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Financial Statements
Year Ended September 30, 2011
Community Mental Health Authority of
Clinton, Eaton, and Ingham Counties
Contents
Independent Auditors' Report
Management Discussion and Analysis
3 and 4
5 - 13
Government-Wide Financial Statements:
Statement of Net Assets
14
Statement of Activites
15
Fund Financial Statements:
Governmental Fund:
Balance Sheet
16
Reconciliation of Fund Balance of Governmental Fund to
Net Assets of Governmental Activities on the
Statement of Net Assets
17
Statement of Revenues, Expenditures, and Changes in Fund Balance
18
Reconciliation of Statement of Revenues, Expenditures, and
Changes in Fund Balance of the Governmental Fund to
Statement of Activities
19
Statement of Revenues, Expenditures, and
Changes in Fund Balance- Budget and Actual- General Fund
20
Proprietary Funds:
Statement of Net Assets
Statement of Revenue, Expenses, and Changes in Fund Net Assets
Statement of Cash Flows
21
22
23
Fiduciary Funds:
Statement of Fiduciary Net Assets
Statement of Changes in Fiduciary Net Assets
Notes to Financial Statements
24
25
26 - 41
Required Supplemental Information
Pension Plan Trend Analysis
42
Combining and Individual Fund Statements and Schedules:
General Fund- Schedule of Functional Expenditures
43
Internal Service Funds:
Combining Statement of Net Assets
Combining Statement of Revenue, Expenses, and Changes to Net Assets
Combining Statement of Cash Flows
Agency Fund- Statement of Changes in Assets and Liabilities
44
45
46 and 47
48
Community Mental Health Authority of
Clinton, Eaton, and Ingham Counties
Management Discussion and Analysis
As management and administrators of the Community Mental Health Authority of Clinton,
Eaton, and Ingham Counties (the Authority), we offer readers of the Authority’s financial
statements this background information on our funding and analysis of the financial activities of
the Authority for the fiscal year ended September 30, 2011.
Funding Background
External factors which impact, positively and negatively, the fiscal condition and actions of
the Authority: A number of factors impact the Authority’s ability to carry out its mission and its
ability to maintain fiscal stability. Those factors include:
•
Constrained state funding, for both of the Authority’s major revenue sources, State
General Fund/General Purpose dollars, and Medicaid.
•
Support (albeit weakening, given state revenue declines) by the Governor and legislature,
as indicated in the annual Appropriations process – both Medicaid and State General
Fund dollars - for the Community Mental Health (CMH) system and the services that it
provides.
•
Changing Medicaid enrollment and rates (pre-paid rates), the latter the result of a biannual (and, at times, annual) rebasing effort.
•
Fiscal and operational impact of the Authority’s role, as the Prepaid Inpatient Health Plan
(PIHP) for an eight county region - carried out via an Affiliation with four other
Community Mental Health Service Programs (CMHSPs) and two substance abuse
coordinating agencies.
•
Changes to the federal Medicaid waivers, under which Michigan operates its Medicaid
program, including the Specialized Medicaid services managed and provided by the
Authority.
5
Community Mental Health Authority of
Clinton, Eaton, and Ingham Counties
Management Discussion and Analysis
(Continued)
The Authority’s aggressive, proactive, and responsive actions to leverage or counter the
impact of these factors: The Authority is not a passive observer to the factors listed above.
The Authority:
•
Actively engages in legislative educational efforts, as part of the Michigan Association of
Community Mental Health Boards, the Mental Health Coalition, and acting on its own to
ensure sound funding for the Authority and the entire Michigan CMHSP System.
•
As a part of its annual budget development effort, prepares, well in advance, for a range
of revenue and expense scenarios.
•
Takes aggressive steps to reduce costs via increases in staff efficiency and the utilization
of the flexibility granted the Authority under the Medicaid managed care waiver. These
steps work to maximize the positive impact of some environmental factors and to
minimize the negative impact of others.
•
Builds alliances with community partners to stretch limited resources. The Authority is
an active member of dozens of local, regional, statewide, and national collaboratives and
partnerships. Most notably has been the formation and operation, over the past several
years, of an eight-county affiliation of CMHs, in which this Authority serves as the hub
to the four spoke CMHs which form the affiliation. This affiliation serves to increase the
clinical, fiscal, political, and compliance capacities of all of its members, while
stabilizing funding for the Authority.
•
Continues to aggressively seek additional funding for a wide range of innovative services
to the tri-county community, including federal, state, local, commercial, and private
sources. This has resulted in the receipt of a number of state and federal grants (totaling
several million dollars annually), allowing the Authority to experiment with new and
innovative approaches, with an eye toward sustaining these changes when the grant
funding ceases.
Ensuring the integrity of the Authority’s clinical, fiscal, and organizational infrastructure: The
Authority has been committed, in the face of varying fiscal conditions, to remaining clinically,
organizationally, and fiscally strong while ensuring its infrastructure was not permanently
damaged by budget cuts. The following provides a picture of that strength:
•
The Authority has been committed to and successful in making budget balancing efforts
which avoid and minimize, whenever possible, harm to consumers.
6
Community Mental Health Authority of
Clinton, Eaton, and Ingham Counties
Management Discussion and Analysis
(Continued)
•
The Authority maintains the clinical and administrative infrastructure of the Authority in
the face of these cuts. This infrastructure is represented by sound clinical philosophies
and approaches, skilled and committed staff, strong wages and fringe benefits, sound
facilities and equipment, strong managerial and administrative capabilities (information
services, finance, human resources, and quality improvement), strong training
capabilities, and strong community education efforts. This is a critical and conscious part
of the Authority’s approach.
•
The Authority has seen far too many human services and governmental bodies faced with
fiscal uncertainty and a rapidly changing environment make draconian compensation
cuts, eliminate staff training, reduce or eliminate building and equipment maintenance,
and dramatically reduce supplies, travel, and other resources key to carrying out their
mission. These cuts are short-term and leave the organizations incredibly weakened. We
have opted not to pursue this course of action.
Overview of Financial Statements
This discussion and analysis is intended to serve as an introduction to the Authority’s financial
statements. The Authority’s financial statements comprise three components:
1. Government-wide financial statements
2. Fund financial statements
3. Notes to the financial statements
This report also contains other supplementary information in addition to the financial statements
themselves.
Government-Wide Financial Statements
The Government-Wide Financial Statements are designed to provide readers with a broad
overview of the Authority’s finances in a manner similar to a private-sector business.
This is accomplished by reporting the Authority’s assets and liabilities using the full
accrual method of accounting. Prior to the implementation and adoption of GASB No.
34, the assets and liabilities of the Authority were reported using the modified accrual
method of accounting. In essence, this change in accounting method requires the
Authority to disclose borrowings, compensated absences for employees, and capital
assets less accumulated depreciation on the Authority’s financial statements.
7
Community Mental Health Authority of
Clinton, Eaton, and Ingham Counties
Management Discussion and Analysis
(Continued)
The Statement of Net Assets presents information on all the Authority’s assets and
liabilities with the difference between the two reported as total net assets. Over time,
increases or decreases in net assets may serve as a useful indicator of whether the
financial position of the Authority is improving or deteriorating.
The Statement of Activities presents information showing how the Authority’s net assets
changed during the most recent fiscal year. All changes in net assets are reported as soon
as the underlying event giving rise to the change occurs, regardless of the timing of
related cash flows. Thus, revenues and expenses are reported in this statement for some
items that will only result in cash flows in future fiscal periods. In addition, this statement
discloses the non-cash expenditure of depreciation that affects the ending book value of
capital assets.
Fund Financial Statements
A fund is a grouping of related accounts that is used to maintain control over resources
segregated for specific activities or objectives. The Authority, similar to state and local
governments, uses fund accounting to ensure and demonstrate compliance with financerelated legal requirements. All of the funds of the Authority may be divided into three
categories: The Governmental Fund, Internal Service Funds, and Fiduciary Funds.
Governmental Funds
Governmental funds are used to account for essentially the same functions reported as
governmental activities in the government-wide financial statements. However, unlike
the government-wide financial statements, governmental fund financial statements focus
on near-term inflows and outflows of spendable resources, as well as on balances of
spendable resources available at the end of the fiscal year. Such information may be
useful in evaluating a government’s near-term financing requirement.
Because the focus of governmental funds is narrower than that of the government-wide
financial statements, it is useful to compare the information presented for governmental
funds with similar information presented for governmental activities in the governmentwide financial statements. By doing so, readers may better understand the long-term
impact of the government’s near-term financing decisions. Both the governmental fund
balance sheet and the governmental fund statement of revenues, expenditures, and
changes in fund balances provide a reconciliation to facilitate this comparison between
governmental funds and governmental activities.
8
Community Mental Health Authority of
Clinton, Eaton, and Ingham Counties
Management Discussion and Analysis
(Continued)
The Authority adopts an annual budget for its General Fund. Budgetary comparison
statements have been provided for the General Fund to demonstrate compliance with
those budgets.
Proprietary Funds- Internal Service Funds
Proprietary funds are used to account for the Authority’s business-type activities. The
Risk Reserve Funds are used to account for assets held as a reserve against potential
liabilities relative to and as allowed by its contract with the Michigan Department of
Community Health (MDCH). Pursuant to these contractual provisions, the Authority’s
risk management plan has been reviewed and approved by MDCH. Separate risk
reserves are maintained for Medicaid and General Fund services. The Fixed Asset
Replacement Reserve is used to account for and finance future fixed asset purchases and
the Compensated Absences Reserve is used to account for the Authority’s vacation and
leave benefit liability. Both the Fixed Asset Replacement Reserve and the Compensated
Absences Reserve are permitted by the Michigan Mental Health Code.
Fiduciary Funds
Fiduciary Funds are used to account for resources held for the benefit of parties outside
the government. Fiduciary funds are not reflected in the government-wide financial
statements because the resources of those funds are not available to support the
Authority’s own programs. Fiduciary funds are commonly referred to as payee funds.
The accounting used for fiduciary funds is much like that used for proprietary funds.
Notes to Financial Statements
The notes provide additional information essential to a full understanding of the data
provided in the government-wide and fund financial statements. The accompanying
notes are an integral part of the financial statements and must be reviewed in conjunction
with the information reported on the financial statements to provide a full understanding
of the Authority’s financial situation.
Other Information
The combining statements are presented immediately following the notes to the financial
statements.
9
Community Mental Health Authority of
Clinton, Eaton, and Ingham Counties
Management Discussion and Analysis
(Continued)
Government-Wide Financial Analysis
The largest portion of the Authority’s total assets (42%) reflects its investment in capital
assets (e.g., land, buildings, vehicles, and equipment). These capital assets are used by
the Authority to provide services to the clients it serves; consequently, these assets are
not available for future spending and are considered fixed. Although the Authority’s
investment in its capital assets is reported net of related debt, it should be noted that the
resources needed to repay this debt must be provided from other sources, since the capital
assets themselves cannot be used to liquidate these liabilities. The corresponding debt for
the facilities makes up the largest portion of the Authority’s liabilities representing
approximately 34%.
