First in a series
Responding rapidly this morning to a galloping employee uprising that was developing over a delayed payroll, Brotman Medical Center officials promised — and appeared to have corrected “the technical glitch” by early this afternoon.
Brotman, in Chapter 11 bankruptcy since last September, explained with emphasis that the error was random, unrelated to the bankruptcy. The Culver City hospital traced the failing to its payroll processing company in Orange County
Numerous already-nervous employees, especially direct-deposit recipients, appeared to panic when their accounts reflected first a deposit, then a mysterious deletion.
By this afternoon, however, most or all had calmed down in the wake of swift action by Brotman’s leadership.
What happened?
The View from the Inside
As the noisy, fast-gathering crisis was ebbing at the end of the noon hour, Stan Otake, the CEO of Brotman since last October, sat down for a wide-ranging interview with the newspaper.
Driven by what he characterized as erroneous news stories circulated across Culver City concerning the state of the hospital’s complex, sometimes indecipherable bankruptcy proceedings, present pressures and future, Mr. Otake offered a perspective previously unheard in the community.
Throughout, he emphasized how much he prizes logic and order, values that probably are two of Brotman’s three neon problems.
Mr. Otake’s crackling candor stood in thundering contrast to the obsessive reclusiveness diligently practiced by the present ownership team, headed by Dr. Jacob Terner.
Sweeping the Air with Clarity
Dressed like an employee but speaking with the unmistaken authority of a CEO, Mr. Otake immediately established himself as a sleeves-up, hair-down type this afternoon. He said he intended to air out the ground-floor room — and rumors — with muscular candor.
Starting with a narrative of the employee-alarming events of this morning, Mr. Otake said that Brotman followed regular procedures, adding that the problem was caused on the other end .
“Frankly, there was a problem with the payroll processing,” he said. “The hospital has used this payroll processing company, Ceridian, for the past 2 1/2 years. We funded the payroll amount according to the same timeline and processing requirements (as in the past).
The First Signs
“We became aware, today at 6:30 in the morning, that some employees’ direct-deposits initially were credited to their accounts, and then there was a reversal on those same deposits. It became clear there was a problem.
“We view our employees’ payroll, inclusive of my check, as very important. Certainly my check is to me and my family. About 700 checks are cut. On a fulltime basis, we have about 500 employees.”
Question: How many employees were affected by the glitch?
“Haven’t been able to get the true number. But we have heard from them. No doubt.”
Question: What did you tell them?
“We have to find a quick resolution. It’s easy to blame people. I am not in the business of blaming. I came aboard to Brotman in late October, one day prior to the bankruptcy filing, part of a new management team that wants to continue Brotman’s legacy for the community.
“We are aware the hospital has been here for 80-plus years, and we have a different vision. Our vision is to provide world-class health care for the community.
“Trying to understand what happened was the first step. Trying to correct the problem was the second step.
“We have addressed this with Ceridian. They acknowledged that they changed some of their processing requirements. They felt like they wanted to receive a transfer to their account by 9 o’clock in the morning (Thursday).
“We had the understanding — and for 2 1/2 years this is the way it was being done— in our mind, we had a time deadline of 5 o’clock yesterday to make the transfer of $1.5 million. That is our biweekly payroll, which includes payroll taxes, everything.
“By 10 o’clock this morning, our Chief Financial Officer, Vince Rubio, who came in very early this morning, talked to our bank (Wells Fargo), acknowledged that the funds were there.
“Mr. Rubio got on the phone early this morning (with Ceridian). But we didn’t get ahold of our account rep. Apparently, (Ceridian) had left a message at 5 o’clock last night that the transfer did not happen at 9 o’clock in the morning.
“We confirmed, through our Wells Fargo account, that funds were available as of 3:06 p.m. yesterday — ahead of our 2 1/2-year 5 o’clock deadline.
“An issue that is important to me is that this, in no way, ties into our bankruptcy issue.
“I am concerned about the media’s portrayal of Brotman, especially in the local newspapers. It’s old news rehashed, i.e., with a Los Angeles Times article redacted.”
(To be continued)
