Good afternoon, everyone. I would like to call the Finance Committee meeting to order for dwihn, can I get a roll call? Please? You
Yes, Madam Chair,
roll call.
Miss Benton Z Thank you. Mr. McNamara, thank you
Miss Brown present,
thank you Miss Garza de Walsh present, thank you, Mr. Glenn present, thank you Miss Ruth. Miss Ruth, present. Thank you. Are there any board members joining the meeting via zoom, are there any board members joining the meeting via zoom? Mr. Adams, are you attending the meeting today?
Yes, ma'am. I am. Thank you.
Thank you, Madam Chair, you have a quorum with Mr. Adams Sud chair joining us today. Thank
you. Hello, Mr. Adams, how are you? Thank you, wonderful. Okay, so now let's call Do we have any commitment committee member remarks, can I get an approval of the agenda? Please, approval, Madam Chair, support, properly moved and supported. Any questions, any discussion, all in favor. Aye. Anyone opposed? I. Follow up items. Is this the only one? William, board action 2470
Madam Chair. This item was referred to the Finance Committee meeting that was held July 17 for board action 2470 facilities is to provide a transition plan to finance committee within the next 90 days. So within 90 days, they will be presenting a transition plan from the constant dying center. It's for informational purposes at this point.
Thank you. Can I get approval of the minutes for July 3, 2024, Madam Chair, Move for approval. Support. Properly moved and supported any discussion? All in favor? Aye, anyone opposed? Okay, here we go, presentation of monthly Finance Report. Madam. CFO, yes.
Thank you very much. Presented before you as the Finance Committee report for the nine months, ending June 30, 2024, I four. I can't necessarily say in terms of the actual financial statements that there's anything necessarily noteworthy that needs to be presented to you and brought to your attention, other than I would say on the income statement. I do want to note that the excess, or the operating revenues over expenses, pretty much pertain solely to the Medicaid carry forward that we carry forward of $32,000,032.5 million into fiscal year 24 that was a that came from fiscal 23 into 24 and then essentially what I'm saying is everything that we're getting in is going out the door through various expenditures. So that would be the only thing that I would say. It would be noteworthy in the financial statements, unless you all have specific questions. Just
American mayor, yes, sorry. Okay,
so I'm not good at reading this. I know you've got some surplus cash. That cash in the in the in your operation. Where would I look for that number? The net cash, that's that's really, truly general fund net cash.
You mean unencumbered, yep. So well, let me say this. I'm going to point you to a number however it is, at the end of the fiscal year, there are certain closing entries that are made as a part of the annual audit that will reduce that number. No, no question. It's going to be reduced. But to directly answer your question, if you go to the statement of net position under the at the bottom of the page where it says unrestricted, there's a line that that would be that number that you just asked me in terms of, like, the bottom line, cash, yeah, okay, yes. However that that number does include some things that would be adjusted at the end of the fiscal year as a result of the audit.
So it would be very wrong for any board member to assume that they had $236 million in net assets that was actually cash.
No, well, I can tell you 37 million of it. So if you look at net position and that $239 million that you just referenced, the first item says net investment in capital assets. None of that's cash. That's your that's your capital assets you're building now. The rest of that, I would say, is cash, but it's restricted for different reasons and purposes by law, statutory and contractual.
Okay, thank you, sorry. Oh, you're
fine. Any other questions,
you can proceed. So the next item on as part of my report is, if you all recall a couple months ago, I did come to you because there was a lot of media attention around a particular local nonprofit organization whereby $40 million was allegedly, I mean, a person is guilt, is innocent until proven guilty, right? Allegedly. There was a fraud scheme of $40 million from a relatively well known and, you know, from my understanding, their board is the who's who of Michigan, right? So, how did this happen? You know, under the nose of all of these, you know, predominant people and so forth. So what I'm here to do today, and again, this is at, at. Really from my so that you all know where we stand as an organization. This was not asked upon me to do this. This was, you know, this was purely something that I felt that there was a elephant in the room, so to speak, and probably an elephant at many of your organizations that you're in as to, you know, Hey, how did this happen and could this happen at my organization? So I wanted to, you know, present this, do this presentation on the dwins and tonal controls and segregation of duties, so that the board feels comfortable that such a occurrence at that magnitude, I am very confident could never happen at Detroit Wayne, and I can say that with the utmost confidence, however I do want, I want to, it's not about what I say. It's about what is in place, right? It's not what Stacy said. It's what's the what's what. You know, regardless of Stacey when she leaves, someone is going to be in this position, and the internal controls and segregation of duties should prevent this from occurring regardless of who sits in this seat. So that is what I'm here to present to you. We've also, I've also asked that our auditors, plant Moran, also be a part of the discussion. Mine is going to be probably more of a presentation. There's more going to be more of a introduction as to what the their typical communications that they submit to you all, what that means, what that looks like, and answer any questions that you all may have for them, I can tell you, being in the role as a previous auditor at a firm, they're going to be, they're going to answer your questions, you know, based on facts, however, you know, they're not going to give any conjecture as to, you know, how did this happen? Because they're the auditor that you know. They're not going to speak of what a auditor did or could have done better. Okay, let me just say that. So they're going to answer questions and based on fact and based on what the professional guidance and standards require of them, is that a fair? Yes. Okay, so with that said, there is a document, a PowerPoint presentation, that is presented before you. I can tell you that we did obtain the actual federal complaint against the nonprofit, the CFO of the nonprofit. So we actually received it. I actually went through a 20 page indictment and read all of the things in which were alleged. So this is all coming from a criminal complaint, and not the newspaper, Detroit Free Press, you know, and so forth. This is coming from the actual federal indictment and criminal complaint. So just to provide some background, on June 4, the CFO of a nonprofit organization, was indicted in federal court for allegedly embezzling approximately $40 million from november 2000 2012 until May of 2024 the The following is based on the official federal quote criminal complaint. The embezzlement included the following. There was payment of approximately $14.9 million to an American Express business platinum card and four American Express corporate cards issued to the CFO his wife and several family members, a payment of approximately 24 point 4 million to two. I'm going to refer to them as fictitious LLCs. They were they were established LLCs with registered with the state of Michigan. I use the word fictitious somewhat loosely because there were fictitious payments made to these organization for services that were probably allegedly not rendered by the organization. So the when I say fictitious LLCs, they were established by the state of Michigan, it's just that the activity appears to be allegedly fictitious. One, one group, one company was called the Joseph group and Associates, and the other was William Smith and Associates. Laura did list William Smith as the Registered Agent for both LLCs. And the final was the CFO was able to execute a $5.5 million line of credit with Citizens Bank, which pledged donated revenue of the nonprofit, approximately 2.5 million was drawn down on the line of credit at the time of the indictment, based on the complaint the embed, the embezzlement was covered up in several ways, including but not limited to. Altered documents, bank statements and board resolutions, are examples and fictitious journal entries and in their accounting system. So what I'm about to do is essentially go through each financial scheme that was that I just outlined, and I am going to talk through what dwins internal controls are, as well as the the audit testing that we are aware of in our in the finance department, as to how plant Moran tests certain things, certain accounts and confirmations and so forth, and their testing procedures that we are aware of and that we take part in, okay, the first scheme was that the CFO provided altered hard copy Comerica Bank statements To the accountant that prepared the monthly bank reconciliations. The CFO was the sole employee authorized access to the primary account, a Comerica account online on the online bank account. So dwins internal controls set, first of all, several staff persons have act, have online, read only, access to the bank accounts and can review and can view banking activity and statements at any given time. I am not the sole one who has access to the online bank accounts. There are several staff. I can think of about five. Many of them have read only, where they can access and read only and print off the statements. My deputy has a lot of the actually her my a lot of my access mirror. My deputy mirrors my access and the event I'm on vacation or unable to perform. She has certain access rights. So that's and I'm gonna, let me say this, I spent almost 10 years at KPMG. So some of my KPMG is a very large CPA firm. I spent 10 years. I'm a certified public accountant. I am going to make certain statements that the auditors are not going to make, okay, and I'm going to bait, I'm going to make these statements based off of my professional experience and what I've done as an auditor for 10 years.
You know? Well, let me before I do that, also want to make note that another internal control which is very, very key, is that there is a senior accountant that prepares monthly, monthly bank reconciliations, and the CFO reviews and approves the reconciliations. The bank statements are obtained directly from the online system by the senior accountant. Okay, so the senior accountant has access to go into all of our bank accounts and go print off statements. In order to do a bank reconciliation, I look at that bank reconciliation. I look to make certain that there are, if there are reconciling items that it is due to timing, and timing would be outstanding checks, much like if you were to balance your checkbook, there's outstanding checks. If you set a certain date at the end of the month, there's certain checks that are outstanding. There may be certain deposits that are pending but have not hit your account. Things of that nature. Those are the things. When I do my review and approval of it, I'm looking to make certain that the outstanding items or reconciling items are true, reconciling items and there are not items that require an actual journal entry. So there are some things that actually require that we actually do a journal entry to put in the system. So I am reviewing that on a timely basis, because timeliness is important if you're doing something three months later, and that's why we have policy that states, I believe we have, I think it's 45 days, because oftentimes it's two months, it's too late. I've stolen $5 million so timeliness, or someone has done it. So timeliness is very important that things are looked at on a timely basis.
