GMH to Make Gross Payroll
Cash management leaves hospital with cash after payroll to pay vendors, while leaving $6 million from loan proceeds in the bank
Press Update: March 4, 2011
Today, for the first time in a while, the Guam Memorial Hospital will make gross payroll for all its employees.
Half of the $12 million loan was used to pay vendors who were owed payments for two or more months. Theother half is in reserve for payment obligations and contingencies. The amount of cash in GMH’s operating account contains only $200,000 out of the $12 million loan proceeds. This means the hospital was able to manage its regular revenues in order to meet gross payroll for tomorrow.
A breakdown follows:
$1,706,052 is in the operating account today (March 3) +1,800,000 in anticipated collections on March 4
=3,506,052 in total cash as of March 4 – 2,697,484 needed for payroll
= 808,568 in total cash left after payroll – 200,000, which is the amount from the $12 million loan
= 608,568 of available cash to pay vendors
The significance of this news is that GMH has brought itself to a position where it can pay both gross payroll and vendors from its revenues, not the $12 million loan proceeds. It means the hospital is managing its cash in a way that relieves some burden on vendors and does not take from its employees.
“This is not an easy process, but Siva Kapurran and our accounting staff have been working very hard to bring us to this point,” Interim Hospital Administrator Rey Vega said. “We want this trend to continue. We’re going to manage the hospital’s cash as effectively and efficiently as possible. We never want to be in a position where we’re only paying net payroll.”
