Beaufort Regional Health System is certified as a legal corporate entity by the N.C. secretary of state’s office, despite a recent report to the contrary on a local media website.

Using source material from the secretary of state’s website, the media site reported the state had suspended the cash-strapped BRHS’s corporate charter for failure to comply with requirements of the N.C. Department of Revenue.

The media website questioned whether BRHS had the legal standing to enter into a lease/purchase agreement with Greenville-based University Health Systems of Eastern Carolina.

It seemed a public filing on the secretary of state’s website gave rise to the rumor that BRHS had a questionable corporate status, and that this filing was incorrect č an error on the state’s part.

UHS has offered to lease BRHS for 30 years and $25 million with an option to buy the medical system at the end of the lease for $10 million “less the amount of any Excluded Liabilities paid by UHS on BRHS or its affiliates behalf,” according to an amended letter of intent from UHS released late last month.

The letter of intent shows UHS “will commit 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 record(s), emergency department expansion and renovation, renovation of patient rooms, expansion or renovation of the Marion L. Shepard Cancer Center (Cancer Center), and annual normal capital expenditures, including asbestos abatement and removal.”

Finally, “UHS will obtain insurance to cover prior unknown and unreported professional liabilities,” the letter reads. “BRHS will only be liable for the amount that claims exceed insurance coverage for such claims.”

The media website indicated BRHS might not be legally entitled to pursue the lease/purchase agreement because of doubts about the local health system’s corporate status.

Asked to comment on this issue, Pam Shadle, spokeswoman for BRHS, referred to the secretary of state’s website, where a notice had been posted showing the Department of Revenue had “notified this office that the above referenced corporation (BRHS) was certified for suspension in error.”

“Please be advised that the corporation has been reinstated,” the notice reads. “We have corrected the original notification from Revenue. On behalf of the State, we apologize for any inconvenience this error may have caused.”

Attempts to obtain comment from officials in the secretary of state’s Corporations Division weren’t immediately successful Tuesday.

A spokeswoman in the Department of Revenue’s public relations office was researching the issue Tuesday afternoon.

The media website’s article also reported BRHS failed to file appropriate nonprofit paperwork with the Internal Revenue Service, citing disagreement over whether BRHS is a nonprofit or an authority.

An official familiar with the matter said BRHS is a medical authority, not a nonprofit, and so likely would be excused from filing IRS 990 forms required of nonprofits.

The official declined to be quoted directly because of the sensitivity of BRHS negotiations with UHS.

Barbara Dunn, a spokeswoman for UHS, also declined to comment.

“We’re still in negotiations, technically,” Dunn said, adding UHS officials are held under a confidentiality agreement.

Asked about potential liabilities connected to BRHS, Paul Spruill, Beaufort County manager, pointed to the revised letter of intent, which lists certain possible liabilities.

The possible liabilities centered around taxes due, contracts, environmental health or safety obligations, employee grievances arising before the execution of a lease/purchase agreement and other factors that could arise, theoretically.

This appeared to be a standard list of liabilities, not setbacks positively identified by anyone in the “due-diligence” process UHS undertook to explore the feasibility of partnering with BRHS.

In response to a question, Spruill said BRHS is a separate government entity from Beaufort County government with a governing board separate from the county commissioners.

“The county is aware, as a result of a published letter of intent, that UHS and the authority foresee the potential for certain liabilities,” Spruill said. “Naturally, the county would be interested in better understanding the reality of how such liabilities may affect the authority or Beaufort County, if at all.”

Because the county owns the BRHS buildings, the county commissioners will have final say over any partnership linking BRHS and an outside entity.

“It’s my opinion that the new UHS offer came about primarily as a result of the accounts receivable write down and differences in the way the depreciation expressed the value of total assets,” Spruill said, recalling an audit of BRHS finances.

The audit revealed concerns about BRHS accounting practices, and showed the health system suffered a loss of $11.2 million in 2009-2010.