I have a quick question. You said 45 days after the close end of the statement period that the reconciliation occurs? Or what do you so our
the policy is 45 days after the month and I received a reconci, a reconciliation for review and approval. Okay, you see, I receive it for review and approval. Yes, we tried 30, but it just didn't 30. Just wasn't long enough. It was a lot. Yeah, it was too much activity. So one of the one of the audit testing that. We know that plant Moran, or tapes that would have directly, that directly addresses this fraud issue is a audit confirmation that's sent directly to the bank, whereby the response the bank confirmation. We call them a bank confirmation, the bank confirmation. I signed a document stating that I authorized plant Moran to obtain this information and that you send it directly to them. So there's a bank confirmation that's sent directly to the bank by plant Moran, where the response goes back to the plant Moran, one of the issues around this fraud scheme is that the banking, the bank statements and the ending balances, okay, were altered, in my professional opinion. I don't understand for the life of me, because a bank confirmation, like, is 101, okay. Like, that's auditing 101, it does not get more 101, than a bank confirmation, um, had a bank confirmation been sent, okay, the response would have shown that the amount at the end of that fiscal year, or would not have agreed to what was being presented in their financial statements. I mean, it's one on one, y'all seriously like one on one. So this, I don't know how they confirm cash. I don't know what they did, but a bank confirmation is literally teaching a two year old was two plus two equals four, literally from from an accounting perspective or auditing perspective.
Madam Chair, can we ask questions now, or should we wait till the end? Or
you can, you can, you can answer now, I
just have a quick question on the bank confirmation process. So is this something that plant Moran is involved in just at the end of the year when the audit is being worked on, when the audit is being it's not every month? No, okay,
no, this is they do an annual audit. They come out once a year and do testing, and there is usually over a course of several months. I think it's probably January, and February is usually the timing of field work, and that is done at that time. Okay, thank you. The bank reconciliations are done monthly by a separate this is important segregation. Segregation of duty is done by a person separate from the payable process, and it's entirely, pretty much, really, they only they are the accountant that handles the cash. They don't pay. Pay things. You know, they're separate from all of the those payable functions.
So since you said that, now I'm asking, would it be wise to have a process where somebody would get a confirmation from the bank, monthly, some someone else beside the CFO? I'm just asking. So,
I don't the accountant that does the bank reconciliation. She gets the statements, goes online and gets the statements online every month to do that monthly reconciliation. So that bank statement is coming directly from the bank's portal, and it can't be altered. It's coming directly from the bank's portal. So the monthly reconciliation process, essentially is is not an auditor confirming, but it is someone outside of the process confirming what those cash balances are and reconciling it to the ledger.
Thank you.
I have, I do have a question, did they name their ordering? Yes, they did. Are they criminally charged
with I don't. I don't think that they're criminally I don't think that there's many criminal charges. I don't know if there's going to be any civil litigation filed against them. I haven't heard of of any, but no, there's been no, no criminal charges against the auditor at this Okay,
anyone else? Madam Chair,
if I may. I just wanted the record to reflect that Mr. Bernard Parker joined the meeting. Yeah. Any, any other questions in regards to the bank reconciliations, this is, I mean, this is 101 you guys. It really is. It's 101 so the going on to the next item, scheme, the second scheme. Team was that the CFO was authorized to execute contracts on behalf of the nonprofit organization. He was also responsible for payments to the vendors and or subcontractors. He formed an LLC. LLC executed a a contract between the LLC and the nonprofit organization, and made payments totaling $25 million to the fictitious LLC. He covered up the transactions with fictitious journal entries. Okay, so dwins internal controls is one all contracts over $50,000 are required to be have a board action, and that includes professional service contracts, the requisition process, or the PO process, is very, very, very detailed in terms of it touches a lot of hands. So 150 any, any contract, over 50,000 has to have board approved, board action approval. So in order to get up to a $25 million I mean that that those contracts definitely, obviously had to be over 25 over $50,000 but the PO process is very, it's a very it touches a lot of departments. So the requisition is entered into the system by the requesting department. So if it is, for example, Sud, Sud has a person that is designated to enter in and make the request for the purchase of goods or services, that's very important. Segregation of duty is that the requesting department is making is entering in the requisition. The next is that the department director, so I will follow through on the Sud request. The the the department director will approve that request, it then goes to my budget administrator, where she approves the request and the budget the account numbers are consistent. She's looking to make certain there is a board action present and approved by the board. The next is, I then, if it's over 50,000 I then am a second. I board action, present amounts, present account numbers, present because account numbers is important, because you don't want to charge it to them wrong, grant. So all of these steps are done a as a second. I in terms of making certain that it's accounted for properly, and that the process has been met, and that there is a board action that is attached, that their board has approved, and then next it goes to the legal department, or the legal department confirms that there is a contract in place. There's a signed, executed contract. That's important, obviously, because you want to make sure that the contract there is a document where that where two parties agree and agree to the contracting process. The last item is the purchasing manager issues a purchase order. Purchase order then goes through an approval process where, I believe Mindy, you approve purchasing, the purchasing director approves that purchase order and makes certain that everything is in place for that particular transaction journal entry. So for, I'm sorry for professional service contracts under 50,000 the same process that I just described is present, except I don't. I do not do a secondary review. It goes to the budget administrator or legal I just don't approve anything, unless it's for finance department. If it's under 50,000 in terms of journal entries, because that's another way that he was able to cover up this scheme. I do not for the most part. I say that at the year end I prepare closing entries as a result of the audit and a year end closing process, I do prepare entries. However, I do have a staff person, because I make mistakes too. I have a staff personally view the journal entries those closing, year end entries that I make to make certain that I didn't miss anything and that everything is present. But in terms of the normal course of business, journal entries are prepared by staff. They are entered by staff. I am only the review and approver and poster of those entries, so they are initiated and entered by staff other than myself. I only am the reviewer approver and poster of the entries that was not the. Uh, that couldn't have been in place in this particular circumstance. Also, I want to mention that we have a what's called a positive pay functionality with fagstar, whereby the payee and amount must match the payment or check that was remitted in the payment file. I say that because apparently it looks like, based on what I saw, he may have paid this fictitious company $100,000 well, the journal entry and the information that went into the into the General Ledger had 10,000 maybe. And it was too it was too mdot, another whole, another provider altogether. So not only was the payee and the amount wrong and not consistent with what was paid out and but the ledger reflected something differently. So the positive pay function assist in making certain that these type of things don't happen in terms of the payee being someone different and the amount being different. In terms of a audit function that the plant Moran, that we are aware that plant Moran does, they do a sample of contracts with a sample. Do a sample and pull contracts, and they review for accuracy, completeness and timeliness. They also review full board minutes through issuance of the audit, you know, through the issuance of the audit report. So they obtain all full board the minutes from that for the entire year through audit field work, where they review those minutes. They also perform a visual walk through of the requisition to purchase order process to make certain that the policy is adhered to and that a PO cannot get issued without going through the steps that I just went through. So they do a visual online screen, walk through of that process a sample. They also do a sample of journal entries are reviewed to ensure segregation of duties are in place, and that is, they get email approvals. They can see where the staff has entered it and where I have sent an email, approving the email, I mean approving it to be entered into the system and then whereby I posted so they are ensuring the segregation of duties are in place. I also want to know that the the CFO has never so that the the CEO executes all contracts on behalf of the of the organization, his or her designee. Oftentimes, he may designate, for example, potentially, if he's not in one of his designees, I believe at the time of our you know, it was Manny. I have never been a designee to sign and execute contracts. So that is also a segregation. I mean, he was able to execute contracts and pay them too. So you can only imagine. I mean, that's, that's, that's an issue. That's a segregation of duty issue. You should not be able to execute a contract and then pay it at the you know, as well. So that was, those are some of the audit testings and segregation of duties that we have in place. I will also say that 9999 we are billion dollar organization. So imma say 99 99% of our payments are through MH win and I, and they are not through this PO process, okay, most of them involve a very detailed authorization process where authorizations for particular members, they have to have a, you know, there's a IPOs That's then, I believe, uploaded into our system, and authorizations based on that IPOs are generated, and that is how payments. 99%
of the money that we get are paid because they are Medicaid payable services, and Medicaid, you have to have CPT code, and it's service. It's CPT code driven. So 99% of our payments go through this very income, this very, very detailed process where every payment is associated with a member. So from dwins perspective, something being paid inappropriately, is it cannot happen now on the other end, on the provider's end, I cannot assure you, okay, on the provider's end, that they're um. That, yeah, I can't assure you what they're doing on their end. I can only assure you what we're doing on our end. Okay, that's why they have their own audits and things that are done to make certain that that level of assurance is provided. So I do make that caveat. On our end, we can't, you know, there $40 million isn't going to go out the door to a fictitious vendor, but I cannot assure on their end, and that's why, contractually, we have most of our providers require an audit to take place,
and then Mayor, they
just send those audits up to you. Then after the Yes
they do, we obtain the audit reports, we do a review. And my senior auditing manager, Tony Jones, receives those reports, and she does a review of them and follows up as needed. Tony, you want to stand up. I want to make sure they know that we do have, I do have staff that's doing all this work. So That's Tony, so that is how we, to the best of our ability, ensure that the providers are spending the money in accordance. Okay, you all know that there is no absolute 100% guarantee in that. I just want to be, you know, put that caveat out there, but we certainly go through the process to ensure that, you know, we do our part to make certain that we monitor that the next scheme, the third scheme,
sure, yes. So I don't want to, I don't want to go down this road too far. But if you have a new provider and they're up for audit, do you have input in the pre audit to ask the auditor to look at certain aspects of what they're doing?
