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MDHHS
Foster Care
CCI COST REPORT
TRAINING
For
Fiscal Year Ended
09/30/2017Slide2
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Training Info and Logistics
To access the webinar click or type in the url:
https://somdhsostdwebpeterson.centurylinkccc.com/CenturylinkWeb/2017CostReport
Enter your first and last name and email address.
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Chat feature and submitting questions through chatSlide3
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Agenda
Introductions
Cost Report Context
Training Goals
High-level Overview of Cost Report Changes
Cost Report Updates
Submitting the Cost Report
Q & ASlide4
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Presenters
Sarah Goad –
Manager, MDHHS Foster Care Program Office
Tim Kubu –
Manager, MDHHS Audit and Review Section
Robert Fay –
Auditor, MDHHS Audit and Review Section
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Michigan Department of Health and Human Services (MDHHS) receives cost reports from Foster Care providers* to monitor and evaluate the rates the State of Michigan pays providers for Foster Care services.
The State of Michigan’s evaluation of payment rates involves collecting cost reports that capture revenues, expenses and other program data for those services rendered through contracts with providers.
*Foster Care providers can be either a child placing agency (CPA) or a child caring institution (CCI).
Cost Report ContextSlide6
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2017 Cost Report
The purpose of this training is to identify the changes that were made since the 2016 fiscal year reporting cycle. We hope that by identifying changes it will be easier for your organization to prepare the 2017 cost report.
MDHHS has made revisions from the 2016 cost report based on the experience of working with providers. Changes were made to:
Align reporting with contract and handbook requirements.
Capture information that will be used to evaluate payment rates.
Thank you in advance for your participation in this important process for the State of Michigan!
Cost Report Training GoalsSlide7
Overview of Changes
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High Level Overview of Changes For 2017
Penalty Language
:
60 and 90 day past-due timeframes and withhold/penalty language of 5% of MDHHS contract revenue not to exceed $60,000
Tab 1, Instructions
: We updated instructions related to –
The provider’s “required backup data.”
A new “no activity” indicator.
A new “basis of accounting” field.
A new “fiscal year end date” field.
The “attestation statement.”
The new “statistics” section.
Tab 2, CCI Information
: We added a field for reporting –
The provider’s basis of accounting.
The provider’s fiscal year end date (this may differ).
Next to the contract number, a check-box to indicate whether the provider experienced “no activity” on a particular contract during the reporting period.Slide9
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High Level Overview of Changes For 2017
(continued):
Tab 3, Direct
: We changed the format of this tab such that the revenues are on the top of the page and the expenses are below. We added a “basis of accounting” flag which pulls from “basis of accounting” input field at Tab 2.
Tab 4, Indirect
: We added a new line in our new Section 3,
Miscellaneous-Indirect
, to allow flexibility to report costs which are in accordance with 2 CFR 200.412 and 200.414.
Tab 5, Supplemental Schedule of Expenditures
: No changes.
Parent Organization Costs
: For the fiscal year ended 9/30/2017, we eliminated the Parent Organization Cost (tab) from the cost report.
Tab 6, Statistics
: We moved program statistics previously reported with direct and indirect costs to a new stand alone “statistics” tab.Slide10
Cost Report Updates
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Tab 2, CCI Information - Updates
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No Activity Field
We added a “no activity” field.
Your organization is still required to report all contracts and contract numbers that are/were active for the period. Report the contract numbers if your contracts are not rescinded, cancelled or expired. Please mark the “no activity” box next to the contract number if your contract is technically “active” but your organization had “no activity” under the contract during the report period. By appropriately marking this box you will prevent any delays in processing and follow up from MDHHS. Slide12
Tab 2, CCI Information - Updates
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Basis of Accounting Field
Please mark either the “cash”, “accrual” or “other” field.
If you mark the “other” field, please specify the method used by your organization.
The basis of accounting that your organization uses for general ledger purposes should be the same basis of reporting for the cost report. As such, the amounts reported in the cost report should match to your general ledger.
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Tab 2, CCI Information - Updates
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Fiscal Year End Date Field
Please enter your organization’s fiscal year end date. This will be the same year-end date that your organization uses to report income to the IRS (Form 1120 Corporate, 1065 Partnership, or similar). For those organizations exempt from income tax, this will be the same year-end date on your organization’s annual information report to the IRS (Form 990).
Your organization’s fiscal year end date may be different than the State of Michigan’s fiscal year end date, September 30. If your organization’s fiscal year end date does not match the State of Michigan’s, then, for MDHHS cost report purposes, your organization will need to accumulate data across more than one accounting period.Slide14
Tab 3, Direct Cost - Updates
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Tab 3 (Direct Costs Template) will automatically populate the “basis of accounting” table based on the check box entries from Tab 2. The purpose of this table is to remind the organization that the basis of accounting and reporting must match.
Basis of Accounting TableSlide15
Tab 3, Direct Cost - Updates
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We changed the format of the direct cost tab such that the revenues are now on top (table 3.1) and the expenses are now below (table 3.2). The “additional funding source” rows are now grouped with the revenues on top. Slide16
Tab 3, Direct Cost - Updates
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We removed fields for program statistics off of Tab 3.
