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Case ends on nonprofit hospital execs’ alleged misuse of assets


The Idaho State Journal reports that a deal has been sealed over allegations that executives of Bingham Memorial Hospital, in Blackfoot, Idaho, misused the charitable assets of the nonprofit institution. With hospital executives, including at what are technically “nonprofits,” increasingly being compensated (including via big expense accounts) like moguls, and attracting the attention of regulators and law enforcement in the process, we can expect more such investigations.

The hospital agreed with  Atty.  Gen. Lawrence Wasden that it would review financial records and confirm that it has received reimbursement for any unauthorized personal charges, and it may be  required to revise its policies and procedures to guarantee  that charitable assets are only used in the  hospital’s best interest.

BMH has also agreed to pay the AG $50,000 as reimbursement for investigative costs and legal fees.

The attorney general’s probe “turned up several issues, including the unauthorized use of BMH charitable assets by International Consulting Services, a former for-profit company. ICS allegedly used charitable assets to fund its operations and did not reimburse the hospital. Some BMH executives were associated with ICS,” Becker’s Hospital Review reported.

Further, reported Becker, investigators found that “the hospital did not collect timely records of executives’ credit card charges, and executives allegedly used charitable assets to purchase personal goods and services without providing valid documentation to warrant repayment to the hospital.”

“After an exhaustive investigation, I’m pleased we’ve reached an agreement that will bring about change and enhance the level of accountability at BMH,” said Mr. Wasden. “My hope now is that BMH and Idaho’s other nonprofit hospitals learn from this and understand just how seriously I take my duty to protect charitable trust assets.”

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