Budget and audit committee minutes
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Budget and audit committee minutes

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Budget and Audit Committee Minutes October 22, 2009 Rehabilitation Services Commission 400 E. Campus View Blvd., Columbus, OH 43235 Call to Order At 9:05 a.m. Chair Daugherty called the Budget and Audit Committee meeting to order. Approval of Agenda Commissioner Romer-Sensky moved to add Maintenance of Effort Waiver as a topic to the October 22, 2009 Budget and Audit Committee agenda, seconded by Commissioner Growick. Motion carried. Introductions Commissioners: Chair David Daugherty, Commissioner Romer-Sensky, Commissioner Growick Staff: Administrator Michael Rench, CFO Chris Hansen, BSVI Director Mike Hanes, CIO Roger McMahill, Fiscal Officer, Marc Protsman, Fiscal Specialist Steve Tribbie, Office of Communications Director Eileen Corson, Fiscal Specialist Amadou Diallo, BDD Director Kathy Johnson, HR Director Janine Ashanin, Guests: Connie Hill, OARF, Kevin Futryk, OACCD, Brenda Hanes, GWC, Robin Hepler, COVA Teleconference participants: Mark Seifarth, DD Public Comment None Approval of Minutes Commissioner Growick moved to approve the August 24, 2009 Budget and Audit Committee Minutes, seconded by Commissioner Romer-Sensky. Motion carried. Review/Amend Committee Charter (attachment A) Chair Daugherty read the Purpose Statement and asked Commissioners if they had any comments. Commissioners agreed with the Purpose Statement and offered no comments. Chair Daugherty read the changes made to the Key Work ...

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Budget and Audit Committee Minutes
October 22, 2009
Rehabilitation Services Commission
400 E. Campus View Blvd., Columbus, OH 43235
Call to Order
At 9:05 a.m. Chair Daugherty called the Budget and Audit Committee meeting to
order.
Approval of Agenda
Commissioner Romer-Sensky moved to add Maintenance of Effort Waiver as a
topic to the October 22, 2009 Budget and Audit Committee agenda, seconded by
Commissioner Growick.
Motion carried.
Introductions
Commissioners:
Chair David Daugherty, Commissioner Romer-Sensky,
Commissioner Growick
Staff:
Administrator Michael Rench, CFO Chris Hansen, BSVI Director Mike
Hanes, CIO Roger McMahill, Fiscal Officer, Marc Protsman, Fiscal Specialist
Steve Tribbie, Office of Communications Director Eileen Corson, Fiscal Specialist
Amadou Diallo, BDD Director Kathy Johnson, HR Director Janine Ashanin,
Guests:
Connie Hill, OARF, Kevin Futryk, OACCD, Brenda Hanes, GWC, Robin
Hepler, COVA
Teleconference participants:
Mark Seifarth, DD
Public Comment
None
Approval of Minutes
Commissioner Growick moved to approve the August 24, 2009 Budget and Audit
Committee Minutes, seconded by Commissioner Romer-Sensky.
Motion carried.
Review/Amend Committee Charter (attachment A)
Chair Daugherty read the Purpose Statement and asked Commissioners if they
had any comments.
Commissioners agreed with the Purpose Statement and
offered no comments.
Chair Daugherty read the changes made to the Key Work Products/Time Lines.
Commissioners agreed with changes presented.
Budget and Audit Committee
October 22, 2009
Page 2
Chair Daugherty read the Committee Function or Scope of Work and asked
Commissioners for comments.
Commissioners offered no comments and agreed
with statements.
Chair Daugherty read the Operating Principles and asked for comments from
Commissioners.
Commissioners offered no comments and agreed with
statements.
Chair Daugherty read the changes to the Composition/Membership section.
It
was suggested to change the composition of the committee from three members
to two members and the Commission Chair would sit as ex-officio.
Commissioner Romer-Sensky asked, can the ex-officio break a tie vote?
Chair
Growick stated we should do away with ex-officio and have the Commission
Chair participate in all three committees.
