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Kittson Healthcare shares improved situation, but still lagging in reports filed

By Anna Jauhola
During the Kittson Memorial Hospital Association annual meeting on Tuesday, Jan. 23, board members and administration reported the organization is going in the right direction.
“I feel we’re making some progress as far as our finances are concerned,” said Board President Bob Jaszczak. “Are there still some things that we need to worry about? Absolutely. But again, we’re making progress. We’re finally getting some of those things cleaned up. And for the first time, I guess, in a little while, it does feel like we’re making progress in the right direction.”
Curtis Bach, chief financial officer of Kittson Healthcare, gave the treasurer’s report on the finances, stating they have a preliminary audit for Fiscal Year 2022.
“We are in the process and hopefully in the next day or so, we’ll be filing the 990 tax return for the organization,” Bach said. “And we are currently just in the final stages of reconciling, getting the audit ready for Fiscal Year 2023, which ended in September.”
He added the organization increased its revenue from 2022 to 2023 by about 3 percent at $700,000.
“Expenses, we’ve been able to, just through the process of attrition, hiring of people, we’ve been able to – what I would consider the environment, the management style that’s being used – have been able to keep expenses fairly level,” Bach said. “Which obviously has allowed us to reduce our operating loss substantially from FY22 to FY23.”
According to the profit and loss sheet in the packet handed out at the meeting, the operating loss went from $1,393,821 in Fiscal Year 2022 to $661,286 in Fiscal Year 2023. He added that Kittson Healthcare increased its cash balance by almost $1 million from $599,045 in May 2023 to $1,588,547 in December 2023.
“I think overall, both aspects of cash accounting, and actually doing the financials on the books, I think we’re going in the right direction,” Bach said. “I think we’ve got a lot to look forward to with some of the things we’re doing because we have not, like I stated before, had a price increase of any form. We have not had an operating budget, which I can work with the managers and the staff here at the hospital. Even with that, I think we’ve been able to stabilize some stuff and move forward in a very positive fashion.”
At the 2022 Annual meeting, several issues came to light including that the 2021 Medicare and Medicaid cost reports had not been filed and the 990 tax return had not been filed. Those have since been filed, but the 2022 financials have yet to be fully audited and the 2022 990 has not been filed yet – the fiscal year ended in September 2022.
Last year, Interim CEO Everett Butler said a hospital association meeting would be called to address the 2022 audited financials once they were complete. When asked if that would still happen, Jaszczak said it depends on if the stockholders would want to call a meeting. He asked if it would be sufficient for the board to hold a regular board meeting and report the final audit findings through the Enterprise. Nicole Johnson suggested mailing the findings to stockholders as well and putting them online, with several stockholders in the audience agreeing.
The board plans to review, approve and publicize the audit findings at a regular board meeting. Jaszczak said the board meets the fourth Tuesday of the month at noon at Kittson Healthcare in Hallock.
The question arose of whether the 2023 cost reports and 990 tax return have been filed.
“2023? No,” Bach said, adding they’re gathering information for the 2023 cost reports.
After the 2022 fiscal year, the facility hadn’t filed these reports and Medicare and Medicaid withheld funding until they were filed. Kittson Healthcare recouped that funding.
“I’m hoping they’ll be on time,” Bach said.
“We got a better chance of being on time this year than we did last year,” Jaszczak said. “Which is a sad thing, but that’s the reality.”
Stockholder Lee Pemberton asked whether they had heard how much of the federal COVID funding they’d be able to keep — it was thought last year the facility could keep $3.5 million. Bach said they had not heard and Kittson Healthcare has paid back “around $450,000” and currently have “about $4.2 million, $4.4 million of provider relief funds” in the bank.
Board member Stacy Diamond asked Bach to point out the sale of the pharmacy on the financial statement presented. He did not answer that question, but stated where the pharmacy revenue is on the balance sheet – that is, 340b money that Kittson Healthcare still receives from sales at the pharmacy.