No, there are audit standards. The auditors you know, we hope, I mean, for the most part, in nice region, maybe our auditors that you know are competent, you know, and there's certain assumptions that are made into competent team. They're going to follow professional standards, you know, so there's certain things that we rely upon. They're independent, and that they're going to look, look at the risk anytime, you know, just from past experience, you know, when I went into a new when we audited a new company, we went in and we got an understanding of what the where the risk we're at. And my
curious question, because, I mean, if you see something questioning, you can you actually aim the audit in that other company?
If I see something questionable, and I'm going to perform my own I'm going to go in and do okay, that works, but verify, right? Ain't much I liked about Ronald Reagan, but that was one of the things that I definitely did trust, but verify. Yeah. So, so the third item was that over $14 million in American Express charges were made on his on his and his wife's personal card. Such charges included payments for vehicles, Gucci, Louis Vuitton, and landscaping for personal residence. It should be noted that the nonprofit organization did not have a corporate issued American Express credit card. So these were his personal cards that the corporation did not have its own American Express cars, and to some extent, I mean not to
Yeah, that. So let me, let me ask you a question. Yes, ma'am, so the the the cards that were listed under the charges were not under the name of the organization, no, ma'am, they were under his personal name, yes, ma'am, they were so and the fraud part comes in is because he seeked reimbursement, so to speak, he paid the charges, he paid the
car, he paid the car. He didn't seek reimbursement. He paid the car, just paid the car, paid the card. Madam Chair, if I may, I just want to remind people that the criminal complaint are allegations. I did so, and I said, just want to make sure that we are very careful with the language we use. So these are all allegations. He is not the person has not been proven guilty in a court of law at this point. So let's just make sure that we are very careful with our language, that this is a criminal complaint. These are okay, so
So I get that. Thank you very much. But let me ask you this question before I say something else. What did I say that was inappropriate.
I would rather not say that on the record, um, because it breaks a transaction claim. Okay,
so, so the alleged individual that better, that is better than that has been charged. Have they been formally charged? Yes, okay, yep, the alleged I went through all of those caveats that has been charged had a card in their personal name and seat payment yes from the alleged organization. Is that good? Well, it's not the alleged the organization. Okay, so the organization, right? And the reason being is because there was no card issued under the organization name. They were under their personal name, and that's where the fraudulent transactions were inputted into the system to pay those cards. So those were the fraudulent transactions that were put into the system. And he used that money. The money was allegedly used to pay
those cards. Well, the money was used to pay. The money was used, I'm just trying to, I'm just, I mean, yeah, the money was used to pay those cards. Yes, that was, that was yes. That's probably the indictment. The transactions,
the transactions that were placed
were, were Gucci, Louis Vuitton, vehicles, landscaping for his
person. But nobody had, you're saying he, he the the person that they're accusing, yeah, or allegedly, yeah, whatever, yeah.
You can say madam chair that you're assuming that the facts in the complaint are, you know,
are allegations, and that you are saying per the complaint, XYZ.
So just say, okay, so per the complaint, I'm just trying to understand how the transactions is because there were no oversight at the end of
the day, at the end of the day. I mean, the reason why we're having this discussion is because we wanted to discuss dwins and tonal controls and segregation of duties, so we when we have in place, so that the things that are alleged and the then the criminal complaint would not happen here. So how you know, you know, listen, there was,
I don't understand how, listen,
listen, you're not going to understand it. Because it's really, it's you're not. You're not going to understand how you're not. It's it you're not. You're not. I mean, it's how does
so you're just saying is it was no oversight.
I mean, absolutely, and that's what I'm saying. Chairperson brown having and knowing about internal controls and being a part of it every day. You know you this is what you breathe every day. As a CFO, you're not going to understand how this happened. I'm going to tell you right now. I mean, trying to make sense of it. You're just not. You're not. Um, so our internal control,
do we know who the auditor was for the organization? Or no, they did have land. They have,
they had it in the paper. Yes, it's in the paper. I mean, I don't want to, you know, call out people's, you know, it's in the paper. I mean, it's in the paper. Google
it. Okay, go ahead.
Yeah. I'm sorry. Commissioner, who it was, George Johnson, okay. It's in the paper, right? So I do want to note that. So for our American Express we do have American Express cards. So all our executive leadership employees have the G win AMX card issued in their names each month, a finance staff person obtains the credit card statements directly from the AMEX online account, online account, so directly from Amex the online account. It should be noted that this person does not have a credit card issued in their names, so they're meaning they are separate from the entire credit card process. Okay. Further, the CFOs Amex card is issued for all non ELT staff travel and purchases, and is not in possession and is in the possession of the accounts payables supervisor. I just note that I have an Amex card, but my Amex card is used for the entire organization that are non ELT. But the person that the finance person, is not me. Who accesses the online account is someone else. She also accesses my account where she reconci gets the all the supporting documentation that's needed to pay the bill. So each credit card statement
as a question,
it's not on, it's not on, okay, sorry, so I see the process of validating and reconciling the receipts against the statement. But the other broken process, in my mind, is setting up a vendor. So obviously someone had to set up a vendor and didn't pay attention that the credit card that you're setting up is actually in his personal name. Okay, you can set up a vendor. Well, it can go but it goes through a process. But there is that you set up vendors. So what is our actually approval process? Absolutely.
There is segregation of duty. Thank you for mentioning that, because you're right that is a very key control. Is that who is allowed to set up a vendor and what is required in order to set that vendor up? And I'm going to explain this as best as possible if I need danetta to assist me in this, because she actually is the approver of the vendor, we have a staff person who enters in the vendor information into the system a another staff person, or it may even be that staff person, but then a separate staff person goes and obtains the IRS verification that the person is listed in the IRS, and that's the right ENI number and The name, and all of that matches in the IRS system that is also so now we know it's not a fictitious company, right? It is a valid IRS, you know, company that is entered and then danetta Does who was separate. She does the approval of that vendor. I believe that one of the things that she does is she makes certain of what type of that there is a contract in place for that vendor, so that just any vendor cannot just be entered a system. It has to be a vendor that has an approved contract, or is in a process of getting an approved contract. Because sometimes we move in quickly. Yes, what? Absolutely, yes, right. Why? Why are you setting up an American Express and we don't have an American Express card, um, but all of those, again, all of those segregational duties were not in place at this organization. And let me also say there are a lot of small organizations that can't they're not doing they don't have a finance team to have all these separate people, right? That's just the reality. There are small organizations where they do not have different people, like we have to do all of these various steps. However, they do have other. They do have other. For example, I can remember a small company that we worked at back in the day when I was an auditor, and this was before online banking accounts, but the bank statement went to the President's admin, and she was responsible for opening the statements and reviewing the statements and giving it to someone for the record. So somebody else was looking. Listen, she's an ad man, you know, but she looks. She also knows. We know that. Why is American Express on here? We don't even have an American Express card. I mean, I know my president doesn't even have an American Express card. So why are we paying the message? So there are simple things that can be done with people within the organization that don't have any affiliation with the day to day routine that can be embedded in segregation of duty. Well,
the thing of it is, there's no check. There were no checks and balances the auditors Well, there were no checks and balances internally or externally. There was nothing going out of what was what were they doing? Yeah,
I don't, I don't know. Well,
I mean, I just Yeah, I understand.