When Commissioners are ready to
review the Bylaws to establish the new Legislative Committee, which it is
currently an ad hoc committee, then committees can be composed of three
members.
We can keep the Chair as a regular Committee member and not have
the title of ex-officio member.
The Commission chairperson would then be a
voting member of each of the committees.
Motion
Commissioner Romer-Sensky moved to make a recommendation to take
to the full Commission to revise the Composition/Membership Committee Charter
to read, the Budget and Audit Committee will be composed of three Commission
members that includes the Commission Chairperson, seconded by
Commissioner Growick.
Motion carried.
Commissioners agreed with the changes to the Liaison Contact Information and
Backup Liaison Contact Information as noted in the Committee Membership
section of the Charter.
Review of Calendar for 2010
A listing of key fiscal dates for calendar year 2010 was provided for Committee
review.
Chair Daugherty identified February 24, 2010, April 21, 2010 and June
30, 2010 as potential dates for the Budget and Audit Committee Meetings.
Meeting times would be 9:00 a.m. – 11:00 a.m.
Committee dates for the second
half of calendar year 2010 will be established once Commission meeting dates
have been set for the balance of 2010.
Budget and Audit Committee
October 22, 2009
Page 3
Motion
Commissioner Romer-Sensky moved to approve the February 24, 2010,
April 21, 2010 and June 30, 2010 Budget and Audit Committee Meeting dates,
seconded by Commissioner Growick.
Motion carried.
Stimulus Update
VR Case Management
Administrator Rench thanked Communications Director Corson, CFO Hansen
and Fiscal Officer Protsman for their hard work in providing an extensive amount
of information to Controlling Board members.
He stated that the Controlling
Board did approve our request for a waiver of competitive bid for the VR Case
Management System.
IT and Contract Services are now reviewing the final
contract.
The Controlling Board request indicates that 8% of the contract work
would be subcontracted.
Mr. Rench stated, we want as much of that 8% as
possible to be subcontracted to an Ohio-based MBE or EDGE vendor.
Administrator Rench reported that the Controlling Board request did meet with
some outside opposition.
We are entering into the first phase of the contract,
which totals $3.5 million dollars for the two years.
Since ARRA dollars expire
September 30, 2011, we are under a very tight timeframe to complete this
project.
In addition Administrator Rench stated Susan Pugh, BVR Director, has begun
discussion with staff regarding the culture change the new web based system will
bring to about 400-500 VR staff.
Their business lives will change on how they
perform processes.
We plan to utilize some of BDD Director Johnson’s staff,
who have undergone a similar systems overhaul, to think about what we need to
prepare for with the upcoming system changes.
Commissioner Growick asked, can we get a flavor of the members of Controlling
Board, who expressed concern?
Administrator Rench responded the overall
concerns related to why previous bidding processes were not successful and
why OIT ultimately released RSC to negotiate directly with the software vendors.
CFO Hansen stated it also seems, due to budgetary constraints, the theme of the
Controlling Board focuses on cost savings and assuring that funding requests do
not by-pass the biennial budget process.
Administrator Rench stated there were several “friendly” questions from the
Senators.
We explained the benefits, cost savings for staff and an effective use
of our partners’ time to the Controlling Board members.
Budget and Audit Committee
October 22, 2009
Page 4
Administrator Rench stated OARF was very helpful and Executive Director Keil
lobbied for RSC, was there with us, and worked with Representative Hottinger
and attempted to talk with others.
We enlisted the assistance of the Governor’s
Office, who also contacted the Controlling Board members.
This is a very
important project facing this organization.
Administrator Rench further stated we respectfully disagreed with some points,
understood their concerns, provided lots of data, and explained that RSC has
ARRA dollars which will not be available in the future.
Based on the timing of the
stimulus dollars, this is our only real option. Commissioner Daugherty asked, did
any of the members ask about creating jobs?
Administrator Rench responded,
Representative Luckie was interested in his constituents.
Communications
Director Corson stated we included a breakdown county-by-county of RSC
consumers, hourly wages, etc., so the Controlling Board members would see
how the new computer system is a benefit to their respective districts.