Net Assets
Governmental Activities
2011
2010
September 30,
Current and other assets
Investments
Capital assets, net
$
13,116,961
11,122,224
17,362,416
$
11,596,260
12,721,361
16,617,942
Total Assets
41,601,601
40,935,563
Other liabilities
Long-term liabilities outstanding
19,517,387
9,633,033
18,293,578
10,519,374
Total Liabilities
29,150,420
28,812,952
6,085,390
1,812,638
4,553,153
6,077,362
1,804,897
4,240,352
Net assets:
Invested in capital assets, net of related debt
Restricted
Unrestricted
Total Net Assets
$
10
12,451,181
$
12,122,611
Community Mental Health Authority of
Clinton, Eaton, and Ingham Counties
Management Discussion and Analysis
(Continued)
Changes in Net Assets
Governmental Activities
2011
2010
Year ended September 30,
Revenues:
Program revenue:
Charges for services
Operating grants and contributions
General revenue:
MDCH contract
Local funding
Unrestricted investment earnings
Total Revenues
$
Expenses:
Adults with mental illness
Children with emotional disturbance
Developmental disabilities
Substance abuse
Board administration
Affiliation
Medicaid pass-through
ABW pass-through
Total Expenses
Changes in Net Assets
Net Assets, beginning of year
Net Assets, end of year
$
3,307,945
48,172,303
$
2,865,906
46,035,604
91,609,218
2,887,145
60,425
146,037,036
83,810,624
2,959,017
32,724
135,703,875
34,421,527
13,683,218
44,856,460
2,674,716
9,714,820
1,068,458
38,337,386
951,881
145,708,466
30,073,608
12,968,850
42,927,642
2,539,258
9,700,453
1,000,425
36,096,908
228,892
135,536,036
328,570
167,839
12,122,611
11,954,772
12,451,181
$
12,122,611
Financial Analysis of the Government’s Funds
As noted earlier, the Authority uses fund accounting to ensure and demonstrate compliance with
finance-related legal requirements.
The focus of the Authority’s Governmental Fund is to provide information on near-term inflows,
outflows, and balances of spendable resources. Such information is useful in assessing the
Authority’s financing requirements. In particular, unassigned fund balance may serve as a useful
measure of a government’s net resources available for spending at the end of the fiscal year.
11
Community Mental Health Authority of
Clinton, Eaton, and Ingham Counties
Management Discussion and Analysis
(Continued)
As of the end of the current fiscal year, the Authority’s Governmental Fund reported an ending
fund balance of $4,553,153, an increase of $312,801 in comparison with the prior year.
Approximately 64% of this total amount $2,905,693 constitutes unassigned fund balance, which
is available for spending at the government’s discretion. The remainder of the fund balance is
reserved to indicate it is not available for new spending because the underlying assets are
included in inventory, prepaids and principal of endowment funds and are not available for
current expenditures.
Capital Assets and Debt Administration
Capital Assets
The Authority’s investment in capital assets for its governmental activities as of September 30,
2011, amounted to $17,362,416 (net of accumulated depreciation of $18,982,550). This
investment in capital assets includes land, building, vehicles, and equipment. Additional
information on the Authority’s capital assets can be found in Note 6 of the financial statements.
Debt Administration
The Authority’s long-term debt activity consisted of borrowing $2,590,703 for facilities and
making debt service payments of $3,470,334 to decrease debt by $879,631. Additional
information on the Authority’s long-term obligations can be found in Note 7 of the financial
statements.
Budget Modifications
Federal Substance Abuse and Mental Health Services Association (SAMHSA) revenue was
reduced by ($999,464) to reflect the funds available in the final year of this contract, and to
utilize Medicaid, Child Care, and General Fund to provide services to children in the IMPACT
program. General Fund revenue budgets were increased by $859,089 to reflect pass thru rate
increases for state facilities and to recognize one-time funds reallocated to CMHA-CEI from
West Michigan CMH and Network 180. All remaining major budget modifications in fiscal year
2011 resulted from adjustments to Adult Benefit Waiver (ABW) and Medicaid rate and
enrollments. ABW and Medicaid budgeted revenue increased by $3,126,379. There were
offsetting budgeted increases Medicaid pass through expense to Affiliates and Coordinating
Agencies of $3,126,379. Clinton, Eaton, and Ingham program and administrative expense
budgets were modified to reflect the use of increased funding as follows: Adults with mental
illness $1,489,724, Children with emotional disturbance $16,892, Adults and Children with
developmental disabilities $2,364,662, and Board Administration and Facilities $423,692.
12
Community Mental Health Authority of
Clinton, Eaton, and Ingham Counties
Management Discussion and Analysis
(Continued)
Variance Budget to Actual
There were no significant variances between budget and actual.
Contacting the Authority’s Financial Management
This financial report is designed to provide our citizens, taxpayers, customers, investors, and
creditors with a general overview of the Authority’s finances and to demonstrate the Authority’s
accountability for the funds received. If you have any questions about this report or need
additional information, contact:
Business Office
Community Mental Health Authority of Clinton, Eaton, and Ingham Counties
812 East Jolly Rd
Suite 210
Lansing, MI 48910
13
Community Mental Health Authority of
Clinton, Eaton, and Ingham Counties
Government-Wide Financial Statements
Statement of Net Assets
Governmental
Activities
September 30, 2011
Assets:
Cash and cash equivalents (Note 4)
Investments (Note 4)
Accounts receivable (Note 5)
Prepaids and other assets
Capital assets not depreciated (Note 6)
Capital assets depreciated, net (Note 6 and 7)
Total Assets
Liabilities:
Accounts payable and accrued liabilities
Unearned Revenue (Note 5)
Current portion of long term liabilities (Note 7)
Noncurrent portion of long term liabilities:
Compensated absences (Note 7 and 8)
Debt and capital lease obiligations (Note 7)
$
5,079,932
11,122,224
6,389,569
1,647,460
2,077,172
15,285,244
$
41,601,601
$
13,301,528
3,538,582
2,677,277
544,331
9,088,702
Total Liabilities
29,150,420
Net Assets:
Invested in capital assets, net of related debt
Restricted for contract losses
Unrestricted
6,085,390
1,812,638
4,553,153
Total Net Assets
12,451,181
Total Liabilities and Net Assets
$
41,601,601
See accompanying independent auditors' report and notes to financial statements.
14
Community Mental Health Authority of
Clinton, Eaton, and Ingham Counties
Government-Wide Financial Statements
Statement of Activities
Program Revenues
Year ended September 30, 2011
Expenses
Functions/Programs:
Governmental Activities:
Adults with mental illness
$
Children with emotional disturbance
Developmental disabilities
Substance abuse
Board administration
Affiliation
Medicaid pass-through
ABW pass-through
Total Governmental Activities
Charges for
Services
$
34,421,527
13,683,218
44,856,460
2,674,716
9,714,820
1,068,458
38,337,386
951,881
145,708,466
$
Operating
Grants and
Contributions
622,436 $
558,025
1,874,877
219,031
17,881
15,695
-
$ 3,307,945
$
1,346,080
3,540,955
1,344,967
1,497,334
275,878
877,822
38,337,386
951,881
Governmental
Activities
Net (Expense)
Revenue and
Changes in Net
Assets
$
48,172,303
(32,453,011)
(9,584,238)
(41,636,616)
(958,351)
(9,421,061)
(174,941)
(94,228,218)
General Revenues:
MDCH contract:
Medicaid
General Fund
Local Funding
Unrestricted investment earnings
78,364,655
13,244,563
2,887,145
60,425
Total General Revenues
94,556,788
Increase in Net Assets
328,570
Net Assets, beginning of year
Net Assets, end of year
12,122,611
$
12,451,181
See accompanying independent auditors' report and notes to financial statements.
15
Community Mental Health Authority of
Clinton, Eaton, and Ingham Counties
Governmental Fund
Balance Sheet
September 30, 2011
Assets:
Cash and cash equivalents (Note 4)
Investments (Note 4)
Accounts Receivable (Note 5):
Grants and contracts
Affiliate
Fees
Trade
Other receivable
Interfund Receivable (Note 9)
Inventories
Prepaid expenditures and deposits
Total Assets
General Fund
$
$
Liabilites and Fund Balance
Liabilities:
Accounts payable:
State of Michigan
Community inpatient hospitalization
Trade
Other
Accrued payroll
Interfund payable (Note 9)
Deferred revenue (Note 5)
Total Liabilities
Fund Balance:
Nonspendable
Unassigned
Total Fund Balance
Total Liabilities and Fund Balance
$
$
5,079,932
9,309,586
3,393,614
2,451,391
146,337
252,869
145,358
1,345,528
124,464
1,522,996
23,772,075
1,563,372
1,298,615
8,254,195
549,465
1,635,881
2,378,812
3,538,582
19,218,922
1,647,460
2,905,693
4,553,153
23,772,075
See accompanying independent auditors' report and notes to financial statements.
16
Community Mental Health Authority of
Clinton, Eaton, and Ingham Counties
Governmental Fund
Reconciliation of Fund Balance of Governmental Fund to
Net Assets of Governmental Activities on the Statement of Net Assets
September 30, 2011
Total Fund Balance - Governmental Fund (Page 16)
$
4,553,153
Amounts reported for governmental activities in the Statement of Net
Assets are different because:
Internal Service Funds are used by management to set aside certain
resources as a risk reserve against potential contract losses in
future periods for fixed asset replacement and to fund compensated
absences. The assets and liabilities of the Internal Service Funds are
included in governmental activities in the Statement of Net Assets.
Add - Net assets of Internal Service Funds
7,898,028
Net Assets of Governmental Activities (Page 15)
$
12,451,181
See accompanying independent auditors' report and notes to financial statements.
17
Community Mental Health Authority of
Clinton, Eaton, and Ingham Counties
Governmental Fund
Statement of Revenues, Expenditures, and
Changes in Fund Balance
Year ended September 30, 2011
General Fund
Revenues:
Federal sources
State sources
Local sources
Medicaid contracts
Other contracts
Charges for services and fees
Investment income
Medicaid pass-through
ABW pass-through
$
Total Revenues
2,065,181
13,244,563
3,172,266
79,330,442
8,256,378
618,514
52,288
38,337,386
951,881
146,028,899
Expenditures:
Adults with mental illness
Children with emotional disturbance
Developmental disabilities
Substance abuse
Board administration
Affiliation
Medicaid pass-through
ABW pass-through
34,421,527
13,683,218
44,856,460
2,674,716
9,812,131
978,779
38,337,386
951,881
Total Expenditures
145,716,098
Excess of Revenues over Expenditures
312,801
Fund Balance, beginning of year
4,240,352
Fund Balance, end of year
$
4,553,153
See accompanying independent auditors' report and notes to financial statements.
