colorado government finance officers association june 18, 2015 moderator: laurie litwin, teller...

Social Services Accounting –What YOU need to know

Colorado Government Finance Officers Association

June 18, 2015

Moderator: Laurie Litwin, Teller CountyPanel: Elaine Johnsen and Nikki Simmons – El Paso CountyVicki Caldwell – Teller County and Venita Dye – City and County of Broomfield

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Panel Members Why we believe you need to understand

Social Services accounting Who are you and what do you hope to learn

or take away from this session?

Introduction

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Topics we will cover Approximate timeline Goal for this session Handouts Resource Material Contact information

Overview

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Understanding the Intricacies of Human Services accounting and funding

Major Programs, Allocations and SFY Close-out

State DHS Data Systems

Fiscal Manual Budgets Reconciliations Cost Allocation Plan

Discussion – County & DHS Finance Organizational Structures

Coding, Time Reporting and RMS

The Single Audit & the new Super Circular

Communication Resources Questions

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Child Welfare Allocation Core Services Allocation Colorado Works Allocation Child Care Allocation County Admin Allocation Adult Protection Allocation

Major Program Allocations

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The Allocation Committees◦ How is each committee formed◦ Who are the members of each committee◦ Decision making process

Allocation Formulas◦ What is the formula, model, or calculation for

allocating to the counties Allocations and Close-out

Allocation Details to be Covered

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The committee – CWAC ◦ HB 13-1087 – Establishes committee structure

Child Welfare Allocation

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Historically, the statutory allocation committees for Child Welfare and for Colorado Works have been structured differently and appointments did not always represent statewide diversity

The legislation maintains two separate committees, creates the same structure in each committee and designates regional representation

The Committees: Eleven Members on each CommitteeEight members from Counties

One from each (CCI) Region (5 Regions) Three from the CCI Large County Caucus (22 Counties) County with the largest caseload must be represented

Three members from CDHS Executive level person, Program expert, Financial/Budget expert

HB13-1087

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The members:◦ CCI Appointees – Commissioners

Sallie Clark, El Paso (Co-chair); Barbara Kirkmeyer, Weld; Darius Allen, Alamosa; Dave Potts, Chaffee; Rose Pugliese, Mesa; Rocky Samber, Logan; Wendy Buxton-Andrade, Prowers.

◦ State Appointees – Jeff Holliday, Denver Human Services; Mary Alice Mehaffey, CDHS, Division of Child Welfare Sarah Sills, CDHS – Director of Budget & Policy Robert Werthwein, CDHS, (Co-Chair) Office of Children, Youth

and Families

Child Welfare Allocation

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Decision Making Process• Child Welfare and Core Services allocation

decisions are all determined by popular vote of the present members of the committee, though achieving consensus is attempted on key issues.

• The Committee will frequently solicit the input of standing or ad hoc sub-committees to analyze the detailed impact of potential decisions.

• Input from Non-Committee Members who attend either in person or by phone is solicited on each issue.

Child Welfare Allocation

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Allocation Model History◦Senate Bill 97-218 Established a county-

by-county capped allocation. Prior to that, counties were given a “target” allocation, but were only held to a state-wide appropriation, which was subject to amendment.

◦For SFY-98 – SFY-01 the allocation was based on historical expenditures in the base year, with a gradual increase based on appropriations and caseloads.

Child Welfare Allocation

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◦For SFY-02 – SFY-07, the “Optimization Model” was implemented to determine county allocations.

◦For SFY-08 – SFY-11, the allocation was “frozen” at the percentages driven by the Optimization Model in SFY-07.

◦In SFY-12, the Optimization Model was used, with a modification that capped allowable expenditures at each county’s proportionate share of the SFY-07 allocation.

Child Welfare Allocation

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Current Allocation Model – Approved on May 17th for implementation Jan. 1, 2014 and adopted for use in SFY 2015-2016- Approximately $6.6 million of the total $403

million appropriation made available to counties is “held out” for incentives. Incentives are awarded to counties who meet or exceed minimum standards of performance in three predetermined categories, proportionate to their level of performance and the size of the child population in each county.

Child Welfare Allocation

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- The remaining $328 million appropriation is divided into seven categories, weighted for their relative significance toward predicting expenditures and to direct toward desirable outcomes, as identified by the Child Welfare Allocations Committee.