The Ohio
Association of Goodwills also helped RSC.
Commissioner Growick stated congratulations and a tremendous thank you to
Administrator Rench and staff.
We will be tremendously different because we
have ARRA money and can go forward with the web-based system.
This is a
tremendous accomplishment and a coming-of-age event for our new
administration.
VR/ILOB/IL Projects
BVR Director Pugh reported there was a tremendous interest in the ARRA funds
with 65 proposals submitted.
The 65 proposals were evaluated and 19 contracts
were awarded.
Due to logistical issues with the 19 contracts, there are 25
separate contracts.
We awarded $7.3 million, which is an increase and more
than we initially planned to award in the first round.
The contracts started on
September 1, 2009 and will conclude on September 30, 2010.
The projects
awarded include a variety of services.
Many contracts are comprehensive
packages designed to provide a variety of services.
Due to the economy and
nature of individuals with significant disabilities, the 19 contracts were seen as
very helpful to consumers.
Ms. Pugh further reported on the contract awardees
as follows:
one contract was awarded to Enterprise Works; CRPs with specialty
groups have been awarded contracts; five contracts will serve people with mental
health issues; two contracts will serve transition students; two contracts will serve
ex-offenders; one contract will serve all veterans; one contract will serve
individuals with brain injury; and one contract is for the Business Enterprise
Budget and Audit Committee
October 22, 2009
Page 5
Program.
The Cleveland Sight Center’s project is to make their BE training
program an on-line program so that it is more accessible to people with visual
impairment.
We are also pleased that several contracts include collaboration
amongst multiple CRPs.
She further stated, of the entities not selected, we
offered to meet with them and provide feedback about their proposals.
BVR
Director Pugh met with 20 of those not awarded and had very productive
discussions so they can prepare for the next round of stimulus dollars.
In addition, BVR Director Pugh reported we have available the second half of
stimulus money for RFPs.
The bureaus have spent time gathering input from
staff regarding their community needs, bringing together people from the field to
evaluate feedback and look at developing RFPs for these projects.
She stated,
we want to be more descriptive in this round of RFPs.
The expectation is by the
end of November, we will have the second round of RFPs out.
Applicants said
they would like to have more time – a couple of extra weeks to write and submit
their proposals.
Administrator Rench stated, we are holding out funds from the second round of
stimulus money to hire two positions.
Per RSA, the TBI grant requires a full-time
grant person.
RSC did not budget for this position.
We are buying some time
with ARRA funds.
The second position is for a project management position.
In addition, Administrator Rench stated the $10.6 million is the amount for the
second round of funding.
He asked, do we need any of this money for VRCMap?
CFO Hansen responded, monies for the first round and second round of funding
are being set aside for VRCmap.
However, she needs to sit down and see what
dollars have been allocated through the RFPs, VRCMap and staff, and see what
the remaining dollars are.
Commissioner Romer-Sensky asked, what is geographical distribution?
BVR
Director Pugh responded, we have a couple of statewide projects.
We awarded
more projects in the northern region than in the southern region.
We need to
take a look at geographical distribution in the second round of stimulus funds.
Commissioner Growick stated, has there been discussion among the 60 or so
applications for the need for accreditation.
Was this a prerequisite for applying
and are there any thoughts or maybe the time frame is too short to address this?
He further stated there may be an accredited entity that we would want to fund,
especially innovative and creative projects, and our partners cannot get
accredited due to funds.
BVR Director Pugh responded, the project proposals
needed to address how our accreditation rule would be met if they plan to
Budget and Audit Committee
October 22, 2009
Page 6
provide a service that requires accreditation.
We also said that for proposals that
provided services requiring accreditation, the applicant must be the accredited
entity.
For example, we did have to reject a rehabilitation technology project due
to elements in the proposal that were not appropriately accredited.
In these
situations, we talked with entities that submitted proposals and discussed options
and for them to resubmit proposals, in the second round, and not include
services that require accreditation or collaborate with CARF-accredited entities to
develop a work plan to put together an application.
