Hospital deficit at $6.1M, records show

The Commonwealth Healthcare Corp. posted a deficit of $6.142 million in fiscal year 2013, based on records obtained by the Saipan Tribune.

The records show that the corporation earned a total of $30.4 million last fiscal year, while its operating expenses reached $37.9 million—an operating loss of $7.4 million.

Because CHCC also registered an additional $1.087 million in non-operating income, this lowered the deficit to $6.399 million, less the $256,704 net assets recorded in the beginning of fiscal year 2013.

Based on records, the corporation’s financial performance last fiscal year is far different than what was recorded in fiscal year 2012, when the agency posted a $256,704 surplus that was used as the beginning net asset for fiscal year 2013.

Of the $30.4 million revenue posted last fiscal year, $28.6 million was generated from hospital services while $1.8 million was from “other revenue.” An additional $5,500 was generated as “contributions.”

For its $37.9 million operating expenses, the highest expenditures were personnel wages and salaries, $16.6 million; employee benefits, $4.5 million; professional services, $913,500; recruitment/repatriation, $248,823; back wages, $83,615; communications, $171,652; travel, $177,446; repair and maintenance, $674,550; utilities, $5.7 million; cleaning services, $545,975; other services/penalty charges, $240,023; medical general supplies, $3.3 million; medical lab supplies, $1.062 million; pharmaceutical supplies, $1.4 million; office and operations supplies, $236,681; machinery tools and equipment, $1.2 million; fuel and lubricants, $129,106; and food items, $169,775; among other items.

Other operating expenses included advertising, $12,190; official representation, $16,405; board and other compensation, $420; dues and subscription, $22,365; printing and photocopying, $85,795; licenses and fees, $47,967; rental, $10,247; freight and handling, $65,623; computer system and equipment, $17,377; and office equipment, $1,488.

Comparison to FY 2012

A few items under the fiscal year 2013 financial statements indicated significant changes: personnel wages and salaries were slightly up from $15.8 million to $16.6 million.

Professional service expenses last fiscal year also increase from $469,594 in fiscal year 2012 to $913,556 in fiscal year 2013. Repair and maintenance costs also increased from $360,675 in 2012 to $674,550 in 2013.

Utilities expenses jumped from $4.9 million in 2012 to $5.7 million last fiscal year.

Supplies cost also jumped, from just $1.6 million for medical general supplies in 2012 to $3.3 million last fiscal year. Medical lab supplies were also up from $499,939 in 2012 to $1.062 million in 2013.

Still based on records, the corporation posted total operating revenues of $29.6 million in fiscal year 2012, of which $28.2 million came from hospital services, $1.3 million from “other revenues,” and $18,000 from “contributions.” The corporation also generated $3.6 million in non-operating income. Its operating expenses totaled $33.050 million, while surplus for the year reached $256,704.

Serious concern

Corporation board chair Joaquin Torres described the organization’s financial performance in fiscal year 2013 as “a serious concern.” He said he feels disappointed after reviewing the financial data.

This, he said, is one reason why the corporation needs to fill the long-vacated post of chief financial officer to bring in an expert who would manage the agency’s finances. Torres wants a CFO named within a month or two.

“A CFO will play an important role in the organization. We’ve been having problems with our financial system for so long…and we need to address that,” Torres told Saipan Tribune yesterday.

He also hinted at the possibility of “outsourcing” the corporation’s financial system to ensure that jobs are performed as expected.

Whether that will be pursued or not when a permanent CFO is appointed remains unknown at this time, according to Torres.

The board is expected to tackle the corporation’s financial standing at its next meeting.