- The data used in calculating each of the seven categories is to be the most recent available reliable data.

- All 64 Counties are included in the calculation.

Child Welfare Allocation

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◦ The CWAC has approved these seven data categories be used to calculate the allocation:1) Child Population (15%)2) Children in Poverty Population (10%)3) 3-Year Rolling Avg Program Services Costs (40%)4) 3-Year Rolling Avg # of Foster Care Days Paid (15%)5) 3-Year Rolling Avg # of Congregate Care Days Paid (5%)6) 3-Year Rolling Avg # of Subsidized Adoption Days Paid (10%)7) 3-Year Rolling Avg # of New Adoptions (5%)

Child Welfare Allocation

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- The resulting allocation amount calculated for each of the seven Data Categories and the three Incentive Categories are aggregated to arrive at each county’s allocation.

- The final results may be modified by employing “Floors” and “Ceilings” to mitigate any significant year-to-year decreases or increases in allocation.

- A 3% floor is approved for SFY 15-16.

Child Welfare Allocation

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Recent request to increase base allocation 7 smallest counties If approved, $235,000 would become the

new base Other counties reduced in order to fund CWAC meeting on June 1, 2015 to decide

Small County Funding

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Balance of State Mitigation Pool- The final allocation determined for each of

the Balance-Of-State Counties is reduced by 4%, in order to establish a “Mitigation Pool”. This pool is used at close-out to cover unforeseeable expenditures that may be incurred through the year.

- A Committee of Balance-Of-State Directors determines the extent to which each of the Balance-Of-State counties may draw from this pool, based on a variety of factors.

Child Welfare Allocation

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Fiscal Year-End Close-Out Process- Balance of State Counties are awarded an

amount of Mitigation Pool funds, as determined by the committee.

- Counties submit their preferences as to priority of close-out options, as they pertain to TANF Transfers, Surplus Distribution, and County-Only Funding.

- Each county’s over- or under-expenditure is calculated by CDHS Accounting.

Child Welfare Allocation

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- Based on the Preferences submitted by each county, available appropriations, and required Managed Care Savings and Collaborative Management Savings distributions, CDHS Accounting determines the extent to which over-expending counties’ expenditures are to be covered by Surplus Distribution and TANF Transfers and how much must be covered with County-Only funds.

Child Welfare Allocation

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- The Surplus Distribution Formula is generally geared toward covering first those over-expenditures within a “tolerable” percentage over the allocation before covering those at a more “excessive” percentage. However, what is considered “tolerable” decreases as the size of the county increases.

- The State is limited to a total expenditure of funds transferred from TANF to cover Child Welfare expenditures of 10% of the Current-year TANF Block Grant.

Child Welfare Allocation

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The committee – CWAC ◦ Determination by CDHS Executive Director to use

CWAC as a group of advisory stakeholders for CORE allocations

The members:◦ The same members as previously listed

Decision Making Process◦ Essentially the same process as the Child Welfare

Allocation

CORE Services Allocation

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Allocation Model – Current- Prior to SFY-13, the Core Services Allocation

was based on the original amounts awarded to counties at the inception of the program, in the early 1990’s.

- The SFY-13 allocation was calculated as follows:- The total $44.6 million appropriation was

divided between the Ten-Large Counties and the Balance-Of-State Counties in the same proportion as was used in SFY-12 (Approximately 73% / 27%)

Core Services Allocation

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Allocation Model – Current Holdout for evidence based services

for the Ten Large Counties (TLC) Balance allocated 75% of funds to TLC 25% to Balance of State (BOS)

Core Services Allocation

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Allocation Model – Current – Ten-Large Counties- The allocation is determined by the

following five cost driver categories and weighting:

1. Households Below 200% of Poverty (45%)

2. Referrals (2.75%)3. Assessments (5.5%)4. Involvements (44%)5. Out-Of-Home Placements (2.75%)

Core Services Allocation

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Allocation Model – Current – Ten-Large Counties- The resulting calculations for each of

the five Cost Driver Categories are aggregated with the Evidence-Based Enhanced Funding Services hold-out to arrive at each county’s preliminary allocation

