state fiscal year close all most some of what county accountants need to know about the joy that...
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State Fiscal Year Close
All Most Some of What County Accountants Need to Know About the Joy That Happens Every July
Presented by Lennie Bottorff2015 County Accounting Conference
Colorado Springs, CO May 13-15, 2015
State Fiscal Year Close
• Gain understanding of where the money comes from (The Long Bill Explored)• Provide a high-level view of the close-out procedures • Share ideas on using monthly allocation tracking reports to “predict” outcomes
Objectives:
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Where Does the Money Come From?
• The Long Appropriation Bill• Supplemental Appropriation Bills•Other Bills carrying Appropriation Adjustments• Legislative Authority
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Where Does the Money Come From?
The Long Appropriation Bill
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For the 2014-15 Supplemental Bill and the 2015-16 Long Bill, you’ll need to look at bills in the current session.
For the 2014-15 Long Bill, you’ll need to look at bills passed in the Prior (2014) session.
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When you click on “Prior Session”, you’ll see this screen. The Long Bill funding SFY 2014-15 was passed in the 2014 Legislative Session.
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The Long Bill was House Bill 14-1336, so select “House Bills 1301-1350” from the drop-down list. Then click on “Go->”.
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Scroll down until you see HB14-1336, then click on the link.
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The Long Bill is sub-divided into its effect on individual agencies. So, you can “View” or “Download” the portion that applies to either CDHS or CDHCPF.
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Each year, the Legislature passes the Long Appropriations Bill. The number of the bill changes from year to year. The Long Bill forSFY-16 is Senate Bill 15-234
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Each Department’s appropriations are detailed within the bill.
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The first appropriation group of specific interest to counties appears on Human Services Pages 86 and 87 and on Health Care Policy and Financing Pages 55 and 56 as County Administration.
These appropriation groups include several lines, including County Administration and County Tax Base Relief.
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The next appropriation of interest is titled on Page 87 and continues through Pages 88 and 89 for Child Welfare Services.
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Take special note of the footnotes identified with the Title. Footnote 31 is of great importance. It gives us specific authority to spend the appropriation across line items, in order to best serve clients. The footnote, itself, is on Page 111.
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There are several appropriations of interest on page 87. We will focus our attention on Child Welfare Services.
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“Cash Funds” refers to funds received from an entity other than the State General Fund or Federal Funds. “Reappropriated Funds”, which used to be referred to as “Cash Funds Exempt”, refers to “Cash Funds” which are not counted as revenue against the TABOR limitations, because they are inter-governmental transfers.
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In this case, “Cash Funds” refers to the County Share amount of $64,034,448, which is only an estimate. The Legislature will “allow” counties to spend as much County Funds as they wish.
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The non-Medicaid General Fund appropriation is $180,190,655. This can only be adjusted by transfer to HCPF or by Supplemental Appropriation.
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The “Reappropriated Funds” amount of $14,943,615is designated by letternote (a), on Page 88, as Federal and State Medicaid Funds appropriated to HCPF.
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These funds are intended to finance the Medicaid treatment portion of RMH and CHRP Programs, as well as the ACM portion of CW Administration.
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The $88,692,589 appropriated as “Federal Funds” are identified in letternote (f), on Page 89, from three sources:
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$61,082,727 is from Title IV-E, $23,590,313 is from Title XX, and $4,019,549 is from Title IV-B. These amounts may only be adjusted by a Supplemental Appropriation.
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Footnote f says “$64,153,620 shall be from Title IV-E …”. Lennie said $61,082,727. A difference of $3,070,893.
Did Lennie Lie ????Where are the pitchforks ??
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Family and Children’s Programs, also known as Core Services, uses the same footnote. So, the difference represents the Title IV-E Funds appropriated for Core Services.
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The Child Care appropriation group also contains several individual appropriations. We’ll focus our attention on the Child Care Assistance Program.
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The total General Fund appropriated for the Child Care allocation is $13,949,428. This amount may only be increased by a Supplemental Appropriation.
