WASHINGTON 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 reached.
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 office.
"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.
(Additional reporting by Jonathan Stempel in New York and David Adams in Miami; Editing by Eric Walsh)