Hillcrest Nursing Home auditor: Monitoring cash flow critical

McCOOK, Nebraska -- Hillcrest Nursing Home Board of Trustees were told to keep an eye on cash flow and operations for the upcoming year, citing more than $3 million in long-term debt.

Doug Kucera, CPA, of Schroeder and Schreiner PC accounting firm in Grand Island, told the board Tuesday at its regular meeting that "receivables are in bad shape" and that it's critical that it is monitored monthly.

"If we're not generating revenue....it's hard to meet debt reserve," he said, recommending a reserve of $400,000 that will be used to make debt payments.

"Bottom line, it was not that good of a year," he said, but "we have to concentrate on what we can do." He advised to concentrate that payments due, such as Medicare and Medicaid reimbursements and private insurance, are paid on time and to keep an eye on operations and cash flow.

Long-term debt of the facility, according to the audit report, is $3.150 million, with $140,000 of general obligation refunding bonds (issued to fund an assisted living facticity) and $2,165,000 of bonds to fund a renovation project that was completed in 2012. In addition, the Red Willow County loaned the facility $1 million to help fund renovation projects and for working capital.

Revenues this year compared to 2012 show a total of $6,910,572 for 2013 ($6,859,118 in 2012) with total expenses at $7,303,518 for 2013 ($6,577,109 in 2012.) As of June 2013, net position of Hillcrest was $329,946 in the red.

The report did not seem as a surprise to the board, with board member Randy Dean commenting that "We have work to do." The new financial software will be able pinpoint funds more accurately, he said, which Nappa agreed. She added that the new business manager has been digging into accounts from a few years prior up to the present, to ferret out details of each account.

After the meeting, Nappa said staff is doing everything to be financially conservative within reason, including reviewing contracts, training department managers in budgets, monitoring overtime and decreasing pool labor.

"If you take care of the pennies, the dollars take care of themselves," she said.

In other business, the board learned:

* since the Veteran's Administration approved Hillcrest for benefits, one resident who meets the criteria is receiving care. Nappa clarified that Hillcrest does not determine who gets benefits but that families and individuals should contact the VA to find if they qualify.

* financial report: total cash flow through Nov. 30 is $129,270.93. Bills that are due for payment by the end of the month, including payroll, comes to $402,710.81. Cash estimated to be received, from Medicaid, Medicare and private insurance payments, is $531,981.74. Total cash on hand is $404,857.96