We are open to entities that
are not accredited so long as the proposal does not include services that require
accreditation.
Administrator Rench stated this is a long term issue we are exploring and will be
bringing to the Committee.
Other states reimburse CRPs for CARF
accreditation.
If we were to consider this, we would not want to fund one group
but not other entities.
He further stated we are looking at a mechanism to allow
all participants to reduce their costs.
We are researching what other states are
doing.
Commissioner Romer-Sensky stated RSC might want to look at ODJFS who
provides incentives for childcare to get accredited.
Mental Health moved more of
its providers to accreditation and they had some incentives.
She stated RSC
may want to have conversations with its sister agencies about this.
Chair Daugherty asked, how many of the projects will sustain after ARRA funding
goes away?
BVR Director Pugh responded, in the selection criteria, we identified
an element that scored the project’s sustainability.
This was not an area that
people who submitted proposals scored well in.
There are not opportunities for
alternate funding given the current state of our economy.
We identified this as an
element of scoring because we would want to give additional consideration to the
project if sustainable funding were available.
Regarding the accreditation, we
have been referring them to training that OARF is providing through its earmark.
This is a very helpful resource to RSC.
Chair Daugherty stated there is a period of time, in the rules, that an organization
can become accredited through CARF.
There is an opportunity to work the clock
to get an accreditation.
RSC rules require the accreditation to provide core
services.
There are some preliminary accreditation options available through
CARF that RSC would accept.
There is technically a waiver opportunity if we do
not have a service provider in the area.
Budget and Audit Committee
October 22, 2009
Page 7
Commissioner Growick stated we need to invite OARF to the November 18, 2009
Commission Meeting regarding its earmark.
Chair Daugherty agreed to add
OARF Earmark as an agenda item.
Commissioner Romer-Sensky asked staff to
provide a one to two page document describing what it means to be accredited
and what the costs are and how many agencies are accredited.
Commissioner Growick asked, regarding the 19 projects awarded, how will this
decrease RSC’s waiting lists?
BVR Director Pugh responded, we do not have a
waiting list today.
However, we do not expect to maintain that success.
We are
expecting ERI reduction in staff over the next couple of months.
She stated that
one influencing factor related to this is quality.
We have been talking with staff
about spending more time with consumers and ensuring that we are not
admitting more consumers than we can serve appropriately.
After the first of the
year, we are anticipating that we will have waiting lists.
However, we are starting
processes that we believe will have minimum impact on consumers.
The intake
and orientation projects can certainly help us with this.
We can move these two
items off the counselor’s plate.
Four projects are providing this service for us.
We will continue to provide updates to Commissioners.
Commissioner Growick asked, are we having a pre-bidders conference for this
next round of RFPs?
He further asked, are we helping bidders with the process?
BVR Director Pugh responded, we plan to look at where applicants were
struggling and make improvements to the RFP in these areas.
We are also
planning a pre-proposal conference – and will share some of this information
about what we learned to help applicants with their proposal.
We do plan to
make changes to RFP to help applicants better understand what we are looking
for.
BDD
Chair Daugherty asked BDD Director Johnson to report on BDD’s hiring
activities.
BDD Director Johnson reported we had 400 applicants for the next
adjudicator hiring.
Those applicants who were qualified moved to the next
process.
We interviewed 173 people.
Due to space constraints, we asked SSA
to approve 12 and start a new class in January 2010.
We anticipate another
class in March so we do not have to go through the interviewing process again.
BDD Director Johnson stated our new training room moved to the “old” Scioto
Room.
The “old” BDD Training Room is being set up to train new Pathways
people.
BDD Director Johnson further reported the new adjudicators will be moved to
where HR was previously housed.
BDD Supervisor positions have been posted
and interviews are being held.
She stated SSA continues to expect the workload
Budget and Audit Committee
October 22, 2009
Page 8
to increase and is looking at ways to accommodate this.
On a national basis,
SSA is looking to move work around the states.
Regarding Medicaid, BDD Director Johnson reported the group continues to
have dialogue. The meeting in September was cancelled.
