Modoc County Grand Jury

FY 2004/ 05 Report

Scanned from the Modoc Record

and converted to Microsoft Word format.

Pagination and formatting changed to 8.5” by 11”.

Hyperlinks added for Table of Contents.

Last modified 10/ 22/ 2005 11: 53: 06 AM gts.

June 15,2005

FY 2004/ 2005 Grand Jury Report 2

Table of Contents

INTRODUCTION

Functions of the Grand Jury........................................................................................................ 3

Judge’s Letter ............................................................................................................................. 4

Acknowledgements............................................................................................................... ..... 4

Foreperson's Letter ..................................................................................................................... 5

2004- 2005 Grand Jury Roster ..................................................................................................... 5

Notice to Respondents ................................................................................................................ 6

GRAND JURY REPORTS

Note: Responses are required from the officials and entities ( Respondents)

that are shown in italics at the end of individual reports.

SPECIAL DISTRICT/ AUDITS

Annual Audits of Special Districts................................................................................... 7

Hot Springs Valley Irrigations......................................................................................... 8

Alturas Rural Fire Protection District .............................................................................. 8

LAW ENFORCEMENT

Required Annual Inspection of Devil's Garden Conservation Camp ................................ 9

Required Annual Inspection of Modoc County Jail.......................................................... 9

9 1 1 System.................................................................................................................. 10

SCHOOLS

Modoc County Office of Education............................................................................... 11

HOSPITAL

Modoc Medical Center.................................................................................................. 12

FY 2004/ 2005 Grand Jury Report 3

Functions of the Grand Jury

The Grand Jury is part of the judicial branch of the government, mandated by the California

Constitution, and an arm of the Superior Court. The primary function of the Grand Jury is to examine

local government. The Penal Code states the Grand Jury is specifically:

Mandated to conduct civil investigations and audits of City and County Government, to insure efficient

and proper operation of all local government And to detect and expose fraud and malfeasance.

The Grand Jury addresses citizen complaints and conducts investigations to act as a " watchdog the

citizens of Modoc County.

The Grand Jury reviews and evaluates performance of local government officials and entities, focusing

on procedures, methods and systems ( not polices), to determine if more efficient and economical

measures might be employed and if procedures are being followed. The Grand Jury three ways to

exercise its powers:

1. Reports - Published report evaluating local government conditions, generally addressing

specific issues, with findings and recommendations. The County Board of Supervisors, City

Councilor affected agency must comment on each recommendation as per Penal( 933.05.

( When crimes are not charged but suspected, special reports with documentation may refer

to specific issues to other authority.)

2. Accusations - Formal written complaints accusing a government official or employee of

misconduct. ( Conviction would result in removal from office/ duties rather than criminal

penalties.)

3. Indictments - Formally charging a person with a crime.

The Grand Jury is specifically authorized to:

·   Inspect and audit local entity records, insuring proper and legal accountings of public record;

·   Investigate and report on performance of special districts or commissions.

·   Evaluate conditions of jails and detention centers within the county.

·   Investigate charges of misconduct by public officials or employees.

·   Investigate and report on " questionable practices" of such agencies or officials.

The Grand Jury also receives complaints from citizens alleging mistreatment by officials, suspicions of

misconduct, or government inefficiencies. While keeping all complaints confidential, each is

acknowledged and considered by the panel: those accepted under Grand Jury jurisdiction are

investigated carefully before any action is taken.

FY 2004/ 2005 Grand Jury Report 4

LARRY L. DIER

Superior Court Judge

FRANCIS W. BARCLAY

Superior Court Judge

MODOC COUNTY SUPERIOR

COURT

Robert A. Barclay Justice Center

205 South East Street Alturas, CA 96101

Phone ( 530) 233- 6526 Fax ( 530) 233- 6500

VICKI L. HUGEHES

Court Executive Office

July 1,2005

To: Grand Jury Members

Dear Ladies and Gentlemen:

As your service on the 2004- 2005 Modoc County Grand Jury comes to a conclusion, it is my pleasure and privilege to

express my appreciation and the appreciation of the Superior Court to all of you for your diligence, dedication and

hard work this year. Special appreciation and gratitude is owed to Hans Van Nes for his guidance and leadership as this

year's Foreperson and Jodi Frey for all of her work as this year's Secretary.

