Back in July of 2017, two engineers evaluated compromised sewer lines at the St. Croix hospital. Both said the lines needed to be replaced or at least repaired. The acting CEO sent a report to the governor about the problem and started the process to put out a request for bids on the work. In September, Hurricane Maria severely damaged the hospital. In October, the CEO was terminated.
Meanwhile, on an emergency basis, the hospital hired a contractor who charged a base price of $23,650 a week to pump out and vacuum the lines — frequently more for additional service.
Over the next three years, the “emergency” service cost the hospital more than $1.3 million.
In 2020 the hospital hired a worker who began repairs in December and completed them in February 2021. The repairs cost $2,216.
The hospital now pays an average of $600 a week for keeping the lines clear.
And the 2017 report by the engineers? The former CEO’s effort to follow their advice?
“We found that the current Hospital Officials did not know about this report,” is how an audit report released this week puts it.
The situation is just one of many outlined in a Virgin Islands Inspector General’s audit that describes the Juan F. Luis Hospital as an institution hampered by frequent management turnover, lack of communication within its administration, and repeated disregard for regulations meant as safeguards against misspending.
The audit covers roughly fiscal year 2017 to fiscal year 2019, with a few references shortly before or after that time frame.
The report also chronicles some situations that may be partially the result of bad luck and partially the result of bad decisions.
For instance, a hospital assistance group out of New Jersey and North Carolina determined to loan JFL some trailers to use as temporary operating space after the hurricane laid waste to the hospital. The trailers arrived on island in April 2018. They were to be returned in August 2019.
But they weren’t actually ready for use. Structurally, they didn’t meet Medicare/Medicaid or other medical standards. In July, the hospital contracted for them to be brought up to standard. Much of the materials required had to be shipped into St. Croix which added to delays. About the time the trailers were ready for use, it was time to return them.
“The hospital expended $1.4 million on temporary operating room trailers that were never utilized,” the report states. It suggests the hospital officials might have anticipated the situation and faults them for not contracting the renovation work sooner and for not asking for an extension of the time the trailers were on loan.
Meanwhile, hospital officials were also busy with plans for a modular facility, the so-called JFL North. The contract for that was completed in 2018 and the completion date was set as December 2019.
The current completion date is the end of 2022.
The auditor blames the delay in large part on the decision to break out the contract for the structure itself from all the equipment and interior facilities.
‘The Hospital’s prior management decision to exclude the purchase and installation of furniture, fixtures, and equipment (FFE), a Radiology Department, and utilities such as Med-gas, sewer lines, and fire pumps from the initial RFP has delayed the JFL North’s opening by over two years,” the report states.
The auditors agreed with the contractor that he was hamstrung, not knowing what was to go where, and having to guess at installing walls, openings, ceilings, electrical and plumbing interface and other items.
The St. Croix District Hospital Board requested the audit. Its stated objective was to determine if hospital officials solicited, awarded and monitored contracts in accordance with board policies as well as with applicable laws and regulations.
The audit describes many instances in which they did not.
In several cases, officials tried to get around a law requiring bids for services costing more than $25,000 by dividing up payments. A vendor providing plumbing service was paid $58,590 in three monthly payments of $19,530 each. A vendor providing trash removal, got two payments over five months, totaling nearly $60,000.
The board instituted a policy that required board approval of contracts with vendors for more than $100,000. Auditors found at least five vendors who were paid that much, without any indication that the board had approved their contracts.
In one egregious case, the auditors found a contract for professional services “to assist the Hospital in replacing its HVAC system, roofing, electrical and other repairs. However, two amendments were made to the contract. The Board’s ]Chairperson signed the first amendment on February 14, 2018, with an amended cost ‘not to exceed $497,000;’ however, the contractor’s signature was not on this document. Nine days later, on February 23, 2018, the contract was again amended for a price “not to exceed $537,000.” This amendment was signed by a representative of the contractor and included a signature that appeared to be the Chairperson of the Board.”
However, “our further inquiry found that the signature on the document was found not (to be) that of the Chairperson,” the report states.
The turnover that JFL has experienced in recent years has exacerbated challenges. From 2015 to 2019, the hospital has had five different chief executive officers, three different chief financial officers, and three different chief legal counsels. At the same time, the audit states, it has been understaffed at the middle management level.
The board, in fact, is currently unable to muster a quorum. It has nine members by statute, but only four in reality.
The frequent changes in management were coupled with neglect in sharing information. For instance, the auditors found that various management personnel used computer software not readily available to their successors. Information on some vendors was stored in old programs.
In its response to the audit, the board disputed some findings; for instance, it said that the decision to separate the work on JFL North was necessary because the hospital was still assessing its equipment needs, and it could save money if the contracts were separated. But in the main, the board accepted most findings and has begun implementing changes in an attempt to tighten controls.