You're not going to understand it. So our credit card process is very, very detailed. The the credit card is obtained from someone separate and distinctive from the prop from having a card. That credit card statement is then sent to each administrative assistant of the person who has it. So, for example, Manny's credit card statement goes to Nicole Starks his admin. It is up to Nicole whereby she gets all the information, she creates a log of all the transactions. She gets all the supporting information from Manny, and she submits that to finance for our review, and we can see in detail what these costs are pertains to. So that is a log. That is a process that's done every month. So there are
time period that they have to have that done. We
try to out, we try to, I believe it is, I know, before the bill is due. Is it within a month? Yeah, so it's within 30 days. But there's a law created where it specifies that the nature of the business, nature of the if it was a launch, a meeting who it was with, you know, and the nature if it was a purchase, why was it purchased, and, you know, for what purposes? So that we know that obviously it's purchased for business purposes, we also make certain, in terms of restaurants and and bills, that there are no alcoholic beverages on the on the bill. On the credit card that we pay, you know, it that we don't pay any alcoholic beverages. I mean, because, technically, I guess it could be an alcoholic beverage on it, but it's shown probably as a reduction, and then the net is reimbursed. And of employee likely is, I mean, they are responsible for remitting the payment, but I generally, I think most of the time they utilize that. They are other transactions alcohol. They probably use a whole different credit card. I know that when we, you know, we, we ask for the food to go on one bill, and the, you know, any alcohol to go on another separate bill. So that's usually how that's done. So there are numerous of hands that touch the American Express Bill, and there is no way that it's going to be Gucci Louis Vuitton or landscaping services in terms of,
excuse me one second, Mr. Wash,
just a real quick comment, knowing what our our process is at Sara Metro when you use your American Express, there's a policy even of what you can use it for in the amount, even sometimes is restricted. So I guess I'm I'm with chairperson Brown. I'm not understanding how card could be used for probably 1000s of dollars in payments made in 1000s of dollars, I assume yes or allegedly, made to the CFO, allegedly, and not somebody in the accounting department did not question that, or did not stop it, or did not, you know, what is this for? And, you know, I guess that's, that's what's Mind, Body. They didn't
see it. Because what happened was, in terms of on the bank statement, because he altered the bank statements, he altered the bank statements, it stated that he altered bank statements, and he did not give them online access to be able to obtain the bank statements directly from the online banking account. So the bank statements were altered and then He covered it up with journal entries, you know, instead of it went, you know, it may have went to American Express. He might have put m.on it. So, I mean, there was no segregation of duties here. You're not, you're not gonna, it's gonna be hard for you to comprehend how it happened. It really
is. So then allegedly, he did all of the steps within the transaction, wrote the check, or paid the payment, made the payment, you know, received the bill, you know, all the steps, yes, and that's what's kind of hard to understand when you have so many staff that are involved with the segregation of duties. Well,
he may not have had. So again, we have a lot of staff thankful to us, but a lot of organizations are are much, have much smaller accounting departments, and they don't have the they're not privy to be able to have different people do different things, but,
but I would think his organization is because they're large. They have a lot of funding. They're
large dollar wise, I'm sorry. Oh, okay, they're
large financially wise, not
necessarily, yeah, dollar wise. Okay,
that's correct. Okay, that's true. That's true. I wasn't thinking of that. Yeah, sure,
this is the thing. Go ahead, right? There was nothing there, right?
Allegedly, yeah,
thank you. You're welcome. So in terms of the auditing, audit testing plant Moran, we are aware that plant Moran request a sample of vouchers with supporting documentation, which includes invoices are attached. Samples are traced, so it's applicable work workflow to determine reasonableness, completeness and accuracy. Samples are selected by amounts and by type, and I say that they are selected millions of dollars, but also $10,000 so the range of amounts in terms of the sample selection varies across that sample selection, and when we do, when we do submit our sample selection, the invoices and all the backup support. We call it the cert Service Voucher package. That entire package is given to the auditor so that they are able to look through all of the detail, which you know, for example, you know, if it would have been an American Express Bill, they would see American Express and they would see all of this. See all of this supporting documentation, the logs, the receipts, etc, from dwin. And lastly, the fourth scam, which is that the CFO executed a line of credit with Citizens Bank. Okay, um, the nonprofit held a but this is what's interesting, because to me, this is one way this could have been caught. Um, the nonprofit did hold a general checking account with Citizens Bank and the accountant did have access online access to that general checking account, not the line of credit, but to the general checking account. The CFO provided the bank with a quote corporate Certificate of Authority, purportedly signed by the corporate secretary of the board, which authorized him to execute contracts. Okay, the bank transferred funds from the line of credit to the general checking account, and then the general the CFO transferred the money from the the Citizens Bank, general checking, to the Comerica general checking, where he only had access to that account. Okay. Um, so our internal controls is the CS, the CFO, the CEO is listed on the officer certificate and as as the authorized signers list for all of dwinn financial institutions. Again, several staff have read only access to our bank accounts. Transfers between bank accounts are are restricted to the CFO and Deputy CFO with CFO approval required. CEO with CEO approval required. So, for example, when we opened up the Huntington Bank account where we invested $5 million in it, there were a whole lot of letters that needed to be signed. One for that, when one comes from the CEO, but in terms of Eric, had to. So I have authority to do it with myself or or my deputy. However, Eric, or the CEO, is a required person. That's a part of so I have, I have authority, but it's includes the CEO. So not showing off on your exclusive of the CEO. I mean, not so that the the CEO does not have exclusive so that so because all of this, you know, the CEO does not have exclusive right to do it without say my signature, and I can't do it without his So,
and we do not have a line of credit. We we
do not have a line of credit. We have debt instruments. We have a no payable. We have loans through the construction level. We do not have a line of credit, um, so, and also a separate finance staff prepares the monthly banking reconciliations. One thing that I did note here is that what he did, what which is interesting, is that he that he gave online access for the citizens account, which the money was moved into the from the line of credit into the citizen account, but then it was moved out to that Comerica account. Um, you know, it's interesting, and to know that, why the maybe, why the accountant wouldn't have noticed that money coming in or wondering because that person did have online access. So in my mind, I'm thinking, okay, that the accountant could have saw the money being transferred or coming into that general checking and said, Hey, what is this? But then it immediately went in and out to the account that he had. So, you know, hindsight, I'm sure it's 2020, you know, but that is one thing that I did note that would be interesting as to why the accountant may maybe didn't notice, but maybe because it went in and out probably the same day. One of the audit testings is obviously the bank confirmations, where the bank confirm should have went to citizens. Citizens should have listed all accounts that was open and citizens in that nonprofit organization's name, that's generally how bank confirmations work, is that you list all accounts and all activities in that financial institution. So I don't know if a bank confirmation went out or not. I. They what procedures they are involved in, in communications with you all, and you can certainly ask any questions that you need to ask. And we've got Alicia Watkins and Stacy Reeves. Is this mic on? Oh, there we go. All
right. Well, thank you for the invitation to join you all for this conversation, I have seen many of you at the past meetings, and appreciate the opportunity to be part of the conversation. I have been the lead audit engagement partner for the d1 audit for about the past three years. Stacy Reeves, who is here joining me today, she leads our public sector practice for plant Moran, and she, she also was a past partner on this engagement, and so we have had a few partner rotations, just to kind of have that fresh set of set of eyes, really our, our purpose for joining the meeting today was to provide an opportunity for a conversation directly with plant Moran and the Finance Committee. As you can imagine, we have received a lot of phone calls. There are a lot of boards who are as concerned as you all are, and I think that's very understandable. And we've had a lot of folks say, I need and want to talk directly to my auditor. And so I want to hear from folks other than just just our team. And so we just wanted to avail ourselves to have that conversation with you, to answer your questions. I appreciate Stacy's caveats at the beginning. Obviously it just would not be appropriate for us to speculate about another firm What did or didn't happen, or about sort of the specific case itself. We just don't have any involvement. And I just don't think all the facts are really have been made available to any of us yet, but we are certainly happy to talk about our role, our responsibility, our professional standards, and answer any questions specifically about the dwin audit.
Thank you. So as board, our primary responsibility is to the budget, and their primary thing is to review the audit. Is there any way that we can do a better job at response to working with the audit team. I will give you an example. Say I've got a new assistant to the financial director who is doing certain certain things. And I'd say I've got a new assistant to the financial director. I don't know. Are they? Is there a way to direct audits into areas to say, okay, is she putting everything into the budget correctly? Is she posting properly before, you know, goes down the line three years and we discover that there's problem? Is there a way that the board can aim audits? I would say, I'm going to do that, or believe that
extent there's, there's a lot a board can do in your role as as the sort of oversight body over the financial reporting function, and I think that is where it has to start, right? And so there's a lot of conversations around oversight, although our audits are not designed to detect fraud. If we do detect fraud during our audit, it's too late. It's already happened, right? And so we really got to start with what controls are in place at our organization to prevent that from occurring in the first place. And so the question is, is a good one? Stacy talked about a lot of the segregation of duties, what you can do? Because I understand at the board level, you're really far removed from this. So it's one thing to maybe have an awareness of certain internal controls. It's another thing to be comfortable if they're working effectively, which is, I think, what your question gets at. And so you can certainly bring in third parties to do specialized internal control reviews. You know, folks sometimes hire a forensic auditor to do a specific.