The stockholders approved the treasurer’s report.
Kittson Healthcare CEO Andrea Swenson gave an update on the strategic plan, upper level remodeling and overall facility operations. She said the strategic plan document is complete and in motion as a “moving, living document.” The facility will continue to work on and grow the plan as it pushes forward.
“I think quality of care is another topic that’s important to address,” Swenson said.
They’ve had few complaints about care and overall receive praise and thanks from patients and families.
Services remain strong, including an increased census in the nursing home. As of Tuesday, Jan. 23, there were 41 residents. The clinic remains fully staffed with some changes and radiology has received some new equipment, some with funding help from the Kittson Memorial Foundation.
“We’ve had some trying times, but I do think that the current group of staff, leadership, management team, etc., are all really here for the right reason,” Swenson said. “I think we’re trying to build a strong organization together.”
Stockholder Ruth Lupien asked whether there’s a plan to eliminate travel nurses and CNAs. Swenson said it’s been difficult to get local people interested in being career CNAs, and with not as many youth in the county, it’s hard to recruit in those areas. Not as many youth are going into the healthcare field. Kittson Healthcare has been attending career fairs, however, to try and bring young people and others already in the field to the facility.
Swenson said the renovations on the upper level are almost complete and have been completed mostly in-house, which has saved the facility nearly $250,000. She said a contractor estimate before renovations began was $350,000. So far, they have spent $100,000 to turn the former upper level nursing home into open space for rehab and therapy services, to include staff offices, private exam rooms and rooms for locum tenens doctors. To fund this renovation, Kittson Healthcare has used 340b funding from the pharmacy, which is designated specifically for capital improvements.
The stockholders approved Swenson’s report.
The group reviewed written reports from the foundation, Kittson Memorial Auxiliary and Kittson Healthcare Ambulance.
Stockholder Pam Hunt quietly asked Foundation President Deb Cederholm if the Kittson Memorial Foundation can do any fundraising right now, to which she responded, “No.” There was a follow-up question asked directly to the board of why they can’t fundraise.
“Because the 990 tax return has not been filed yet,” Bach replied. “And the Minnesota Attorney General’s Office requires the tax return for a 501(c)3 charitable organization to be able to solicit funds has to have a current tax return on file.”
Earlier in the meeting, Bach said the 990 would be filed the following day. It was asked again if that’s the case.
“Any day,” Jaszczak said.
“Hopefully. It’s in final review,” Bach said.
Stockholder Shirley Rydberg asked if the Kittson Memorial Auxiliary had a financial report, because the report presented only stated what activities they’d done without any numbers.
“The auxiliary has a bank account,” Bach said.
“I know they have a bank account. But do they have a financial report?” Rydberg asked.
“Not specifically,” Bach said.
Rydberg, who had been on the auxiliary at one time, said they’d at least give an oral financial report and she would like to see one in the future to know what projects the auxiliary has coming up.
“That’s something we definitely need to take care of,” Jaszczak said.
Pemberton, who is also on the ambulance crew, said they need another ambulance and will be fundraising for that. The cost is about $200,000, even for the refurbished one he’s looked at.
Board member Kenny Hultgren suggested contacting Sheriff Matt Vig to ask whether they can use Stonegarden Federal Grant funds to purchase an ambulance. This funding has been used in the past to purchase new vehicles for the sheriff’s office, but is only used for those purchases every few years.
“We do have a lot of border calls,” Pemberton said.
Board member Janelle Craigmile suggested the ambulance crew also visit with the foundation to lay out their needs. Cederholm said when the foundation has a specific fundraising goal, it’s easier to solicit funding.
Pemberton mentioned their biggest fundraiser is letters to the townships for contributions to the ambulance service. That usually brings in up to $14,000.
The stockholders approved all three reports.
In other business, the stockholders also:
• approved a unanimous ballot to re-elect four board members – Dr. Jana Riley, Hugh Hunt, Dr. Roland Larter and Michael Swanson. Each will serve a three-year term.

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