Apria Drops Auditor, Loses Board Nominee
In another round of unsettling announcements, troubled Apria Healthcare Group Inc. said Friday that it has dumped the Ernst & Young LLP accounting firm as its auditor.
The Costa Mesa home health-care company also said Stephen J. Trafton, the Glendale Federal Bank chairman named to its board less than two weeks ago, won’t stand for election at its annual meeting July 28.
The announcements came two days after Apria said federal prosecutors have subpoenaed records on its billing practices. But “there’s no connection” between the announcements, spokeswoman Sheree Aronson said.
She attributed Ernst & Young’s dismissal to an effort by Apria’s reorganized management team and board to “have a new set of eyes reviewing the company.
Ernst & Young has audited Apria since 1995, when the company was formed by a merger of two Orange County rivals Homedco Group Inc. and Abbey Healthcare Group Inc. The accounting firm previously served as Homedco’s auditor, Aronson noted.
Documents filed Friday with the Securities and Exchange Commission included statements from both the company and Ernst & Young indicating that they had no disagreements over accounting matters.
Apria has interviewed two other firms, according to the filing.
Apria said Trafton cited personal reasons in withdrawing his name for nomination to a new term on the board. Trafton, 51, said he’s moving from Southern California to Washington state. He said he has confidence in the company’s future and plans to increase his personal investment in Apria.
Trafton was drafted along with two other board nominees to fill three seats vacated in May when five directors resigned. Two other board seats were not filled.
Trafton’s departure will leave the company with eight directors, and the board has not decided whether to seek someone else for the ninth seat, Aronson said.
On Wednesday, the company said federal prosecutors in Sacramento have demanded records on its billing for services to government-funded health plans. The company said it is cooperating with the investigation.