Statistics such as the “number of children served” or the “actual days of care” are now reported independently at
Tab 6, Statistics.Slide17
Tab 3, Direct Cost - Updates
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We updated the allow-ability of certain direct
operating
costs on the cost report. Allowable expenses now include the following and may be reported at: Tab 3 (Direct), Section 2, Operating, Occupancy row: Depreciation, Interest and Property Tax related to the contracted facility. Tab 3 (Direct), Section 2, Operating, Equipment row: Furniture, appliances, computer equipment, computer maintenance and security applications, printers, file cabinets, chairs and other durable goods. The guidance and criteria for these costs are listed in the Annual Cost Report Handbook, Child Caring Institutions and begin at page 17 (Occupancy) and page 19 (Equipment). To claim these expenses on the cost report as direct costs, the CCI must use the criteria as published in the handbook. Depending on their nature, some costs may be claimed between direct and indirect. Slide18
Tab 3, Direct Cost - Updates
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Equipment Capitalization Threshold
Handbook, page 19:
The amount reported on the cost report for equipment should match the institution’s capitalization and or expense depreciation policy. The capitalization threshold cannot exceed $5,000. Any item costing $5,000 or more must be capitalized and depreciated. Slide19
Tab 3, Direct Cost - Updates
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We also updated the allow-ability of certain direct
miscellaneous
costs on the cost report. Allowable expenses now include the following and may be reported at: Tab 3 (Direct), Section 4, Miscellaneous row:This may include and must be reported separately-Cable TV, Satellite, DVD rental and internet based servicesPlease refer to the Handbook, Child Caring Institutions, page 24. Slide20
Tab 4, Indirect Costs - Update
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We updated the allow-ability of certain
indirect
operating costs on the cost report. Allowable expenses now include the following and may be reported at: Tab 4 (Indirect), Section 2, Operating, Occupancy row: Depreciation, Interest and Property Tax related to the contracted facility for the use of contracted facility space for indirect administrative personnel. Tab 4 (Indirect), Section 2, Operating, Equipment row: Furniture, appliances, computer equipment, computer maintenance and security applications, printers, file cabinets, chairs and other durable goods for the use of contracted facility space for indirect administrative personnel.
The guidance and criteria for these costs are listed in the Annual Cost Report Handbook, Child Caring Institutions and begin at page 17 (Occupancy) and page 19 (Equipment). To claim these expenses on the cost report as indirect costs, the CCI must use the criteria as published in the handbook. Depending on their nature, some costs may be claimed between direct (Tab 3) and indirect (Tab 4). Slide21
Tab 4, Indirect Costs - Update
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We added to Tab 4, Indirect Costs, Section 3 – a row to report miscellaneous indirect costs.
Please refer to the CCI handbook, page 25, for guidance on miscellaneous indirect costs. Slide22
Tab 5, Supplemental Schedule of Expenditures
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There are no updates to the “SSE” tab; however, this schedule remains critically important.
MDHHS uses this schedule to claim monies for Foster Care from the appropriate Federal source. The schedule shows direct costs split between “maintenance” costs and “social services” cost. The Department uses that split to claim money either from Title IV-E (for maintenance) or Title XX (for social services).
Tab 5, SSE is linked to the direct costs at Tab 3. There should be no difference in total costs between the two schedules. The CCI representative should read the Handbook, Section 5, page 26, for guidance on how to split costs between “maintenance” and “social services.” Slide23
Tab 5, SSE
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Tab 6, Statistics - New
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We added a new tab in the cost report to report program statistics which includes:
Children Served
Days of Care (Available)Days of Care (Actual)Employment – Full Time Equivalents – DirectEmployment – Full Time Equivalents – IndirectEmployment – Full Time Equivalent – Exits (Direct Only)We added a new section to the Child Caring Institution Handbook, Part 5, Section 6, pages 29 and 30, which gives a quick reference on how to calculate the various program statistics. Slide25
Tab 6, Statistics - New
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Submitting the Cost Report
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Submitting the Cost Report
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Ensure that the Agency Information has the correct contact person for your provider agency
Ensure that the cost report has been electronically signed
Attach the completed cost report to an email and send to:
MDHHS-FOSTER-CARE-AUDITS@Michigan.gov
Cost Report Due Date: Friday, December 15, 2017Slide28
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Back-up Documentation
MDHHS may ask your organization for back-up or supporting documentation related to the Cost Report. Your organization should be able to provide:
General ledger (accounting) reports that tie directly to the cost report;
Reports and schedules from your payroll or other financial systems that tie to the cost report; and/orOther program-specific reports. Slide29
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All organizations must comply with the audit report requirement of the Foster Care contract. This may include the following:
A single audit issued in accordance with generally accepted governmental auditing (GAGAS) standards.
A financial audit issued in accordance with generally accepted auditing standards (GAAS); or,
An audit status notification letter indicating that the organization is exempt from the audit requirement. Audit Report RequirementPlease Note:Submission of the annual cost report is independent and separate from the audit report requirement in your contract. Slide30
What Should I Do If I Need Assistance?
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For Program Related Questions Contact:
Sarah Goad –
goads@Michigan.gov 517-599-8408For Cost Report Related Questions Contact:Audit & Review Section – MDHHS-FOSTER-CARE-AUDITS@Michigan.gov 517-373-0929Slide31
Questions?
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