18
Community Mental Health Authority of
Clinton, Eaton, and Ingham Counties
Governmental Fund
Reconciliation of Statement of Revenues, Expenditures, and
Changes in Fund Balance of the Governmental Fund to Statement of Activities
Year ended September 30, 2011
Net Change in Fund Balance - Governmental Fund (Page 18 )
$
312,801
Internal Service Funds are used by management to set aside certain
resources as a risk reserve against potential contract losses in
future periods for fixed asset replacement and to fund compensated
absences. The net revenue of those funds are reported with
governmental activities.
Add:
Net operating loss from Internal Service Funds
Interest revenue from Internal Service Funds
Gain on sale of fixed asset in Internal Service Funds
Change in Net Assets of Governmental Activities (Page 15)
(8,177)
8,137
15,809
$
328,570
See accompanying independent auditors' report and notes to financial statements.
19
Community Mental Health Authority of
Clinton, Eaton, and Ingham Counties
Statement of Revenues, Expenditures, and
Changes in Fund Balance - Budget and Actual
General Fund
Year Ended September 30, 2011
Revenues:
Federal grants and contracts
State of Michigan
Local revenue
Earned contracts
Medicaid contracts:
PIHP
Substance abuse - PIHP
Fee for service
SSI/SSA
Fees
Foodstamps
Interest
Medicaid pass-through
ABW pass-through
Total Revenues
Original Budget
$
Expenditures:
Adults with mental illness
Children with emotional disturbance
Developmental disabilities
Substance abuse
Board administration
Affiliation
Medicaid pass-through
ABW pass-through
Total Expenditures
Excess of Revenues
Over Expenditures
Fund Balance, beginning of year
Fund Balance, end of year
$
3,218,579
12,423,431
3,386,355
7,275,124
Final Budget
$
2,219,115
13,282,520
3,221,312
7,407,519
Actual
$
2,065,181
13,244,563
3,172,266
7,153,239
Variance with
Final Budget
Positive
(Negative)
$
(153,934)
(37,957)
(49,046)
(254,280)
71,890,528
113,814
2,048,451
1,098,040
660,066
145,662
31,435
35,931,171
174,101
138,396,757
76,444,132
164,626
2,069,112
974,335
845,901
136,184
31,435
38,234,484
997,167
146,027,842
76,876,725
176,214
2,277,503
960,177
618,514
142,962
52,288
38,337,386
951,881
146,028,899
432,593
11,588
208,391
(14,158)
(227,387)
6,778
20,853
102,902
(45,286)
1,057
32,896,230
13,965,353
42,390,563
2,421,580
9,401,163
922,025
35,931,171
174,101
138,102,186
34,385,954
13,982,245
44,755,225
2,647,197
9,824,855
972,116
38,234,484
997,167
145,799,243
34,421,527
13,683,218
44,856,460
2,674,716
9,812,131
978,779
38,337,386
951,881
145,716,098
(35,572)
299,027
(101,235)
(27,519)
12,724
(6,663)
(102,902)
45,286
83,145
294,571
228,599
312,801
4,240,352
4,534,923
$
4,240,352
4,468,951
$
4,240,352
4,553,153
84,202
$
84,202
See accompanying independent auditors' report and notes to financial statements.
20
Community Mental Health Authority of
Clinton, Eaton, and Ingham Counties
Statement of Net Assets
Proprietary Funds
Internal Service
Funds
September 30, 2011
Assets:
Investments (Note 4)
Interfund Receivable (Note 9)
Capital assets not being depreciated (Note 6)
Capital assets being depreciated, net (Note 6 and 7)
Total Assets
Liabilities:
Interfund Payable (Note 9)
Current portion of long term liabilities (Note 7)
Long-term liabilities:
Compensated absences payable (Note 7 and 8)
Debt and capital lease obligations (Note 7)
$
1,812,638
2,378,812
2,077,172
15,285,244
$
21,553,866
$
1,345,528
2,677,277
544,331
9,088,702
Total Liabilities
13,655,838
Net Assets:
Invested in capital assets, net of related debt
Restricted for contract losses
6,085,390
1,812,638
Total Net Assets
7,898,028
Total Liabilities and Net Assets
$
21,553,866
See accompanying independent auditors' report and notes to financial statements.
21
Community Mental Health Authority of
Clinton, Eaton, and Ingham Counties
Statement of Revenue, Expenses, and
Changes in Fund Net Assets
Proprietary Funds
Internal Service
Funds
Year Ended September 30, 2011
Operating Revenue Charges for services
$
1,441,696
Operating Expenses:
Compensated absences
Depreciation
225,923
1,223,950
Total Operating Expenses
1,449,873
Operating Loss
(8,177)
Non-Operating Revenue:
Interest income
Gain on sale of fixed assets
8,137
15,809
Total Non-Operating Revenue
23,946
Changes in Net Assets
15,769
Net Assets, beginning of year
7,882,259
Net Assets, end of year
$
7,898,028
See accompanying independent auditors' report and notes to financial statements.
22
Community Mental Health Authority of
Clinton, Eaton, and Ingham Counties
Statement of Cash Flows
Proprietary Funds
Year ended September 30, 2011
Operating ActivitiesCash payment from other funds
Capital and Related Financing Activities:
Proceeds from new installment debt
Principal payments
Capital asset purchases
Proceeds from sale of fixed assets
Cash Used in Capital and Related Financing Activities
Investing Activities:
Interest income
Purchase of investments
Cash Provided by Investing Activities
$
2,552,100
2,590,703
(3,470,334)
(1,968,424)
15,809
(2,832,246)
8,137
(7,741)
396
Decrease in Cash and Cash Equivalents
(279,750)
Cash and Cash Equivalents, beginning of year
279,750
Cash and Cash Equivalents, end of year
$
Reconciliation of Operating Loss to Cash Provided by Operating Activities
Operating loss
Adjustments to reconcile operating loss to cash provided by operating activities:
Depreciation
Changes in assets and liabilities:
Interfund receivable
Interfund payable
Compensated absences payable
Cash Provided by Operating Activities
$
-
(8,177)
1,223,950
$
(225,923)
1,336,327
225,923
2,552,100
See accompanying independent auditors' report and notes to financial statements.
23
Community Mental Health Authority of
Clinton, Eaton, and Ingham Counties
Statement of Fiduciary Net Assets
Fiduciary Funds
Private Purpose
Trust Fund
Agency Fund
Assets:
Cash and cash equivalents (Note 4)
Investments (Note 4)
$
15,195
$
592,353
-
Total Assets
$
15,195
$
592,353
$
539
$
592,353
September 30, 2011
Liabilities and Net Assets
Liabilities Accounts payable
Net Assets Held in trust
14,656
Total Liabilities and Net Assets
$
15,195
$
592,353
See accompanying independent auditors' report and notes to financial statements.
24
Community Mental Health Authority of
Clinton, Eaton, and Ingham Counties
Statement of Changes in Fiduciary Net Assets
Fiduciary Funds
Private Purpose
Trust Fund
Year ended September 30, 2011
Deductions Investment loss
Program services
$
1,018
50
Change in Net Assets
(1,068)
Net Assets, beginning of year
15,724
Net Assets, end of year
$
14,656
See accompanying independent auditors' report and notes to financial statements.
25
Community Mental Health Authority of
Clinton, Eaton and Ingham Counties
Notes to Financial Statements
1. Description of the Authority
The Community Mental Health Authority of Clinton, Eaton, and Ingham Counties
(the Authority) was established under Section 205 of the Michigan Health Code.
The Authority provides services generally in the areas of mental health,
comprehensive substance abuse treatment, and developmental disabilities for the
Clinton, Eaton and, Ingham County region. The Authority’s activities are funded
through federal grants, state allocations, premium revenue, county appropriations,
service fees, and local gifts and grants.
The Authority serves as the Prepaid Inpatient Health Plan (PIHP) for the
Community Mental Health Affiliation of Mid Michigan (CMHAMM). In this
role, the Authority is responsible for the Medicaid revenue and expenditures of an
eight county region consisting of Benzie, Clinton, Eaton, Gratiot, Ingham, Ionia,
Newaygo, and Manistee Counties.
2. Summary of Significant Accounting Policies
The financial statements of the Authority have been prepared in conformity with
accounting principles generally accepted in the United State of America (GAAP)
as applied to governmental units. The Governmental Accounting Standards
Board (GASB) is the accepted standard-setting body for establishing
governmental accounting and financial reporting principles. The Authority’s
significant accounting policies are described below.
Basis of presentation
Government-Wide Financial Statements: The Statement of Net Assets and the
Statement of Activities report information on all of the activities of the Authority.
For the most part, the effect of inter-fund activity has been removed from these
statements. The Government-wide financial statements categorize activities as
either governmental or business-type. All of the Authority’s activities are
classified as governmental.
The Statement of Activities demonstrates the degree to which the direct expenses
related to a given function or segment are offset by program revenues. Direct
expenses are those that are clearly identifiable with a specific function. Program
revenues include (1) charges to recipients who purchase, use or directly benefit
from goods, services or privileges provided by a given function and (2) grants and
contributions that are restricted to meeting the operation or capital requirements
26
Community Mental Health Authority of
Clinton, Eaton and Ingham Counties
Notes to Financial Statements
of a particular function. Other items not included among program revenues are
reported as general revenues.
Fund Financial Statements – Separate financial statements are provided for the
Governmental Fund, Proprietary Funds, and Fiduciary Funds. The General Fund
is the only governmental fund in the fund financial statements.
Measurement Focus and Basis of Accounting
Government-Wide Financial Statements - The government-wide financial
statements are reported using the economic resources measurement focus and the
accrual basis of accounting. Revenues are recorded when earned and expenses
are recorded when a liability is incurred, regardless of the timing of related cash
flows. Grants and similar items are recognized as revenue as soon as all
eligibility requirements imposed by the provider have been met.
Fund Financial Statements – Governmental fund financial statements are
reported using the current financial resources measurement focus and the
modified accrual basis of accounting. Revenues are recognized as soon as they
are both measurable and available. Revenues are considered available if they are
collected within the current period or soon enough after to pay liabilities for the
current period. The Authority considers revenues available if collected within 60
days of the end of the current fiscal period. Expenditures generally are recorded
when a liability is incurred, as under accrual accounting. However, debt service
expenditures and expenditures related to compensated absences, are recorded only
when payment is due.
Service charges to first and third-party payor and grant funds associated with the
current fiscal period are all considered to be susceptible to accrual and have been
recognized as revenues of the current fiscal period.
The Authority reports the following major governmental fund•
The General Fund is the general operating fund of the Authority. It is
used to account for all financial resources except those required to be
accounted for in another fund.
27
Community Mental Health Authority of
Clinton, Eaton and Ingham Counties
Notes to Financial Statements
Additionally, the Authority reports the following fund types:
•
The Internal Service Funds are used to account for and finance potential
uninsured risks of loss related to various funds received through the
Michigan Department of Community Health (MDCH), as well as for
reserves for fixed asset replacement and compensated absences, as
permitted by the Michigan Mental Health Code.
