In Their Own Words: The Exit of Chris Anderson

In 2013, after KPMG had conducted some preliminary field work for that year’s audit (costing Singing River $50,000), Singing River decided, as a cost-saving measure, to hire Horne LLP (“Horne”) to conduct its fiscal year 2013 audit instead.

Horne’s field work in preparation for its audit of Singing River’s financial statements revealed that KPMG’s prior audits were riddle with flagrant accounting errors that had resulted in a colossal overstatement of Singing River’s accounts receivable by approximately $88 million.

Around the same time, Lee Bond, Former Executive Director of Finance and now Chief Financial Officer of Singing River, was asked to review Singing Rivers bad debt accounts as part of his ongoing analysis of various Singing River programs.

Upon Bond’s review, the bad debt accounts appeared misstated. After further analysis, he came to the conclusion, as did Horne, that KPMG’s annual audits had been egregiously flawed and had resulted in an $88 million overstatement:  approximately $27 million from 2012, and approximately $61 million from previous years.

Complaint, Singing River Health System v. KPMG LLP, January 16, 2015

In February 2014, Singing River announces Chris Anderson’s departure. Board of Trustees president Michael J. Heidelberg had this to say about Anderson’s tenure:

“Chris and I have worked together serving Singing River Health System for the past 16 years,” said Michael J. Heidelberg, President of the Board of Trustees for SRHS.”

During that time period, we have developed a true friendship and a very positive and productive working relationship. Chris has devoted himself to assuring that Singing River Health System was providing the best quality of health care available to the citizens of our community, and, noting the world-class heath care we provide locally, I would say that he has definitely accomplished his goal.

Speaking on behalf of the Board of Trustees of Singing River Health System, we would like to thank Chris for his dedication and service to the citizens of Jackson County and wish him and his family, as well as Baptist Health Systems, the best in the future.”

“While Chris’s departure and the loss of his excellent leadership abilities will be felt, the citizens of Jackson County and the surrounding area can be assured that Singing River Health System will continue to provide the high quality health care they have become accustomed to over these years,” said Heidelberg. “Our system of delivering health care is one that was developed and put in place by the combined efforts of the Board of Trustees, the CEO, the Administration, the Medical Staff, the employees, and the volunteers of Singing River Health System, and we will continue to fulfill our mission.”

“Chris Anderson, CEO of Singing River Health System, leaving to lead Baptist Health System in Jackson” Gareth Clary, GulfLive.com, February 10, 2014

On February 28, 2014 it was announced that Kevin Holland, then COO, would succeed Anderson, effective March 1, 2014.  Two days later, Holland and Lee Bond (as Executive Director of Finance) showed up at the Jackson County Board of Supervisors meeting. During a closed doors executive session, Holland and Bond revealed to the supervisors that SRHS would be facing losses. They made themselves available for media questions after the meeting.

“It’s a large adjustment,” county Comptroller Josh Eldridge said.

The health system is county-owned, and the county backs its debt, but county tax dollars do not fund the system’s operations. The county has five mills pledged in case the health system ever defaults on its debt, but Eldridge noted the system is “not even close” to default.

“Singing River Health System likely to collect $88 million less on bills than previously anticipated” April Havens, Mississippi Press, March 3, 2014

Eldridge is running for Jackson County Chancery Clerk. The Chancery Clerk is the custodian of the SRHS pension plan assets, per an order from Judge Breland Hilburn.  If he were to be elected, Eldridge would be the trustee of the SRHS pension plan assets.

On March 27, 2014, Singing River’s newly appointed CFO, Bond, and Horne’s auditors spoke by conference call to [KPMG partner Ashley] Willson and David Langston, who also worked on KPMG’s Singing River account.

Bond and Horne’s auditors alerted Willson and Langston to the serious errors in their previous audits of Singing River’s financial statements, and asked them to restate their audit conclusions, withdrawing their “clean” opinions and correcting the egregious errors in the financial statements.

Wilson and Langston refused. Perhaps it is not surprising that KPMG refused to do so, as the withdrawal and restatement of its opinions would be an admission of its failures to comply with the standards guiding its profession.

The next day, Langston emailed Bond that, “after considering the applicable auditing standards … and generally accepted accounting standards, you have not provided us with any new information that would indicate that our auditors’ report on the System’s 2012 financial statements should no longer be relied on.” Email dated March 28, 2014 from D. Langston to L. Bond re: 2012 Audit.

Complaint, Singing River Health System v. KPMG LLP, January 16, 2015