The Beaufort County Board of Commissioners on Thursday evening heard a report on the audit of Beaufort Regional Health System for the 2009-2010 fiscal year that painted the same dire picture of the local health system presented to its board earlier in the week.

One commissioner said that audit should have little effect on the value of BRHS and the offer before the commissioners for a lease/purchase agreement by University Health Systems of Eastern Carolina.

“Regarding the question of value, there’s plenty of value in this so that UHS should not be concerned at all,” said Commissioner Hood Richardson, who also serves on the BRHS board.

The BRHS board asked the auditors to make a detailed review of BRHS finances to “clean up the serious problems that have been on the books for some time” at the local health system.

“If everything goes the way we hope things will go, this will be the last audit,” Richardon said.

The audit of BRHS and its affiliates was presented by Steve Stang, an accountant with LarsonAllenLLP of Charlotte.

The commissioners heard Stang’s report following a 15-minute closed-door session with the county’s lawyers about the specifics in a draft of the agreement from UHS now before the BRHS board and the county commissioners.

The county commissioners are considering a recommendation from the BRHS board to accept an offer from UHS for a 30-year lease of the local health system for $30 million with the option to buy the property for an additional $10 million at the end of that lease.

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

BRHS recorded an $11.2 million loss in the 2009-2010 fiscal year as compared to a $2.3 million loss in the 2008-2009 fiscal year, according to the audit. A part of that loss resulted from a $4.1 million adjustment in accounts receivable, the commissioners were told.

The audit uncovered two “material weaknesses,” two “significant deficiencies” and three matters of concern in internal controls in BRHS’s operations.

Stang’s report to the commissioners included one change from his report to the BRHS board.

In information presented to the BRHS board, the report indicated that BRHS management does not receive financial information from the Shepard Center Foundation “on a timely basis to enable proper interim financial reporting.”

The revised report instead cites BRHS management as not requesting financial information from the foundation throughout the year “to enable proper interim financial reporting” and recommends “a more formal communication channel be developed” with the foundation.

In other business, the board:

• Voted unanimously to approve an application for an $87,136 grant for a Criminal Justice Partnership Program that would provide substance-abuse treatment or referrals for criminal offenders with substance-abuse or dependence issues. The commissioners also unanimously voted to appoint 13 people to the county’s Criminal Justice Partnership Board of Directors.
• Heard a presentation and request for funds from George Schreyer and Scotty Taylor on Veterans Memorial Park, located on East Third Street in Washington. Park supporters plan to build a wall topped by an eagle that would identify the park with 24-inch black letters. The project has an estimated cost of $37,000, the commissioners were told. Park supporters are requesting a $10,000 appropriation each in the 2011-2012 budgets of the City of Washington and Beaufort County, and they hope to raise the remaining $17,000 from private sources.
• Voted 5-2 to approve a request from Jason Briley to extend an N.C. Department of Transportation permit he obtained in October 2008 to construct a billboard along U.S. Highway 17 north of Washington for the Northgate development. The county’s Planning Board did not approve the request and referred Briley to the commissioners. Richardson, who had done survey work for the project, said Briley had been “caught in a regulatory trap” because the commissioners approved the county’s ordinance regulating billboards after Briley received his permit. Board Chairman Jerry Langley and Commissioner Ed Booth voted against the request.

“We’ve got to stop doing this for people we do work for,” Booth said. “We always break the rules for special interests.”

• Heard a report on the activities of the Mid-East Commission during the 2009-2010 fiscal year from Tim Ware, executive director. The commission’s programs served 29,171 participants from Beaufort County during the year, Ware told the commissioners including 28.863 through the Area Agency on Aging and 309 through work force development programs. The commission also obtained some $6.2 million in grants for projects in Beaufort County. The county pays $12,050 in dues each year to the commission, according to the report.
• Held a public hearing on the closure of a Community Development Block Grant in the amount of $75,000 for training on community development and housing construction practices. The public hearing drew no speakers.

Richardson left the meeting and the board approved the following with 6-0 votes:

• Held a public hearing on an application by Beaufort County to the Local Government Commission for interim financing in the amount of $4.4 million in order for the county to proceed with the construction of a new Allied Health Building at Beaufort County Community College. The interim financing will cover the costs associated with the project until it is completed, at which time, the county will obtain a loan from the U.S. Department of Agriculture. The project has a total estimated cost of $7.6 million with $3.2 million funded by grants and the remaining $4.4 million funded by the USDA loan. There were no speakers at the hearing. Following the hearing, the commissioners voted to approve the interim financing application.
• A request from the Beaufort County Schools for payment of the third quarter capital outlay draw down of some $375,000 for construction projects that have been completed or are underway.
• $18,174.01 in travel expenses.
• Budget amendments for the Department of Social Services, Health Department, Emergency Management and the E911 fund that required no increase in county funds.

All commissioners attended the meeting.