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Millions of dollars in equipment missing from LSU hospitals since privatization, auditors say


BATON ROUGE, Louisiana — Nearly $6 million in state-owned hospital equipment can't be located, and millions more bought for the recently opened New Orleans public hospital hasn't been tracked properly, according to an audit released Monday.

Legislative Auditor Daryl Purpera's Office looked at the LSU Health Care Services Division's financial reporting for the last budget year, which ended June 30. Most of LSU's hospitals were privatized several years ago by Gov. Bobby Jindal, with the facilities and equipment leased by private hospital managers.

The audit says more than $15 million in equipment bought for the new University Medical Center in New Orleans wasn't properly recorded and tagged before it was turned over to the hospital operator.

"Failure to tag and enter data into the state's asset management system increases the risk that assets will be misappropriated or become unlocated, the financial statements will be misstated and could result in noncompliance with state laws and regulations," auditors wrote.

Meanwhile, auditors say $1.1 million in equipment from an interim New Orleans hospital hasn't been found since the shift to the new facility. Also missing is $4.6 million in equipment from the now-shuttered Earl K. Long Medical Center that LSU operated in Baton Rouge before inpatient services were moved to a private hospital in the city.

In a written response, LSU said it is working to find and properly tag the items.

University officials told the auditor's office that the Jindal administration's Office of Facility Planning and Control didn't provide the needed documentation about the $15 million in equipment bought for the new hospital in New Orleans, to allow for proper recording of it.

Lanette Buie, deputy chief executive officer for the Health Care Services Division, wrote that LSU will continue to ask for the invoices from the Jindal administration and "continues to search for and reduce the number of unlocated items reported."

The Jindal administration released a follow-up statement from Jerry Jones, with the LSU Health Care Services Division, saying the equipment bought for the new hospital in New Orleans was documented with "receiving reports."

The equipment "is currently being entered into the inventory system. The time lag for entry is due to the volume of items needing entry," Jones said.

Since 2013, Jindal privatized nine LSU-run hospitals and their clinics, which care for the poor and uninsured and train many of the state's medical students, through no-bid contracts. In most instances, the management company of a nearby hospital took over operations. Three contracts closed an LSU hospital and shifted its services to private hospitals.

LSU's Health Care Services Division has leases for six of the hospital deals, in New Orleans, Lafayette, Bogalusa, Lake Charles, Baton Rouge and Houma, with the facility operators managing $1.4 billion in state-owned assets. The other hospital deals, covering north and central Louisiana, are overseen by a different arm of the LSU System.


The audit can be found at: http://bit.ly/1PWiXPT

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