Board of Directors Meeting Minutes
January 16, 2008
Wayne County Commission Offices
600 Randolph – Room 402
Detroit, Michigan 48226
Board Members Present: / Mr. Gail Warden, ChairpersonCommissioner Tim Killeen
Judge Sandra Cicirelli
Mr. Chuck Gayney
Mr. Reuben Munday
Dr. Cynthia Taueg
Staff Members Present: / Mr. Chris Allen
Ms. Janette Davis
Ms. Faith Polk
Ms. Marcia Hendrick
Guest Present: / Mr. Ken Brooks, CPA – Hungerford & Co.
Ms. Maureen Garza, Outreach Director – Oakwood Health Care
I. / Meeting Call to Order
The Health Authority Chairperson, Mr. Gail Warden, called the
January 16, 2008 meeting of the Board of Directors to order at 2:05 p.m.
II. / Agenda Approval
Mr. Warden reviewed the agenda as presented and also asked for everyone to review the handout “Detroit Wayne County Health Authority Governance Accountability Policy”. Mr. Warden stated that there were no changes in the policy and asked everyone to sign the release before they left today.
Mr. Warden also introduced Ms. Faith Polk as the new Outreach Director for the Health Authority.
III. / Secretary’s Report
Board Secretary, Judge Sandra Cicirelli presented the minutes of the October 31, 2007, Board of Directors Meeting. Judge Cicirelli asked if there were any corrections, additions or deletions needed for the minutes. Hearing none, Judge Cicirelli asked for approval of the minutes from the October 31, 2007 Board of Directors Meeting, so moved by Mr. Chuck Gayney with support from Dr. Cynthia Taueg. APPROVED
IV. / Treasurer’s Report
In the absence of Sister Giovanni, Treasurer, Mr. Warden asked Mr. Gayney to present the findings of the Health Authority Board Finance and Budget Committee as well as the Audit Committee. Mr. Gayney stated that the Finance and Budget Committee and the Audit Committee of the Board of Directors met on Friday, January 11, 2008.
Financial Statements
1. Balance Sheet --- Governmental Fund
a. Cash Position and Fund Balance
i. Cash is $284,943 representing a stable balance since the beginning of the year at $277,219.
ii. The Fund Balance decrease is a result of no additional receipts reported during this quarter.
b. Total Receivables of $38,368 – this represents a significantly lower balance than the beginning of the year with receivable at $940,103. This is an indication that funds were collected and paid out to support the Outreach Program.
c. Liabilities of $195,865 have been deferred for Oakwood’s future Outreach Services. (Note: The payment from Oakwood was received on January 16, 2008 and will be reflected in the next statements.)
2. Health Systems
a. The health systems have fulfilled their three (3) year promise. The exception is the DMC whose payment equals $50,000 in comparison to the $150,000 payment made by all the other health systems pledges.
3. Fund Balance
a. Total - $127,446
Mr. Gayney asked if there were any questions, hearing none, Mr. Gayney turned the meeting over to Mr. Ken Brooks CPA, and senior partner of Hungerford & Co., to present his findings of the fiscal year 2006-2007 Health Authority Audit.
The Detroit Wayne County Health Authority was subject to two audits this year. The Financial Report with Supplemental Information dated September 30, 2007and the new single audit Report of Expenditures of Federal Awards dated September 30, 2007. Each Board Member was presented with a copy of the Detroit Wayne County Health Authority Audit Reports.
Mr. Brooks stated that the Independent Auditor’s Report will show a clean opinion, which is the highest level of assurance. Due to the Medicaid outreach match funds, the auditors spent a significant amount of time in this area reviewing agreements, laws and rules. Mr. Brooks determined that in the opinion of Hungerford & Co., the Detroit Wayne County Health Authority complied in all material respects with the requirements referred to in the Government Auditing Standards and the standards of the Local Governments and Non-Profit Organizations that are applicable to each of its major federal programs for the year ended September 30, 2007
IV. / Treasurer’s Report (cont.)
REPORT ON FINANCIAL REPORT WITH SUPPLEMENTAL INFORMATION
Mr. Brooks continued his comments with describing the Management’s Discussion and Analysis of the Authority as a whole. He referenced his opening statement by indicating that the Authority’s net assets, as it relates to GASB 34, increased by $88,041. Noting that the Authority’s primary sources of revenue were from Contributions and Donations, and Federal Grant dollars via the Interagency Agreements the Authority has with the Michigan Department of Community Health. He summarized the significant expense of the Authority, that being salaries and fringes which represent 30 percent and Contracted Services, primarily Medicaid Outreach Services, which represent 56 percent of total expense.
