State To Audit Salinas Valley Hospital Over CEO’s Retirement Pay
On Wednesday, the state Joint Legislative Audit Committee approved plans for a comprehensive financial audit of Salinas Valley Memorial Hospital in the wake of recent media attention about the hospital's finances, the Monterey County Herald reports (Johnson, Monterey County Herald, 5/12).
The hospital audit comes after the Los Angeles Times reported that outgoing SVMH CEO Samuel Downing received $3.9 million in supplemental retirement payouts in addition to his $150,000 annual pension (AP/Sacramento Bee, 5/11).
Audit Details
Assembly member Luis Alejo (D-Watsonville) requested the six-month audit, which will be conducted by State Auditor Elaine Howle.
Alejo said the audit will examine "serious allegations" about SVMH's finances. He said the hospital has spent millions on consultants and excessive pay for executives while reducing its staff and possibly compromising patient care.
The audit is expected to cost about $244,000 and will investigate various aspects of SVMH's finances, including:
- Compensation practices;
- Expenditures;
- Revenue; and
- Staffing (Monterey County Herald, 5/12).
Hospital Response
At the legislative hearing, hospital officials defended their compensation practices and said that they welcomed the audit (Allen, Los Angeles Times, 5/12).
Jim Gattis, president of SVMH's board of directors, said a portion of Downing's compensation package was designed in the mid-1980s. He added that the retirement funds accumulated interest and were compounded over Downing's nearly 40-year career at SVMH (AP/Sacramento Bee, 5/11).
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