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The total Local Funds estimated for the Child Care allocation are $9,599,282. Per letternote (f), $9,260,049 of this is the Child Care Direct MOE. I’ve asked the State for clarification as to why the actual MOE being collected is only $7,899,282.
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The total Federal Funds appropriated for the Child Care allocation are $53,784,568.
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Per letternote (g), $53,684,568 of this is from the Child Care Development Fund. The remaining $100,000 is from Title XX.
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The final Long Bill appropriation we’ll look at is the Colorado Works appropriation, which is on Page 92. The main appropriation is labeled “County Block Grants”.
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There is a $22,349,730 Estimated County Share appropriation included.
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Per letternote (b), of this amount, $22,149,730 is the County Actual Spending Level MOE, with the remainder estimated to be captured through TANF Collections.
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All $130,198,357 of the Federal Funds appropriated to Colorado Works are from the TANF Block Grant.
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Footnote 37c created a $2,000,000 carve-out of the Colorado Works allocation for “Employment-Focused Programs”.
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Additional Spending Authority can be obtained through Supplemental
Appropriations bills and other Appropriation-Adjusting bills.
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House Bill 14-1317 expanded and standardized many of the policies and processes associated with the Child Care Assistance Program.
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The appropriations clause for House Bill 14-1317 was lengthy. Most notably, it added $8,279,903 to the county Child Care allocations, in anticipation of the increased need created by the bill.
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House Bill 14-1368 transferred responsibility for caring for developmentally disabled youth, between the ages of 18 and 21, from Child Welfare to the HCBS Adult Services program.
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The Appropriations clause of this bill actually reduces the Child Welfare Services appropriation, in recognition of the reduced demand for Child Welfare resources.
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Under no circumstances may we authorize counties to spend more General Fund dollars than are appropriated in the Long Bill and Supplemental Appropriations bills.
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26-1-121. Appropriations.
(1) (c) When the executive director determines that adequate appropriations for the payment of the costs described in paragraph (a) of this subsection (1) have not been made and that an overexpenditure of an appropriation will occur based upon the state department's estimates, the state board may take actions consistent with state and federal law to bring the rate of expenditure into line with available funds. The general assembly declares that case load and utilization based on medical necessity are legitimate reasons for supplemental funding.
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Please note that there is not an appropriation for Pass-thru’s in the Long Bill, nor in Supplemental Appropriation bills.
Pass-thru’s are non-appropriated, because statute allows for open-ended earning of Federal Revenues.
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26-1-122.County appropriations and expenditures - advancements - procedures.
(4) (h) Notwithstanding any other provision of this article, the county department may spend in excess of twenty percent of actual costs for the purpose of matching federal funds for the administration of the child support enforcement program or for the administrative costs of activities involving food stamp, public assistance, or medical assistance fraud investigations or prosecutions.
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Analysis of SFY-15 County Administration Close-Out Based on Projected Expenditures
During SFY-15, counties are projected to incur the following County Admin expenditures:Medicaid - $47,531,200Food Assistance - $58,332,100Child Support - $3,690,200Leap/Other St. Only - $2,757,600Total Expenditures - $112,311,100
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Those Expenditures will have the following impact on Federal Revenues:Medicaid-Reimb - $31,455,300CDHS Federal:Food Assistance - $29,166,100Child Support - $ 2,435,600Total CDHS Federal - $31,601,700[The CDHS portion of the Long Bill limited our ability to use Federal Revenues to $26,841,168. Therefore, the remaining $4,760,532 has to be moved to the Pass-thru appropriation to be used.]
Analysis of SFY-15 County Administration Close-Out Based on Projected Expenditures
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In summary, the Revenues that can be used in County Administration are: CDHCPF Federal - $ 31,455,300 CDHS Federal - $ 26,841,168 Total Federal - $ 58,296,468General Fund - $ 30,510,741Total CA Revenues - $ 88,807,209P/T Revenues - $ 4,760,532Grand Total - $ 93,567,741
Analysis of SFY-15 County Administration Close-Out Based on Projected Expenditures
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My Estimation: (Note all of the “Ifs”)IF expenditures continue at their current pace, and IF all of the expenditures are determined eligible for the Federal reimbursement rate initially used in CFMS, and IF the close-out methodology doesn’t do something strange with the distribution of funds, there may actually be General Fund to revert for the first time in my history.
