Kittson Healthcare financials on track

By Anna Jauhola
Stockholders of the Kittson Memorial Hospital Association should expect good news at the annual meeting in January. It’s been a long road, but Kittson Healthcare’s financials are finally back in shape so there’s a clear path for the facility to move into the future.
Kittson Healthcare engaged Eide Bailly to handle accounting services in March 2023, after which former Chief Financial Officer Curtis Bach’s position was eliminated. Since then, Neil Frizzell has been the facility’s CFO through Eide Bailly and working extensively with in-house personnel and Eide Bailly employees to clean up the financials.
“We’ve done October 2023 through September 2024. We have monthly financials again,” Frizzell said, noting the process took about one year because the board didn’t have financials in almost two years.
The biggest hurdle was getting monthly financial reports completed. In August, Frizzell and CEO Andrea Swenson reported on the October, November and December 2023 monthly financials.
“Our method for reporting, just because we had fallen so off course, is to report three months of monthly data at a time,” Swenson said in September.
As of Tuesday, Nov. 26, Frizzell and Swenson reported monthly financials to the board through Sept. 30, 2024.
“We also covered the Sept. 30 audit report, which is formally closed and done,” Frizzell said on Wednesday, Nov. 27 during a virtual call with Swenson. “It’s been a marathon. Things are going good. We’re happy.”
Getting monthly financials up to speed was a key component for the facility’s operations in several ways. Without those completed, they could not start audits for fiscal years. Those are now caught up, and the 2024 audit is going to begin.
“Our plans for 2024 is to have our final reconciliations done in the next 30 days. Then we’ll be ready for the audit. We will be near back to normal routine,” Frizzell said.
Monthly financials also allow for a better evaluation of each department in the facility. Once they have completed reconciliations, the plan is to do an analysis of each department using the full 12 months of month-end information.
“And, once we’re back to a normal level of financial analysis, it’ll help us do strategic planning,” Frizzell said. “To determine, ‘What is the direction for Kittson going down the road?’”
Swenson added now that financials are nearly up to speed, they have implemented better practices.
“Now our process is, when you complete a month-end and all journal entries are in, payroll’s been entered, the month is closed – then we can go in and run departmental level revenues and expenses on a monthly basis,” she said. “We weren’t able to do that until now. We still have a little catchup work to do, but we’re not too far from being able to produce that.”
Having updated financials will also assist Kittson Healthcare in obtaining grants, such as a state grant for upgraded laboratory equipment. Frizzell said the state grant, which the board approved submitted an application, can pay up to $125,000 toward essential equipment. Kittson Healthcare’s chemistry analyzer is beginning to show its age, and it is a $350,000 machine.
Continued on page 2
In that same vein, updated financials and reports, such as the IRS 990, allows for efficient fundraising through the Kittson Memorial Foundation. The foundation’s Score Fore Golf Tournament raised enough money this year to pay for $28,000 of new physical therapy equipment. This equipment is owned by Kittson Healthcare, and used by the facility’s contracted physical therapists through Big Stone Therapies.
“Our therapy department has been growing over the last four years considerably,” Frizzell said. “Outpatient therapy is a very good, viable business for Kittson.”
Although the situation required the use of a large firm to get Kittson Healthcare’s financials into shape, Swenson said the cost will be a wash compared to having someone in house. The need for someone with extensive expertise in healthcare financials was essential to rectify everything. She noted not only does Frizzell have about 40 years of that background in similar sized facilities, but Eide Bailly has the personnel to adequately assist him. Frizzell added he has trained an associate, whose hourly cost is about half his, to handle Kittson Healthcare’s needs so there is less of a cost. And they have 350 other accountants with similar backgrounds.
“Then not to mention they felt that added safety net if something happens where Neil is unavailable, they’ve got resources to put somebody in his place,” Swenson said. “They’re in our systems, they have our information, they don’t want us repeating the situations that got us to where we were.”
As they continue to work on reconciliations, the next step will be to create a transition plan for his associate, Scott Lee, to take over most of the work to reduce Frizzell’s hours to 10 per week.
Swenson said they are feeling confident in their current business office and other staff to have a solid in-house footing. They have also felt confident enough in the facility’s finaicials to place $2 million of reserve funding into CDs.
“I’ve been around for way too many decades doing this, but what I’d like to say is the staff from Kittson, from dietary to business office, to nursing, everyone and especially Andrea – the dedication and the love they have for the Kittson facility, you don’t see that everywhere,” Frizzell said.
He gives a lot of credit to the people who make Kittson Healthcare a valuable local hospital, clinics and nursing home. Without the people, this change would not have been possible.
The annual meeting for the Kittson Memorial Hospital Association will take place at the end of January. Stockholders will receive a letter in the mail and a notice will be published in the newspapers. Anyone who would like to become a stockholder can purchase stock for $50 through the front desk at Kittson Healthcare.