The stock value of community hospital information systems vendor Computer Programs and Systems Inc. fell nearly 7 percent in morning trading on June 17 after the company announced its chief financial officer is being investigated for misuse of a corporate credit card.
The Mobile, Ala.-based company has placed Darrell West on administrative leave as it determines whether he used the card to pay $55,000 in personal taxes. West earned $312,000 in 2009. What follows is the explanatory text in a Form 8-K document that CPSI filed with the Securities and Exchange Commission on June 16:
"Pending the outcome of the investigation described in Item 8.01 below, as of June 15, 2010, Computer Programs and Systems Inc. with the authorization of the Board of Directors of the Company has placed the company's Vice President - Finance and Chief Financial Officer on administrative leave. The responsibilities of the Vice President - Finance and Chief Financial Officer will be assumed by other members of the Company's management team during his absence.
"As of June 15, 2010, the Board has determined to investigate issues related to the suspected misappropriation of assets by the Company's Vice President - Finance and Chief Information Officer, primarily involving the suspected misuse of a Company credit card for the payment of personal tax obligations in the amount of approximately $55,000. In addition to authorizing the absence discussed above, the Board has appointed the Audit Committee of the Board to oversee an internal investigation into the suspected misappropriation and has authorized the engagement of a forensic accounting firm to assist in conducting the investigation and the review of the internal controls of the Company related to the suspected misappropriation.
"At this time, the Company believes that there will be no material impact on previously reported earnings, financial position or results of operations as a result of these matters. The Company does not intend to update the disclosure provided hereby until the investigation commenced by the Audit Committee has been substantially completed or unless there are other material developments to report prior to the completion of the investigation."
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