•
The Fiduciary Funds are used to account for resources held for the benefit
of parties outside the government.
Private-sector standards of accounting and financial reporting issued prior to
December 1, 1989, generally are followed in both the government-wide and
proprietary fund financial statements to the extent that those standards do not
conflict with or contradict guidance of the Governmental Accounting Standards
Board. Governments also have the option of following subsequent private-sector
guidance for their business-type activities and enterprise funds, subject to this
same limitation. The Authority has elected not to follow subsequent privatesector guidance.
Proprietary funds distinguish operating revenues and expenses from nonoperating items. Operating revenues and expenses generally result from
providing services and producing and delivering goods in connection with a
proprietary fund’s principal ongoing operations. The principal operating revenues
of the government’s Internal Service Funds are charges to other funds for services
provided. All revenues and expenses not meeting this definition are reported as
non-operating revenues.
Assets, Liabilities and Net Assets
Cash and Investments – Cash includes cash on hand, demand deposits, and
certificates of deposit. Investments include deposits with a maturity of more than
three months from the purchase date and money market accounts.
Affiliate Receivable – Affiliate receivables represent funds due to the Authority
from affiliate counties under the PIHP.
Inventories, Prepaids, and Deposits – Inventories are valued at the lower of cost
or market on a first-in, first-out basis, which approximates market. Inventories
consist of materials for the toothbrush production facility at Bretton Square.
Inventories are recorded as expenditures when they are consumed.
28
Community Mental Health Authority of
Clinton, Eaton and Ingham Counties
Notes to Financial Statements
Certain payments to vendors reflect costs applicable to future accounting periods
and are recorded as prepaid items. Certain funds held by third parties for future
benefits are recorded as deposits. Transactions between funds that are
representative of lending/borrowing arrangements outstanding at the end of the
fiscal year are referred to as interfund balances.
Capital Assets – Capital assets are capitalized and reported in the Fixed Asset
Replacement Reserve Internal Service Fund, net of accumulated depreciation. All
purchased capital assets are recorded at cost where historical records are available
and at estimated historical costs where no historical records exist. Donated
capital assets, if any, are valued at their estimated fair market value on the date
received.
Only improvements that add to the value of the asset or materially extend assets
useful lives are capitalized. It is the policy of the Authority to capitalize assets
whose value exceeds $5,000. Capital assets are depreciated on the straight-line
basis over the estimated useful lives:
Building and Improvements
Capitalized Building Lease
Equipment
Vehicles
10-15 years
40 years
5-10 years
3 years
Compensated Absences – Compensated absences are charged to operations in
the Compensated Absences Reserve Internal Service Fund when earned by
employees.
MDCH Revenue – The Authority provides mental health services on behalf of
the MDCH in accordance with a managed specialty supports and services
contract. Under the contract, the Authority receives monthly capitation payments
based on the number of MDCH’s participants, regardless of services actually
performed by the Authority. In addition, the MDCH makes fee-for-service
payments to the Authority for certain covered services.
Deferred/Unearned Revenue – Deferred/unearned revenue represents the
portion of the current year MDCH contract amount and other grant revenues that
may be carried over to and expended in subsequent fiscal years.
29
Community Mental Health Authority of
Clinton, Eaton and Ingham Counties
Notes to Financial Statements
Medicaid savings, which are limited to 7.5% of the MDCH Medicaid contract
amount, must be spent in the following year in accordance with a Medicaid
Reinvestment Strategy. State general fund savings, which are limited to 5% of
the MDCH general fund contract amount, must be spent in the following year.
Use of Estimates - The preparation of financial statements in conformity with
accounting principles generally accepted in the United States of America requires
management to make estimates and assumptions that affect the reported amounts
of assets and liabilities and disclosure of contingent assets and liabilities at the
date of the financial statements and the reported amounts of revenue and expenses
during the reporting period. Actual results could differ from those estimates.
Net Assets – Net Assets represent the difference between assets and liabilities.
Net assets invested in capital assets, net of related debt, consists of capital assets,
net of accumulated depreciation, reduced by the outstanding balances of any
liabilities used for the acquisition or construction of those assets. Net assets are
reported as restricted when there are limitations imposed on their use either
through enabling legislation or through external restrictions imposed by creditor,
grantors, laws or regulations from other governments.
Fund Balance – Fund balance represents the difference between assets and
liabilities in the governmental fund financial statements. The Authority’s fund
balance is classified in the following categories:
Nonspendable fund balance – represents amounts that cannot be spent due to legal
requirements or because it is not in spendable form. The Authority reports
nonspendable fund balance for inventories, prepaids and principal of endowment
funds.
Restricted fund balance – restricted for specific purposes imposed by providers,
constitutional provisions or enabling legislation. The Authority reports restricted
fund balance at September 30, 2011.
Unassigned fund balance – represents the residual of general fund.
CMH Affiliation of Mid-Michigan – In 2003, the Michigan Department of
Community Health changed the requirements for administering Medicaid
contracts. As part of this change, smaller CMH boards were required to partner
together to create affiliations of sufficient size to be able to contract with MDCH.
The Authority acts as the PIHP for one such affiliation. Accordingly, a
substantial portion of the Authority’s budget is reported as “Medicaid passthrough,” and is passed-through to the CMH boards of other counties, subject to
an affiliation agreement.
30
Community Mental Health Authority of
Clinton, Eaton and Ingham Counties
Notes to Financial Statements
3. Stewardship, Compliance, and Accountability
Budgetary Information – The Authority’s annual budget process begins with a
steady state budget in May, includes active participation of management and
labor, and concludes with program originated budget modifications. The annual
budget is adopted by the Authority during September. The budget reports revenue
by major funding sources, and expenditures by population and cost category.
Subsequent amendments are approved by the Authority.
Excess of Expenditures Over Appropriations – The budget has been adopted
on a program basis. P.A. 621 of 1978 Section 18(1), as amended, provides that a
local unit shall not incur expenditures in excess of the amount appropriated. This
comparison includes expenditure budget overruns. Expenditure budget overruns
were as follows:
Year ended
September 30, 2011
Adults with mental illness
Developmental disabilities
Substance abuse
Affliliation
Medicaid pass-through
Original
Budget
Final
Budget
Actual
$ 32,896,230
$ 42,390,563
$ 2,421,580
$
922,025
$ 35,931,171
$ 34,385,954
$ 44,755,225
$ 2,647,197
$
972,116
$ 38,234,484
$ 34,421,527
$ 44,856,460
$ 2,674,716
$
978,779
$ 38,337,386
Variance with
Final Budget
$
$
$
$
$
(35,572)
(101,235)
(27,519)
(6,663)
(102,902)
4. Cash, Deposits, and Investments
Deposits – State statutes require that certificates of deposit, savings accounts,
deposit accounts, and depository receipts are made with banks doing and having a
place of business in the state of Michigan that are also insured by an agency of the
United States.
The Authority’s investment policy complies with the State statutes and has no
additional limitations on deposits.
31
Community Mental Health Authority of
Clinton, Eaton and Ingham Counties
Notes to Financial Statements
Custodial Credit Risk – Deposits – Custodial credit risk is the risk that, in the
event of a bank failure, the Authority’s deposits might not be recovered. The
Authority does not have a policy for mitigating custodial credit risk over deposits.
At September 30, 2011, $13,613,675 of the Authority’s bank balances of
$13,873,876 was exposed to custodial credit risk as follows:
Uninsured and Uncollateralized:
Cash and savings
Money market
Certificates of deposit
Total Uninsured and Uncollateralized
$
6,390,398
5,823,277
1,400,000
$ 13,613,675
At September 30, 2011, none of the fiduciary bank balances of $663,793 included
in the Statement of Fiduciary Net Assets was exposed to custodial credit risk.
Investments – State Statutes authorize the Authority to invest in obligations and
certain repurchase agreements of the United States Treasury and related
governmental agencies, commercial paper, banker’s acceptances of the United
States banks, obligations of the state of Michigan or any of its political
subdivisions, and mutual funds composed entirely of the above investments. As
of September 30, 2011, the Authority had no such investments.
32
Community Mental Health Authority of
Clinton, Eaton and Ingham Counties
Notes to Financial Statements
5. Accounts Receivable
Receivables, as of September 30, 2011, for the Authority’s General and Internal
Service Funds in the aggregate, are as follows:
Amount Not
Expected to
be Collected
Internal
Within One
General
Service
Total
Year
Receivables:
Grants and contracts
Affiliate
Fees
Trade
Other Receivable
$ 3,393,614
2,451,391
146,337
252,869
145,358
$
- $ 3,393,614
2,451,391
146,337
252,869
145,358
$
-
Total Receivables
$ 6,389,569
$
- $ 6,389,569
$
-
The Authority estimates all receivables will be fully collected.
The Governmental Fund reports deferred revenue in connection with receivables
for revenue that is not considered to be available to liquidate liabilities of the
current period. The Governmental Fund also defers revenue recognition in
connection with resources that have been received, but not yet earned. At the end
of the current fiscal year, the various components of deferred revenue and
unearned revenue reported in the Governmental Fund was $3,538,582.
33
Community Mental Health Authority of
Clinton, Eaton and Ingham Counties
Notes to Financial Statements
6. Capital Assets
Capital asset activity for the year ended September 30, 2011, was as follows:
Balance
October 1,
2010
Additions
Deductions
Governmental Activities:
Capital assets not depreciated - Land
$ 2,077,172 $
- $
Capital assets depreciated:
Building and improvements
14,442,044
1,158,575
Capitalized building lease
10,215,407
Equipment
4,352,475
781,869
(339,552)
Vehicles
3,658,953
27,980
(29,957)
Totals at Historical Cost
32,668,879
1,968,424
(369,509)
Less accumulated depreciation:
Building and improvements
(8,130,486)
(448,642)
Capitalized building lease
(3,457,505)
(254,420)
Equipment
(3,604,242)
(233,226)
339,552
Vehicles
(2,935,876)
(287,662)
29,957
Total accumulated depreciation
(18,128,109) (1,223,950)
369,509
Total capital assets being depreciated, net
14,540,770
744,474
-
Net Capital Assets
Depreciation Expense by Function
Adults with mental illness
Children with emotional disturbance
Developmental disabilities
Substance abuse
Board administration
$ 16,617,942 $
$
744,474 $
-
433,850
79,727
500,293
19,013
191,067
Total Depreciation Expense by Function $ 1,223,950
The Authority leases various buildings and equipment under operating leases.
These leases generally have a term of one year. Management expects that, in the
normal course of operations, leases will be renewed or replaced with other leases.
Total costs for such leases were recorded as rent expense in the supplemental
financial schedules included with this report and amounted to $688,685 for the
year ended September 30, 2011.