Analysis of SFY-15 County Administration Close-Out Based on Projected Expenditures
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Section II -A High-level view of the close-out
procedures
This is a repeat of my presentation at the 2001 County
Accounting Conference
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Overview of Close-Out Process
• Verify Final Child Welfare Allocations• Obtain Final County Expenditure Totals• Determine Each County’s Over- or Under-
Expenditure Levels• Perform Surplus Distribution Calculations• Move Remaining Deficits to TANF Transfer
or to County-Only
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Verify Final Child Welfare Allocation
Child Welfare Allocations Have Been Adjusted For:
• Final Determinations of the Child Welfare Allocations Committee
• Distribution of Supplemental Funding• Mitigation Requests• Transfers to Core Services/EPP
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Obtain Final County Expenditure Totals
• Move any 100% CW Administration Over- or Under-Expenditures to 80/20 Line
• Reconcile Expenditure Report to Existing CFMS Reports
• Reconcile Total Expenditure Data to COFRS Balances
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Determine Each County’s Over- or Under-Expenditure Levels
• Re-Allocate State Share of RTC/CHRP Over- or Under-Expenditures from RTC/CHRP Lines to 80/20 Line:
– Multiply Over- or Under-Expenditure Amount by Federal Earning Rate (Approximately 50%)
– Divide This Amount by 80% to Establish a Comparable County Share
• Adjust RTC/CHRP Allocations to Expenditure Level
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Determine Each County’s Over- or Under-Expenditure Levels
(Continued)
• Adjust 80/20 Allocation by Amount Calculated
• Subtract 80/20 Expenditures from Net 80/20 Allocation. This Represents Each County’s Net Over- or Under-Expenditure of the Child Welfare Allocation
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Perform Surplus Distribution Calculations
Perform the Following Steps for All Over-Expended Small- and Medium-Sized Counties:
a Divide Each Over-Expended County’s 80/20 Child Welfare Allocation by the Total 80/20 Allocation of all Small and Medium-Sized Over-Expended Counties. The Total of this Column Should Equal 100%
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Surplus Distribution Calculations (Continued)
bDivide Each Over-Expended County’s Over-Expenditure by its 80/20 Child Welfare Allocation
c Calculate the Inverse Over-Expenditure Percentage by Dividing the Result of Step b into 1
d Calculate Each County’s Inverse Percentage from Step c as a Percentage of the Total of All Counties’ Inverse Percentages. The Total of this Column Should be 100%
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Surplus Distribution Calculations (Continued)
e Determine the Average of Each Over-Expended County’s Child Welfare Allocation as a Percentage of the State-Wide Total Child Welfare Allocation (Step a) and Each County’s Inverse Percentage as a Percentage of the State-Wide Total of Inverse Percentages (Step d). This Determines Each County’s Surplus Distribution Factor
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Surplus Distribution Calculations (Continued)
f Multiply the Surplus Distribution Factor, as Calculated in Step e, by the Surplus Distribution Pool. This Pool is Composed of the Total Amount of Under-Expenditures in Small and Medium-Sized Counties, Plus Any Unused Mitigation Pool Funds. This Step Determines the First Tier Distribution
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Surplus Distribution Calculations (Continued)
g Step f will result in a Distribution to Some Over-Spent Counties Which Exceeds Their Over-Expenditure Amount. Calculate the Amount of Such Over-Distributions. This Amount Becomes the Surplus Distribution Pool for the Second Tier Surplus Distribution
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Surplus Distribution Calculations (Continued)
h Repeat Steps a through g for all Counties With Remaining Over-Expenditures Until You No Longer Have a Mixture of Under-Spent and Over-Spent Counties
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Surplus Distribution Calculations (Continued)
i Complete the Surplus Distribution Process for Non-Managed Care, Ten Large Counties. The Surplus Distribution Pool Will Include the Under-Expenditures From Any of the Non-Managed Care Ten Large Counties and Any Unused Ten Large County Mitigation Funds
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Surplus Distribution Calculations (Continued)
j If There Are Small, Medium-Sized, or Non-Managed Care Ten Large Counties With Remaining Deficits, and Any Surpluses Which Have Not Yet Been Distributed, Complete Steps a Through g To Cover Deficits in These Counties to the Extent Possible
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Surplus Distribution Calculations (Continued)
k If There Are Managed Care Ten Large Counties With Remaining Deficits, and Any Surpluses Which Have Not Yet Been Distributed, Complete Steps a Through g To Cover Deficits in These Counties to the Extent Possible. This Completes the Surplus Distribution Process
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Move Remaining Deficits to TANF Transfer or to County-Only
• Determine the Portion of Each County’s Remaining Over-Expenditures That Can Be Covered With TANF Transfers:
– Does County Have Colorado Works Under-Expenditures?