Core Services Allocation

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Allocation Model – Current – Balance-Of-State Counties (BOS)- The five cost driver categories and

weighting are used:1. Households Below 200% of

Poverty (45%)2. Referrals (2.75%)3. Assessments (5.5%)4. Involvements (44%)5. Out-Of-Home Placements (2.75%)

Core Services Allocation

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Allocation Model – Current – Balance-Of-State Counties- The resulting calculations for each of

the five Cost Driver Categories are aggregated with the Evidence-Based Enhanced Funding Services, Substance Abuse, and Mental Health hold-outs to arrive at each county’s preliminary allocation

Core Services Allocation

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CORE Services Allocation at Close-Out ◦BOS (Balance of State) then TLC (Ten

Large Counties)◦Surplus Distribution – same process as

described in Child Welfare◦Over-expenditures-TANF Transfers or to

Child Welfare

Core Services Allocation

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The Committee – WAC ◦ Legislation HB 13-1087

The members:◦ CCI Appointees – Commissioners

Nancy Sharpe, Arapahoe (Co-Chair) Norm Steen, Teller; (Co-Chair) Steve Johnson, Larimer; Tobe Allumbaugh, Crowley; Kevin Karney, Otero; Eva Henry, Adams; Wendy Andrade-Buxton,

◦ State Appointees – Penny May, Denver; Katie Griego, CDHS; Levetta Love, CDHS; Sarah Sills, CDHS

Colorado Works Allocation

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Decision Making Process ◦Decisions are made by majority vote of the

committee◦The WAC adopted the principles behind the current

allocation on March 26, 2010 with the final SFY 2011 allocation being approved in the fall of that year

◦Several sub-committee meetings were held and open to anyone to participate in person or by phone

◦This formula development represents the first time local demographic factors were used in allocating Colorado Works funds

Colorado Works Allocation

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Current Allocation Formula- The current formula used to allocate the

Colorado Works Block Grant was developed during a lengthy series of meetings and discussions among a Sub-Committee of counties and with CDHS.

- The goals of the Allocation Sub-Committee were to develop a formula that equitably allocated the available funding among Colorado’s 64 counties and to do so in such a way that was not subject to manipulation.

Colorado Works Allocation

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Current Allocation Formula- The $150 million Colorado Works Block

Grant appropriation is divided into six Cost Driver Factors, separated into two Factor Groups, and weighted for their relative significance toward predicting expenditures.

- The data used in calculating each of the seven categories is to be the most current, available and reliable data.

Colorado Works Allocation

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Formula Factors and Drivers:- Demographic Factors – to identify the

population most likely to require services from the Colorado Works Block Grant.

- 50% of the total weight of the factors, divided evenly between the four drivers by county:1. Child Poverty Population (12.5%)2. # of Children Enrolled in SNAP (12.5%)3. # of Children Enrolled in SNAP Whose Family

Income is below 50% of the Fed Poverty Limit (12.5%)

4. # of Children who Qualify for Medicaid/CHP+ (12.5%)

Colorado Works Allocation

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Formula Factors and Drivers- Expenditure Factors – selected for the

ability to predict county expenditures.- 50% of the total weight used to calculate

the allocation based on two drivers:1. County Expenditures in the Previous SFY

for Basic Cash Assistance (BCA) and State Diversion (30%)

2. County Expenditures in the Previous SFY for all other Colorado Works Block Grant activities (20%)

Colorado Works Allocation

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Current Allocation Formula- The resulting allocation amounts

calculated for each of the six Cost Driver Factors are aggregated to arrive at each county’s preliminary allocation.

- Counties with BCA/Diversion expenditures greater than 70.9% of their total allocation have those expenditures weighted at 40%

Colorado Works Allocation

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Current Allocation Formula- Counties are held to a maximum

decrease of 5% and to a maximum increase of 25% over their prior fiscal year allocation.

- The funds required to fund these floors and ceilings are adjusted from those counties otherwise receiving an increase over their prior year allocation.

- Counties with allocation totals less than $100,000 are held harmless.