34
Balance
September
30, 2011
$ 2,077,172
15,600,619
10,215,407
4,794,792
3,656,976
34,267,794
(8,579,128)
(3,711,925)
(3,497,916)
(3,193,581)
(18,982,550)
15,285,244
$ 17,362,416
Community Mental Health Authority of
Clinton, Eaton and Ingham Counties
Notes to Financial Statements
7. Long-Term Obligations
The following is a summary of long-term debt transactions of the Authority:
Beginning
Balance
Ending
Balance
Due Within
One Year
September 30, 2011
Additions
Reductions
Governmental activities:
Installment debt:
Capital leases
$ 3,541,995 $
- $ 401,566 $ 3,140,429 $ 387,390
Notes payable
6,464,412
2,590,703
2,764,405
6,290,710
208,201
Vehicle loans
804,722
304,363
500,359
247,205
Total installment debt
10,811,129
2,590,703
3,470,334
9,931,498
842,796
Compensated absences
2,604,736
2,300,970
2,526,894
2,378,812
1,834,481
Total Long-Term Liabilities Governmental activities
$ 13,415,865 $ 4,891,673 $ 5,997,228 $ 12,310,310 $ 2,677,277
Annual requirements to pay principal and interest on long-term debt are as
follows:
Governmental Activities
Year ending September 30,
Principal
Interest
Total
2012
$ 842,796 $ 456,078 $ 1,298,874
2013
779,125
422,014
1,201,139
2014
743,198
389,144
1,132,342
2015
674,343
357,705
1,032,048
2016
706,346
327,027
1,033,373
2017-2021
2,480,448
1,186,166
3,666,614
2022-2026
1,821,993
741,799
2,563,792
2027-2031
1,670,668
266,130
1,936,798
Thereafter
212,581
11,804
224,385
$ 9,931,498 $ 4,157,867 $ 14,089,365
35
Community Mental Health Authority of
Clinton, Eaton and Ingham Counties
Notes to Financial Statements
Long-term installment debt payable at September 30, 2011, is comprised of the
following:
Capital building lease payable, interest ranging from 4.30% to 5.00%, due in
semi-annual installments ranging from $215,553 to $488,335, plus interest,
through July 2018
$ 2,932,017
Capital leasehold improvements payable, interest at 5.00%, due in monthly
installments of $2,285 through April 2021
Notes payable, including interest ranging generally from 4.3125% to 85% of
prime, .0014% to .0276% effective at September 30, 2011, due in monthly
installments through December 2032, collateralized by land and buildings
208,412
6,290,710
Vehicle capital lease payable, interest ranging from 3.60% to 5.50%, due in
monthly installments through August 2014
Total Long-Term Debt
500,359
$ 9,931,498
8. Risk Management
The Authority is exposed to various risks of loss related to torts; theft of, damage
to, and destruction of assets; errors and omissions; and injuries to employees. The
Authority manages its risk exposures through commercial insurance and excess
coverage policies. On risks that are commercially insured, the Authority retains
risk of loss ranging from $1,000 - $25,000. Settlements have not exceeded
commercial insurance coverage in any of the past three years.
In addition, the Authority provides dental employee benefits through a selfinsurance plan. Claims expenditures and liabilities are reported in the General
Fund when it is probable that a loss has occurred and the amount can be
reasonably estimated. At September 30, 2011, the liability was less than $1,000.
The Authority is exposed to risk of loss up to 7.5% of revenues received from the
state of Michigan under its managed care contracts. To manage these risks, the
Authority makes payments to the Mental Health Risk Reserve Internal Service
Fund based on actuarial estimates of the amounts needed to pay prior and current
claims to establish a reserve for excess loss.
36
Community Mental Health Authority of
Clinton, Eaton and Ingham Counties
Notes to Financial Statements
The Authority established savings goals as follows: 1) Medicaid savings goal of
up to 7.5% of Medicaid revenues and not less the 2.5% of Medicaid revenues; 2)
General Fund savings goals up to 5% of General Fund Revenues; 3) Medicaid
Internal Service Fund reserves to no greater than the maximum amount allowed
by MDCH; and 4) General Fund Internal Service Fund reserves to no greater than
the maximum amount allowed by MDCH.
The Fixed Asset Replacement and Compensated Absences Reserve Internal
Service Funds are restricted for securing resources to fund future capital asset
replacements and making payments on accrued compensated absences, as
permitted by the Michigan Mental Health Code.
Following is a schedule of changes in Net Assets of the Risk Reserve Internal
Service Funds:
Year ended
September 30, 2011
Beginning balance
Additions
Deletions
Mental
Fixed Asset Compensated
Health
Replacement
Absences
$ 1,804,897 $ 6,077,362 $
7,741
225,923
8,028
(225,923)
Ending balance
$ 1,812,638
$ 6,085,390
$
-
Additions to the Mental Health Risk Reserves were comprised of funds received
from MDCH and interest earnings. Additions to the Compensated Absences
Reserve were comprised of interfund charges for services and gains on the sale of
capital assets. Reductions in the reserves represented the funds’ respective
program services and depreciation.
Contributions to the Internal Service Funds are considered eligible expenditures
under the MDCH contract and, accordingly, are included on the Statement of
Revenue, Expenditures, and Changes in Fund Balance-General Fund in the
various expenditure categories.
37
Community Mental Health Authority of
Clinton, Eaton and Ingham Counties
Notes to Financial Statements
9. Interfund Receivables, Payables, and Transfers
The Authority has the following interfund receivables and payables:
Due to:
Due from:
General Fund
Fixed Asset
Replacement Reserve
Total Receivable
General
Fund
$
Compensated
Absences
Reserve
Total
Payable
- $ 2,378,812
$ 2,378,812
1,345,528
$ 1,345,528 $ 2,378,812
1,345,528
$ 3,724,340
These balances represent the difference between the cumulative cash flows of the
fixed asset replacement reserve, risk reserve, and compensated absences reserve,
and the amounts charged to the General Fund as eligible expenditures under the
MDCH contract.
10. Retirement Plan
Defined Benefit Pension
The Authority participates in an agent multiple-employer defined benefit pension
plan administered by the Municipal Employees Retirement System of Michigan
(MERS), which provides retirement, death, and disability benefits covering
substantially all of the Authority’s full-time employees. MERS issues a publicly
available financial report that includes financial statements and required
supplementary information for MERS. That report may be obtained by writing to
MERS, 1134 Municipal Way, Lansing, Michigan 48917.
The obligation to contribute to and maintain MERS for these employees was
established by negotiation with the Authority’s collective bargaining units and
requires a contribution from employees of 1.54% to 6.34%.
For the year ended September 30, 2011, the Authority’s annual pension cost of
$6,614,881 for the plan was equal to the required and actual contribution. The
annual required contribution was actuarially determined as a percentage of payroll
ranging from 1.87% to 16.96% using the entry actual age cost method. At
December 31, 2010, the date of the latest actuarial valuation significant actuarial
38
Community Mental Health Authority of
Clinton, Eaton and Ingham Counties
Notes to Financial Statements
assumptions used include (a) an 8% investment rate of return, (b) projected salary
increases of 4.5% per year, plus a percentage based on an age related scale to reflect
merit, longevity, and promotional salary increases, and (c) withdrawal rates ranging
2.4% - 20% based on years of service, and scaled up or down according to each
division’s experience. The actuarial value of assets was determined using
techniques that smooth the effects of short-term volatility over a four-year period.
The unfunded actuarial liability is being amortized as a level percentage of payroll
on a closed basis over 30 years.
Funded status and progress
As of December 31, 2010, the most recent actuarial valuation date, the plan was
77% funded. The actuarial accrued liability for benefits was $122.25 million, and
the actuarial value of assets was $93.78 million, resulting in an unfunded actuarial
accrued liability (UAAL) of $28.47 million. The covered payroll (annual payroll of
active employees covered by the plan) was $30.82 million, and the ratio of the
UAAL to the covered payroll was 92%.
The Pension Plan Trend Analysis, presented as Required Supplemental Information
following the notes to the financial statements, presents multi-year trend
information about whether the actuarial value of the plan assets are increasing or
decreasing over time relative to the actuarial accrued liability for benefits.
Defined Contribution Pension
The MERS defined contribution pension plan was established by the Authority to
provide benefits at retirement to physicians that elected to discontinue their
participation in the MERS defined benefit plan as of August 1, 2000, and to all
physicians that were hired after August 1, 2000. At September 30, 2011, there were
12 plan members. Plan members are required to contribute 3% of covered salary.
The authority is required to contribute 7.7% of annual covered payroll, totaling
approximately $108,000 for the year ended September 30, 2011. Plan provisions
and contribution requirements are established and may be amended by the
Authority.
39
Community Mental Health Authority of
Clinton, Eaton and Ingham Counties
Notes to Financial Statements
11. Other Postemployment Benefits
In addition to the pension benefits described in Note 10, the Local 459 union
provides postretirement health care benefits for eligible retirees of the Authority.
To be eligible upon retirement, the criteria are as follows:
Local 459 Residential Unit and RN Unit
- the employee must have retired from employment with CEICMH after October 1, 1991,
- be in a Residential, RN or Local 459 position for 10 years,
including the five prior to retirement,
- be at least 60 years of age with six years of service,
- or be a retired CEI-CMH employee, receiving health care
coverage through the Employer, but the retired employee that
is not the policy holder and loses coverage (i.e. divorce from
the policy holder, death of the policy holder).
Local 459 Large Unit
- the employee must have retired from employment with CEICMH after October 1, 1991,
- be in a Residential, RN or Local 459 position for 10 years,
including the five prior to retirement,
- be at least 60 years of age with ten years of service credit or 55
years of age with twenty years of service,
- or be a retired CEI-CMH employee, receiving health care
coverage through the Employer, but the retired employee that
is not the policy holder and loses coverage (i.e. divorce from
the policy holder, death of the policy holder).
The plan allows retirees to purchase health care insurance for $150 less than the
cost per month. If the plan does not have proper funding for this discount, the cost
to the retiree will increase. The Authority is obligated to make annual contributions
of $30,039 under the plan and is not required to provide any additional funding to
the plan.
40
Community Mental Health Authority of
Clinton, Eaton and Ingham Counties
Notes to Financial Statements
12. Grants and Contracts
The Authority participates in various federal, state, and local grants for mental
health and substance abuse programs. Certain provisions and allowable levels of
participation and expenditures not qualifying for participation are subject to
interpretation and adjustment by appropriate governmental agencies. The state of
Michigan allocation under Act 258 provides support for all qualifying programs and
allowable costs, with the balance being provided by contributions from local
sources.
State grants are subject to audit by responsible state agencies. Although these
audits may result in some changes, they are not expected to have a material effect
on the financial statements.
13. New Pronouncement
In 2011, the Authority implemented Governmental Accounting Standards Board
Statement No. 54, Fund Balance Reporting and Governmental Fund Type
Definitions. The pronouncement changes the classifications of fund balance and
provides new definitions for general fund. As a result, the classifications of fund
balance for the general fund have changed.