I realize it is not an easy task to serve as a Grand Juror and address the complex, varied and sometimes sensitive issues

that are presented to you. However, I am very impressed with to Were effort and commitment to quality demonstrated

by all of you and commend you on the job you have done and the report you have prepared.

Thanks once again for a job well done and a special thanks to those of you that have gone beyond the call of duty by

serving a second term this year and to those of you that have agreed to serve a second term next year.

Sincerely,

Francis W. Barclay

Modoc County Superior Court Judge

Acknowledgements

The Grand Jury acknowledges Judge Barclay and Judge Dier for their counsel on matters both legal

and practical.

We express thanks to the Modoc Superior Court staff: Vicki Hughes and Linda Ostoja for help in

obtaining a computer and printer.

We also wish to thank all the individuals, County department heads and employees, and members of

the Modoc Medical Center Board of Trustees for their cooperation and assistance in our investigations.

Lastly, we thank the Modoc County Record for assisting in the distribution of this Grand jury Report to

concerned individuals throughout Modoc County.

Modoc County Grand Jury

2004- 2005

FY 2004/ 2005 Grand Jury Report 5

Modoc County Grand Jury

205 South East Street

Alturas, California 96 10 1

June 15, 2005

Modoc Medical Center has some difficult problems that need immediate attention and action if it is to

survive.

Sufficient money to properly run the system is a problem that becomes more serious with each passing

day. Elsewhere in this report, we identify chronic difficulties in billing and collecting monies due as a

major cause of this dilemma. Management shortcomings are also a factor in this regard.

Services must be provided around the clock ( 24/ 7), an expensive proposition under the best conditions.

A few years ago, most nursing staff could be recruited locally, but the current situation at Modoc

Medical Center makes that option a lot less likely. Accordingly, " Registry" staff brought in from other

areas is much more expensive, aggravating an already serious financial burden.

Yet, there is a real need for the medical and long- term care services to be continued for our

community. We simply must all pull together to make this institution run properly.

The 2004- 2005 Grand Jury hopes this report will assist decision- makers in attaining that goal.

Hans Van Nes

2004- 2005 Modoc County Grand Jury Roster

Thelma Barker, Alturas Chris Lauppe, Alturas

Doug Dollarhide, Davis Creek Gary McClellan, Alturas

Brock Elliott, Canby Linda Moore, Lookout

Janice Flynn, Alturas Virginia Pierce, Alturas

John Fogerty, Alturas Ike Richardson, Alturas

Jodi Frey, Alturas Carol Richert, Alturas

Mike Hickman, Tulelake Lynne Schluter, Alturas

Alan Hopkins, Alturas Yvonne Studinski, Alturas

Pauline Howard, Alturas Hans Van Nes, Alturas

Jerry Hoxsey, Alturas

FY 2004/ 2005 Grand Jury Report 6

Notice to Respondents

Response Requirements

On January 1, 1997, an extensive change in the legal requirements affecting respondents and responses

to the Grand Jury Findings and Recommendations took effect ( California Penal Code Section 933.05).

Each respondent identified in this report should become familiar with the law and, if in doubt, should

consult legal counsel before responding.

How to Respond to Findings

For the assistance of all respondents, California Penal Code Section 93 3.05 is summarized as follows:

' The Respondent ( person or entity) must respond to Findings in one of two ( 2) ways, stating that:

1. You agree with the Finding.

2. You disagree wholly or partially with the Finding; in which case, the response shall specify

the portions( s) of the Finding that is disputed, and shall include an explanation of the

reasons for the disagreement.

How to Report Action in Response to Recommendations

Recommendations by the Grand Jury require actions( s). The Respondent must identify actions( s) on all

recommendations in one of four ( 4) ways, stating that the recommendation:

1. Has been implemented, with a summary of implemented activities.

2. Has not yet been implemented, but will be implemented in the future, with activities and

time frames for implementation.

