State to audit Salinas hospital system

May 11th, 2011

The Associated Press

California officials will audit a hospital district that awarded its CEO nearly $4 million in retirement payments in addition to his $150,000 annual pension.

A state legislative committee voted Wednesday in favor of the audit, which will probe executive compensation at Salinas Valley Memorial Healthcare System as well as potential conflicts of interest involving hospital board members. The hospital receives some public funding.

The audit comes after a report in the Los Angeles Times that the district approved a series of supplemental retirement payments to Samuel Downing, its former CEO, totaling $3.9 million.

Assemblyman Luis Alejo, who called for the audit, said the goal in part was to ensure patient service wasn’t compromised. The hospital has recently eliminated about 600 positions.

Hospital officials say some of Downing’s compensation plan was designed in the mid-1980s, well before the recent cuts.