HERMANN — Administrator Bill Hellebusch has an interesting yet realistic view of where Hermann Area District Hospital finds itself in trying to secure its future in the community: “There’s no way we can climb out of a hole until we reach the bottom,”

Unfortunately for Hellebusch and the hospital’s Board of Directors, that hole still seems deep — even as the new administration continues to make significant strides in putting the hospital on a solid financial footing.

At least that’s the picture that was painted Monday afternoon by Cori Schoenke of Wipfli, the hospital’s auditing firm. Schoenke delivered the hospital’s 2023 annual audit at the board’s regular monthly session.

After Hellebusch opened the session with generally good news about hospital operations in March — “We’ve had a busy month,” he said — Schoenke followed with what has become a familiar message heard by the directors.

“Here comes the bad news,” Schoenke said as she ticked off a list of findings that easily could have been lifted from previous audit reports and dropped into the latest version. Internal controls remain a concern, she said, especially in terms of oversight of settlement of third-party payments, involving primarily insurance companies; reconciliation of various accounts; the write-off of outstanding bills owed to the hospital; and, perhaps most glaring, the amount of money that has been owed to the hospital for more than a year. For 2023, that amount stood at $1.2 million, the report said.

“Didn’t we talk about this last year and the year before?” asked Director Trigg Render.

“Probably,” Schoenke replied.

The overriding concern resulting from the audit, according to Schoenke, is the same as in the past few years: Technically, Wipfli is skeptical of HADH’s ability to remain a “Going Concern,” which means it’s ability to stay in business. “We’ve always had a Going Concern opinion,” she said. “You’re not making your debt covenants. We’re not sure this organization will be in effect in another year,” she said.

But, she quickly noted, the hospital has been able in recent years to pull itself just out of range of a fatal financial hit and keep providing medical services to the community.

“You’ve always pulled it through,” she said, adding that “the numbers are getting better” with the steps taken by the new administration.

Schoenke was quick not to cast blame at longtime former Administrator Dan McKinney and his administration for the ongoing financial struggle. Rather, while his focus was fixed on cutting costs, only so much progress could be made. Hellesbusch’s efforts to increase revenue — through increasing patient volume — while cutting costs — replacing costly outside agency staffing with local hires — is credited with the more positive numbers recently. She said she’s hopeful the 2024 audit report will significantly different than what’s been delivered the past half-dozen years.

“Let’s clean it up,” she said. “Let’s get a clean slate going in 2024.”