Colorado Works Allocation

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Colorado Works Allocation at Close-Out ◦No Surplus Distribution – Underspent amount

goes to each counties TANF Reserves◦TANF Reserves – Use of County Reserves or

Reversion from TANF Transfers◦Audit Adjustments – TANF Audit Adjustment

through-out the year◦Cap Reversions – In excess of 40% of the

county’s original preliminary Colorado Works allocation distribution reverts to State Long Term Reserve

Colorado Works Allocation

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The committee ◦The Financial Management Sub-PAC

recommends allocation through Policy Advisory Committee (PAC)

◦The allocation decision rests with the Executive Director - CDHS

Child Care Allocation

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Decision Making Process ◦ Allocation Task Group formed under the

Finance Sub-PAC –designs formula and submits to Sub-PAC as a recommendation Monthly Task Group meeting State and County representatives

◦ Finance Sub-PAC – reviews formula & if approved sends to PAC as a recommendation

◦ PAC – reviews and sends to CDHS Executive Director as a recommendation

◦ CDHS Executive Director – Makes final decision and approves formula for implementation

◦ CCCAP Administrator – allocation to counties is made based on the approved allocation formula

Child Care Allocation

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Allocation Model ◦ , Likely Enrollment, Income Eligibility, Utilization

Each county’s portion of: With a weight of: Children under 12 enrolled in SNAP 25% Children under six years old, ≤ 184% FPL (Census) 30% Children ages six to eleven, ≤ 184% FPL (Census) 20% Utilization of CCCAP – limited to 130% FPL 25%

◦ Utilization Factor Data Drivers Use actual units of care (utilization) by county from CHATS Group counties based on similarity in the Self-Sufficiency

Standards Use average CCAP provider market rates within each

group

Child Care Allocation

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Child Care Allocation at Close-Out ◦Surplus Distribution – same process as

described in Child Welfare

◦TANF Transfers to Child Care to cover over-expenditures

Expenditures coded to Child Care Quality Activities covered with TANF Transfer throughout the year reduce the amount available of TANF Transfer available at closeout

Child Care Allocation

The committee ◦ Financial Management Sub-PAC ◦ Ad Hoc Sub-PAC Committees – Adult Protective

Services The members: Financial Management Sub-

PAC Decision Making Process

◦ Workload Study in 2007◦ Activity-Based Costing (ABC) Methodology ◦ Review Activities and Minutes in CBMS◦ Base Counties◦ Hold Harmless

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County Admin Allocation

◦ Three Components and Adult Protection Allocation◦ CDHS Allocation◦ Health Care Policy & Financing (HCPF) Admin◦ HCPF Enhanced Funding Admin◦ Adult Protective Services Allocation

Pulled from County Admin with new funding Close-out first then over (under) by county returns to

CDHS County Admin for final close-out. Will eventually close separately.

New data system, no longer in CBMS Separate Client services funding – surplus distribution

then reverts to State

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County Admin Allocation

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County Admin Allocation at Close-Out ◦ Surplus Distribution - same process as described

in Child Welfare◦ Both HCPF Admin & Enhanced closed, then

over(under) moved by county to CDHS Admin◦ APS Admin closed and over(under) moved to

CDHS Admin Federal Pass-thru – Any remaining county deficits

after Surplus Distribution are eligible for federal pass thru reimbursement.

Federal Revenue earned but unmatched during the year and at close-out is calculated

A proportionate share of the remaining deficit shall be reimbursed with these federal funds with only county match – 50/50 Federal/County

County Admin Allocation

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Child Welfare and CORE Services – TRAILS Child Care (CCCAP) – CHATS TANF, Food Assistance (SNAP), Medicaid, Adult

Financial, Long Term Care – CBMS Adult Protection - CAPS Administrative and non-client payments,

correcting journal entries – CFMS Personnel costs – CEDS At month end all systems interface to CFMS Large counties may electronically interface to

CFMS from their financial systems

DATA SYSTEMS

Where to find it◦ http://Coloradohsda.org under Publications or

http://www.hsfoa.org/Training Why developed Different procedures for different counties

FISCAL MANAGEMENT MANUAL

• Two Methods1. 100%2. County Share

• Fiscal Years– State Fiscal Year – 7/1 - 6/30– Federal Fiscal Year – 10/1 - 9/30– County Fiscal Year – 1/1 - 12/31

• State Allocation & Budget Letter

BUDGETS

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SFY 2014-2015

Budget Agency Letter

COLORADO DEPARTMENT OF HUMAN SERVICES1575 SHERMAN ST., DENVER COLORADO 80203-1714

NUMBER: ABA 14-02-A

 AGENCY LETTER

CROSS REFERENCENUMBER:

DIVISION OR OFFICE: Office of Performance and Strategic Outcomes 

DATE: 08/18/2014

Office Director:Melissa Wavelet

PROGRAM AREA: Accounting, Budgeting Allocations – ABA DIVISION DIRECTOR:Sarah L. Sills

TITLE: State Fiscal Year 2014-2014 Preliminary Allocations TYPE: A - Action

By Program Previous Trends/Actuals RMS – Random Moment Sampling Bail-out (Should you or Shouldn’t you?) Communication

1. Changes to Policies/Rules/Allocations2. Increased/Decreased caseloads3. Budget Adjustments

Budget - Items to Consider

Monthly Basis State Program tracking systems to CFMS County to State Year-end Issues

1. Cash vs Modified Accrual 2. County Share Method – Annual reconciliation

RECONCILIATIONS

Generates Reimbursement to the County General Fund

Do it Yourself or Contract it out

Cost Allocation Plan

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Discussion◦ How are counties structured now?◦ How is it working?◦ What works well?◦ What are the challenges?

Pros and Cons of Changing the Structure◦ Lessons learned in a consolidation of County and

Human services Budget and Finance function◦ Panelist experiences

Organizational Structure

CFMS Coding and Time Reporting

Maximize reimbursement!

RMS & Cost Pools, 100% Time Reporting, and Semi-Annual 100% Time Certifications

100% and 80/20 Child Welfare funding

Agency letters and grant award letters

CDHS Settlement Accounting

Have a Plan!

RMS, or Random Moment Sampling, is a Federally approved method of distributing expenditures among various funding sources.

Caseworkers and Technicians across the state are polled electronically about their activities and the cases they are working.

The responses are combined and percentages are calculated on a quarterly basis, to move cost pool expenditures to the various funding sources.

RMS

Employees who work in more than one federal grant must keep track of their time on a daily basis.

At least quarterly, their time charged to various funding sources must be reconciled and adjustments made in CFMS.

Some small counties use 100% Time Reporting to maximize their reimbursement from specific funding sources since they have fewer employees with multiple job duties.

100 % Time Reporting

Some employees may work in a single Federal program.

In this case, the employee is not charged to a cost pool and does not have to keep 100% time reporting forms.

Twice a year, the supervisor must sign a certification that the employee has worked only in that one Federal program.

Semi-Annual 100% Time Certifications

Evaluate allocations of 100% reimbursable child welfare expenditures and 80/20 reimbursable expenditures.

What works best for individual counties? This may differ from large counties to small counties.

Each county should decide if they want to spend all their 100% money at the start of the SFY or spread it out over the year; if the 100% allocation is overspent, it will be moved to 80/20 reimbursement at the end of the SFY.

Child Welfare 100% & 80/20

Study this letter each year for information about allocations, programs, reimbursement percentages and more.

If a current agency letter isn’t available, refer to a previous year ‘s letter for program information that generally doesn’t change.

Be sure to have other agency letters and grant award letters routed to finance and budget; critical coding and reimbursement information is often included.

CDHS Annual Agency Budget Letter

The State employees in this office are experts in CFMS and coding.

Work closely with them to ensure accurate and appropriate reimbursement for expenditures.

Contact CDHS Settlement Accounting at:

CDHS_SettlementAccounting@state.co.us

CDHS Settlement Accounting

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Program Audits and financial impact What is your accounting structure for including

client benefit payments made through state systems?

Do you need to report the Required Supplementary Information?

When there is a single audit finding Recent changes to Single Audit and Federal Grant

Rules “Super Circular”

Single Audit and Human Services

Speaking (and understanding) Human Services Finance

County Terminology Human Services Terminology

Accounts Receivable◦ Cash receipting of funds due the

County

Payroll◦ Salary and hourly wages paid to

county employees for work performed

Revenue◦ Property Tax Revenue◦ Sales Tax Revenue◦ Services Revenue

Accounts Payable◦ Payments made by the county to

vendors for goods and services

Confidentiality◦ Often county finance activities are

public record. Confidentiality is applied on a need-to-know basis.