3. Requires further analysis or study. In such case, the law requires a detailed outline of the

analysis and time frame not to exceed six ( 6) months. Further, the complete analysis or

study must be submitted to the officer, director or governing board of the entity being

investigated.

4. Will not be implemented because it is either unwarranted or unreasonable with an

explanation( s) and supporting facts.

Timing of Responses and Actions to Findings and Recommendations:

As stated in Penal Code Section 933( c), for 45 days after me end of the term, the Grand Jury

foreperson or designees shall, upon reasonable notice, be available to clarify recommendations in the

report. No later than 90 days after the grand jury submits a final report on the operations of any public

agency, the governing body of any public agency subject to grand jury reviewing authority, shall

comment to the presiding judge of the superior court on findings and recommendations. Every elected

official or agency head for which the grand jury has responsibility shall comment within 60 days to the

judge of the superior court with a copy sent to the Board of Supervisors.

FY 2004/ 2005 Grand Jury Report 7

Grand Jury Reports:

SPECIAL DISTRICTS/ AUDITS

AREAS OF STUDY

·   Annual Audits of Special Districts

·   Hot Springs Valley Irrigation District- 2004- 2005 Grand Jury Follow- up

·   Alturas Rural Fire Protection District - Complaint Regarding Sale of Surplus Vehicle

Annual Audits of Special Districts

Issues: The Grand Jury investigated the problem Special Districts have had for years meeting the State

law requiring annual audits. The Grand Jury met with the Modoc County Auditor/ Recorder on this

issue.

Findings: In January 2005, Grand Jury members met with the Auditor/ Recorder concerning annual

audits for Special Districts. The Auditor/ Recorder indicated that this has been a problem for years and

that, although required, few audits are actually received from Special Districts in the County. The

Auditor/ Recorder stated that meeting the State requirements for an audit could be a heavy financial

burden for many of the districts in her opinion. She proposed that the Board of Supervisors ( BOS)

authorize the hiring of an assistant auditor. The addition of one assistant auditor would enable the

Auditor's Office to complete annual audits for all Special Districts that require one. The additional

auditor would also be able to assist in completing other backlogged workload demands within the

Auditor's Office.

Recommendations: The Grand Jury recommends that the BOS implement the recommendation of the

Auditor/ Recorder concerning the hiring of an assistant auditor, who would work part- time assisting the

Special Districts in meeting their State requirements for annual audits. In the opinion of the Grand

Jury, this change will bring these important County entities into compliance with state law and forestall

potential future problems in financial transactions. Although this would add another County employee

position, it would eliminate financial burdens of individual Special Districts in meeting the audit

requirement. Many districts operate on shoestring budgets and rely on dedicated volunteers to perform

the functions of their districts. In addition, the Grand Jury recommends that the BOS establish a policy

to inform Special Districts of their responsibilities under State law. With limited exceptions, these

responsibilities include filing an annual audit with the Auditor's Office; filing an annual conflict of

interest code with the County Clerk; and filing Form 700 Statement of Economic Interests, by each

board member of a Special District, with the County Clerk. The individual Supervisors should

follow- up with the districts in their areas throughout the year to make sure these requirements are

being met. The Grand Jury recommends that the 2005- 2006 Grand Jury follow- up on these

recommendations to assist Special Districts in complying with State law concerning annual audits.

Respondent: Board of Supervisors

FY 2004/ 2005 Grand Jury Report 8

Hot Springs Valley Irrigation District ( HSVID)

Issues: The 2003- 2004 Grand Jury recommended that the current Grand Jury follow- up on its findings

to determine if: ( 1) the HSVID obtained a required annual audit and has filed a copy of the audit with

the State Controller and the Modoc County Auditor and ( 2) each current HSVID board member had

completed and filed Form 700- Statement of Economic Interests with the County Clerk; and ( 3) the

HSVID had met the State requirements for having a conflict of interest code on file with the County.

