By Sarah N. Lynch
WASHINGTON, Sept 13 The operator of Miami-Dade
County's largest hospital will settle civil charges accusing it
of misleading investors about its financial condition before an
$83 million bond offering, U.S. regulators said on Friday.
The Public Health Trust, the governing authority for Jackson
Health System, will not face a civil monetary penalty due to its
cooperation with the federal government during the investigation
and its current financial condition.
A spokesman for the Public Health Trust was not immediately
available for comment. An attorney with the Office of the
Miami-Dade County Attorney could also not be immediately
The U.S. Securities and Exchange Commission alleged that the
Public Health Trust misstated current and future revenue due to
problems with a new billing system that inaccurately recorded
revenue and patient accounts receivable.
The trust had projected a non-operating loss of $56 million
in a document with its August 2009 bond offering. But later,
after the bonds were sold, external auditors discovered problems
with the billing system.
The Public Health Trust ultimately reported a non-operating
loss figure that was more than four times higher, at $244
million, the SEC said.
The SEC also alleges the trust did not account properly for
an adverse December 2008 arbitration award and misrepresented
that its financial statements were prepared according to U.S.
Generally Accepted Accounting Principles, or GAAP.
The Public Health Trust fell short in its obligation to
maintain adequate accounting systems and controls that ensure
truthful disclosures to investors about its financial
condition," said Eric Bustillo, the head of the SEC's Miami
"The Public Health Trust used stale numbers to calculate its
revenue figures and lacked any reasonable basis for projecting
losses that were far less than reality."
Miami-Dade's public hospital system adopted a $1.5 billion
budget for 2014 last month, seeking extra money for more
physicians and nurses and upgrading electronic health records.
In a referendum due to go before voters in November, Jackson
is seeking $830 million in bonds to be raised from property
taxes to pay for new buildings, equipment and other upgrades.