The. Forensic audit review. So there are things that you can do to sort of test to see if your system is working effectively. That is going to be more designed around the control side of it. I think some of some of the description there was around, you know, kind of the process, the day to day processes and procedures, which is probably a little bit different. It's really the control over those processes and procedures that you want to hone in on to make sure they're working for you and that they are in place in
a way that can and will prevent something like this occurring. I think it's also a key point. There is a key point, though, in the audit planning process, and you may recall seeing as part of our audit last year, we sent a letter in advance of the audit that goes to you and talks about our plan, scope and procedures of the audit. It talks about the timing, when we're going to be starting the audit, our risk assessment process, what areas that we're going to be spending additional time on because they're more complicated or unique transactions. And
part of that letter does ask
that if there are any areas that you want us to add specific focus to that you communicate with us directly, and we provide our contact information within that letter, and that's to get exactly what you're asking. And that was a result of an audit center that that came about because of basically the Enron experience and some of the failures that were identified as part of that process. So we don't, as part of the audit process, only communicate with management and and inquire of segregation duties and controls from management. We do include the board in that process, and we actually have to do specific fraud inquiries of specific members of governance as part of that process. It just to be upfront. I
thank you. This
is awesome. What you've done. I wish everybody would do this. And I'm on so many boards, this is great. I mean, you guys sound like you had a bulletproof system there. That sounds awesome. And thank you for doing it. It makes me feel so much better than and I'm not worried about that. I'm actually more worried about school by doing something wrong in the day to day process that I am stealing now, because this is awesome what you've done. Thank you. Thanks. Mr. Wash,
yes. Thank you, Madam Chair, when we first heard about this, you know, a lot of people, I'm sure, first heard about this broad that occurred, river, Riverside, riverfront. The first thing that I heard out of a lot of people's mouths were, don't they have an audit every year, and why didn't they catch it? Now, you just said at the beginning of your presentation that you're not your audits are not designed to catch or detect fraud. So there's like this misunderstand or misconception about what auditors and audits are supposed to provide, and so I would think, or you know, I could be wrong, but that after you heard about it, you probably were wondering what area you could focus in on or look at, Maybe in the audit process that could detect something like this, even if it's not your your role? Yeah, you know what I'm saying? Like I would think, if I were in that industry, I would go, Oh, my God, you know, we you need to look at this area or this process or this so I'm just curious as to, you know, whether you all thought that? Sure. I'll share a couple comments and Stacy you could probably add to it. We have very robust quality control processes and systems in place. So this is something that we are evaluating always. We have we have our own internal control systems in place to prevent failed audits, candidly, because we are subject to very high professional standards, we do go through peer review. So other audit firms review our audit procedures to ensure that we're following professional standards, and we do get feedback just like we provide our clients. And so this is something that we are constantly focused on, in addition all like our audit and so you're absolutely right. I just want to acknowledge that there is a lot of confusion about our role in this. Right? A financial statement audit is designed for the purpose of issuing an opinion to tell the users whether the financial statement statements materially comply
with gap that is the scope of the work. It is different from a forensic audit, which is designed to detect financial irregularities or wrongdoings. However, our professional standards do say as part of our financial statement audits that while we are not issuing an opinion on internal controls, we do have to get an understanding of them and review them, and we do spend a lot of time on that. And while we're not issuing opinion on internal controls, to the extent that we identify. Identified deficiency, we do have a responsibility to report that to management and governance. And so if you think in recent years, we have had a couple of findings where we said we think you have an internal control deficiency in this area, and we need to make you aware of it. That is part of our responsibility as it relates to fraud, our professional standards would say that we do have a responsibility to brainstorm and consider where the where fraud could occur in the audits that we perform such that they could potentially create a material misstatement. And so that comes back to if we identify, I'll call an area of vulnerability, even if it didn't lead to material misstatement, but it has the potential to we bring that to your attention, our standards say that we have to, so yes, we spend, we spend some time evaluating the risk of fraud, but our audit is really designed to issue an opinion about whether the statements materially comply with gap. You want to add anything I was just going to say to your point, anytime there's a situation where there's an allegation of fraud or abuse, we always do, you know, get whatever information we can and look at how did this happen? And we actually have an internal group within the firm that actually focuses on forensic audits, and they actually provide training to our audit teams and talk about real life examples of things that they've encountered to help us be prepared as part of that process. So we're required to maintain professional skepticism. We can't we have to be independent. We have to maintain our independence. And we can't just take a transaction or a journal entry that's on a piece of paper. And say, okay, that makes sense. We actually have to get the supporting detail and ensure that the support is appropriate and aligns with approvals and authorization. So as part of that process, we do our due diligence to understand as much as we can about what internal controls and segregation of duties best practices are. But it doesn't mean that you might have an audit that doesn't identify fraud and there was fraud, because that's just not the primary purpose of the audit. But to Alicia's point, if we identify things that are concerns related to internal control,
we do have to report those two and we have, you've seen that. We also do rotation at the partner and manager level. So I was, when we first started working with you, I had the proud honor of being able to serve you as your engagement partner. There was another engagement partner that has also participated as part of the audit, and now Alicia is serving as the engagement partner, and we've also done that as at the manager level as well. And that gives you that fresh look, but it also allows you to maintain the historical knowledge of the people that you're working with, which is what the AICPA and other seniors bodies have said, that's the right combination of rotation. And so that's what we've done. You do go out to bid. So we are just in our second term through the bid process. So you do go out to bid and ensure that the firms that you're working with
have the qualifications that you would want. So you know our process as it relates to internal controls. We do do confirmations over cash. We do also look at online banking controls and understand what those controls are. We look for segregation of duties. If we identify items within those processes where they're not either designed or operating
the way that they've been communicated, then
we have to report that to you. Miss fan, Thank. You So quick question. I know you're focused on obviously internal controls, but as a board when, when you do your first visit to talk and plan audit, if we were to say, You know what, I want you to look at the obviously approval process of credit cards, part of that process you would have to validate few of that. Them, right? So you're looking beyond just the process, and in the internal you're actually auditing some of them for whether they follow process or not
correct. Yeah. So. So that would be a way for us to say at one. We engage you. Here are a couple of focus areas for you that we want you to focus on, right, correct. And we would, we would talk through that to say what you know, what are your specific concerns? What are the things that you'd want us to look at, you know? And we would sort of have a dialog around making sure we really address your concern. Certainly, if you wanted something more robust than us to do that on a sample basis. We could talk about a separate engagement but, but that is the feedback that we're looking for. There are particular area you'd like us to pay attention to, and we absolutely respond to that accordingly. Mr. Parker, thank you. Just
have one question or opinion on the reconciliation. I have to run a agency or a school, and our auditor required us
to have a outside firm do our reconciliation because and we're a small staff in the bookkeeping department, I know now. I mean, I understand that, because the number of people that person does the reconciliation has nothing to do with writing checks and things. But is there a thought one way or the other? The best way to do that to have an internal staff person due to reconciliation versus outside person or firm doing it? Yeah, I there's probably not a necessarily best practice between one or the other. It's facts and circumstances based. And I would also maybe just offer up that, you know, we can make recommendations, and we do, but ultimately it comes down to a management and governance decision. I'm assuming maybe that recommendation was made because you just didn't have the ability to create segregation of duties because you had such a small team. And so that is one way to do that, by bringing a third party accountant. We
see that other places, and that does work well in those instances for dwin, because, you know, I was, as was described by Stacy, because you do have a large team, you
really do have an opportunity to get at those segregation of duties internally. Mr. McNamara, just one question. You ping your bank accounts to to verify the balances. Do you ping? Do you ping our money market accounts to the ones where we've got money managers actually stocking us? We do. And I want to clarify something, because the confirmation process has changed over the years, and so we used, we used to see a lot of what I'll call open ended confirmations, and where you would we would have an audit confirmation letter. We would give it to Stacey or somebody in her role, she would sign it, and we'd send it in. Now, the way that it works, everything's online. It's called confirmation.com and it is the source that auditors have to use to confirm with external parties, whether we're confirming debt balances, investment balances or cash, we are required now to specifically input the specific accounts that we want to identify, so it's no longer an open ended confirmation. But for dwin, we do, in fact, confirm, we send a confirmation request for all cash investment balances as well as debt balances with the institution that those are held with. Thank you. Any other questions?