Findings: Grand Jury members met with two board members of the HSVID in January 2005 to discuss

the follow- up recommended by the prior Grand Jury. The Grand Jury members were informed that

HSVID had not obtained or attempted to obtain an annual audit. The board members were again

informed that Form 700- Statement of Economic Interests is to be filed annually and had not been filed

by members of HSVID and that assistance with filing Form 700 could be obtained from the County

Clerk. The board members were reminded that a conflict of interest code was not on file with the

County Clerk and that assistance with filing the code could be obtained from the County Clerk. The

board members informed the Grand Jury that they were aware of the filing requirements. The board

members said that they felt the cost of an annual audit would be prohibitive to small Special Districts,

such as HSVID. A follow- up in June 2005 revealed that: All three board members of the HSVID had

filed Form 700 as required; the HSVID had not filed a conflict of interest code as required; and the

HSVID had not submitted an annual audit as required. The Grand Jury notes that these violations have

gone on for several years with the HSVID and have been noted annually by previous Grand Juries.

Recommendations: The Grand Jury realizes that the cost of an annual audit may be a burden on

HSVID. However this district has ignored State law and Grand Jury requests, for at least the last 2

years, by not filing an audit. The Grand Jury recommends that HSVID file an annual audit beginning

with 2005. The Grand Jury recommends that the BOS implement the recommendation of the

Auditor/ Recorder concerning the hiring of an assistant auditor as mentioned elsewhere in this report. In

addition, the B OS should follow- up with this Special District to make sure the filing requirements for

an annual audit, Form 700, and a conflict of interest code are being met in the future. The Grand Jury

recommends that the 2005- 2006 Grand Jury follow- up with HSVID concerning these State law

requirements.

Actions: Due to the continuing lack of response by the HSVID relative to the filing of a conflict of

interest code and an annual audit, the Grand Jury is notifying the Fair Political Practices Commission

and the State Controllers Office of these omissions.

Respondents: Hot Springs Valley Irrigation District

Board of Supervisors

Alturas Rural Fire Protection District

Issues: A complaint was received by the Grand Jury alleging that a surplus vehicle of the Alturas Rural

Fire Protection District was sold without being offered through a surplus sale and that vehicle retianed

the County government license plates.

FY 2004/ 2005 Grand Jury Report 9

Findings: Grand Jury members contacted the fire chief. The sale of a surplus vehicle was in process,

but had not been completed. The vehicle was parked at a private residence and the license plates were

still in place. Final payment and transfer of ownership through the DMV had not occurred. The fire

chief had contacted other fire districts in the area concerning the surplus vehicle, but was not aware of

any government policy concerning surplus vehicle sales. Following contact with the Grand Jury, the

fire chief rescinded the sale and posted a notice of sealed bid in the Modoc County Record. The fire

chief reported that, following the bid closing, bids were opened, the high bidder made payment, and

title to the vehicle has been transferred from the Special District to the individual.

Recommendations: The Grand Jury recommends that the BOS provide procedures for the sale or

disposal of surplus property to all Special Districts in Modoc County.

Respondents: Board of Supervisors

LAW ENFORCEMENT

Areas of Study

Required Annual Inspection of Devil's Garden Conservation Camp

Required Annual Inspection of Modoc County Jail

911 System

Complaints received from Modoc County citizens

Devil's Garden Conservation Camp:

The camp has a 120 inmate capacity, with five 17- person crews. The inmates earn $ 1.45 to $ 3.25 per

day for labor on community projects and earn $ 1.00 per hour on fire and emergency assignments. Last

year the crews totaled 10,552 hours for community work and had 90,535 man hours on the fire lines in

the state. The camp also sponsors a bike- refurbishing project. Bikes are refurbished for under

privileged children. The bikes are distributed through TEACH. The camp operates on the barter system

when available rather than cash, because the State charges a 10% fee for administration. Donations for

the bike program may be made by contacting the camp.

Recommendations:

None

Respondents:

None

Modoc County Jail:

Members of the Grand Jury toured the jail. The capacity of the jail is 52 inmates. The jail averages 20

to 35 inmates.

Facilities offered to inmates include a library, recreation area and laundry room. Inmates are assigned

to do the cooking, laundry, etc. The jail seems to be running efficiently.

