CLINTON — With a review of its agreement with the county, and coupled with interviews with officials, Ozark Health hospital is meeting the terms of its lease agreement.
The lease, dated June 20, 2002 has a requirement for the hospital to provide financial to the county Quorum Court “on request.” The, if requested, report would have “… the income and expenses of operation of both the New Hospital and the New Nursing Home for the preceding calendar month.” per the lease’s Article 18, titled “Operations.”
Later in that section, “as requested” is again used if Quorum Court wants to see an auditor’s report. No reference mandates a monthly report being made to the Quorum Court unless it is requested.
Van Buren County Judge Dale James said any request for a report would be generated by the court’s Building and Grounds committee, charged with overseeing such matters. The committee is chaired by Justice of the Peace Dell Holt.
Holt confirmed that not only has the committee not requested a financial report, but the hospital sends it a financial report every month.
“Ozark Health is in full compliance,” Holt said. By the specific terms of the lease, his committee would, if needed, request a financial report through the hospital’s Board of Governors, members of which are appointed by the Quorum Court.
The county leases the building and lands to Ozark Health which in turn provides maintenance. The county helps the hospital through its millage account, currently at one-third of a mil, in support of the hospital.
The millage was originally passed in the 1940s for the initial hospital build, at 1 mil. This was reduced to a third of a mil in the 1950s.
The arrangement between the hospital and the county, as all county government operations, are subject to review by the Arkansas Legislative Audit.
In January Legislative Audit asked for the 20th Judicial District Prosecutor’s office to review expenditures made by the county judge for repairs to the Ozark Health Nursing Home. In question was expenses paid by the county to Noacon Inc. for repairs. Noacon is headed by Donnie Collins, who is also appointed by the Quorum Court as head of the hospital’s Board of Governors. Legislative Audit was concerned about a possible conflict of interest in Collin’s role.
“Finding no criminal intent, no further action will be taken on this matter,” a March 18 letter to Legislative Audit and signed by 20th Judicial District Prosecutor Carol Crews states.
At issue were repairs to the nursing home after damage due to a 2018 flood. Collins, and Ozark Health CEO David Deaton, said the nursing home had to contend with no just water damage, but mold growth due to the water incursion, especially concerning due to the delicate health of the nursing home’s clients.
At issue in the legislative audit report was not the repairs made to the nursing home after the flood damage – which Deaton compared to asbestos mitigation, with the need to carefully seal off airways and work areas in order to protect nursing home clients.
Those repairs were covered by insurance, and were undertaken as quickly as possible without bid. The lack of bid was approved by the Quorum Court in an emergency ordinance passed by the court and signed by then county judge Roger Hooper.
At issue was the pre-repair phase, called “mitigation,” by Collins’ company, ultimately leading to his writing an approximately $20,000 check to the county, he said.
Mitigation was required in order to quickly removed flood-damaged walls and insulation before any damage, including mold growth, could propagate.
“I didn’t charge for that part of the work,” Collins said. Instead he made arrangements for the county to pay the labor costs of his employees who were doing the mitigation, the tear-out of damaged property, which the county paid.
Per Crew’s March 16 letter, money was paid through the county’s hospital millage fund.
Collins said that later, as final settlement with the insurance company was being paid, the insurance company refused to cover mitigation costs, citing the time lapse between the flood and mitigation. That decision, coupled with Legislative Audit’s concern about a possible conflict of interest, led to him writing a check to the county to cover the mitigation labor, Collins said.
Collin’s company had done the repair work to the hospital, which was, again, done as an emergency due to the nature of the damage and approved by a Quorum Court ordinance – all fairly routine in circumstances like this.
What was apparently missing and cited by Legislative Audit is that the county did not file a second ordinance approving Collins’ company to do the work since Collins was a member of the hospital Board of Governors.
Crew’s letter to legislative audit cites that Collins did address the Board of Governors about a potential conflict, as well as seeking “advice from the county attorney” just a few days after repairs were authorized.
“Although the advice given is in dispute, the fact that owner/board member [Collins] was seeking approval from the Board and advice from the county attorney negates evidence of criminal intent for the purpose of my review. Also noteworthy is that the County received what it paid for. There is no evidence the work was not done and done well,” Crews’ letter states, concluding, “Please contact me if you have any questions.”