A meeting was held in
October and discussed the counties’ concerns about JFS no longer providing the
hearings process and how the hearing process will work.
There seems to be
confusion and conflicts with claimants.
CMS is to check their rules on this.
A
second meeting has been scheduled for this Friday.
Administrator Rench stated the federal government sent RSC a letter stating this
is going to take a lot longer than what we think.
BDD Director Johnson stated we
submitted the proposal to SSA and to Baltimore.
We have not heard back from
them.
IL/OB/IL
BSVI Director Hanes reported ILOB had a stimulus award during the same time
as the VR program.
We provided an annual grant award to the Centers.
We did
not award all funds from the first stimulus RFP.
We issued $704,000 in awards.
The stimulus funds required a 10% match.
Discussions are being held in
counties and locating partners.
We have served about 2400 and this is a boost
to serve individuals throughout the state.
Commissioner Romer-Sensky stated, we asked the local community to come up
with the 10% match.
She further stated, is this a burden for them, especially in
southern Ohio.
BSVI Director Hanes responded, this continues to be a major
hurdle.
We are having discussions with the Department of Aging to help remedy
this in the local community and with veteran’s programs to cover the match.
BSVI Director Hanes further reported on the IL projects.
He stated, funds are
being targeted to create a new Part C program in Warren, Ohio and raising the
ten remaining Centers’ allotment to $350,000 to help stabilize, increase and
expand their programs.
We have approval from RSA and are proceeding with
this plan.
Administrator Rench stated there is a problem with RSA and Part C ARRA
dollars.
The Part C dollars distribution has traditionally been based on a formula;
however, RSC distributed the Part C stimulus dollars equally. RSA is now stating
the amounts that were allotted will serve as the basis for future funding for IL Part
C.
We are working with RSA on this issue.
This will affect IL’s spending.
One
Center could lose as much as $100,000.
ARRA funds have never impacted any
other formula.
There is no written documentation on this.
If we can’t get this
resolved, it could have a significant impact.
Budget and Audit Committee
October 22, 2009
Page 9
First 1512 Quarterly Report
CFO Hansen reported that “Section 1512” refers to the section of the federal
code that requires federal reporting under stimulus funding.
The State of Ohio is
reporting all ARRA information through the Governor’s SharePoint site, not
individually.
RSC participated in two reporting test runs.
The first actual
reporting was on October 10, 2009.
We provided ARRA information through
September 30, 2009.
There are 48 programs identified on Governor’s
SharePoint site.
RSC has three programs to report:
VR, ILOB, and IL Part B.
Of those 48 programs, we were in the first eleven to get our reports submitted
both timely and accurately.
The information in the report includes overall
program data including program description, total funding and contacts as well as
expenditure data and jobs information—both number of jobs created and a
description of the type of jobs created.
Programs had to provide information by
October 10
th
, then we had 10 days to report any revisions, then the federal
government has 10 days to review.
On October 30, 2009, the information
becomes available to the public.
CFO Hansen further reported, we had no
expenditures to report for this first reporting period because the reporting dates
ran through September 30, 2009.
We did have job information, but OBM said
since we had no expenditures and had job creations, this looks odd.
The First
1512 Quarterly Report will not show job creation information; however, future
reports will capture this data.
The first report should be available to view the first
of November.
SFY 2008 Audit Update
CFO Hansen referred to the Audit report in the packets.
She stated this audit
took much longer than past audits due to a number of factors.
There was a new
team of auditors, who were perhaps not as seasoned as past audit teams.
It
took them extra time to learn, understand, and go through our procedures.
This
audit team also applied new auditing standards, which had not been followed in
the past.
Finally, the implementation of OAKS, the Statewide automated
accounting system, had an impact on slowing the audit process due to difficulties
in obtaining necessary reports.
CFO Hansen stated there were two deficiencies in the audit report.
One
deficiency dealt with cash management procedures.
We could not sufficiently
prove to the AOS that federal funds were expended within three days of receipt.
We need to better document our cash management processes to support
compliance.
