As it attempted to lease out West Jefferson Medical Center in Marrero, La., Jefferson Parish officials spent $3.9 million on poorly monitored consulting agreements and violated its own laws, according to a report from the local inspector general's office, The Times-Picayune reported.
The OIG report, released July 6, identifies "several areas of concern" about Jefferson's consulting arrangements as the parish negotiated between April 2014 and September 2015 to lease West Jefferson Medical Center, according to the report. The parish finalized the $563 million lease and handed over operations of the hospital to New Orleans, La.-based LCMC Health on Oct. 1, 2015.
The Jefferson Parish Council hired two consultants for the deal: Washington, D.C.-based law firm Hogan Lovells, which Jefferson paid $2.86 million, and Nemzoff & Co., a New Hope, Pa.-based hospitals transaction adviser, which received a $1.08 million payment from the Jefferson Parish Council, according to the report.
Since August 2013, Jefferson Parish Inspector General David McClintock's office has been watching lease negotiations for West Jefferson and East Jefferson General Hospital in Metairie, La., and he has issued other reports in that timeframe. Mr. McClintock's latest report says the Jefferson Parish failed to adhere to his previous recommendations and violated the parish's own regulations for hiring consultants. According to the OIG report, the parish's actions "served to circumvent its own procurement practices and undermined its internal controls."
Among the issues cited in the report, Jefferson Parish failed to finalize an amended contract with Hogan Lovells; it failed to comply with parish ordinance that requires contracts to have a fixed maximum payment amount; it failed to properly manage its negotiation team; and no one was assigned to oversee the consultants' duties to ensure labor was being divided appropriately and time was used efficiently, according to the report.
The only parish official to respond to the report was Councilwoman Cynthia Lee-Sheng, saying the report "provides an appropriate opportunity to initiate a dialogue regarding the council's continued effort to improve professional service contracting," according to The Times-Picayune.