McHenry Times

McHenry County MHB Finance and Audit Committee met March 21.

Here is the agenda as provided by the Committee:

Committee Members present: Lynn Kasicki, Ray Lapinas, Sam Melei, Paula Yensen (left at 6:19 p.m.)

Committee Members absent: Mike Baber

Others present: Scott Block, Jane Wacker, Terry Braune, Pat Peterson

I. CALL TO ORDER

Sam Melei called the meeting to order at 5:01 p.m. Roll Call was taken.

II. PUBLIC COMMENT – none.

III. APPROVAL OF MINUTES - FOR ACTION

Paula Yensen motioned to approve the Minutes of the January 17, 2017 Finance and Audit Committee and

the Minutes of the February 21, 2017 Finance and Audit Committee. Seconded by Ray Lapinas. A ROLL

CALL VOTE WAS TAKEN. Lynn Kasicki - Yes, Ray Lapinas - Yes, Sam Melei - Yes, Paula Yensen – Yes.

All in favor. Motion carried.

IV. TREASURER'S REPORT - FOR DISCUSSION / RECOMMENDATION

Jane Wacker reviewed the Treasurer’s Report for the Committee. Fund Balance was discussed for explanation to new Committee members. Scott clarified the footnote on the $1M for the building debt payoff. The intent of this is to earmark $500,000 for FY18 and again for FY19 and to move those dollars into actual budget for payoff in FY19 to satisfy the debt. Service needs in the county may change the amount used for this purpose and would be approved through Board action. The funds are not locked into building payoff.

Packet pg. 9, the amount in Buildings and Repairs is for payment of a handicap ramp and heating system repair. On the Travel Out of County there is a negative number that zeroes out a previous posting that is now appropriately placed in Meeting Expense. Computer Program Maintenance includes Fundware, PsychConsult, and Cerner/Anasazi renewal, all software agreements. Anasazi must be maintained until 2035 (MHB is legally bound to maintain these C & A records until that time) at a cost of $6,000 per year but this could be eliminated if these files could be copied to .pdf documents. Current administrative staff would be charged with the duty of creating the .pdf

documents of these records. PsychConsult, at $6,000/year, can be purged by year’s end thereby cutting that cost. Packet pg. 10, Jane explained that amounts on this page have actually been paid out and posted to the system. A number of these have been paid in this month and slow payment is not uncommon in the first few months of the fiscal year because contracts are still being put together.

Transportation Funds were discussed as there has been an increase in use. Scott noted that this funding availability has been publicized at the QMT and Network Council meetings where reaching line staff is more apt to occur. The last line on this page is Special Projects which contains various items like computer equipment. It does include over $1M that has been designated for client service funding, CILA funding (approximately $500,000), etc. More will be

discussed about this on pg. 17.

Packet pg. 11, is the Fee For Service (FFS) report where the original budget, current budget with any budget

adjustments, YTD Expenditures, as well as percentage used remaining are all shown. Staff take the YTD figures divided by the number of months reported already and multiply by 12 to get the projected column using a standard formula basing the projection on what has been reported year-to-date.

At the bottom of the page, the FFS items, any line that has an * at the beginning, is reported as month 2, FFS is not reported until the month is complete, Grants take 3 months into consideration. Red numbers illustrate under-utilized funding, blue illustrates over-utilization. Grant amounts have been adjusted.

Agencies potentially at-risk or under-performing, mutual software systems, the benefit of mid-year reconciliation reporting adding value to this report, and the reduced numbers of clients accessing services out of fear were all noted items discussed. Jane referenced Special Projects on Packet pg. 17, Grants to Agencies at $1.189M are dollars that are part of the pool yet to be determined as awards yet. Staff are hoping $500,000 will be awarded for CILA and $100,000 for the A Way Out program. These dollars are in the budget and available for funding throughout the year. The Special Projects line items are items that do not happen every year such as the CARF Audit, Office equipment, building improvements, Computer work, etc. In the Projection column based on YTD submission of affidavits, the revenue will be $721,000 less than expenditures for the year because $1.8M was budgeted for utilization of fund balance and if all went as planned this number would be $721,000 negative by the end of the year. The left hand corner of the page provides a key for meaning of marks within the document. Ray Lapinas motioned to recommend approval of the Treasurer's Report for the Period Ending February 28, 2017. Seconded by Paula Yensen. A ROLL CALL VOTE WAS TAKEN. Lynn Kasicki - Yes, Ray Lapinas - Yes, Sam Melei - Yes, Paula Yensen – Yes. All in favor. Motion carried.