– Did County Authorize TANF Transfer?– Is Transfer Needed to Cover Child Care
Over-Expenditures?
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Move Remaining Deficits to TANF Transfer or to County-Only(Continued)
• Reduce Child Welfare Expenditures and Increase TANF Transfer Expenditures By The Amount to be Transferred
• Calculate Remaining Over-Expenditure Amounts
• Reduce Child Welfare Expenditures and Increase County-Only Expenditures By The Amount of Remaining Over-Expenditures
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Move Remaining Deficits to TANF Transfer or to County-Only(Continued)• Note: Coming soon to a Close-Out near you!
- If there are funds remaining after the previous steps are completed, CMP Counties that elected to participate in Managed Care Savings will have a second chance at Surplus Distribution.
- If there are still funds remaining, CMP Counties that elected to participate in Surplus Distribution will have a second chance to receive the General Fund Portion of their savings.
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Section III – Shared Ideas
What can counties do to avoid County-Only dollars being used
to cover allocated programs?
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What can counties do to avoid County-Only dollars being used to cover allocated programs?
1. Find the optimal way to code expenditures LEGALLY, in order to maximize expenditures to allocations where your county is adequately funded, and minimize expenditures to those that are under-funded.
Potential Problems:1) Did I mention it must be LEGAL?2) Don’t automatically assume that 100% time reporting is going to drive costs where you “want” them to go. (Be careful what you wish for …)
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What can counties do to avoid County-Only dollars being used to cover allocated programs?
2. Authorize TANF Transfers in such a way that they maximize our ability to use them to bail your county out of Child Welfare and/or Child Care over-expenditures.
Potential Problems:1) This may use up your County TANF Reserve faster than you had planned.2) If you have other plans for funds transferred to Child Care from TANF, this may use up those funds on Close-Out, instead.
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What can counties do to avoid County-Only dollars being used to cover allocated programs?
3. Monitor your allocated expenditures monthly, so you can advise your Director to enact cost-reduction measures in time for those measures to take effect.
Potential Problems:You need to consider future expenditure patterns that can be anticipated. (e.g. Large remodel costs, Pending OOH placements, Provider rate increases, etc.)
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What can counties do to avoid County-Only dollars being used to cover allocated programs?
4. Monitor your RTC placements, so that you know what expenditures you’re actually generating, as opposed to the amount that is showing in CFMS each month.
Potential Problems:1) There can be expenditures that “carry over” from year-to-year, due to slow provider reimbursement requests.2) There is a great deal of effort involved.
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What can counties do to avoid County-Only dollars being used to cover allocated programs?
5. As a last resort, re-classify expenditures from allocations that are going to be significantly over-expended into the pass-thru appropriations.
Potential Problems:1) You lose any chance at reimbursement at the standard rate, in order to be “guaranteed” 33% reimbursement.2) Future allocations could be reduced, if they are calculated based on historical expenditures.3) County Contingency revenue could be reduced.
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What can counties do to avoid County-Only dollars being used to cover allocated programs?
Other Ideas????