If I could offer up one more observation for the board, Stacy had mentioned our forez forensics team, and we've been able to spend some time with them, and we do periodically over the years, because they do educate us on this stuff. And one of the things that they've shared
is that where they see fraud
decline significantly, or just the instances of the occurrences of fraud be
a lot less, is when organizations have fraud awareness training. So when you just have direct conversations, you maybe you bring a specialist in, maybe you do it internally, but when you have conversations and education around fraud, it automatically
declines at organization that is their professional experience, and they would say there's data to support that. Part of that is also, you know, do people know maybe when they should raise their hand to whom they should raise their hand? Is there a hotline? Many of the frauds that do get reported are from and from internal staff when they when they have an opportunity to report it, usually anonymously. Sometimes that happens through clients and vendors, and so that's something that they've really implored us to remind boards about, that that that is something you can do directly, create that awareness, evaluate if a hotline is helpful, and that automatically in their experiences, reduces the risk for fraud to a court organization. So just wanted to leave you with that as well. And to that end, we do have a hotline number where people can contact and
provide any complaint or you know, anything that they want to report internally or externally, any other questions I don't share Yes. Ms. Ru, just a comment. I just want to thank Mr. Rand and her team when this first hit the media, this is something that she brought. Our attention, attention. And she was very proactive. So just appreciation and thank you and Job well done. Any other comments or questions? Well, thank you very much. Individuals from plant Moran, thank you very much, Madam. CFO, um, great presentation. I'm sure people still have amount of questions. I never doubted we had the processes in places, the segregation of duties, the checks and balances in place, a wonderful accounting firm, uh, auditors that we have in place, that that we did not have the things in place in order
to avert a lot of fraudulent activity that could occur. That was not the doubt in my mind. I just can't wrap my head around
and if I can add other things, Madam Chair, Alicia and Stacey did speak on I know that there has been, there was some when when the audit contract, or renewal contract came before the board
for plant Moran, in terms of
the length of time that they've had the audit contract, and It was a concern.
They they did mention that they do rotate staff
as part of professional required standards. I think AICP professional stands require that there's
a rotation. Is that what require? But there's some recommendation
that that's done, and they do adhere to that recommendation. So although it's the same
firm, a lot of the lower level staff tend to rotate by attrition, because, you know, being in public accounting is
not fun, so a lot of the lower the lower staff tend to rotate by natural attrition. But as a firm, they've rotated the manager and partner level. So although it's the same firm. I just want to be clear, oftentimes it's a different team. So we got the same firm, but the team is different. Yeah, I remember that. I just want to comment be or come in an issue when we discuss that extent. Absolutely. Does anyone else have any comments concerns? No. Madam Chair, I just want to thank Miss Durant again for for this presentation, it was extremely helpful, and just you know, provides a lot of confidence for me and how we handle our finances. Thank you. Anyone else? Alrighty? Let me make sure. Madam, do we have any we don't have any
unfinished business
that is correct. Madam, no new business that is correct. Madam, Chair, okay. Trent, do we have anyone on the line for good and welfare? Chair, we do have, guests for us today, but we don't have any written submissions. Okay? Well, we're going
to allow the folks online and the folks in house, if you would like to make public comment, please come at this time and I'll read the comments. Members of the public are welcome to address the board during this time for no more than two minutes, the Board Liaison will notify the chair when the time limit has been met. Individuals are encouraged to identify themselves and fill out a comment card to lead with the Board Liaison.
However, those individuals that do not want to identify themselves may still address the Board issues raised on good and welfare public comment that are of concern to the general public, and
many May. Initiated inquiry and follow up will be responded to and may be posted to the website. Feedback will be posted within a reasonable time frame. Information that is HIPAA related or of a confidential nature will not be posted, but rather responded to on an individual basis. Do we have anyone for public comment? Can I get a move forward. German, please the move Madam Chair support, properly moved and supported.
Any dis. Session, all in favor.
Anyone opposed?
Eyes? Have it move? Meeting
adjourned. Second. Uh, the budget hearing. What time is
it? It the budget hearing meeting will start in two minutes
at 330, stopped.
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how are I guess? But
it. I don't know if we have any no no approval. We just do approval of the agenda. I don't think there's nothing, no word.
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my Best I will do
me, yeah,
Awesome, I forgot so we are so, yeah, like it was so funny, because Even in like first Metro, Like to The airport And
For budget hearing the wind budget hearing meeting to order.
Recording in progress, okay, good afternoon. I
would like to call the board budget, the dwin board budget hearing meeting to order Ms. Lillian, can I get a roll call?
Yes, Madam Chair,
Dr tag is excused for today.
I. Up. Mr. McNamara, here. Thank you, Miss Brown present. Thank you, Miss Garza de Walsh. Thank you,
Miss ventunzi is going to be excused, Miss Bullock. Miss Bullock, are you able to join the call via zoom. Miss Bullock, are you joining the call via zoom, circle back. Dr Carter is excused. Mr. Glenn, present. Thank you. Commissioner kenlock, thank you. Mr. Parker, thank you. Mr. Phillips, is excused. Oh. Mr. Phillips, are you joining the call via zoom? Mr. Phillips, are you joining the call via zoom? Will mark him excused and Miss Ruth, okay, all right, Madam Chair, your
roll call is completed.
Oh, Mr. Adams, are you still joining the budget? Hearing via zoom. Mr. Adams, are you joining the budget here? Hearing via zoom. Okay, Madam Chair, your roll call is completed for the day here or properly moved and supported any discussion. All in favor, anyone opposed? Budget presentation, madam, CFO, ma'am. So before I present to you the budget presentation, I do want to acknowledge some staff that have, I will say, really have done the work here again. I'll, I'll tell you I'm on the face, but the work is done by a great, awesome team that I have next to me is Mindy Haner. She is our budget director. And out in the audience, we've got Steve zawisza, Steve, can you stand up? Steve is our Director of fiscal information informatics, and danetta Brown is my deputy. She's the deputy CFO presented before you is by way of the mental health code we are required. The board of directors is required to, before the beginning of the fiscal year, approve a budget. That budget needs to be presented in a public forum and for the persons from outside the organization to to be a part of it. So this is what the intent and purpose of this particular budget hearing is for. So presented before you is the fiscal 25 budget. That budget approximates 1,000,000,164 one 1.1 point $2 billion which is 2% more, or $23.5 million more than the fiscal 24 budget, amended budget. The increase of is approximately of the increase is primarily related to a $20 million of state grant funds budgeted for the new integration care centers that are on seven mile and down river. E course, there are certain in order to prepare this budget, there are certain assumptions that have to be made, and because a lot of the information that we get from the Michigan Department of Michigan Department of Health and Community, Michigan Department of Health and Human Services, I'm sorry, is not received until later in the fiscal later at the end of the fiscal year, or sometimes in October and November. So there are certain assumptions that I have to make in order to prepare this budget. One of the assumptions that I have made is that our Medicaid rates will be the same medical met as the fiscal mid year 24 rate, rates that were implemented effective April 1 of 2024 that went back retroactive to October 1 of 2023, so to remind the board, mid year, the state made rate adjustment to accommodate three things that the initial rates that they published at the beginning of fiscal year 24 did not pan out, and a lot of the assumptions were around the ending of the public health emergency and certain enrollment numbers and how we they knew that we would lose as a result of the public health emergency. They knew that we would lose membership. Or Medicaid eligibles. So they estimate certain assumptions, and estimated as best as they could what that would look like. Well, those estimates did not come to fruition, and it resulted in less revenue to the PHP so in in April, or effective April, they made a rate adjustment to accommodate for those reductions in revenue, or the reductions in revenue that the pihps are receiving, I will say this, although they did a rate adjustment, that rate adjustment is still not being seen in our revenue. So I don't know if the state is going to make another quote rate adjustment in order to increase those rates so that the money gets distributed. But they estimated, and I'm going to say it was about $130 million of additional revenue that was supposed to go to the PHPs. The PHPs are not seeing it. So I am told, and I have heard, that there is going to be another rate adjustment to push some of that money out. I estimated that we would get around, you know, around 20. So I think 20 to 23% which was about $20 million we've only seen about five so we're we're a little short, we're definitely short on what we should have seen. But that is statewide. It's not just restricted to Detroit Wayne. So based I am my revenue projections that i. I have in this budget. It's based on what I am seeing in the door, okay, not on what may be happening and forthcoming. So I do want to make that caveat. It's based. Based on what I am seeing coming in the door as we spin it. Um, the next assumption is. And if there's a narrative document that I'm going to go through that is a part. Of this submission, I'm just going to go through that narrative which will hit upon certain key elements within the body of the document. But the next assumption that is being made is that the 25 CC BAC revenue the budget does not include any additional ccbhcs that the state will will, at some time, I believe, in next month, make announcement who is a new CCBHC. So I don't know who those are. I don't know who they're going to approve. I don't know what the additional revenue is going to look like for them. So therefore I can't include it in the budget. Similar to what we did in fiscal 23 there was a budget adjustment that came before this body and approved certified additional revenue related to CCBHC.
