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Ernie-Sadau
Ernie Sadau was senior vice president and chief operating officer of Texas-based Christus Health in 2008, when Christus St. Vincent Regional Medical Center paid him $967,423, according to 2008 tax forms.

Information, Please

Attorney General: Christus behind in financial reporting

April 13, 2011, 1:00 am

Christus St. Vincent Regional Medical Center is “delinquent” in filing past tax forms and could face late fees and even cease and desist letters if it doesn’t come into compliance, according to the state Attorney General’s Office.


Christus is more than four months late in filing a Form 990, the tax form that nonprofits file with the Internal Revenue Service. Alanna Goodman, Charities Unit Investigator for the AG’s Office, says the AG’s Office also hasn’t received any notice from the IRS that Christus applied for an extension. 


Christus spokesman Arturo Delgado says Christus received an extension from the IRS and doesn’t know why the AG’s Office isn’t aware of it. IRS spokesman William Brunson tells SFR that it can’t disclose information about a 990 other than to provide a copy if it’s been filed. 


Lee Hipps, president of the National Center for Nonprofit Excellence in Philadelphia, says nonprofits in general sometimes fall behind in their accounting because they don’t have staff dedicated to that function, but that’s not usually the case for nonprofit hospitals.


“Hospitals are a little bit different than regular nonprofits because hospitals in essence function like businesses,” Hipps says. “They’re usually more on top of getting those things done because they have the staff to get them done.” 


As SFR previously reported, Christus has been audited by the Centers for Medicare & Medicaid Services for part of the same time period covered by the missing 990. The draft audit released March 29 covers fiscal year 2009 (Oct. 1, 2008-Sept. 30, 2009), during which time Christus allegedly used ineligible county match money to draw down $23.7 million in federal Medicaid money. 


That audit raises other questions when compared to a Santa Fe County indigent care claims report, which states that Christus’ indigent care claims for FY09 totaled $4.5 million—raising the question of what Christus did with the remaining $19.2 million intended for indigent care. 


Santa Fe County commissioners have repeatedly asked Christus for greater accountability of its public funding. At a February 2010 Board of County Commissioners meeting, the BCC tried to impose transparency requirements as a condition of the hospital receiving county money. The BCC wanted to know if Medicaid money is leaving the state and going to Christus Health’s—which owns the hospital—Texas headquarters, and asked the hospital to allow a BCC member to sit on its board and be privy to financial discussions. 


“It could really improve relations between the hospital and the county if we felt like we were all working together on doing what was best for the community,” Commissioner Kathy Holian says of the board member idea. But I’m pretty sure that they don’t really want us to look at their finances very carefully, and that’s why they are just not interested in that at all.”


Holian and Commissioner Liz Stefanics tell SFR that Christus also has not provided any information as to what public money is being spent on, arguing that, as a nonprofit, it isn’t required to. Delgado says it didn’t honor the request to put a BCC member on the hospital board because hospital board members “cannot represent any external interests.” However, Delgado assures SFR that all Medicaid money “remains in our community” and none leaves the state.


According to Christus’ 2008 Form 990, the hospital’s profits for that year totaled $18.6 million. That year, CEO Alex Valdez made $513,352 in base pay and other compensation besides benefits. Ernie Sadau, who is listed as the hospital’s director but was the Texas-based senior vice president and chief operating officer of CH at the time, according to the CH website, made $967,423.


“If they’re making those kind of salaries, they probably are not anxious for the community to know that,” Holian says. “As far as I know, they haven’t cut their budget at all, even in these hard economic times.”

 

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