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Central Health operating revenues, expenses down

Monday, January 25, 2021 by Ramon Rodriguez

Over the past fiscal year, Central Health’s operating revenues – consisting of lease revenues from the Central Health Downtown Campus and the Dell Seton Medical Center at the University of Texas – have dropped by 10 percent. Meanwhile, its nonoperating revenues, which are obtained mostly through property taxes, rose by about an equal percentage.

Those were some of the preliminary findings in an audit of the public health care district’s operating statements and balance sheet. The audit, conducted remotely by the accounting firm Maxwell Locke & Ritter, found operations to be in accordance with government auditing standards and was presented to Central Health’s Budget and Finance Committee in a public teleconference last Wednesday evening.

The presentation took the form of a slideshow as the actual report was not available to the public or the news media. Spokesperson Mike McKinnon said in an email that the report “will become publicly available after the full Board of Managers accepts it at next Wednesday’s meeting.”

Operating revenues were at $11.9 million, down from $13.2 million last year, while nonoperating revenues were $219.7 million for the fiscal year that ended Sept. 30, 2020. Total operating expenses were $150.8 million, down from $183.6 million. These expenses consist of health care delivery, salaries and benefits, depreciation, and other goods and services.

Central Health, or the Travis County Healthcare District, is a public health authority legally separate from Travis County. It is charged with providing medical and hospital care to low-income and uninsured Travis County residents. It has been a critical resource during the pandemic – a circumstance that complicated the auditing process as well.

“This year we did the full audit remotely, which is new for us,” said Jimmy Rommel, a CPA with Maxwell Locke & Ritter. “Normally we’re on-site for at least two to three weeks during the audit process so it definitely brought some additional challenges as far as getting everything wrapped up.”

Rommel went over the highlights of the audit’s findings, which included a 25 percent increase in net position, which is currently $397.9 million. Defined in Central Health’s Fiscal Year 2019 audit, net position “represents the difference between assets, or Central Health’s investment in resources, and liabilities, or Central Health’s obligation to its creditors.” A positive change in net position signals improved financial health.

The major force behind the change was an 18 percent decrease in operating expenses, due to fewer fund transfers to other governmental entities and a 20 percent reduction in health care delivery expenses. In addition, there were no membership payments to the Community Care Collaborative, a partnership between Central Health and Seton Healthcare Family that was terminated last fiscal year.

Central Health also saved $600,000 by paying off high-interest bonds with lower-interest bonds, a practice known as bond refunding. Central Health goes into the fiscal year with an outstanding debt of $7.3 million, $1.2 million of which is due in 2021.

Other highlights included a 23 percent increase in total assets and a 12 percent decrease in total liabilities.

The full report will be publicly available upon its acceptance at the board meeting this Wednesday. The next Budget and Finance Committee meeting is scheduled for Feb. 17, location depending on the governor’s disaster declaration.

This article has been changed since publication to correct a typo.

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