That will be the same process that we'll do
for the new ccbhcs for this year. Oh, so I'm sorry for fiscal 25
is there any questions on that? I'm kind of seeing Mrs. Brown thinking,
so I'll pause. Go ahead. Okay,
item number c is there was a HRA hospital rate adjustment that was almost 100% increase that has been included in the budget as well, and it's reflected in the fiscal 24 and 25 numbers and hospital rate adjustment, just so to educate everyone, a hospital rate adjustment is passed through dollars that the state gives us two community hospitals. They in order to incentivize community hospitals to give beds to our members. So in addition to whatever we pay them as part of our negotiated, contracted rate, the state also gives them an additional it used to be $312
a day, per day, per per person.
It doubled to almost, almost doubled to 200 $612 per per bed, per person. This is a pass through from us, from the state to those community hospitals. Just a second. Mr. McNamara, is, do we have a lot of beds? So we're holding the hospitals? Yes, we got a lot of beds that we got a lot of money that gets passed through on this. HRA, okay, what is your question again, how many do we need a lot of beds anymore, with all the beds we're putting in? Yeah, so, and I'll do
my best, and I'll answer this question. There are, there are certain so we need, we need our beds
in our care center, because oftentimes members
can't be sent home, because their crisis is not to the point where they should
be home. However, it also isn't to the point where they need to
be in an inpatient setting. However, you too for empty beds?
Well, we, we will be utilizing our revenue, which is, it's part of this budget, and I'll get to that. We'll be utilizing our Medicaid revenue to pay for those the care center. Yes, and the state's going to pay you for the empty beds. No, no, we don't. State never pays for empty beds hospital rate assessment. So, so, so, just so you to correlate, to answer correlate because you said, Do we still need beds, hospital beds? Because we got our beds right? Yes, we do. Because some, some people, some people's their their level of severity and crisis, we cannot handle it.
They has to go to an inpatient setting. Okay?
We need our beds because not we can't send people home that in crisis.
So because we didn't have our beds, we
had to send them to inpatient, and they had to go to the hospital. And just so really quick, yes, no, kind of an answer. So when we're getting
beds and we put somebody in one of our beds, the state is now giving us more money to that person. Lot more money. So part of this for $308 to six, $12 that's two. That's impatient hospital. That's only for the hospital. Okay, that's all that you don't go any further. Go ahead. I don't want to go too far off the road. Madam Chair, yes, the same question, how much is the rate that we pay them? That was, oh, it ranges. It depends. Listen, it goes all the way. I mean, it ranges 800 to, in some cases, to, I mean, 1000s of dollars. I'll just say that. I mean it, there's a range. And it's negotiated each each hospital is negotiated
a rate. For the most part, we've got like, rates that are pretty standard
within a certain range, but there are some hospitals that are out there and that, but they listen. They, they have
us. We, what are we going to do? But yeah, the rates range Miss rule. I'm sorry, mister. Or her, you, yeah, I
just want to know that's, I'm a, I'm a random question, and just to be one second, this is I was just, Oh, go on. I want to, can we go over that hospital rate adjustment, like, one more time? Yes, absolutely. So what? So we have to pay for the Okay, go ahead. Okay. So what happens is, is that the state has set aside up at the state level, okay, they
set aside a certain amount
of money to pass through us, pass through us to the hospitals, to
incentivize them to have to accept Medicaid members, opposed to persons on the private insurance. Okay? So this is an incentive, right? A pass through that they receive. But every Medicaid member who occupies a bear for every day that they occupy it, they get, in addition to our negotiated rate, they receive this HRA rate. And it's done. It's paid out quarterly. Okay, so how many beds are we allowed to have? So do they keep the
bed reserved? Whether No, Medicaid never pays for an empty bed. They only, Medicaid only pays for the use or for services. Okay, I got that saying, but does the hospital reserve a certain a minimum amount of beds as an adjusted case? Or is this this? Let me let you finish. Yeah, no, no. I think you're, you're, I think what you're asking for is, is, does this hospital rate adjustment allow that PHPs or, you know, Detroit Wayne will have a certain guarantees, that we
will have a certain number of beds? Guarantee? No, there's no guarantee. But it's a but, but, but, it's incentive to give to that people. God would Okay, yeah, okay. Are you done this room? Yeah, I got another question. Go ahead. Go ahead. Give me a second. Oh, mister McNamara, so,
so the new business model that I get from
Derek doe and you guys talking
about it, is a patient goes to the hospital. Merge zero. I
need to be put into the hospital. The possible contacts
they used to contact cope, they now contact a dwin employee who makes a determination
whether that person's going to stay in that hospital or is where I get lost. Go to another location that we control. So what happened? New Business Model, okay. So what happens is a page, someone, a member, comes and states that they're in crisis, they go to an ED. They still call coke goes because coke goes out to the hospitals. Okay, so coke goes out, sends a clinician out to the hospital to do an assessment to determine whether or not that person needs inpatient. Are they so bad that they need hospitalization? Or, listen, maybe they just, they don't need a level of impatient, but they need care center. Okay, they thought we ate
that group. I mean, I mean I thought that we what I thought we brought that group into our area, the
group that goes out to the emergency room and actually approves? No, no, no, God. That
was the one that was
a big cost overruns that we wanted to get control of. Wow. That was cope, which was the one that still got it was right, which is why you would say we're still doing business.
I will sit. I'm sitting back down. I'm sorry. Chairman, any other questions? Go right ahead. We good, yes. Okay, so the next, the next assumption, is that our state general fund allocation remains the same and there's no reductions of $21.4 million okay? Dollars. And I am happy to report that I believe around about two weeks ago, we did receive our GF allocation. It is not being cut, and it is 24 $21.4 million thank you. We're grateful for that. However, I still want to reiterate that $21.4 million is not sufficient for Detroit Wayne and general additional general fund dollars are needed in order for us to meet the basic needs of our community, the basic needs of our community. You're talking, I'm sorry, you're talking about the general fund dollars. Yes, the state my general fund. Mr. Glenn, so, so what's our plan to see if we can acquire some additional general fund dollars? What's our plan? I will defer that to our interim CEO and our director of our VP of governmental operations.
I will direct that question to them.
So basically, there
is a continued advocacy, you know, with the legislators to push for more general fund. But question is the you always want to look at what other ways you could provide you utilization for Medicaid dollars and to credit to our CFO, we came up with some quite. Quality Health Quality Measures, where some of the programs that were dependent upon general fund dollars were diverted because they met the quality usage of Medicaid dollars for that purpose. So that was one way that we supplemented Medicaid dollars to support program that originally were not supported. But to come back to the original question in terms of, you know, how do you get more general fund dollars? I mean, you have to keep continuing that Bucha to see what's out there available from allocation standpoint, and put forth that. I mean, that was part of my conversation two weeks ago with Speaker Tate as well as director hotel, and they are saying they are continuing to review that. But some of the areas that need Look at, look at his grant programs where there is an opportunity to leverage more, because there are more and more federal grant programs, including things that are available for programs that are today, funded through general fund. So those programs that were diverted, are they? They're included. We're going to get to that. Yeah, we're going to get to that. Okay, but you know, we certainly need to continue to advocate with public, without with PA. I forgot the name of our lobbying group.
