County grand jury last week released a report on Jackson Health System, describing its financial problems as “a colossal mess.” No formal charges were brought by the panel.
“Those who had the responsibility of running this institution, as well as those who had the duty of oversight, have been irresponsible, complacent and reckless,” the grand jury said in the first paragraph of its 44-page report. They “blindly relied on financial misstatements.”
The grand jury was empaneled late last year to investigate growing deficits at Miami Dade’s health system, which includes Jackson Memorial Hospital, and provides health care for the indigent.
The county imposes a voter-approved, half-cent sales to support the medical system.
The grand jury found no evidence of any problems related to health care.
However, it discovered that the “net patient revenue adjustment” for fiscal 2009 had “the cumulative effect of increasing projected revenue by $155 million while at the same time concealing $155 million of deficit.”
The adjustment was included in monthly financial reports but eliminated by the system’s independent auditor when the annual audit was prepared.
No witnesses provided a reasonable justification or explanation for the adjustment, according to the grand jury report.
“The bottom-line result was a skewing of the revenue figures and a masking of one of the indicators that could have warned of the upcoming financial train wreck,” the grand jury report said. “Anyone looking at or relying on the numbers contained in monthly financial statements would have had a complete misunderstanding of the hospital’s true financial condition.”
Jackson is overseen by an appointed board called the Public Heath Trust. Members are appointed by the county commission, which also reviews the system’s budgets and union contract negotiations.
Mounting financial problems prompted county commissioners to place Jackson Health on “management watch” in March, allowing Miami-Dade officials to closely supervise the health care system and work on budget cuts as well as cost-saving strategies.
The financial crisis also sparked an inquiry from the Securities and Exchange Commission into an $83.3 million bond deal that Miami-Dade County sold last year on behalf of the health system.
The grand jury urged the county to continue its management-watch efforts in hopes of stabilizing the hospital system. A long list of recommendations included studying a new governance system with qualified board members that would have more autonomy with regard to budgeting and union negotiations.
The panel recommended that a referendum be placed on the ballot to ask voters for an additional half-cent sales tax for the Jackson Health System.