Recommendations:

None

FY 2004/ 2005 Grand Jury Report 10

911

The Sheriff's Department seems very diligent in applying for grant money and finding funds for

necessary County equipment. Funds from Homeland Security money were parceled out to the states.

California divided the funds by County. Modoc County has purchased a new 911 system with these

funds. This Radio over Internet Protocol is a computer aided dispatch system. It will be able to handle

multiple calls with ease. It also has a guidance system that will pinpoint exact locations of incoming

calls, including cell phones. The County is also implementing procedures for handling mass casualties

in the event of a catastrophe. The Grand Jury commends the Sheriff's Department for their efforts in

these regards.

Recommendations:

None

Respondents:

None

Issues:

Four separate complaints were received during the tenure of this Grand Jury,

• Misuse of gas card by a deputy sheriff.

• Improper hiring procedures by the Sheriff's Department.

• Misuse of County vehicles.

• Unlawful confiscation of firearms.

Findings:

·   Regarding the theft of gas by a deputy, the department turned the investigation over to the City

Police, as is policy. The individual has resigned and will be prosecuted. There are new procedures

in place to prevent misuse of County gas cards in the future.

·   On the hiring procedures, the Sheriff's Department gives tests locally for prospective hires, also

finds prospects in the California Job Journal ads and from State personnel service. A valid

California POST ( Peace Officer Standard Training) certificate is required for field officers, but not

for jailers. Probationary periods are in place: I year for new hires and 6 months on promotions.

·   Grand Jury members met with the Sheriff and Under Sheriff to clarify the use of County vehicles.

In the past, during inclement weather, the Sheriff's Department has lent four wheel drive vehicles

to County employees ( including members of BO S), who were traveling outside - the County for

meetings, training, etc. They no longer loan out their vehicles to BO S members or other county

employees. The members of the BOS each receive $ 200.00 a month for travel expenses.

·   The City Police Department followed proper procedures in the confiscation of the firearms. Prior to

this, the complainant had attempted to purchase a firearm locally and was " red flagged" by ATF

because of an incident in another state. Firearm registration is federally regulated. Proper

paperwork must be presented to fulfill regulations. The complaintant had not forwarded the proper

paperwork to ATF to clear the " red flag".

FY 2004/ 2005 Grand Jury Report 11

Recommendations:

None

Respondents:

None

SCHOOLS

Area of Study

Modoc County Office of Education

General Report:

Members of the Grand Jury interviewed the County Superintendent of Schools. Jurors discussed the

State of California budget cuts and various education programs offered in Modoc County.

Issues:

While there were no specific issues regarding Modoc County Office of Education, the Grand Jury had

received a complaint regarding the Modoc Joint Unified School District Board. This complaint was put

aside with the subsequent election of a new board.

Findings:

The Modoc Office of Education serves as an intermediate unit operating between the State Department

of Education and the school districts within the County. Jurors found the superintendent to be very

knowledgeable and informative.

The enrollment figures for the district as of October 2004 were:

1399 students in Modoc Joint Unified Schools ( including Modoc Charter School)

197 students in Surprise Valley Joint Unified Schools

565 students in Tulelake Basin Joint Unified Schools

161 students in Modoc Office of Education Schools

Enrollment has declined at Modoc County schools in recent years, which impacts the school districts'

budgets. The Superintendent noted that Modoc districts are in very good shape compared to other

districts.

Modoc Office of Education operates State preschool programs, Community Schools, Special

Education and Court Schools. The Superintendent looks to improve the pre- school programs

throughout the district and plans are underway to add Alternative Education programs in Surprise

Valley next year.

Recommendations:

None

Respondents:

None

FY 2004/ 2005 Grand Jury Report 12

HOSPITAL

AREA OF STUDY:

Modoc Medical Center ( MMC)

Background:

One complaint was referred from the 2003- 2004 Grand Jury to the 20042005 Grand Jury and five

separate complaints were received during the tenure of this Grand Jury.