The most important of all the Governmental statements demonstrates compliance with various states laws and shows the stewardship of the Authority’s revenue. For fiscal year ending September 30, 2007 the Authority’s budget provided for excess revenue in the amount of $56,578, but the actual General Fund activity provided excess revenues of $98,281.
It was noted that a new line of credit for $500,000 was being negotiated. Hearing no more questions he proceeded to report on the second audit, the Report on Expenditures of Federal Award.
REPORT ON EXPENDITURES OF FEDERAL AWARDS
Mr. Brooks stated that there were five (5) areas in the federal award findings and questioned costs that will require corrective action. The conditions and recommendations are:
1. Condition: The Authority did not obtain personnel activity reports for those employees that worked on multiple activities.
Recommendation: The Authority must obtain personnel activity reports from all personnel that work on multiple activities, one of which is a federal program.
Comment: Personal activities reports (PAR) are required because everyone works on multiple programs. Just using a set percent of their time does not meet State requirements. The Health Authority is now using the PARs but they were not being used during the audited period.
IV. / Treasurer’s Report (cont.)
2. Condition: The Authority used the base salary of each employee rather than the actual salary of these employees. The Authority used fringe benefits based on a percentage of the salaries rather than on an allocation of actual costs.
Recommendation: We recommend that the Authority complete its Financial Status Report based on actual expenses. We also recommend that the Authority refund the State of Michigan $4,505.
Comment: The Authority did not change the amount reported when salaries increased due to salary adjustments. Fringe benefits were overstated because a percentage of the salaries were used instead of actual costs. A journal entry has been completed. The State may not require it to be paid back; the Health Authority is waiting to hear from the State.
3. Condition: The federal expenditures reported on the Financial Status Reports under this program include the salary and fringe benefits of its chief executive.
Recommendation: The Authority must exclude the salary and expenses of its chief executive from the Financial Status Report.
Comment: The Executive Director’s salary cannot be included as expenses because we are a political subdivision. The State understood that the Executive Director was part of the FSR. They are still looking into it. There is the potential that it may have to be repaid. The amount would be approximately $60,000.00.
4. Condition: HIPAA compliance is addressed in all agreements with the Authority’s subcontractors, except for one.
Recommendation: It is recommended that the Authority thoroughly review all subcontractor agreements before they are signed to ensure that all the requirements of the agreement it entered into with the Michigan Department of Community Health are met.
Comment: Care Compensation Specialists contract had no HIPAA provision in it. All contracts will have a HIPAA clause in the future.
5. Condition: The Authority did not submit a Cost Allocation Plan Certificate to the Michigan Department of Community Health for the current year.
Recommendation: It is recommended that the Authority take the necessary steps to ensure that it complies with all of the requirements included in the agreement with the Michigan Department of Community Health.
Comment: This is the same contract that is being used by the Health Departments. Bill Hart, Michigan Department of Community Health, is checking into whether we are required to do a Cost Allocation Plan.
IV. / Treasurer’s Report (cont.)
There were no prior year corrective action plans as this was the first year for the Single Audit. Mr. Brooks noted that each area above will require a corrective action plan. He also noted that taking into consideration that this is the first year of a Single Audit these corrective action findings could have been more significant. Mr. Brooks commended Ms. Davis and Ms. Kathie Zalewski and all the staff on the excellent work they have done in the accounting area.
Mr. Gayney and Mr. Warden thanked Mr. Brooks for his presentation.
