The Grand Jury releases the findings to the Mendocino Coast Health Care District Board

MCHCD has a lease on the Mendocino Coast Adventist Health Hospital buildings (Mary Benjamin-Fort Bragg Advocate-News)

FORT BRAGG, CA – The Mendocino County Civil Grand Jury released its findings and recommendations after completing a year-long investigation into the performance of the Mendocino Coast Health Care District Board.

On June 6, 2024, the report describes a publicly elected board that failed to follow the rules as mandated by the authorities, did not serve the public interest, and over time, managed the hospital’s finances badly. Also noted is the Board’s indifference to public transparency and lack of friendliness in public meetings.

The report, titled, “Sick, but Back to Health,” acknowledges the Board’s current efforts to improve its management functions. “Since the beginning of our investigation,” the Grand Jury noted, “MCHCD has taken many steps to correct the above issues and is to be commended for its focus and diligence.”

The Grand Jury “decided to take MCHCD’s investigation to a higher level than any of the individual complaints, rather than focusing on administrative problems within MCHCD that allowed the issues many remain unresolved for several years and through many Boards.”

Its concerns centered on the Board’s failure to restructure following the transition of hospital operations to Adventist Health, which significantly affected the Board’s ability to secure the bond required for the federally mandated reimbursement of the hospital building’s relocation. .

The report gives three important reasons for the Board’s initial decision to lease the hospital to Adventist. In general, MCHCD was “in poor financial health, changes in the health care industry have reduced their income” (a common problem in rural hospitals), and “they found it difficult to hire health care professionals in a remote area.”

In addition, since the acquisition, the MCHCD Board’s performance has been repeatedly criticized by residents at public meetings, in the media, and has been the subject of numerous complaints in Mendocino County. Civil Grand Jury.”

The report identifies problems in each area of ​​the Board’s operational and administrative responsibilities. “Areas of concern” include Board training and certification, regulations and policies, vision and mission, funding and public transparency.

The important thing is that since then, the Board has no control over medical operations, medical procedures, departments, staff, or the hospital’s operating budget.

The first report addresses the lack of training for new or appointed board members who “lack the background or experience in direction and oversight.” For example, according to the Grand Jury, the Board does not have a clear understanding of the Brown Act and Ethics, nor can any member provide documentation that they have received training.

The Grand Jury heard numerous public complaints about board discussions and actions outside the legal boundaries of scheduled public meetings. The report recommends that the Board seek training and assistance from government agencies designated for this purpose, whose services are often free.

As a result of the process, the Board no longer had access to secretarial or administrative staff once it was shared with the hospital. It tried to fulfill all aspects of its responsibility on its own but was unsuccessful.

The Board has hired Regional Government Services (RGS) for assistance, but the report indicates that these costs may exceed the Board’s $250,000 budget. The board has not yet decided what assistance RGS will provide or how long the agency will provide assistance.

The second area addressed by the Grand Jury focuses on regulations, policies and procedures, and mission. These factors, said the Grand Jury, constitute “a stable institution necessary for a functioning organization.”

The report asserts, “Without that, any organization of this size, responsibilities, and obligations will be chaotic and likely to create operational conflicts and misunderstandings that prevent the organization from making meaningful progress in achieve its goals.”

The report said: “As far as the Supreme Court can see, the Board has been operating without legally signed and written regulations applicable to their new work.” Additionally, a copy of the minutes of the November 2020 meeting was found, and was signed and dated on 8/16/2023 by a board member who was not active in November 2020.

Further evidence of the Board’s failure in its public responsibilities is the report’s claim that the Board did not have a policy and manual for the provision of a Grand Jury. Given a copy of the 1999 book that was later found, a Grand Jury review of the document noted that “all 15 sections were no longer relevant to [Board’s] has become a part. ”

The report recommended that, while the Board is working to include policies on “conflict of interest, record keeping, and ethics, the Board should also add policies on “financial controls, technology, security and jokes.”

