State auditor warns of financial instability for Lexington

Audit finds failed plan to build new hospital contributed to overspending

By Leah Wankum, Editor

A citizen-requested state audit of the City of Lexington revealed financial instability and lack of checks and balances in management of the city’s finances.

Missouri State Auditor Nicole Galloway released on Wednesday the citizen-requested audit of the City of Lexington. The report details a series of financial missteps, including payments related to a failed venture to build a new city-owned hospital. The payments resulted in a steep decline in city funds.

“It is critical that leaders take a proactive approach to budgeting and make sure that taxpayer dollars are managed responsibly,” Galloway said. “The City of Lexington has the potential to get back on track, but needs to ensure appropriate oversight is in place to monitor the city’s financial condition. With proper accountability, the city’s financial position can be strengthened.”

Lexington resident Darrell McLanahan requested the audit, according to the Lexington News. A total of 312 residents signed a petition to request the state audit.

In 1985, the city entered into a 30-year lease with a nonprofit corporation to manage a city-owned hospital. In 2001, a for-profit corporation purchased that contract to manage the hospital under the terms of the existing 30-year lease.

The city and the hospital management company began in 2009 a process to design and build a new hospital. To support the effort, the management company made an advance-lease payment of $515,000 to the city in 2011, which was spent by the city on architectural plans for a new building. Voters rejected the new hospital plan in 2012, but by then, more than $1 million in costs had been incurred.

The complete story is in the Tuesday, October 10, 2017 Richmond News.

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