By PHYLLIS ZORN

Staff writer

Hillsboro city council were not surprised by annual audits last week but accountants said the numbers do not include $13,318.39 in legal bills so far for a hospital mortgage foreclosure lawsuit filed in early January.

Grace Huxman, of the accounting company Adams, Berens, Brown and Ball, pointed out that expenses for the hospital lawsuit were not factored.

“Liability for the hospital declaring bankruptcy happened after the end of the audit year,” Huxman said.

Huxman also said, as the city has heard each year, that the city should have more “segregation of duties,” meaning different people should take care of billing and receiving money.

“What she said is, it’s typical in a financial management office is to have different people doing different things instead of one person doing different things,” city administrator Larry Paine said. “It keeps one person doing a multitude of tasks.”

The city is one of 11 defendants in a Bank of Hays lawsuit against the company that used to operate Hillsboro Community Hospital.

The lawsuit seeks foreclosure of a mortgage originally taken out by CAH Acquisition Company #5 to build the hospital. A related company, HMC/CAH Consolidated, which signed a promissory note agreeing to be held liable for the balance of the mortgage, is also one of the 11 defendants.