Accounts Receivable◦ Client recoveries that must be entered to client

cases within 48 hours in CBMS using a hierarchical scheme

Payroll◦ Batched payments made to employees, vendors,

child welfare providers, etc. Entered to CFMS by upload, manually, or transferred from other state systems such as TRAILS, CHATS, CBMS

Revenue◦ Shares Revenue – Federal/State/Local Share◦ County Pass through Revenue◦ Medicaid Match◦ Parental Fees◦ Employment First Enhanced Funding◦ Incentive Revenue (Child Support Enforcement,

Fraud Incentives for various program fraud collections, Child Welfare incentives)

Accounts Payable (Admin Vendor Payroll)◦ Payments made by the County for goods and

services using a variety of funding sources. Must be transferred to CFMS. Any changes must be made to County accounting system and to CFMS

Confidentiality◦ Strict rules separating case duty functions and

finance/payment functions

County Policy vs. Human Services Policy

County Finance Human Services Finance

County policies are often created internally so there is greater ease in changing business processes to suit County preference.

Efficiency measures are easily implemented with County control of IT resources and systems.

County budgets can be prepared with greater accuracy because large amounts of County revenue are known prior to the start of the county budget year.

Human Service policies, regulations and rules are promulgated at the federal and state level.

County staff can influence state policy making through involvement on state committees. This can be challenging because HS accounting jobs tend to be highly task oriented and driven by tight deadlines.

HS staff are mandated to use certain computer systems and follow strict rules and regulations which can conflict with County policy.

County Policy vs. Human Services Policy

County Finance Human Services Finance

County finance departments have a known County Audit each year to prepare the CAFR and can staff accordingly.

HS revenue is not received until an expenditure is made. Allocations may not be known until late into the state fiscal year and can shift unexpectedly based on Congressional action.

County Admin funding to run mandated programs is underfunded statewide with unknown consequences to counties until state fiscal year closeout.

HS departments typically experience 8 to 13 audits per year which place demands on staff.

Fiscal Officers Group (FOG)◦ This group meets the third Friday of each month (with the exception

of December and May) from 9 am to 1 pm at the CO Department of Human Services (CDHS), 1575 Sherman Street, 4th Floor Conference Rms, Denver, CO.

◦ The meeting is available by teleconference. The Phone Number into the meeting is: 1-877-820-7831. The Participant Passcode is: 501029#.

CDHS Settlement Accounting◦ CDHS County Mailbox: cdhs_settlementaccounting@state.co.us

Sandy Eckerman, 303-866-6533 Lori English, 303-866-2513 Karon Schleigh, 303-866-5883

CGHSFOA Annual Accounting Conference◦ Held in May each year and provides sessions on various social

services topics.

Where to Find Information When Your Social Services Experts Leave

Childcare (CCAP)◦ Valerie Limes, CCAP Mailbox:

CDHS_CCCAP_CHATS@state.co.us Child Support

◦ Mike Auran, 303-866-3183 Child Welfare

◦ Les Cowger, 303-866-6480 Core Services

◦ Melinda Cox, 303-866-5962 Food Assistance (SNAP)

◦ Sheryln Stephens, 303-866-3860 Medicaid (Health Care Policy and Financing)

◦ Jocelyn Parker, 303-866-6647 TANF (Temporary Assistance to Needy Families)

◦ Luis Garcia, 303-866-5821◦ Sarah Marsh, 303-866-5762

Allocation and Funding Source Contacts

CDHS Audit Department◦ Cheryl Wilmer, 303-866-7330

Cost Allocation◦ Suzie McGinley, 303-866-4421

Neal Christensen, CPA (Retired CDHS Auditor available on a consulting basis)◦ NealCPA@q.com 720-468-1765

Panel Participants◦ Elaine Johnsen, Funding Optimization Manager, El Paso Budget Administration, 

elainejohnsen@elpasoco.com 719-520-6386      ◦ Vicki Caldwell, Accounting Supervisor, Teller County Finance Department,

caldwellv@co.teller.co.us 719-686-7920 ◦ Venita Dye, Operations Manager, Broomfield Health and Human Services

Department, VDye@broomfield.org 720-887-2250◦ Nikki Simmons, Finance Manager, El Paso County Budget Administration,

NikkiSimmons@elpasoco.com 719-520-6461

Additional Resources

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Questions?