In 1992, the El Camino Hospital Corporation was created, and major assets of the El Camino Hospital District were transferred, leased or sold to the corporation. Beginning in 1997, the district assumed control of the corporation, and in 2009 the corporation purchased Los Gatos Hospital. That purchase prompted an audit to see if the district was acting outside of its boundaries and/or if the district should continue receiving public funds.
The audit, conducted by Harvey M. Rose Associates for the Santa Clara County Local Agency Formation Commission, recommends the district restructure its budget process to make it more transparent and publicly accountable; limit its contributions to the corporation for principal and interest on debt incurred by the district for the recent rebuild of El Camino Hospital; and cease all automatic payments to the corporation or its affiliates that support the corporation’s community benefit program.
If those reforms aren’t enacted, the commission could remove the district as the sole member of the corporation. It could also alter the corporation board to include majority representation by people who aren’t involved with the district.
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