ADAMS COUNTY, Wash. – The future of East Adams Rural Healthcare (EARH) is uncertain as the community grapples with its financial challenges. During a public meeting last week, hospital leadership revealed the dire state of the facility’s finances, leaving the community with a choice to adapt and consolidate or face closure.
Recent audits have uncovered significant financial shortfalls at EARH, largely due to a lack of yearly audits. The district is now working to address these issues and develop a path forward.
The latest audit, released Wednesday morning, indicates that East Adams has been operating at a deficit for 12 years. The most significant losses occurred over the past three years, with auditors identifying fraud and misuse of funds during that time.
Cathlene Wright, a Ritzville resident, voiced her concern, saying, “You’re leaving a lot of people out there stranded with nothing.”
Interim CEO Todd Nida confirmed that there are multiple ongoing investigations and emphasized the hospital’s compliance with them. NonStop Local confirmed with the Washington Office of State Auditor that both a fraud investigation and an accountability audit are underway.
State Auditor Pat McCarthy has released the accountability audit, which examined the hospital’s finances from January 1, 2021, to December 31, 2023. The audit revealed that district operations did not comply with state laws, regulations and its own policies in most areas examined. The audit also criticized the former CEO and CFO, stating they “abused their positions.”
Commissioner John Kragt expressed his regret, saying, “I feel sick. I feel terrible that we didn’t force the audit. If we would have forced the audits, I think we would’ve been in a lot of different situation in the yard today. It’s been a pretty sick and terrible feeling to have. I’m sorry.”
The audit process uncovered additional matters prompting further investigation. It highlighted inadequate oversight of credit card statements, resulting in almost $11,000 in misappropriated funds and $2,800 in questionable expenditures. Additional testing identified 46 questionable purchases totaling over $17,000 made between January and October of 2023, including a plane ticket for a non-employee that was never reimbursed.
The district is now implementing a turnaround plan that includes regular audits, contract cancellations and financial restructuring. The governing board has authorized a request for the state to reclassify EARH as a rural emergency hospital. This move aims to cut costs by trimming services while retaining critical emergency care.
