The McDonough District Hospital's Board of Directors Finance Committee met Wednesday, with Chief Finance Officer (CFO) Sherri Hitchcock presenting the final quarter financials for Fiscal Year 2026, as well as key FY26 key highlights.
To cover operating expenses, which exceeded revenue, $4.9 million was moved from the safety reserve fund in FY26, Hitchcock told the committee. The remaining balance in that account totals $3.5 million. Committee member Todd Lester asked about funding the safety reserve account; however, Hitchcock noted that at the present time the hospital has no means to do so.
According to the report, net operating revenues increased 6.2 percent over last fiscal year, with operating expenses increasing 10.5 percent from FY25 and net income decreasing by nearly 38 percent year-overyear.
'We are not collecting enough cash to fund operations and we've had to dip into other accounts,' Hitchcock added. 'We also are not performing where we should be in revenue collection.'
When asked by Committee Member Dr. Mary Kathleeen Lockard for a 30-second summary on the FY27 budget, Hitchcock replied, 'I am worried about cash flow, honestly.'
Numerous operational expenses were over budget including personnel and employee benefits, supplies and drugs, professional fees and utilities, with $95 million budgeted and $100.9 million expended. There were bright spots presented, including the GI clinic seeing an increase in visits and revenue, along with obstetrics and nursery and physical therapy. ER visits were down by approximately 784 visits, or $767,000. Contractual allowances are running at 61.46 percent of gross revenue, which is a 6.46 percent increase to the budget.
New service lines added in FY26, including an orthopedic clinic, an ophthalmology clinic and an optometry clinic also increased operating expenses, but those are expected to generate additional revenue in the new fiscal year, she noted.
'We have some low-hanging fruit here,' Lester added. 'We have to be urgent about this cash situation.'
Finance Committee Chair Ryan Riggins also posed the question: 'How big of a bandaid do we put on a bullet hole?”
'We have to fix this issue operationally,' he stressed.
Incoming Interim CEO Wanda Foster told the media earlier this week that one of her main priorities and concerns is the hospital's fiscal situation. After Wednesday's finance meeting, she told The Community News Brief that she'll be getting additional perspectives from department heads.
'I want to hear their ideas and collaborate with them as we sort out the financial situation,' Foster said.