Mr. Gayney asked for Approval of the Treasurer’s Report. Judge Cicirelli with support from Commissioner Killeen moved for acceptance of the Treasurer’s Report as presented. APPROVED
Mr. Gayney asked for Approval of the Audit Committee report. Commissioner Killeen supported by Dr. Taueg moved to support and approve the Detroit Wayne County Health Authority Report on Expenditures of Federal Awards dated September 30, 2007 (Single Audit) and the Detroit Wayne County Health Authority Financial Report with Supplemental Information dated September 30, 2007 as presented by Hungerford & Co. APPROVED
V. / Executive Director’s Report
Mr. Allen reviewed with the Board his January Executive Directors report which highlighted:
· An invitation to present the experiences of the Health Authority at a meeting of local, state, and federal health officials in Louisiana. They were exploring the possible implementation of a similar program to the Health Authority’s in Louisiana.
· The Health Authority and Accretive Michigan Healthcare have signed an agreement for the Health Authority to provide Medicaid outreach activities to Accretive’s five health systems in Michigan.
· The Eastside Planning Team established their charge for 2008. A charge that will ultimately produce recommendations for establishing a network of primary care services resulting in medical homes for all residents of the area.
· During a recent meeting of the Provider Advisory Committee, discussion centered on the challenges of redirecting patients to federally qualified health centers (FQHC) for appropriate care. Mr. Allen is planning to meet with the FQHC’s and the Medicaid HMO’s to work on a solution.
· During the Community Advisory Committee meeting, community organizations were invited to sign up to help disseminate information on health care insurance options to families with children.
· Faith Polk has joined the Health Authority’s staff as Outreach Director.
· The 2008 Prospective Action Agenda of the Primary Care Network Council was reviewed.
An article in the Journal of Healthcare Management was inserted in the appendix of the Board materials. The article highlighted was Financial Preconditions for Successful Community Initiatives for the Uninsured by Paula H. Song and Dean G. Smith and Practitioner Application by Chris Allen.
V. / Executive Director’s Report (cont.)
Mr. Allen ended his report and introduced Ms. Maureen Garza. Ms. Garza is the Oakwood Health Care Director of Patient Accounts. Her report on the Medicaid Outreach activities at Oakwood Hospital at this Board Meeting is one of her last assignments before her retirement.
Ms. Garza could not express enough praise for the excellent work that has been performed by the Health Authority staff in this Medicaid Initiative.
According to Ms. Garza, they see a vast improvement with taking patient information and are moving some of the screening to the emergency room department. They appreciate the more direct ability to communicate with the patient and are working with the Western Wayne Family Health Center (FQHC) and hopefully will be sending an outreach worker to that site to take applications. They have also had calls from Trinity Health and will be advising them on the Oakwood System successes.
Mr. Allen thanked Ms. Garza for her report. Mr. Allen also added that Oakwood’s bottom line has increased by $10 million since they signed the agreement with the Health Authority six and a half months ago.
Mr. Warden asked what percentages of the applications are rejected. Ms. Garza stated that about 40% of applications are rejected. This is due to age related issues because the applicants are between the ages of 21 and 64 and have no apparent disability and therefore are not eligible for any type of assistance. Most of the applicants are male.
VI. / New Business
Mr. Warden asked everyone to again review and sign the Governance Accountability Policy Agreement. This is an annual necessity in accordance with our accounting and audit regulations. By signing the agreement, the Board Member states that they do not have any actual, potential or apparent conflict with the Accountability Policy as presented to them at this meeting.
VII. / Updates
Mr. Warden reminded everyone that the next Board meeting will be on April 16, 2008 at the Coleman A. Young Municipal Center – City Council Chambers.
VIII. / Board Member Remarks
None noted.
IX. / Public Comment
None noted.
X. / Call for Adjournment
With no further business to discuss, Mr. Warden adjourned the meeting at 3:45 p.m.
Respectfully Submitted:
Marcia HendrickExecutive Administrative Assistant / Sandra Cicirelli
Board of Directors Secretary
3