In response to a query from Chair Daugherty regarding OAKS, CFO
Hansen stated OAKS has refined their data so that it is more user-friendly and
provides the back-up documentation that we now need.
CFO Hansen reported
the second deficiency in the Audit report dealt with BDD and documentation of
internal controls.
This same finding was also noted in the Performance audit and
Budget and Audit Committee
October 22, 2009
Page 10
addressed by BDD at that time.
This finding is based on the adjudicator review
of payments for Medical Evidence of Records.
The system previously had an
automatic payment of 20 days without documentation of adjudicator review.
The
I. Levy system has been modified to address the deficiency as noted.
In addition, CFO Hansen stated there are six management letter comments.
She
will provide copies of the six management comments to all Commissioners.
Management letter comments are less significant in nature, but still warrant
attention; they do not come to the level of a finding.
Finally, CFO Hansen
reported the 2009 audit is underway.
Commissioner Growick commended the
Fiscal staff.
He classifies the deficiencies as minor.
September Monthly Budget Report – FFY 2009
CFO Hansen reported on the FFY 2009 September Monthly Budget Report via a
PowerPoint presentation (see attachment B).
Commissioner Romer-Sensky stated, regarding slide one, when was the last
time RSC turned back federal money?
Fiscal Officer Protsman replied, it has
been longer than 10 years.
Commissioner Growick stated, regarding slide 5 the donations language bothers
him.
He asked, can we change the donations language to BMV designation?
Chair Daugherty stated, does the holding account represent a savings.
He
asked CFO Hansen what worries her about the budget.
CFO Hansen
responded, she is worried about another state budget cut.
Additionally, FFY 10
has a big hole to fill in order to reach MOE.
Maintenance of Effort Waiver
Administrator Rench stated he asked CFO Hansen and her staff to prepare a
request for an MOE waiver for FFY 10, anticipating that we won’t make match
and do not want to carry a penalty forward.
CFO Hansen stated if we stayed
where we are now with current match sources, our MOE penalty is approximately
$7 million.
We will need a lot of match dollars to try to make that up.
Administrator Rench stated we would ask the Budget and Audit Committee to
give us permission to prepare a MOE waiver request, then take the Committee’s
recommendation to the full Commission to give us authority to utilize this waiver
request during FFY 10, if warranted.
Budget and Audit Committee
October 22, 2009
Page 11
Motion
Commissioner Romer-Sensky moved that the RSC Fiscal Office prepare a
Maintenance of Effort Waiver for potential submission to the Rehabilitation
Services Administration, seconded by Commissioner Growick.
Motion carried.
CFO Hansen stated we are starting the process early, if we take action and don’t
need it for a particular amount it can be adjusted, but having dialogue with RSA
earlier in the process really helps.
Commissioner Growick asked, has staff contacted Washington with the new
Administrator coming on regarding the MOE waivers that have been granted at
the federal level?
CFO Hansen replied, we had an initial discussion with RSA in
July but the MOE waiver topic was not discussed at that time.
CSAVR has
completed a survey on states that have requested a waiver.
She will check on
the results and get back with the Commissioners.
In the past, waivers were not
granted very often by RSA.
Chair Daugherty stated a meeting with Senators Brown and Voinovich may need
to take place.
Administrator Rench stated he alerted the Governor’s Office about
how important this is and that we will begin the process.
We will run a fiscal
model and report back to the Commissioners.
In closing, CFO Hansen reminded Commissioners that Fiscal will be coming
back to the Committee to modify the FFY 10 budget, specifically for dollars that
were not spent under programs during FFY 09 that must now be rolled into FFY
10.
Next Meeting Date, Time, Location
The next Budget and Audit Committee meeting will be held on December 16,
2009 from 9:00 a.m. – 11:00 a.m. at RSC, 400 E. Campus View Blvd.,
Columbus, OH, in the Columbus/Zanesville Conference Rooms.
Adjourn
At 11:00 a.m. Commissioner Growick moved to adjourn the meeting, seconded
by Commissioner Romer-Sensky.
Motion carried.