V. LEGAL BILLS - FOR DISCUSSION / RECOMMENDATION Legal fees were used to revise the personnel policy manual due to laws that went into effect this year. Jane and Scott had questions for legal counsel on receipt and insurance issues while revising the ICA. Lynn Kasicki motioned to recommend approval of the Legal bills of Zukowski, Rogers, Flood & McArdle. Seconded by Paula Yensen. A ROLL CALL VOTE WAS TAKEN. Lynn Kasicki - Yes, Ray Lapinas - Yes, Sam Melei - Yes, Paula Yensen – Yes. All in favor. Motion carried

VI. OLD BUSINESS - FOR DISCUSSION / RECOMMENDATION / APPROVAL – none.

VII. NEW BUSINESS - FOR DISCUSSION / RECOMMENDATION / APPROVAL A. McHenry County Economic Development Corp. Report – this was rescheduled for next month. Pam Cumpata will demonstrate a model that projects how the salary of providers transfers into consumer goods, jobs, etc. to support the community. Paula Yensen noted that if cuts occur to older adult programs including Meals-on-Wheels, HUD and the CDBG it will trickle down to impact local community. Sam noted that changes in ACA will also have a great effect. Scott added that the senior population has been hardest hit and Family Alliance is one of the providers feeling these cuts. Concern is great regarding where clients get service. Instead of getting federal dollars consumers will seek funding at State or County level. Ray requested historical information on Warrant of Need. In light of this request, Scott asked that we move into discussion of Item C.

C. Historical Fee For Service Report Scott presented a spreadsheet that provided a historic look back at MHB FFS dollars and noted milestones including the introduction of the Affordable Care Act in 2010, Family Service closure in 2012, Illinois approved Medicaid expansion in 2014, and the States total cut all of Psychiatric Leadership funds to McHenry County, about $540,000, in 2015. In 2017, MHB budget had $3M allocated but through Pay For Performance (P4P) the MHB has $1.3M designated to psychiatry. MHB expenditures have stayed much the same over the years. Scott added that even with AHCA, Medicaid would start to roll back in 2020. It is difficult to say what will happen in the next few years. If States get a capped on the amount of Medicaid, the potential impact on the system is difficult to project. A revision of Medicaid eligibility requirements would be changed and Medicaid rates have not kept up with inflation. MHB funded agencies that provide a large amount of Medicaid services include: Community Mental Health Center, AID, Centegra, Family Alliance, Mathers, Pioneer Center, Rosecrance, and Thresholds. MHB has tightened Medication supplementation. Ray asked if there is a way to break out services provided to McHenry County Medicaid clients. Though this is not tracked, Scott noted that the HFS statistics reveal that projection is that 1 in every 5 clients receiving Medicaid also receives mental health or substance abuse services. Medication reform will have substantial local impact. The State budget impact will not have as much an impact as this Federal change.

Funds not spendable due to ACA related issues caused creative attempts by the Board to develop new types of

funding avenues to provide different services. Sam noted that the MHB may need up to an additional $1M in FFS dollars. Scott discussed FFS Set Aside funds, end of year reconciliations and increased due diligence that all brings additional funding back into MHB instead of into agency budgets.

Sam noted that the Board has considered actual utilization of FFS funds and has not cut back but instead built their

budget around those figures for future years. Agencies underutilizing saw budget cuts that matched their previous year utilization. Scott noted that the Strategic Planning meeting will allow for further budget discussion.

B. Draft Reconciliation Policy and Procedure

Scott reviewed the Draft Reconciliation Policy and Procedure on packet page 19. Being the third year of

reconciliation staff have worked to develop this policy. The first part of the draft is about the procedure. No

direction or structure was provided on Board action. This policy provides steps that the Board would take

procedurally. When budgets are collected from agencies they provide an all-agency-budget but at end-of-year all

the MHB needs is a budget showing MHB dollars. Structure needs to be developed to ensure the recoupment of

reconciliation dollars and the compliance of these rules. Sam asked for an example of the form the next time this is discussed in order to understand why the agencies are having difficulty completing the reconciliation reports. If

agencies cannot comply perhaps it is a red flag and if noncompliant, perhaps future funding could be withheld.

Scott suggested a screen projection for review next month.

D. Draft FY 18 Budget Highlights & Accomplishments and Performance Indicators

Scott noted the County required budget documents of Draft FY 18 Budget Highlights & Accomplishments and

Draft FY 2017/2018 Performance Indicators. These will go into the Final County Budget in May. No discussion is needed, they are provided for review and feedback. These will be discussed at the Strategic Planning meeting.

Performance Indicators have been a County forced document and do not accurately affect what the County does.

MHB revised them entirely last year and County staff was impressed with this. His intention is to keep the

indicators the same. The Committee was asked to review them for submission to the County.

VIII. PUBLIC COMMENT – none.

IX. ADJOURN

Ray Lapinas motioned to adjourn. Seconded by Lynn Kasicki. A VOICE VOTE WAS TAKEN. All in favor.

Motion carried. The meeting adjourned at 6:26 p.m.