Louisiana Legislative Auditor
Daryl G. Purpera, CPA, CFE

November 30, 2015

Millions of Dollars in New and Used State Hospital Equipment Was Never Tagged, Recorded in State Property Records; Some Now Missing

According to a legislative audit released Monday, more than $15 million in new hospital equipment the state bought for the University Medical Center (UMC) in New Orleans was never tagged or recorded in the state property management system – meaning there is no record of where that equipment is right now or how much it is worth.

Another $1 million in state-owned hospital equipment that UMC’s private partner, Louisiana Children’s Medical Center, used while the hospital operated out of a temporary location also cannot be located.

In addition, Legislative Auditor Daryl Purpera found that, since Earl K. Long Medical Center (EKL) closed in Baton Rouge in April 2013 and private partner Our Lady of the Lake stepped in, more than $4.6 million of the $5.9 million in state-owned hospital equipment that Our Lady of the Lake did not want to lease, cannot currently be located.

These findings were made public in a financial audit of the LSU Health Sciences Center – Health Care Services Division (HCSD) for the fiscal year ended June 30, 2015.

HCSD is the state entity named on leases with six private hospital partners now managing Louisiana’s old charity hospitals. Those private partners lease both the buildings and some equipment – used and new – inside the hospitals. The private partners are currently managing $1.4 billion in HCSD (state-owned) assets and are expected to bring in $2.9 billion in future lease payments over the next 40 years.

HCSD is responsible for making sure private partners tag, inventory and keep track of what happens to used state property the private partners keep or new state property purchased for the public-private hospitals.

However, the audit finds that, in the case of UMC in New Orleans, the Division of Administration’s Office of Facilities Planning and Control (OFPC) bought $15,137,952 in new hospital equipment for UMC but, to date, has never given HCSD or Louisiana Children’s Medical Center any invoices listing what equipment OFPC bought or how much it cost.

In EKL’s case in Baton Rouge, HCSD did not inventory and report to the state’s property management system $4,685,445 in movable property that had belonged to EKL but which Our Lady of the Lake did not want to lease. Much of this property is now believed to be in containers, previously located at various leased clinics around Baton Rouge and currently moved to HCSD’s office site to be inventoried.

HCSD agreed with the state auditor’s findings and is pledging to continue to ask for invoices from OFPC on the $15 million in new equipment bought for UMC in New Orleans. HCSD also agreed to work with both private partners to find the currently-missing used state property and file monthly property reports with the state’s property management system.

For more information contact:
Daryl G. Purpera, CPA, CFE
Legislative Auditor
225.339.3800



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Office of the Louisiana Legislative Auditor | www.LLA.La.gov