14. Subsequent Events
Effective October 1, 2012 the Authority intends to assume Coordinating Agency
(CA) responsibility for the counties of Clinton, Eaton, Ingham, Gratiot, Ionia, and
Newaygo. The Authority is midway through the county approval process with final
approval anticipated from Michigan Department of Community Health by early
May 2012. Lifeways Community Mental Health (Lifeways) and Washtenaw
Community Mental Health (Washtenaw) will assume CA responsibilities for their
counties as well, and Mid-South Substance Abuse Commission (MSSAC) will be
dissolved. Funding, assets, and employees will be allocated between the Authority,
Lifeways, and Washtenaw. It is the Authority’s intention to continue all functions
of the CA as they are now performed, and to maintain the current contract network.
The inclusion of CA functions within the Authority’s Affiliation will enable the
Authority to create a comprehensive behavioral health organization that is better
positioned for 2014 when the Patient Protection and Affordable Care Act is
implemented.
41
Community Mental Health Authority of
Clinton, Eaton, and Ingham Counties
Required Supplemental Information
Pension Plan Trend Analysis
Annual pension cost
Percentage of APC contributed
Year ended September 30,
2011
$
6,614,881 $
100%
Year ended December 31,
2010
Acturial value of assets
$
93,777,936
Acturial accrued liability (entry age)
$
122,247,783
Unfunded AAL
$
28,469,847
Funded ratio
77%
Covered payroll
$
30,821,617
UAAL as a percentage of covered payroll
92%
42
$
$
$
$
2010
3,706,222 $
100%
2009
86,880,881
113,040,260
26,159,379
77%
29,430,342
89%
$
$
$
$
2009
2,993,389
100%
2008
81,040,560
107,409,565
26,369,005
75%
28,118,349
94%
Year Ended September 30, 2011
Expenditures:
Current:
Salaries and wages
Fringe benefits
Contractual services:
Clinical
Client
Inpatient
Other
Communication
Dues and supplies
General insurance
Client transportation
Travel, conferences, and parking
Employee programs
Utilities
Rent
Repairs and maintenance
Program food services
Local match
Other
Quality assurance assessment premium
Hospital rate adjustment
Compensated absences uses
Fixed asset use allowance
Total Expenditures before Medicaid Pass-Through
Medicaid pass-through
ABW pass-through
Total Expenditures
Adults
With
Mental
Illness
$ 10,562,302
4,713,613
63,137
3,039,449
8,028,712
170,055
103,224
1,226,292
254,362
250,751
101,052
4,816
267,265
150,610
224,408
176,406
280,924
13,143
2,471,938
1,750,866
(63,544)
631,746
34,421,527
Children
With
Emotional
Disturbance
$
5,696,211
2,833,301
739,023
396,244
765,412
91,296
275,610
94,887
341
327,906
3,437
104,483
51,213
73,113
399,019
1,960
988,879
700,420
(38,385)
178,848
13,683,218
Community Mental Health Authority of
Clinton, Eaton, and Ingham Counties
Schedule of Functional Expenditures
General Fund
Developmental
Disabilities
$
11,953,848
5,224,091
60,804
19,495,966
30,113
160,457
121,404
470,634
256,333
1,352,798
213,694
2,520
253,193
418,867
440,606
73,544
388,103
11,523
3,414,476
(75,575)
589,061
44,856,460
Substance
Abuse
$
1,372,055
668,027
36,033
22,341
69,625
20,383
1,502
7,114
1,770
64,817
46,899
56,230
84,871
204,531
(9,209)
27,727
2,674,716
Board
Administration
$
5,015,178
2,536,497
298,408
119,182
640,666
76,621
61,202
103,067
40,463
62,619
19,024
392,105
89,679
141,888
(34,874)
250,406
9,812,131
Affiliation
$
584,959
268,683
Total
$
28,336
28,872
30,297
7,782
7,705
18
7,169
2,072
4,859
143
(4,336)
12,220
35,184,553
16,244,212
123,941
23,274,438
8,455,069
1,458,701
486,319
2,713,124
710,368
1,666,594
760,538
53,024
759,546
688,685
1,191,321
334,821
1,157,725
168,657
7,079,824
2,451,286
(225,923)
1,690,008
978,779
106,426,831
38,337,386
951,881
$
43
145,716,098
Community Mental Health Authority of
Clinton, Eaton, and Ingham Counties
Combining Statement of Net Assets
Internal Service Funds
September 30, 2011
Mental
Health Risk
Reserve
Assets:
Investments
Interfund receivable
Capital assets not depreciated
Capital assets depreciated, net
$ 1,812,638
-
$
Total Assets
$ 1,812,638
$
$
$
Liabilities:
Interfund payable
Current portion of long-term
liabilities
Long-term liabilities:
Compensated absences payable
Fixed Asset
Replacement
Reserve
-
Compensated
Absences
Reserve
-
Total
$
2,378,812
-
$
1,812,638
2,378,812
2,077,172
15,285,244
17,362,416
$
2,378,812
$
21,553,866
1,345,528
$
-
$
1,345,528
2,077,172
15,285,244
-
842,796
1,834,481
2,677,277
-
-
544,331
544,331
-
9,088,702
-
9,088,702
-
11,277,026
2,378,812
13,655,838
Net Assets:
Invested in capital assets, net of
related debt
Restricted for contract losses
1,812,638
6,085,390
-
-
6,085,390
1,812,638
Total Net Assets
1,812,638
6,085,390
-
7,898,028
Debt and capital lease obligations
Total Liabilities
Total Liabilities and Net Assets
$ 1,812,638
$
44
17,362,416
$
2,378,812
$
21,553,866
Community Mental Health Authority of
Clinton, Eaton, and Ingham Counties
Combining Statement of Revenue, Expenses, and
Changes in Net Assets
Internal Service Funds
Year ended September 30, 2010
Mental
Health Risk
Reserve
Fixed Asset
Replacement
Reserve
Compensated
Absences
Reserve
Operating Revenue Charges for services
$
-
$ 1,215,773
$
Operating Expenses:
Compensated absences
Depreciation
-
1,223,950
225,923
-
225,923
1,223,950
Total Operating Expenses
-
1,223,950
225,923
1,449,873
Operating Loss
-
225,923
Total
$
1,441,696
(8,177)
-
(8,177)
Non-Operating Revenue:
Interest income
Gain on sale of fixed assets
7,741
-
396
15,809
-
8,137
15,809
Total Non-Operating Revenue
7,741
16,205
-
23,946
Change in Net Assets
7,741
8,028
-
15,769
1,804,897
6,077,362
-
7,882,259
$ 1,812,638
$ 6,085,390
Net Assets, beginning of year
Net Assets, end of year
45
$
-
$
7,898,028
Community Mental Health Authority of
Clinton, Eaton, and Ingham Counties
Combining Statement of Cash Flows
Internal Service Funds
Year ended September 30, 2011
Mental
Health Risk
Reserve
Operating Activities:
Cash payments from other funds $
Cash Provided by Operating
Activities
Capital and Related Financing
Activities:
Proceeds from new installment
debt
Principal payments
Capital asset purchases
Proceeds from sale of fixed
assets
Cash Used in Capital and
Related Financing Activities
Investing Activities:
Interest income
Purchase of investments
Cash Provided by Investing
Activities
-
Fixed Asset
Replacement
Reserve
Compensated
Absences
Reserve
$ 2,552,100
$
-
Total
$
2,552,100
-
2,552,100
-
2,552,100
-
2,590,703
(3,470,334)
(1,968,424)
-
2,590,703
(3,470,334)
(1,968,424)
-
15,809
-
-
(2,832,246)
7,741
(7,741)
-
15,809
-
(2,832,246)
396
-
-
8,137
(7,741)
396
-
396
Decrease in Cash and Cash
Equivalents
-
(279,750)
-
(279,750)
Cash and Cash Equivalents,
beginning of year
-
279,750
-
279,750
Cash and Cash Equivalents, end
of year
$
-
$
46
-
$
-
$
-
Community Mental Health Authority of
Clinton, Eaton, and Ingham Counties
Combining Statement of Cash Flows
Internal Service Funds
(Concluded)
Year ended September 30, 2011
Mental
Health Risk
Reserve
Reconciliation of Operating
Loss to Cash Provided by
Operating Activities:
Operating loss
$
Adjustments to reconcile
operating loss to cash provided
by operating activities:
Depreciation
Changes in assets and liabilities:
Interfund receivable
Interfund payable
Compensated absences
payable
Cash Provided by Operating
Activities
$
-
Fixed Asset
Replacement
Reserve
$
(8,177) $
-
1,223,950
-
1,336,327
-
-
-
$ 2,552,100
47
Compensated
Absences
Reserve
-
Total
$
-
$
(8,177)
1,223,950
(225,923)
-
(225,923)
1,336,327
225,923
225,923
-
$
2,552,100
Community Mental Health Authority of
Clinton, Eaton, and Ingham Counties
Statement of Changes in Assets and Liabilities
Agency Fund
September 30, 2011
Beginning
Balance
Additions
Deletions
Ending
Balance
Assets Cash and cash equivalents
$
489,527
$ 5,846,253
$ 5,743,427
$
592,353
Liabilities Accounts payable
$
489,527
$ 5,846,253
$ 5,743,427
$
592,353
48
Community Mental Health Authority of
Clinton, Eaton, and Ingham Counties
Additional Reports Required by
OMB Circular A-133
Year Ended September 30, 2011
The report accompanying these financial statements was issued by
BDO USA, LLP, a Delaware limited liability partnership and the U.S.
member of BDO International Limited, a UK company limited by
guarantee.
Community Mental Health Authority of
Clinton, Eaton, and Ingham Counties
Additional Reports Required by
OMB Circular A-133
Year Ended September 30, 2011
Community Mental Health Authority of
Clinton, Eaton, and Ingham Counties
Contents
Report on Internal Control Over Financial Reporting and on
Compliance and Other Matters Based on an
Audit of Financial Statements Performed in
Accordance with Government Auditing Standards
3 and 4
Report on Compliance With Requirements That Could Have a
Direct and Material Effect on Each Major Program and on
Internal Control Over Compliance in Accordance With
OMB Circular A-133
5 and 6
Schedule of Expenditures of Federal Awards
7 and 8
Substance Abuse Disorder Services
Schedule of Budgeted, Reported, and Audited Amounts
Substance Abuse Disorder Services
Schedule of Expenditures and funding Sources by Program
Notes to Schedule of Expenditures of Federal Awards
Summary of Auditors’ Results and
Schedule of Findings and Questioned Costs
2
9
10
11 and 12
13
Tel: +269-382-0170
Fax: +269-345-1666
www.bdo.com
211 East Water Street
Suite 300
Kalamazoo, Michigan
49007
Report on Internal Control Over Financial Reporting and on
Compliance and Other Matters Based on an Audit of
Financial Statements Performed in Accordance With
Government Auditing Standards
Independent Auditors’ Report
Finance and Audit Committee
Community Mental Health Authority of Clinton, Eaton, and Ingham Counties
Lansing, Michigan
We have audited the financial statements of the governmental activities, the General Fund, and the
aggregate remaining fund information of Community Mental Health Authority of Clinton, Eaton, and
Ingham Counties (the Authority), as of and for the year ended September 30, 2011, which collectively
comprise the Authority’s basic financial statements and have issued our report thereon dated March 30,
2012. We conducted our audit in accordance with auditing standards generally accepted in the United
States of America and the standards applicable to financial audits contained in Government Auditing
Standards, issued by the Comptroller General of the United States.