Procedures:

The Grand Jury interviewed 41 people, of whom 11 were former employees, 13 current employees, 2

contract employees, 6 management employees, 1 doctor, 1 business owner and 6 members of the

MMC Board of Trustees.

The Grand Jury reviewed the Modoc County Code, Title 2, Administration and Personnel and the

9- 1- 04 through 8- 31- 05 Memorandum of Understanding between Modoc County and the United Public

Employees of California, Loca1 792, LUINA, AFL- CIO ( Medical Unit).

Detailed notes were written for all interviews. The Grand Jury analyzed these notes to identify issues.

Issues:

Board of Trustees:

·   Insufficient oversight to MMC by the Board of Trustees ( BOT) as an official body

·   Responsibilities for MMC by the Board of Supervisors ( BOS), Board of Trustees ( BOT) and the

CEO are unclear.

Personnel Management -

·   High rate of turnover of staff in Patient Care and Billing.

·   No exit interviews by management staff or BOT

·   Claims and lawsuits filed relating to stress, retaliation, and harassment.

·   Lack of performance evaluations.

·   Compromising employee confidentiality.

·   Intimidation by management, including threats of job loss

·   Inadequate staff training

·   Poor Union representation

·   Nepotism and cronyism

·   Improper dismissal of probationary employees.

Financial Management

·   No Chief Financial Officer

·   Account write- offs

·   Overall debt continues to increase.

·   Large amount of dollars in collectable accounts receivable.

·   Improper billing of insurance companies.

·   Refund policy

·   Slow billing process

·   Excessive use of Registry Nurses.

FY 2004/ 2005 Grand Jury Report 13

Records Management -

·   Improper document destruction

·   Documentation missing from patients charts and other files

·   Incomplete documentation on patients' charts and doctors' reports.

Patient Care –

·   Unrecorded incidents at Skilled Nursing Facility and hospital

·   Employees working outside their scope of certification.

Physical Plant -

·   Asbestos removal and disposal

·   Mold in the hospital buildings

Findings:

Board of Trustees:

·   During interviews with members of the B OT, several of the newest members said they were only

asked to vote on one issue ( a personnel matter involving a doctor) during the last 2 '/ 2 years.

·   Several BOT interviewees expressed the concern that they were not being kept informed on an

on- going basis. One interviewee indicated the information from management was too selective.

Accordingly, that interviewee reported the need to obtain accurate information elsewhere.

·   This BOT member also reported several situations that the full board did not learn about in a timely

manner.

·   The CEO goes directly to the BO S on financial matters.

·   When issues become controversial, the BOS often defers to the BOT. One time this year, when

doing so, the BOS stated personnel matters are the responsibility of the BOT.

Personnel Management:

·   High Turnover Rate- The turnover rate of employees at MMC is particularly high in Nursing and

Billing. An interviewee stated that, during one period of time, turnover in the Billing Department

was as high as 200%. Management and the BOT do not conduct exit interviews of departing

employees to find out why they are leaving MMC.

·   Low Morale- Most employees interviewed complained of low morale due to poor communication

( top to bottom), fear of management reprisal, lack of proper training, poor management skills, and

lack of confidentiality among employees and between Administration and employees.

·   Inadequate Performance Evaluations- 3 0% of employees interviewed have received no

performance evaluations; 20% have been evaluated only intermittently, which is a violation of the

Union Memorandum of Understanding ( MOU). The MOU specifies employees will be evaluated

after the first six months and annually thereafter. Most department heads, when asked, admitted

they were delinquent in performance evaluations

FY 2004/ 2005 Grand Jury Report 14

·   Autocratic Management Style- The current style of management results in low productivity, low

morale, stress, stress- related illnesses, fear of reprisal and high rate of employee turnover.

Interviewees reported that sometimes they were made to feel guilty for requesting leave in times of

family emergencies or other personal situations. Doctor orders for shift changes were met with

indifference.

·   Salary and Benefits - MMC's salaries and benefits packages are not consistent with the rest of

Modoc County employees. ( MMC employees receive lower salaries, fewer health benefits, and

fewer holidays.) Interviewees complained these circumstances contribute to low moral and high

employee turnover.

