Ex-CEO, exec misused $256K+ in Iowa hospital funds, state audit finds

The former CEO and a former executive of Manchester, Iowa-based Regional Medical Center misused more than $256,000 in hospital funds during an eight-year period, according to a Feb. 20 state audit report obtained by Becker's Hospital Review.

State officials opened an audit into the hospital after concerns regarding travel reimbursements to former CEO Lon Butikofer, PhD, RN, and former system fund and development director Mike Briggs. Mr. Briggs was terminated from his role at the hospital Feb. 23, 2017, and Dr. Butikofer resigned from his position four days later.

The state investigation found the two individuals made $256,675.52 in improper disbursements and $28,004.79 of unsupported disbursements between Jan. 1, 2009, and March 15, 2017.

The $256,675.52 in improper disbursements included more than $192,000 in improper payroll costs for unrecorded paid leave used by both individuals, and more than $11,000 in charges to the hospital's credit card. The investigation also found Dr. Butikofer and Mr. Briggs used hospital funds to reimburse personal trips.

The $28,004.79 of unsupported disbursements included $19,285.58 of reimbursements issued to Dr. Butikofer and Mr. Briggs, and charges totaling $8,719.21 to the hospital's credit card. However, auditors noted that "sufficient supporting documentation or other information was not available for these costs to determine their propriety."

RMC board chair Chris Tegeler gave the following written statement to KMCH 94.7 News on Feb. 20: "We understand the concerns and disappointment resulting from these individuals' behaviors and actions. It has been very upsetting to us and we are focused on moving forward and have put several additional checks and balances in place to prevent this unfortunate situation from happening again at our local hospital. We appreciate the State Auditor's office for its collaboration throughout this process and will follow any recommendations to improve our internal control processes.

"Our board has been pleased to have Charlie Button as our Chief Executive Officer. He has helped us continue to focus our healthcare system on what is best for our community. His door is open to everyone and wants to hear from members of the community. We share the goal and mission of continuing to grow and enhance our services so that we are here for you for decades to come.

"We sincerely appreciate our community for your continued support of our healthcare system as we are truly dedicated to providing quality care close to home."

To access the full audit report, click here.

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