When new management took over at Elwyn in April 2017, it inherited what has turned out to be a persistent financial headache at the Delaware County human services provider that has operations in four states and a history dating to 1852.
After already restating two years of audited financial statements, Elwyn said last week that it had hired a new auditing firm, BDO Global, and a consulting firm to help it find ways to meet financial benchmarks required by its lenders. The large Media-based nonprofit — which said in 2018 that it served 25,000 people annually with intellectual, developmental, and behavioral challenges — did not identify the consulting firm or say when it was hired, but said it expected that work to take six weeks.
In addition, Elwyn, which said it had total revenue of $372 million in the year ended June 30, announced that its audited statement for fiscal 2019 would be delayed.
On a preliminary basis, Elwyn reported an $11 million operating loss for fiscal 2019 but said in an email to The Inquirer this week that it still has financial liquidity and is “continuing to pursue growth in services, which is of utmost importance to the community we support.”
Elwyn also warned bondholders about the delay of the fiscal 2019 audit. “The restatement of our financial reports for fiscal year 2018 has compelled Elwyn to do the difficult and important work of verifying all of our financial statements and reports," Elwyn said in the email.
Standard & Poor’s last month raised an alarm about Elwyn’s financial situation and warned that a credit downgrade could be coming. The restatement of fiscal 2018 results caused a swing from $3.1 million in operating income to a $3.8 million operating loss.
New management took over at Elwyn starting in April 2017, when Charles S. McLister became president and chief executive office, replacing Sandra S. Cornelius, who had been in the position since 1991. McLister, who came from Bancroft, a similar organization based in Cherry Hill, is just the ninth CEO in Elwyn’s long history.
McLister brought on a new chief operating officer, Jeff Giovino, the same month he started.
Also in 2017, Elwyn hired a new chief financial officer, Cindy Bertrando, who had previously worked in financial roles for AstraZeneca, including a period as chief audit executive in London for the pharmaceutical company’s global operations. Before that, she was at KPMG, a major accounting firm, for 20 years, according to Elwyn’s website.
Elwyn first disclosed gaps in its legacy accounting practices in August 2018. The initial problem was a failure to properly record depreciation expenses for certain technology assets.
Bertrando replaced Nancy M. Catania, who started at Elwyn in 2000 and was CFO from November 2012 to September 2017, according to Catania’s LinkedIn profile.