Hospital executive resigns as state auditor alleges misuse of public funds on golf, ‘lavish’ fun

Expenses in the letter addressed to the city’s mayor and Warren Memorial Hospital board included airline ticket upgrades, “extraordinary” Ritz-Carlton hotel room service charges, purchases at an ice cream shop and a pizza parlor and streaming subscriptions for Hulu and YouTube TV.

Foley said his team found thousands of dollars in golfing expenses in Nebraska, as well as Florida, Colorado, Nevada, Illinois and Tennessee, which were reimbursed with hospital funds.

“It’s always infuriating to see public money being misused,” Foley said in a related media statement. “But depriving an important medical facility of scarce funds, solely for extravagant personal aggrandizement, is especially disturbing.”

The implicated chief executive and financial officer was identified in the auditor’s letter as Jared Chaffin. According to a hospital response included in the auditor team’s findings, Chaffin has repaid the city’s healthcare system for personal and other charges identified as improper.

The hospital board, whose members are appointed by the city’s mayor and approved by the city council, noted that it previously submitted documentation regarding certain disputed transactions, including Dietary Department purchases that served legitimate hospital business purposes. The board said it was committed to ensuring the hospital is “made whole for any improperly expended funds” and said interim leadership is in place as it searches for Chaffin’s replacement.

Foley said his office turned over its findings to appropriate law enforcement agencies.

The audit team provided a historical backdrop in its report: Friend’s Warren Memorial Hospital, established in 1930, provides emergency, outpatient and clinic services primarily to residents of Saline and Seward counties in southeast Nebraska. Prior to 2024, the hospital, also known as Friend Community Healthcare System, was designated as a “critical access hospital.” 

Around that time, Foley’s team wrote, hospital representatives made public statements that the hospital was reaching a breaking point due to exhaustion of federal pandemic relief money. Other rural hospitals across the state and country reportedly faced similar difficulties.

In January, 2024, the hospital changed its status to become Nebraska’s first rural emergency hospital — a designation created by Congress in 2021 to assist rural hospitals by providing dedicated federal funding to maintain access to emergency and outpatient hospital services in communities that might not be able to sustain a critical access hospital or a small rural hospital. 

Foley said that rural hospitals in Nebraska are “teetering under budgetary pressures,” so financial misconduct “can be enough to push them over the edge of insolvency.”

Foley alleges that Chaffin apparently tried to “deceive” the audit team by claiming he opened a second credit card account for the hospital under his own name because the prior card was cancelled due to lack of payment. 

Other questionable expenses among “hundreds” the auditor alleged to have been incurred by Chaffin included hotel alcohol charges, fees at wholesale clubs, such as Costco, and purchases at a local Dollar General store and a Rocket Car Wash.

The hospital administrators and board, in their response, said they were conducting a comprehensive review of all financial policies, including controls over purchasing cards. 

“The corrective measures … strengthen the institution so it may continue serving its community with integrity,” the hospital leadership wrote.

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