Clarinda Regional Health Center saw an increase in its net equity over the last year despite the challenges created by the COVID-19 pandemic.
Brian Green of the accounting firm Seim Johnson in Omaha, Nebraska, shared that news with the CRHC Board of Trustees during its meeting Sept. 28. Green attended the board meeting remotely and presented an overview of the annual audit report compiled for the hospital for Fiscal Year 2021.
“You should get a clean opinion for the regular audit as well as, we anticipate, from the compliance testing,” Green said.
During the review of the audit, Green said the hospital had $43.5 million in total cash and investments at the end of Fiscal Year 2021 compared to $34.8 million at the end of the prior fiscal year. That was an increase of $8.7 million.
Green said CRHC received $8.2 million in total CARES Act funding related to the COVID-19 pandemic. Clarinda received $3.2 million through the Paycheck Protection Program and $5 million in provider relief funds.
“Ultimately, the reporting stance on how you could use some of those funds was a roller coaster in and of itself. A year ago we didn’t know how we were going to be able to use those other than as capital. That completely went full circle, and now as the reporting portals open, the latest instructions are allowing hospitals and health systems to use a lot of different expenditures to fill those requirements. So, everyone should be able to keep those dollars in their communities and use them as they were originally intended by Congress,” Green said.
As a result, Green said the equity for the hospital increased from $5.9 million to more than $9.6 million during Fiscal Year 2021. That was an increase of $3.75 million. However, he reminded the board the receipt of CARES Act funding was only temporary.
“All of the hospitals we work with in the region are better now, after the pandemic, than they were going into the pandemic. That is all because of that tremendous amount of equiddity that was pumped into the organizations. So, again, remember that faucet will be shut off and you will be back to your old operations,” Green said.
CRHC is one of 1,350 Critical Access hospitals in the United States. In the state of Iowa, there are 82 Critical Access hospitals.
Green noted CRHC does not have the ability to levy property taxes to support its operation. Green said 43 hospitals in Iowa are able to levy taxes.
“From a Critical Access perspective, that ranges from $500,000 all the way up to $4.6 million on an annual basis,” Green said.
CRHC CEO Chuck Nordyke said Montgomery County Memorial Hospital in Red Oak, as an example, receives $1.9 million in property tax revenue.
As part of the audit report, Green also discussed the expansion and renovation project currently underway in Clarinda. Once completed, Green said he expected CRHC to enjoy a strong cash flow margin.