Internal Control Over Financial Reporting
Management of the Authority is responsible for establishing and maintaining effective internal control
over financial reporting. In planning and performing our audit, we considered the Authority’s internal
control over financial reporting as a basis for designing our auditing procedures for the purpose of
expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on
the effectiveness of the Authority’s internal control over financial reporting. Accordingly, we do not
express an opinion on the effectiveness of the Authority’s internal control over financial reporting.
A deficiency in internal control exists when the design or operation of a control does not allow
management or employees, in the normal course of performing their assigned functions, to prevent or
detect and correct misstatements on a timely basis. A material weakness is a deficiency, or combination
of deficiencies, in internal control, such that there is a reasonable possibility that a material
misstatement of the Authority’s financial statements will not be prevented or detected and corrected on
a timely basis.
Our consideration of internal control over financial reporting was for the limited purpose described in the
first paragraph of this section and was not designed to identify all deficiencies in internal control over
financial reporting that might be deficiencies, significant deficiencies, or material weaknesses. We did not
identify any deficiencies in internal control over financial reporting that we consider to be material
weaknesses, as defined above.
BDO USA, LLP, a Delaware limited liability partnership, is the U.S. member of BDO International Limited, a UK company limited by guarantee, and forms part of the
international BDO network of independent member firms.
BDO is the brand name for the BDO network and for each of the BDO Member Firms.
3
Compliance and Other Matters
As part of obtaining reasonable assurance about whether the Authority’s financial statements are free of
material misstatement, we performed tests of its compliance with certain provisions of laws, regulations,
contracts, and grant agreements, noncompliance with which could have a direct and material effect on
the determination of financial statement amounts. However, providing an opinion on compliance with
those provisions was not an objective of our audit and, accordingly, we do not express such an opinion.
The results of our tests disclosed no instances of noncompliance or other matters that are required to be
reported under Government Auditing Standards.
This report is intended solely for the information and use of the board, the finance and audit
committee, management, federal awarding agencies, and pass-through entities and is not intended to
be and should not be used by anyone other than these specified parties.
Certified Public Accountants
March 30, 2012
4
Tel: +269-382-0170
Fax: +269-345-1666
www.bdo.com
211 East Water Street
Suite 300
Kalamazoo, Michigan
49007
Report on Compliance With Requirements That Could Have a
Direct and Material Effect on Each Major Program and on
Internal Control Over Compliance in Accordance With
OMB Circular A-133
Independent Auditors’ Report
Finance and Audit Committee
Community Mental Health Authority of Clinton, Eaton, and Ingham Counties
Lansing, Michigan
Compliance
We have audited the compliance of Community Mental Health Authority of Clinton, Eaton, and Ingham
Counties (the Authority) with the types of compliance requirements described in the U.S. Office of
Management and Budget (OMB) Circular A-133 Compliance Supplement that could have a direct and
material effect on each of the Authority’s major federal programs for the year ended September 30,
2011. The Authority’s major federal programs are identified in the summary of auditors’ results
section of the accompanying schedule of findings and questioned costs. Compliance with the
requirements of laws, regulations, contracts, and grants applicable to each of its major federal
programs is the responsibility of the Authority’s management. Our responsibility is to express an
opinion on the Authority’s compliance based on our audit.
We conducted our audit of compliance in accordance with auditing standards generally accepted in the
United States of America; the standards applicable to financial audits contained in Government
Auditing Standards, issued by the Comptroller General of the United States; and OMB Circular A-133,
Audits of States, Local Governments and Non-Profit Organizations. Those standards and OMB Circular
A-133 require that we plan and perform the audit to obtain reasonable assurance about whether
noncompliance with the types of compliance requirements referred to above that could have a direct
and material effect on a major federal program occurred. An audit includes examining, on a test basis,
evidence about the Authority’s compliance with those requirements and performing such other
procedures, as we considered necessary in the circumstances. We believe that our audit provides a
reasonable basis for our opinion. Our audit does not provide a legal determination on the Authority’s
compliance with those requirements.
In our opinion, the Authority complied, in all material respects, with the compliance requirements
referred to above that could have a direct and material effect on each of its major federal programs
for the year ended September 30, 2011.
Internal Control Over Compliance
The management of the Authority is responsible for establishing and maintaining effective internal
control over compliance with the requirements of laws, regulations, contracts, and grants applicable to
federal programs. In planning and performing our audit, we considered the Authority’s internal control
over compliance with the requirements that could have a direct and material effect on a major federal
program in order to determine our auditing procedures for the purpose of expressing our opinion on
compliance and to test and report on internal control over compliance in accordance with OMB Circular
A-133, but not for the purpose of expressing an opinion on the effectiveness of internal control over
compliance. Accordingly, we do not express an opinion on the effectiveness of the Authority’s internal
control over compliance.
BDO USA, LLP, a Delaware limited liability partnership, is the U.S. member of BDO International Limited, a UK company limited by guarantee, and forms part of the
international BDO network of independent member firms.
BDO is the brand name for the BDO network and for each of the BDO Member Firms.
5
A deficiency in the Authority’s internal control over compliance exists when the design or operation of
a control over compliance does not allow management or employees, in the normal course of
performing their assigned functions, to prevent or detect and correct noncompliance with a type of
compliance requirement of a federal program on a timely basis.
A material weakness in internal control over compliance is a deficiency, or combination of deficiencies
in internal control over compliance such that there is a reasonable possibility that material
noncompliance with a type of compliance requirement of a federal program will not be prevented or
detected and corrected on a timely basis.
Our consideration of internal control over compliance was for the limited purpose described in the first
paragraph of this section and was not designed to identify all deficiencies in internal control over
compliance that might be deficiencies, significant deficiencies, or material weaknesses. We did not
identify any deficiencies in internal control over compliance that we consider to be material
weaknesses, as defined above.
Schedule of Expenditures of Federal Awards
We have audited the financial statements of the governmental activities, the General Fund, and the
aggregate remaining fund information of the Authority, as of and for the year ended September 30, 2011,
and have issued our report thereon dated March 30, 2012. Our audit was conducted for the purpose of
forming opinions on the financial statements that collectively comprise the Authority’s basic financial
statements.
The accompanying supplementary information, such as Substance Abuse Disorder Services Schedule of
Budgeted, Reported, and Audited Amounts, and Schedule of Expenditures and Funding Sources by
Program, and Schedule of Expenditures of Federal Awards is presented for purposes of additional
analysis as required by OMB Circular A-133, Audits of States, Local Governments, and Non-Profit
Organizations, and is not a required part of the basic financial statements. Such information has been
subjected to the auditing procedures applied in the audit of the basic financial statements and, in our
opinion, is fairly stated, in all material respects, in relation to the basic financial statements taken as a
whole.
This report is intended solely for the information and use of the board, the finance and audit
committee, management, federal awarding agencies, and pass-through entities and is not intended to
be and should not be used by anyone other than these specified parties.
Certified Public Accountants
March 30, 2012
6
Federal Grantor/Pass Through Grantor/Program Title
U.S. Department of Health and Human Services:
Direct Grant:
Substance Abuse & Mental Health Services Administration (SAMHSA)
Substance Abuse & Mental Health Services Administration (SAMHSA)
Federal
CFDA
Number
PassThrough
Grantor
Number
93.104
93.104
5U79SM057044-05
5U79SM057044-05
93.958
93.958
09B1MICMHS
10B1MICMHS
SED Waiver DHS Access Position
SED Waiver DHS Access Position
93.958
93.958
09B1MICMHS
10B1MICMHS
Michigan Leadership Institute
93.958
09B1MICMHS
Trauma Informed CBT
Trauma Informed CBT
93.958
93.958
09B1MICMHS
10B1MICMHS
Crisis Response Initiative Incorporating PSS Services
93.958
10B1MICMHS
Improving Practices Leadership Team
93.958
10B1MICMHS
Supported Employment as an EBP
93.958
10B1MICMHS
Home Based Service Manualization
Home Based Service Manualization
93.958
93.958
09B1MICMHS
10B1MICMHS
Total Substance Abuse & Mental Health Services Administration
Passed-through Michigan Department of Community Health:
Block Grants for Community Mental Health Services:
Parent Management Training
Parent Management Training
Community Mental Health Authority of
Clinton, Eaton, and Ingham Counties
Schedule of Expenditures of Federal Awards
Year Ended September 30, 2011
Federal
Revenue
Recognized
in Basic
Financial
Statements
Approved
Award/
Grant
Amount
Accrued
Revenue,
Beginning
of Year
Federal
Revenue
Received
$ 1,924,192
1,153,887
$ 1,876,866
-
$ 1,876,866
-
1,876,866
1,876,866
-
1,153,887
-
1,153,887
1,153,887
50,000
50,525
12,966
-
12,966
40,168
-
50,525
-
10,357
50,525
41,534
92,672
1,880
-
1,880
50,301
-
74,166
-
23,865
74,166
25,000
1,200
1,200
-
-
-
-
-
297,695
310,105
69,587
-
69,587
195,312
-
282,172
-
86,860
282,172
44,667
-
5,298
-
18,941
-
13,643
18,941
20,000
-
8,868
-
19,959
-
11,091
19,959
70,000
-
24,006
-
39,872
-
15,866
39,872
138,870
47,723
36,976
-
36,976
47,723
-
47,723
-
-
47,723
122,609
494,285
-
533,358
-
161,682
533,358
Other
Revenue
Recognized
Federal
Expenditures
Other
Expenditures
$
$
$
-
1,153,887
-
Accrued
Revenue,
End
of Year
$
1,153,887
$
1,153,887
See accompanying independent auditors’ report and notes to
Schedule of Expenditures of Federal Awards.
