ATLANTA – Georgia’s rural hospital tax credit program is in compliance with the state law that created it in 2017 and just needs to tighten up its reporting procedures, according to a new audit.

The program raised $58.7 million in contributions to eligible rural hospitals last year, down slightly from the $59.4 million the tax credit brought in in 2021. In both cases, individual and corporate donors nearly reached the annual program cap of $60 million.

The program allows donors to contribute to hospitals in counties with populations of 50,000 or less and reduce their state income tax liability by the amounts they donate. Taxpayers may choose a specific hospital or, if one is not designated, the hospital will be chosen based on a ranking of need.

The audit, released late Thursday by the state Department of Audits & Accounts, found the Georgia Department of Community Health (DCH) verified that all rural hospitals receiving contributions in 2021 and 2022 were eligible for the program. All of those hospitals provided the DCH with the required reports detailing the contributions.

However, the audit noted inconsistencies in reporting, including errors in contribution amounts received, expenditures exceeding available funds, prior-year unspent funds, and fees paid to third-party vendor Georgia HEART, which contracts with the hospitals to market the program and process contributions.

The report recommended that the DCH review donation and expenditure reports from the hospitals for accuracy and require corrected or additional information when necessary.

The audit also found hospitals participating in the tax credit program had $40 million in unspent contributions in 2021, up from $29.5 million in 2020. Hospital officials reported the unspent funds were earmarked for capital projects that had to be put off during the pandemic.

Most contributions to the program were not directed to the neediest rural hospitals as designated by the DCH, according to the report. Five of the 10 neediest hospitals received less than the average collections per hospital of $1,067,862.

The audit found that all of the 55 eligible hospitals received contributions of less than $4 million as required by law.

Colquitt Regional Medical Center in Moultrie brought in the most donations last year – $3,996,999 – followed by $3,144,927 that went to St. Mary’s Sacred Heart Hospital in Lavonia, which received all undesignated contributions as the neediest hospital; and Crisp Regional Hospital in Cordele, which brought in $2,822,990.