Approval of a proposed merger of the local hospital with Greenville-based University Health Systems of Eastern Carolina is at least a month away, the Beaufort Regional Health System Board of Commissioners was told Tuesday.

That approval will depend, for the most part, on an audit of BRHS finances č scheduled to be presented to the BRHS board Tuesday and the Beaufort County Board of Commissioners on March 10 č the BRHS board was told.

The BRHS board has recommended to the county commissioners a 30-year lease of the local health system by UHS for $30 million with the option to buy the property for an additional $10 million at the end of that lease.

Included in that offer is the commitment by UHS to a minimum of $21 million in capital expenditures in the first five years of the lease, including conversion of the information system with electronic medical records, emergency department expansion and renovation, renovation of patient rooms, expansion or renovation of the Marion L. Shepard Cancer Center and annual normal capital expenditures.

It also stipulates that, working with the local hospital and affiliated doctors’ practices, UHS will develop a strategic and financial plan in the first six months of the lease.

Ultimately, the county commissioners will decide whether to accept, amend or reject the BRHS board’s recommendation.

The final offer by UHS will depend on the results of a review by UHS of the finance records and operations at BRHS č a process known as “due diligence” č that is scheduled to be completed in about two weeks.

“The offer is contingent on their due diligence,” Joseph Kahn, a lawyer for the BRHS board, said.

That final UHS offer also will depend on the results of the annual audit of BRHS finances for the 2009-2010 fiscal year, the board was told.

The audit has taken longer than originally planned, in part, because of the resignations last year of BRHS Chief Executive Officer Bill Bedsole and Chief Finance Officer Chris Riggs, according to Steve Stang, auditor with LarsonAllen of Charlotte.

“The institutional knowledge left with them,” Stang told the board. “Nothing has been taken for granted as correct because of that.”

If the audit uncovers significant changes in BRHS’s financial picture, that could lead UHS to revise its offer, BRHS Board Vice Chairwoman Brenda Peacock told the board.

Peacock presided at the meeting in the absence of Chairwoman Alice Mills Sadler.

Despite the delay in the audit, a first draft of documents for the transfer of management of BRHS to UHS is expected to be completed by UHS lawyers in about a week and sent to BRHS and Beaufort County lawyers for their review.

The two health systems and county leaders have set April 1 as the tentative target date for approval of the agreement.

In other business, the board:

ź Unanimously approved a policy for managing conflicts among and between hospital leaders, medical staff, employees, volunteers, patients and visitors. The policy was first drafted in July 2009, but it was not presented to the board for approval. The policy was presented to the board in response to a recommendation by The Joint Commission following a January 2011 accreditation review of BRHS, the board was told. The new policy includes informal and formal conflict management procedures.

ź Delayed action on a policy concerning substance abuse by employees, volunteers or others associated with BRHS in an official capacity. Among the rules outlined in a draft of the policy is a provision that any employee who tests positive for an illegal substance, on or off premises, or on or off duty, will be subject to disciplinary action. A draft of the policy also stipulates that any employee who consumes alcohol to the point of mental and/or physical impairment at or above the legal limit of .08 would be subject to disciplinary action. The board asked its Quality/Improvement Committee to reconsider the policy and ask a lawyer to review it.

ź Delayed action on a personal behavior code of conduct policy for employees, volunteers or others associated with BRHS in an official capacity. It stipulates that actions that are considered illegal or unlawful by anyone covered by the policy will be grounds for disciplinary action and that all employees charged with criminal action notify BRHS officials before returning to work. The board unanimously voted to have its Quality/Improvement Committee to reconsider the policy and ask a lawyer to review it before resubmitting it for consideration at the next meeting.

In addition to Sadler, board members absent from the meeting included Clifton Gray and Allen Roberson.