Monday, June 18, 2007 | 7:03 a.m.
Accounting firm Ernst & Young brought bad news to Clark County officials earlier this year when its audit revealed that University Medical Center had lost more than $34 million in fiscal 2006, far more than the $18.8 million that former Chief Executive Lacy Thomas had told commissioners to expect.
Now Ernst & Young is the source of more bad news for the county.
The firm is demanding $86,500 beyond the initial $210,000 cost of the audit, saying unforeseen factors required it to put in much more time than expected.
"There were a number of issues with management and financial reporting that contributed to the situation," county Comptroller Ed Finger said.
Thomas had stopped giving the county monthly financial updates for much of 2006, blaming the hang-up on problems with the county's new financial management system.
The county fired him the day preliminary audit results were released. That same day, Jan. 16, Metro Police served a search warrant on the hospital looking for evidence that Thomas gave sweetheart contracts to friends and associates in Chicago. Thomas has said he did nothing wrong and to date no charges have been filed.
The audit took five months longer than expected and required more than 1,700 hours of work, according to Ernst & Young. The work had been expected to take 950 hours.
Ernst & Young initially wanted more than twice the extra $86,500 now being sought, but county officials negotiated down the figure . Commissioners are expected to approve that payment Tuesday.
UMC officials also will ask commissioners to approve a temporary contract with Dr. John Ellerton, a cancer specialist who had been serving in conflicting roles as chief of staff and a top administrator.
Under the proposed six-month contract, Ellerton would earn $175,000 to continue running the public hospital's oncology/hematology department.
Interim Chief Executive Kathy Silver decided to allow other cancer specialists to compete for that work earlier this year after the Sun revealed that in addition to the $120,000 that Ellerton earned annually to direct the department, he also received an additional $230,000 a year to perform administrative duties under a secretive deal with Thomas.
That administrative role put Ellerton at odds with his role as chief of staff, the elected voice of the medical staff to the administration. Many doctors at UMC didn't know that Ellerton also was being paid as an administrator.
Silver stripped Ellerton of his administrative duties, but this new contract would allow Ellerton to continue to collect the extra pay without doing the extra administrative duties , which local physicians have called a gross overpayment.
Silver was going to grant a permanent contract with Ellerton in February, but changed her mind after the Sun reported that other doctors were interested in the contract.
Ellerton and two other specialists have submitted proposals, and Silver said she doesn't want to rush the selection process. She expects to select a permanent specialist within 90 days.
Commissioners are likely to approve an ordinance Tuesday that will require all county employees hired after July 1 to live in Clark County.
Today, about 100 to 140 of the county's 10,000 employees live outside county lines in places such as Pahrump and Bullhead City, Ariz.
Commissioner Tom Collins proposed the requirement, saying that money earned in Clark County should be spent in Clark County. He also says employees will care more about the quality of their work if they are serving their own community.
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