Peterborough hospital finds misplaced $57 million
January 7, 2015
PETERBOROUGH, Ont. – The Peterborough Regional Health Centre misplaced $57 million last year, the hospital’s leader says. The hospital released a corrected financial statement in December for the fiscal year that ended March 31.
According to an article in the Peterborough Examiner, interim CEO Dr. Peter McLaughlin (pictured) said a review discovered the money – a significant portion of the hospital’s budget – was mistakenly placed in a restricted account not accessible for ordinary hospital expenses.
The account is for future capital or operating costs when the money could have been used immediately, Dr. McLaughlin said. He blamed “accounting errors.”
“These errors are unacceptable,” he said. “And the senior team, led by the CEO, and the board, are very much accountable for these errors.”
Officials haven’t said why former president and CEO Ken Tremblay – who dug the hospital out of a $50-million debt – stepped down in November. His abrupt departure came after he had signed a new contract to stay on as CEO until 2018.
McLaughlin wouldn’t discuss his predecessor’s departure.
The newly rediscovered cash, when applied against existing liabilities, leaves the hospital with $32 million to spend on infrastructure and technology to improve patient care, he said.
The hospital will also implement measures to strengthen its internal financial controls, such as creating a system of independent, internal financial audits that will report directly to the board and senior team, “so that these types of errors don’t happen again.” he said.
Asked how the situation was related to Tremblay’s exit, Dr. McLaughlin said he could not comment as he “would be breaking privacy law.”
“In my new role as interim CEO, I, along with the board, am accountable for the implementation of the stronger internal financial controls,” Dr. McLaughlin said. “We will continue to be accountable to our community for the care we provide and to good stewardship of our resources. We are confident in our future coming out of this financial review and the changes that have been made.”
A week after Tremblay’s departure, three more top executives departed and officials again would not say if they were fired or if they quit. Arnel Schiratti (director of strategic communications), Cathy van Leipsig (director of corporate services) and Michael Moore (chief transformation officer) no longer work at PRHC.
PRHC later issued a written statement to clarify that those three departures were not related to the financial review.
The good news resulting from the situation is that the hospital now has $32 million of “accessible cash that puts us in a stronger financial position than we thought we were in,” Dr. McLaughlin said. “That part of it is good news for our hospital and our community.” The money is being earmarked for infrastructure improvements and technology to aid patient care.
“We are facing significant financial challenges as we go forward,” he said, noting the hospital is “ever more dependent” on its foundation and donors. “We have $70 million of ageing medical equipment which is going to have to be replaced over the next four years.”
The money could also help move the hospital “into the 21st century with paperless systems,” said Dr. McLaughlin.