June 22, 2005
Albany - In 2001, Phoebe Putney set up its own insurance company in the Cayman Islands to reduce its medical malpractice costs. According to Chief Financial Officer Kerry Loudermilk, it has. He says, "Grove Point has saved us almost $1 Million a year since it's been in existence, so we incur the expense of running and managing Grove Point in order to save a million dollars a year."
The firm has a four-member board including Loudermilk and Phoebe CEO Joel Wernick. The two, along with others, have taken several trips to the Cayman Islands, Bermuda, London, all, apparently for discussions regarding the company. Loudermilk says, "We're required, legally, to conduct all business of Grove Point, offshore. There's always a business reason for us choosing the places that we go to."
But during those trips some expenses that are non-reimbursable, according to Phoebe's travel policy, were, in fact, reimbursed. During one trip to London, hotel accommodations at the Ritz Carlton, about $570 per night per room, bar tabs and mini-bar costs of $2,555, and more than $300 worth of cigars were paid for. The total at Ritz Carlton was $32,040.16. The total including airfare for the London trip was close to $50,000.
"There were some expenses for the travel that were reimbursed that, in hindsight," says Loudermilk, "should not have been and we're in the process of rectifying that situation."
A situation the Chief Financial Officer was familiar with prior to the trip to London. "(As the CFO, were you already aware of the travel expense policy?) Yes."
Loudermilk doesn't anticipate any changes in the travel policy, just better enforcement by everyone, including executives, and he wants to get back to the real business of Phoebe. He says, "Our volumes are growing, we're serving more and more people in Southwest Georgia and that is what we're all about, service to the community. And it's reflected in people's desire to utilize Phoebe for when they get sick and that's the bottom line."
A line that will now be better defined. Loudermilk did not fill out an expense report, but he approved an expense report submitted by someone else. When he does submit an expense report, it is reviewed by CEO Joel Wernick and a compliance officer.
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