Editorial: Checks and balances needed

Saturday, Jan. 20, 2007 | 7:11 a.m.

This week's debacle at University Medical Center offers a lesson that we hope is learned and not ever forgotten.

No matter how many credentials UMC's top administrators bring to the job, or how sincere they seem when pledging to be truthful and forthcoming to the Clark County Commission, their major financial decisions and statements should be swiftly and carefully monitored.

Lacy Thomas, who accepted the county's offer to become chief executive of UMC in October 2003, was fired by County Manager Virginia Valentine this week. County commissioners had come to believe he was not being forthright with them about losses at the public hospital. On the same day he was fired, contracts that he had approved without sufficient oversight from the commission became the subject of a Metro Police criminal investigation.

No charges have been brought against Thomas and he denies all of the allegations that led to his firing and to the Metro probe.

But in a meeting this week with the Las Vegas Sun Editorial Board, Valentine and County Commission Chairman Rory Reid said they were kept in the dark, and even misled, about the true extent of the hospital's losses for the fiscal year that ended June 30. The losses amounted to nearly $34.3 million, and the county had only budgeted for $12 million in losses.

Thomas certainly failed in one of his prime responsibilities - providing commissioners with written hospital financial statements during regularly scheduled public meetings. He provided no written statements for the last three months of 2005 and skipped them almost entirely in 2006. It was during this period that Thomas verbally assured the commissioners that UMC was doing OK financially.

It is clear that Thomas was not properly communicating with the commissioners, and that they, in turn, placed too much trust in what he was telling them.

The police investigation involves seven contracts and a new top-level UMC position that Thomas authorized. The contracts cost UMC more than $2.5 million. In an affidavit used to obtain a search warrant at UMC, Metro Police wrote that Thomas "has used his position to allow several close personal friends and their businesses to benefit financially." Police also said that UMC has virtually nothing to show for the contracts.

It was a Clark County auditor whose suspicions 14 months ago about UMC's administration led to Lacy's firing and the police investigation. We believe, however, that intervention should have occurred much sooner - long before money began flowing for seven allegedly fraudulent contracts.

The basic problems that led to this week's developments at UMC - miscommunication and insufficient oversight - are hardly without precedent at the hospital. There is no call for the county to micromanage UMC, but it must ensure that its policies and procedures - in place to prevent fraud - are being followed to the letter.

The County Commission should go beyond firing Thomas and study ways to restructure the relationship between itself and the hospital's administration. What has been happening historically, and over the past two years, should never happen again.