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State Audit

To: Our Community
From: Jim Gattis, SVMHS Board President
Date: March 8, 2012
Re: State Audit

The Bureau of State Audit (BSA) today released its report examining our Healthcare System. For the past nine months we have fully and willingly cooperated with auditors, devoting thousands of employee hours to providing all information requested, making available any employee that auditors wanted to meet with, providing open access to six years’ worth of accounts payable and payroll data, access to our contracts database, policies and procedures, and providing more than 6,000 pages of additional information.

It is important to note that the BSA did not express any concern with the quality of our patient care at Salinas Valley Memorial. In fact, the auditors noted that the quality of the patient experience did not appear to suffer as a result of our recent initiatives to reduce costs in order to remain financially viable.

We have welcomed the scrutiny of the state auditors as an opportunity to carefully examine business and operational practices, and to explore areas of potential improvement. The BSA report contains valuable conclusions and recommendations that have already been or will be acted upon. Examples of this include the elimination of supplemental pension plans for executives, new procedures for the consideration of community funding, and implement additional oversight to ensure Brown Act compliance.

The BSA report also contains some conclusions with which we simply disagree. It is our belief and that of our legal counsel that auditors reached some conclusions without analyzing readily available details that provide a more complete picture of the issues.

Over the course of the next few days you are likely to see significant media attention devoted to this issue. If you have any questions or would like to verify any details, please feel free to contact our interim CEO, Lowell Johnson, by email ( or phone, 831-­-755-­-0741. For your convenience I have included a fact sheet. Additional information can be found at

This difficult chapter in our history is now coming to a close. We will emerge from this a stronger organization, ready for a future of continued excellence in health care. Thank you for your continued support of Salinas Valley Memorial.


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