Jefferson Parish President Mike Yenni is having his staff “scrutinize the negotiations and valuations that led to the lease” of the parish-owned West Jefferson Medical Center, a deal that relied on fiscal information that now appears to have been badly off target.
At a news conference Monday, Yenni said a team of top members of his administration will try to determine whether the parish got what is “properly due” from the lease of West Jefferson to LCMC Health. The deal closed last year.
Yenni’s announcement came a few days after the Parish Council decided to hire a forensic auditing firm to review the hospital’s accounting.
Late last month, a parish consultant warned that previous financial statements had understated some of the financial obligations that would remain parish responsibilities under the lease deal, including insurance and pension liabilities. The error could mean as much as $28 million in extra expenses for the parish.
Yenni, who took office in January, after the lease deal had closed, said he will issue monthly reports to the public on his team’s scrutiny of the deal, which handed over management of the financially ailing hospital to LCMC for at least 45 years in return for about a half-billion dollars in rent and building improvements.
“The mistakes, miscalculations and missteps are unacceptable, and they are unsatisfactory to my way of protecting the public trust,” Yenni said. “Only through exhaustive prying and probing will I be able to report accurately to the public what has transpired and what shall be done.”
The officials Yenni has assigned to look into the deal are Parish Attorney Michael Power, Finance Director Timothy Palmatier, Risk Management Director Bill Fortenberry, Chief Operating Officer Keith Conley, Deputy Chief Operating Officer Natalie Newton and Assistant Parish Attorney Jacques Molaison.
One key aspect of the investigation will be finding out where the inaccurate financial data came from.
“Our question is, ‘Who provided those numbers?’ ” Conley said. “This is designed to get to the bottom of that.”
Molaison said LCMC has indicated it supports the administration’s probe.
“They have acknowledged this is the beginning of a 45-year relationship, and they want accurate figures as well,” Molaison said.
Parish Councilman Chris Roberts, who was the council chairman when the lease deal closed, said he supports the investigation as well.
“Any set of eyes to review and bring about scrutiny for the benefit of the public can only be a plus,” Roberts said.
Yenni as well as Councilmen Paul Johnston and Ben Zahn — who co-sponsored the measure seeking a forensic audit of the hospital’s books — credited parish consultant Joshua Nemzoff for making the parish aware of the problematic numbers shortly after he was rehired last month.
Nemzoff, a hospital mergers and acquisitions expert based in Pennsylvania, advised the parish until the lease agreement was closed in September. The council gave him a new contract last month to help with implementing the next phase of the agreement.
Before the lease closed, the officials managing West Jefferson defended the hospital’s bookkeeping, saying it is routine for financial figures to be adjusted once they’re audited.
The parish has said it is too early to tell what consequences the forensic audit and the Yenni administration’s review might have. But they have not ruled out changing who audits the hospital’s books or eventually calling for an investigation by a law enforcement agency.
Additionally, officials Monday renewed their commitment to landing a similar lease deal for the publicly owned East Jefferson General Hospital in Metairie, which also has experienced financial hardships but remains under parish control.