The Grand Jury also emphasized the “serious impact” related to the “absence of minutes for more than a year of Board meetings. The report states that this failure to keep legal minutes “has tended to delay the power of the hospital to meet the deadline to return the money.” According to the report, this refund will require funding through a voter-approved bond.

The state can close a special district hospital that does not meet the deadline. To set the bond rate on the tax, the MCHCD Board must find an “acceptable interest rate on the bond to ensure the Board’s creditworthiness.”

Rating centers will require testing. The audit will examine “the actions of the Board by examining the minutes of the activities of several years.” The report noted that “the lack of minutes has hindered the completion of investigations … and casts doubt on the official historical record and allows for potential errors, and actions that are lost or incorrectly recorded.”

The Grand Jury also pointed out “there is no current policy detailing the reimbursement of expenses … and the lack of receipts is a standard policy for all organizations, especially those that use taxpayer dollars.”

When asked about the Board’s mission statement and vision, members agreed on the wording of its vision but disagreed on the wording of its mission statement. This situation warned the Supreme Court could “cause dysfunction and collapse,” and the Board would not “continue to make a change for its community.”

The report says, “If this could be done, ​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​

It continued, “It would have helped to ensure that basic requirements such as minutes of meetings are completed, funds are handled correctly, and that Board members agree on the project and their role in it.”

The report also states, “Public trust and confidence is essential to the Board’s ability to get the bond approved by the required two-thirds vote.”

The report now turns its attention to MCHCD’s financial position. According to the Grand Jury, “their financial problems are not due to a lack of money, but rather to the misuse of what they have.”

As a result of poor understanding of financial policies, the report found that the Board lost access to other accounts, lost track of income for a period of time, was years behind in audits of the year, and it does not have a clear financial statement.”

The Grand Jury said, “everyone… contribute[d] failing in one of their primary responsibilities, to be transparent to the public about how their tax dollars are being spent.”

The report lists evidence of this failure: District funds were deposited into improper non-interest-bearing accounts, potentially losing as much as $300,000 a year in interest; 25 accounts were charged quarterly fees that added up to thousands of dollars; and, a large portion of the District’s funds were not held in FDIC-backed accounts in the event of a bank failure.

In recognition of the Board’s recent work on these financial irregularities, the Grand Jury sees the 04/10/24 Board meeting and discussion of these matters as “a good start in the right direction.” It recommends that a qualified CFO come in for an audit every three to four months for the next few years.

In this regard, the report also pointed to the failure of Mendocino County to review the organization of the MCHCD Board, as legally required by the Government Reorganization Act of 2000. Since the change of Adventist Health, the Board has changed different organization.

Subsequently, the Supreme Judicial Council noted the lack of a Service Plan, which is necessary since the MCHCD Board is a “building block of the hospital.” The report recommended finalizing and adopting this plan prior to the Board’s upcoming hiring discussions with Adventist Health.

Finally, the report spoke of the need for public education to “understand[ing] the role and responsibility of MCHCD since its affiliation with Adventist. The Grand Jury urged the Board to demonstrate prompt communication to the public for comments and feedback. They encouraged the Board to establish a Public Advisory Committee as a sounding board for the actions of the Board.

In total, the Grand Jury identified 20 findings and made 18 recommendations in its report. The MCHCD Board and the County Fair Trade Commission (LAFCo) are requested a period of 90 days to file their responses to this report with the Honorable Ann Moorman of the Mendocino Superior Court, Mendocino County Counsel’s Office , and Mendocino County Civil Grand. Jury.

To see the full Grand Jury report, go to mendocinocounty.gov/government/grand-jury and click on “Current Grand Jury Reports.” In that new window, click on “MCHCD, Sick but Recovering.”

Editor’s note: Mary Benjamin is an employee partner at Mendocino Coast Adventist Health. The MCHCD board does not oversee Adventist Health hospital staff.

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