By Mary Alice Murphy

The Beat had follow-up questions to the previous answers received from Gila Regional Medical Center.

Interim Chief Executive Officer Scott Manis replied with clarification on the connection between the application to the Internal Revenue Service to establish Gila Regional as a not-for-profit 501(c)3, in addition to its status as a county-owned hospital.

He referred back to the May GRMC Governing Board meeting, when the audit for fiscal year 2020 was mentioned, with one finding being connected to the hospital retirement fund. Two other audit findings have already been resolved.

Manis said when the retirement fund was set up back in the 1980s, it was structured as a 403(b) plan, which is only for non-profit organizations.

"It should have been set up as a 457(b) structure, which is for government entities, and is what the county has," Manis explained. "The auditors noticed it last year. We had a couple of options to fix it. The preferred option was to have the hospital apply for the 501(c)(3) designation."

He emphasized that once the designation is received, "it doesn't change anything. It's just about curing the audit finding. Of course, it will cost us to make the change to the dual status. We will engage legal counsel to have us become a 501(c)(3)."

Interim Chief Financial Officer Greg Brickner said at the Governing Board meeting on May 25, 2021, that the legal counsel they found does only this work on figuring out retirement issues. "There's a program in the IRS called the employee resolution system, so the IRS has figured out it is a common problem, and it has figured out a way in the code to address it. It will fix the audit problem and literally, if the IRS approves it, we wouldn't have any disruption to our employees. It's the simplest path forward."

Manis confirmed that today by saying: "As a 501(c)(3), we would be able to keep the retirement plan as it is now."

He also noted that once the hospital receives the not-for-profit designation, it can accept donations as charitable gifts, making them tax deductible to donors. "We can also apply for grants, but that's in the future. Our primary reason for the change right now is to fix the audit finding."

Manis noted that he, as a community resident, has invested himself in Gila Regional, as have other community residents, staff and patients. "I want to see this place be successful. We continue to pursue our commitment to serve the community well."

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