7
Federal Grantor/Pass Through Grantor/Program Title
U.S. Department of Health and Human Services (Concluded):
Passed-through Michigan Department of Community Health (Concluded):
Homeless Youth Outreach Expansion Project
Homeless Youth Outreach Expansion Project
Mental Health Services for the Homeless
Mental Health Services for the Homeless
McKinney Homeless Act
McKinney Homeless Act
Federal
CFDA
Number
PassThrough
Grantor
Number
93.150
93.150
93.150
93.150
93.150
93.150
2X06SM060023-08
2X06SM060023-09
2X06SM060023-09
2X06SM060023-09
2X06SM060023-09
2X06SM060023-09
Child Care Consultation
93.575
1001MCCDF
Omnibus Budget Reconciliation Act of 1987
Omnibus Budget Reconciliation Act of 1987
93.778
93.778
Supportive Housing Program 09 New
14.235
MI0307B5F000900
14.235
14.235
MI0279BF230801
MI0279B5F23082
Total Passed-through Michigan Department of Community Health
Total U.S. Department of Health and Human Services
U.S. Department of Housing and Urban Development Passed-through the Office of Community Planning and Development Supportive Housing Program
Supportive Housing Program
Total U.S. Department of Housing and Urban Development
Total Federal Programs
Community Mental Health Authority of
Clinton, Eaton, and Ingham Counties
Schedule of Expenditures of Federal Awards
Year Ended September 30, 2011
Approved
Award/
Grant
Amount
$
67,050
75,000
60,792
68,000
15,000
15,000
Accrued
Revenue,
Beginning
of Year
$
Federal
Revenue
Received
28,122
10,547
3,750
-
$
28,122
39,407
10,547
35,672
3,750
11,250
Other
Revenue
Recognized
Federal
Expenditures
Other
Expenditures
$
$
$
33,523
-
54,582
54,801
15,000
33,523
-
Federal
Revenue
Recognized
in Basic
Financial
Statements
Accrued
Revenue,
End
of Year
$
15,175
19,129
3,750
$
54,582
54,801
15,000
42,419
128,748
33,523
124,383
33,523
38,054
124,383
73,837
17,227
17,227
-
-
-
-
-
330,915
330,915
48,003
-
48,003
148,877
72,682
218,047
66,626
69,170
218,047
48,003
196,880
72,682
218,047
66,626
69,170
218,047
-
578
-
1,885
-
1,307
1,885
230,258
837,718
106,205
877,673
100,149
270,213
877,673
2,107,124
2,714,584
106,205
2,031,560
100,149
1,424,100
2,031,560
22,286
-
22,286
26,993
-
33,621
-
6,628
33,621
22,286
49,279
-
33,621
-
6,628
33,621
$ 2,129,410
$ 2,763,863
100,149
$ 1,430,728
$ 2,065,181
24,589
49,875
49,875
$
106,205
$
2,065,181
$
See accompanying independent auditors’ report and notes to
Schedule of Expenditures of Federal Awards.
8
Community Mental Health Authority of
Clinton, Eaton, and Ingham Counties
Substance Abuse Disorder Services
Schedule of Budgeted, Reported, and Audited Amounts
Year Ended September 30, 2011
Budgeted
(FINAL)
Fund Source
A. State Agreement
Community Grant
SDA
SIG
Methamphetamine
Other
$
Reported
(FINAL RER)
-
$
-
Audited
Expenditures
$
-
Variance
(AuditedReported)
$
-
Local
Match
Funds
$
-
A. Subtotal
-
-
-
-
-
B. Medicaid
Current Year PEPM
Federal Share only for Women's Specialty
State Share only for Women's Specialty
Reinvestment Savings
-
-
-
-
-
B. Subtotal
-
-
-
-
-
C. Adult Benefit Waiver (ABW)
Current Year PEPM
Savings
-
-
-
-
-
C. Subtotal
-
-
-
-
-
D. MI Child
Current Year PEPM
Savings
-
-
-
-
-
D. Subtotal
-
-
-
-
-
E. Local
Current Year PA2
PA2 Fund Balance
Other Local (R325.4152 excluding subsection (1)(b))
-
-
-
-
-
E. Subtotal
-
-
-
-
-
F. Fees and Collections - Subtotal (R325.4151 (1)(d))
-
-
-
-
-
G. Other Contracts and Sources (Subtotal)
-
-
-
-
-
Grand Total of Subtotals A-G
$
-
$
$
-
Local Match Funds Total
Local Match Requirement [(Grand Total of Audited Expenditures-B-C-D-G) * 10%]
$
-
Local Match (Shortfall)/Excess
$
-
Amount Billable to MDCH (Section A audited subtotal)
-
$
-
$
-
$
-
Total MDCH Payments
(Overpayment)/Underpayment
$
-
See accompanying independent auditors’ report and notes to
Schedule of Expenditures of Federal Awards.
9
Audited Expenditures
Budgeted
(FINAL)
Program
Administration
$
Reported
(FINAL RER)
-
$
-
Gross
Amount
$
Less
Medicaid
-
$
Less
Fees
-
$
Net
Amount
-
$
-
Prevention
-
-
-
-
-
-
Treatment
-
-
-
-
-
-
Women's Specialty
-
-
-
-
-
-
Communicable Diseases
-
-
-
-
-
-
SPF/SIG
-
-
-
-
-
-
ABW
(Federal share only)
-
-
-
-
-
-
MI Child
(Federal share only)
-
-
-
-
-
-
Other
-
-
-
-
-
-
Totals
$
-
$
-
$
-
Beginning balance
Current year PA2
Expenditures
$
-
Ending balance
$
-
Reconciliation of PA2 Funds:
$
-
$
-
$
-
Community Mental Health Authority of
Clinton, Eaton, and Ingham Counties
Substance Abuse Disorder Services
Schedule of Expenditures and Funding Sources by Program
Year Ended September 30, 2011
Audited Funding Sources
State
Agreement
$
$
-
SDA
$
Other
Local
PA2
-
$
-
$
ABW
-
$
Total
Funding
MI CHILD
-
$
-
$
Questioned
Cost
(Expenditures Funding)
Variance
(AuditedReported)
-
$
-
$
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
$
-
$
-
$
-
$
-
$
-
$
-
PEPM payments received
Medicaid savings carried over
Expenditures
Medicaid savings carryforward
$
-
Returned to PIHP
$
-
$
-
$
Reconciliation of Medicaid Managed Care (PEPM) Funds:
See accompanying independent auditors’ report and notes to
Schedule of Expenditures of Federal Awards.
10
-
Community Mental Health Authority of
Clinton, Eaton, and Ingham Counties
Notes to Schedule of Expenditures of Federal Awards
Year Ended September 30, 2011
1.
Summary of Significant Accounting Policies
The accounting policies of the Community Mental Health Authority of Clinton, Eaton, and Ingham
Counties (the Authority) conform to accounting principles generally accepted in the United States of
America as applicable to governmental units. The following is a summary of the Authority’s significant
accounting policies for its federal grants:
Basis of Accounting
The accompanying Schedule of Expenditures of Federal Awards includes the federal grant activity of the
Authority and is presented on the accrual basis of accounting. The information in this schedule is
presented in accordance with the requirements of OMB Circular A-133, Audits of States, Local
Governments, and Non-Profit Organizations; therefore, some amounts presented in this schedule may
differ from amounts presented in, or used in the preparation of, the financial statements.
Property and Equipment
Property and equipment costs are charged to program costs as incurred.
2.
Description of Grant Programs
Substance Abuse & Mental Health Services Administration - This program strives to improve outcomes
for children with and/or at risk for mental, substance use and/or co-occurring disorders, and their
families by increasing access to a continuum of comprehensive, integrated, culturally, and linguistically
competent services and supports that include prevention, early intervention, and treatment.
Block Grants for Community Mental Health Service:
Parent Management Training - The focus of the program is to provide training to practitioners so that
they can learn how to be more helpful to parents who are struggling with children with serious behavioral
problems. Funding is provided through agreements with the Michigan Department of Community Health.
Homeless Youth Outreach Expansion Project - This program provides funds for education and
prevention services to runaway, homeless, and street youth. Funding is provided through agreements
with the Michigan Department of Community Health.
Mental Health Services for the Homeless - This program provides intervention services to homeless
individuals. Primary services include home-finding and long-term outreach counseling. Funding is
provided through agreements with the Michigan Department of Community Health.
McKinney Homeless Act - This program provides support services to individuals with mental illness who
are homeless or at imminent risk of homelessness.
See accompanying independent auditors’ report.
11
Community Mental Health Authority of
Clinton, Eaton, and Ingham Counties
Notes to Schedule of Expenditures of Federal Awards
Year Ended September 30, 2011
Block Grants for Community Mental Health Service (Concluded):
Child Care and Development Block Grant - The focus of this program is to provide childcare
consultation to Clinton, Eaton, and Ingham Counties. Funding is provided through agreements with the
Michigan Department of Community Health.
Medical Assistance Program - This program provides preadmission screenings for nursing home
admissions and initial resident reviews. Funding is provided through agreements with the Michigan
Department of Community Health.
Supportive Housing Program - This program promotes development of supportive housing and supportive
services for individuals transitioning from homelessness. Funding is provided through agreements with
the Office of Community Planning and Development.
Trauma Informed CBT - The focus of this program is to manage, coordinate, and organize the Trauma
Focused-Cognitive Behavioral Therapy initiative in Michigan. Funding is provided through agreements
with the Michigan Department of Community Health.
Home Based Service Manualization – The focus of this training initiative will introduce, foster, and
replicate the successful FGS strength based, home-based model. This program seeks to start the process
of having Family Guidance Service recognized as an Evidence Based Practice. Funding is provided through
agreements with the Michigan Department of Community Health.
SED Waiver DHS Access Position – The focus of this program is to identify children and their families
who are eligible for and will benefit from the SED Medicaid Waiver for children with severe emotional
disturbance. Included in this program, is outreach and collaboration with other child serving agencies,
particularly the Department of Human Services and private agencies that provide foster care services.
Michigan Leadership Institute – This program provides funding for the registration fee of 30
participants attending the Promoting Leadership throughout Child Serving Agencies Institute.
Crisis Response Initiative Incorporating PSS Services – The focus of this program is to integrate peer
support specialists into the crisis response team, along with developing and maintaining relationships
with community providers.
Supportive Housing Program 09 New – The focus of the program is to provide permanent housing to
people who are homeless and have a disability.
Supported Employment as an EBP – The focus of the program is to establish an evidenced based
model of the supported employment program.
Improving Practices Leadership Team – The focus of the program is to develop and distribute an
informational video designed to educate consumers about Community Mental Health.
See accompanying independent auditors’ report.
12
Community Mental Health Authority of
Clinton, Eaton, and Ingham Counties
Summary of Auditors’ Results and Schedule of
Findings and Questioned Costs
Year Ended September 30, 2011
Section I – Summary of Auditors’ Results
Financial Statements
Type of auditors’ report issued:
Unqualified
Internal control over financial reporting:
Material weaknesses identified?
No
Significant deficiencies identified?
No (none reported)
Noncompliance material to financial statements noted?
No
Federal Awards
Internal control over major programs:
Material weaknesses identified?
No
Significant deficiencies identified?
No (none reported)
Type of auditors’ report issued on compliance for major programs:
Unqualified
Any audit findings disclosed that are required to be reported in
accordance with Section 510(a) of Circular A-133?
No
Identification of major programs:
Name of Federal Program or Cluster
CFDA Number
Substance Abuse & Mental Health Services Administration
Block Grant for Community Mental Health Services
93.104
93.958
Dollar threshold used to distinguish between Type A and Type B programs:
Auditee qualified as low-risk auditee?
$ 300,000
Yes
Section II – Financial Statement Findings
No matters were reported.
Section III – Federal Award Findings and Questioned Costs
No matters were reported.
13