·   Nepotism and- cronyism - The definition of nepotism is " patronage bestowed or favoritism shown

on the basis of family relationship, as in business or politics". Cronyism is defined as " the practice

of favoring one's close friends, especially in political appointments". The perception of nepotism

and cronyism is a very real problem for employee morale at MMC. Despite management's

contention that they are in compliance with the County ordinance, employees interviewed

expressed concerns relating to these practices and favoritism.

·   Probationary employee dismissal - Issues were raised about probationary employee dismissals. Our

investigation found that management is in compliance with the MOU terms in this matter.

Financial Management:

Modoc County's independent auditor ( Carlos Soler, CPA) wrote in his notes regarding financial

statements for June 30, 2004 ( page 29)," The Modoc Medical Center incurred a net loss of $ 186,952

during the fiscal year ended June 30,2004, and as of the same date the Medical Center's current

liabilities exceeded its current assets by $ 2,791,548, and its total liabilities exceeded total assets by

$ 701,276. These and other factors create an uncertainty about the Medical Center's ability to continue

as a going concern."

Overall debt continues to increase despite ( 1) periodic out- sourcing of billing and debt collection and

( 2) the efforts of several consultants who analyzed procedures and systems and offered

recommendations for improvement. Thousands of dollars have been spent on these consultants, only to

have the recommendations ignored by management at MMC.

·   No Chief Financial Officer ( CFO) - MMC CFO position has been vacant for more than a year. The

last CFO had a history of turning rural hospitals into profitable enterprises. A portion of the former

CFO's public comments to the BOS follows: " I have been a CFO of rural hospitals and a regional

CFO for a group of rural hospitals for twelve plus years. I have successfully turned around losing

operations and made it a financially viable entity. I always had accounts receivable days under 60

days. I love challenges and came here with the grandeur vision of doing the same, but soon found

wealth of knowledge and expertise being despised." He appeared to be making significant progress

in Accounts Receivable at MMC until he was terminated.

·   Billing - Slowness in billing for services rendered and collecting monies owed MMC jeopardizes

its ability to operate in a stable fiscal manner. Account write- offs, untimely billing of insurance

companies, and non- aggressive pursuit of debts owed all contribute to MMC's precarious financial

FY 2004/ 2005 Grand Jury Report 15

condition. Computer and policy changes, high staff turnover, and inadequate training provided by

Management contribute greatly to this problem.

·   Write- offs - Based on information from interviewees, large amounts are written off for private pay

individuals. Two interviewees stated that, during a six month period, $ 300,000 to $ 400,000 were

written off. Several interviewees stated that the write- off policy is overused and arbitrarily applied.

·   Refunds - Refunds of over payments are only made upon request by

·   External Registry Staff Use- Staff employed from the external registry are paid $ 47 per hour. This

is more than two times the salary of the regular MMC staff nurses. In addition, Registry staff are

reimbursed for their meals and lodging. The extensive practice of using this service compounds the

financial problems at MMC.

Records:

·   Several interviewees indicated that initial incident reports that were submitted were missing prior

to the investigation of that incident. Incidents involving patient care or patient- to- patient incidents

are documented in patient charts. In one particular instance, the Certified Nurses Assistant ( CNA)

submitted a report of a fairly serious incident at the Skilled Nursing Facility. However, when the

State came to investigate, the report was missing from the resident's daily chart.

·   Employees documented improper practices, including out- of- scope nursing, on- the- job harassment

and unprofessional conduct, only to have these reports deleted before any action was taken by

management.

·   Certified Nursing Assistants, Licensed Vocational Nurses, and Registered Nurses reported that

they were instructed by supervisors to make patient chart entries after the fact- sometimes several

hours or days after an action had occurred ( e. g., vital signs, incidents).

Patient Care:

·   Several interviewees indicated that serious complaints had been lodged against several MMC

employees and that Management did not respond to the complaints; these employees are still

working at MMC. These complaints included one incident of an unnecessary manual fecal

extraction and an incident of a fall with injury to a patient that went unreported by the responsible

shift.

·   Nursing staff routinely work 12- hour shifts. Nursing staff members complain of having to work

back- to- back shifts due to staff shortages. Nurses expressed a fear of reprisal if they did not agree

to this back- to- back assignment. Improper scheduling of nurses affects patient care.

·   Interviewees reported observing employees working outside the scope of their certification on

numerous occasions. In one instance, a Modoc County Jail inmate, scheduled to work in the

laundry room, was found inserting a nasal canula ( oxygen) into a patient. There were numerous

reports to the Grand Jury of CNA's pulling IV's. A CNA was observed administering oxygen to an

emergency room patient without supervision.

FY 2004/ 2005 Grand Jury Report 16

Physical Plant:

·   Asbestos was reportedly removed from the radiology department during remodeling. The

interviewee also claimed asbestos fell from the ceiling of the boiler room. Three other interviewees

claimed white dust settled onto their desks during this remodeling project. If these reports are

accurate, serious health problems for patients and staff alike may develop. When questioned,

Management claimed there was no asbestos found in the radiology room.

·   Interviewees indicated that actively growing mold was covered up during repair of a wall in a

shower stall. Mold is also present in the attic spaces from improperly handled roof leaks.

RECOMMENDATIONS:

Modoc Medical Center Board of Trustees

·   The chairman of the BOT characterizes the Board as " advisory". The BOS created the BOT, but

needs to clarify the BOT's responsibilities.

·   The Grand Jury recommends the BOS either dissolve the BOT or give it full, written authority for

the management of the MMC.

·   The Grand Jury further recommends, if the BOS clarifies and strengthens the authority of the BOT,

some changes should be made to the BOT membership. Rotating chairmanship among the BOT

members, as is the policy of the BOS, would be appropriate.

·   The Grand Jury also recommends the BOS, with input from the community, determine which

medical services need to be provided for Modoc County; The BOS must also determine how to

assure the efficient delivery of the services chosen.

Personnel Management

·   Elsewhere in this report, the Grand Jury identified high turnover rate, low morale, inadequate

performance evaluations and autocratic management style as contributing factors to the problems at

MMC.

·   The Grand Jury concludes from our interviews and findings that management is deficient at MMC.

·   If the BOS elects to strengthen the authority of the BOT, the Grand Jury recommends the

following:

1. Immediately complete evaluations for top management personnel.

2. Actively recruit and hire a person to fill the vacant CFO position.

3. Conduct a full and independent personnel audit. Any recommendations for changes in positions

or reorganization by the auditors should be presented directly to the BOT.

FY 2004/ 2005 Grand Jury Report 17

·   The Grand Jury recommends the BOS treat MMC employees equitably with other County

employees.

·   With regards to nepotism, the Grand Jury recommends Modoc County personnel code should be

updated to comply with California State and Federal Government laws and codes.

Financial Management

·   The Grand Jury recommends a full, independent investigation be conducted by an outside auditor

that covers the last five years. The audit should include, but not be limited to: ( 1) the billing

process, ( 2) extensive write- offs and ( 3) the lack of proper training for the billing staff.

·   The overall authority, either the BOS or the BOT, should have in place, a written policy, with built

in checks and balances, regarding write- offs. The overall authority should approve write- offs at

scheduled meetings.

·   The Grand Jury recommends MMC management reduce reliance on outside " Registry" nursing

staff It is obvious that excessive use of this service is causing many of the financial problems at

MMC.

Accomplishing this recommendation will only be realized when the MMC management atmosphere is

again conducive to the local recruitment of regular staff.

Records Management

The Grand Jury concluded in its findings that incident reports are often missing and nursing staff are

encouraged or instructed to make entries into patient charts after the fact. This is unacceptable conduct.

The Grand Jury recommends these practices be corrected immediately by MMC.

Patient Care

The recommendations offered elsewhere in this report, if adopted, will improve patient care.

Physical Plant

The Grand Jury recommends proper procedures be followed in the future regarding any removal of

hazardous materials. We further recommend any mold problems in the hospital. be corrected.

Respondents:

Modoc County Board of Supervisors

Modoc Medical Center Board of Trustees