We need to continue to lobby. And
as Mr. Singla stated he did have a meeting with Director hotel and reiterated that
there was not adequate general fund for Detroit. Wayne, thank you,
because even with the diversion or moving programs, we still do not have adequate general fund right? The next item is our local the local match requirement from Wayne County is capped at the fiscal year 14 level, which is $17.7 million and the public, the PA two revenue is budget at this at the minimum cap are the new minimum cap of 4.7 million wayne county programs are funded at the fiscal 24 adopted budget level the Seven Mile and down river project. Budget costs for fiscal 25 is estimated to be approximately $26 million and the last one is that there is a 4% cola adjustment that has been applied for all full time employees. This amount also assumes that the PA 152 waiver will continue at a 90. 10 split in terms. Terms of So, moving on to the actual document. Document of a one. You will see, I'll wait till Lillian gets go a little far. Keep going. Lillian to document a one. Yes, that document. So looking at document a one, there are the those assumptions are embedded in this document. So as you'll see, our Medicaid revenue is 10 point, I'm sorry, $9.9 million
higher than fiscal 24
and that is the $5 million that I'm seeing as part of the new rate adjustment. And then the difference is, if you recall the Deaf audit recruitment of $4.6 million that was collected in 2024 that was a one time payment. So we'll see that revenue in 2025 the local, state and federal
grants increased by 11 point 2 million. Most
of that increase, $20 million is related to an estimate, and I strongly is an estimate of what our construction cost will be for down for seven mile and down river, and then from that 20 million, there are offsets that reduce that 20 million. Primarily, all of the covid grants are not continuing this fiscal year, which was approximately 5.5 million. We had that SAMHSA mobile grant, where the funds were primarily spent in fiscal 24 so $1.7 million less and 25 we had opioid settlement funds of 1.7 million
that were include were and budgeted and received in 24
but lesser in 25 so those are the primary reasons for the reduction to the 20 million
and then interest. Interest income is just so
based on what we're seeing in 24 it's trending up. So we've increased that budget allocation to be more reflective of actuals. I believe we budgeted at $6.7 million we went from 24 million to what, no, no So, interest income. We budget. It was budget at 5 million. We budgeted at 6.7
an increase of 1.7 million, okay? And then moving to a network expenses, our admin business unit increased by 5.9 million. 4.4 I'm sorry, 4% is cola adjustment, which amounts to $2 million
2.5 of the 5.9 is directly related to the debt service of our, of our of this building, as well as of this building, as well as facility maintenance costs for this building.
The substance use disorder reduction is directly
related to the elimination of the covid grants for fiscal 25
and I want to the there's a line item here that says health health care quality initiative. I do want to emphasize that's that what Manny was referring to when he said that we were able to make certain programs Medicaid eligible, I do want to note and emphasize to you, though that this health care quality initiative line item is considered administrative. Okay, it is considered to
be administrative. It's not program expense. It's considered to be administrative.
However, we do not when we do our calculations for our admin rate as part of our medical loss ratio, it is not a part and included it is it we are allowed to exclude that as being administrative when we come up with that calculation. Okay, so this is considered to be administrative, but we get to exclude it under the CFR when we calculate our administrative rate.
So, so, so it's a, it's a, it's
but the government says it's not administrative, so it's the best of both worlds. Okay, so we get to fund programs
like the school success initiative, like all of our jail diversion programs that we were previously using, other using general fund for we tweak the program so that they qualify for
Medicaid. Now, okay, however they're concerned. Considered to be administrative cost and not program cost, but they're not. We get to reduce it, and it's not considered administrative when we calculate our administrative rate. I just want to make sure we're clear on that. So So those funds won't be out of general fund dollars. It'll be a separate line that is correct. That, yes, that is correct, and we did that last year as well. We issued an RFP to make certain that the program was was tweaked so it qualified for Medicaid, and we funded those programs with Medicaid, and that's why the school success initiative, when you look or jail diversion programs, when you look on a general fund list, you're not going to see them. It's because they're
in this line item now,
so you're Miss room.
Oh, I was just saying, that's a win win.
That's a win win.
I just want to make that clear. Mr. McNamara, yes, a win, win for sure.
I'll talk later on, because I thought it's something that you've had them still in there. No, they're not there.
Jail services per persons with priority population 5 million. That's jail service. I've never mentioned I said jail diversion, okay, jail services is not diversion. Once you in jail, you ain't being diverted, because you in jail, right?
Is a bad diversion if you did.
Okay? So the next item is direct services. This is an there's an increased direct services and
the care center, as
we expand our direct service, of us doing services within Detroit, Wayne
opposed to contracting them out. So there's some increases there. The Care Center's increase is primarily related
to the debt service, a portion, as you know, a portion of our debt service, or our loans
or and our facility costs are now a part of our care center now. So that is the reason for, primarily
the reason for that increase. Um, Mister Lynn, yeah, I just want to go back to county mental health programs. And I know a while back we had lot of stuff has taken place since then, but I just want to get an update on the encounters that we had requested from the county and how they come in, about providing us with that since two years back. You mean, for in the jail, for services in the jail, yes, they submit encounters to us, and there's a rate that's a set for each of those, and they submit encounters, and we be paid based on encounters only. So we're doing we're doing good with that. We're paying with the counters. Okay, that's right. Thank you. We're not, it's
not a staffing grant, right? Just don't get a check, right? Encounters are required to be submitted. Gotcha, Madam Chair, Mr. Parker,
just to be clear, we are still
not able to use Medicaid dollars to pay for anybody in the jail. You're you medic. That is, yeah, that is correct. That
is a Medicaid rule. We
cannot use Medicaid in a lockdown facility. I know at one point we were talking about trying to do something to change that. Are we still working on that, you know? I don't Yeah, I don't know, yeah, yeah,
yes. Mr. Parker, you're
absolutely right. That was more
of
a state level opt in program. The state has to push for
jail services, the clinical services to become part of that cohort. California and couple of other states have done that that allows them to use Medicaid dollars, even for up to a certain number of days for members while they are incarcerated in jail, to pay for their medical services. So that's something needs to be taken up by state as part of an opt in program. So we did do an advocacy for folks that that are out there to look at that program to see, is there a reason why we should not opt for I don't have an update in terms of you know, what was the decision on that. Just want to say we should continue to push for that
with our lobbyists or whatever, because know that the jails are our largest residential program
into a absolutely, absolutely not to be able to use dollars that identify from enter Hill doesn't make sense. Absolutely. Thank you. Thank you. If you missed America, if you write that bill, I guarantee you, between our friends right here in the House and the Senate, we will get it put forward. I mean, it may die, it may die a horrible death, but we will get people talking about it. Okay, have our PA write a bill. We'll get somebody to sign on to it. Any other questions, you can continue also. Want to note that the line item that says dwin overpass are, though that is, that is a grant program. It's just pulled out separately. It could be rolled into grant programs, but it's just really there to identify the fact that is a internally staff program. So we used to contract that out, that was brought in a year ago, or actually probably over a year ago, and we actually hire the staff to carry out that grant program is complete. It's 100% federally funded. So we bill the state and receive the federal funds to pay for that, that line item, I'm sorry, which line item, the one that says dwin. I said, I said, Okay, that is 100% federally funded, but staffed by dwin employees, going down all the way to the bottom. I just want to note where it says surplus. You'll see that there's an amount there of 26 million under 25 that is the state grant that we received from the state. There is the revenue, but the expense side of it, it's capital in nature. So capital assets don't
go on the income statement. They go on the balance sheet. So that
is why the revenue falls to the bottom line, and there is an excess or surplus of revenue, because over time through depreciation expense, that 26 million will ultimately hit our fund balance. But over time through depreciation expense, it, it will it. I'm going to use the word it eats up that fund balance, that $26 million until it's until it's zero. So later on, in future years, you're seeing large amounts of surplus. I just want to forewarn the board that you're going to see the larger amounts come through as depreciation expense that falls and kind of eats that up. So you're going to see large amounts. That's going to say expenses for depreciation, but the offset of that is this, $26 million that's going to kind of be sitting in and fund balance at some point in time. Is that, I don't know if that makes sense, but it's a capital grant. And capital grants, that's the way capital grants work. With June accepted accounting principles, because the asset is on the balance sheet and there is no offsetting expense
for it until you finish the product
and depreciate it. The next a two is really a a graph that sort of shows the expenses, the revenues, and how much of those expenses are allocated to the different revenue sources. These are estimated, you know, based on historical information. But this is sort of what that chart, this chart represents a three represents a meet more detailed view of our revenues, and detail our Medicaid revenues, our federal grants, state local and the increases and decreases as a result of those. And again, as you'll notice, under state grants in M HHS, the $19 million that's primarily, I mean, that is the the state grant for the integrated care centers. And again, it's estimated on how much we think we all spend in construction and various costs related to those
two locations and. A dash four is a summary
by line item of our administrative budget. As you'll see if you go over the page. On the second page, the total is the 5.9 that
we discussed earlier.
And you can
look at the various breakdowns of where those fundings, where those amounts are coming from, I mentioned a lot of most. Of it is the 4% cola adjustment and also the building expenses
there. Also some expenses that we were able to refer. Fine our budget.
You know, when you the you know when you get new staff, you got a new eye, and you got new processes. And one of the new processes that our new budget administrator went through was going through
all of the purchase orders that were in the administrative business unit to make certain that they were captured in the budget. And through that fine tuning, there were a couple $100,000 of contracts that we had omitted in the previous budget that are included in this budget. So the numbers are reflective more accurately of what we actually have. I
uh, Item A four through
eight. Dash, four. Dash, point one is each administrative business unit in detail that make up that summary.
Mr. McNamara, thank you. So let's go. I want to go back for a second to the
to the you had a program or or an account or salary from last year that wasn't paid out,
and you moved it into this year. No, um,
what you were speaking about when I said about the
Refine process and the purchase orders. No.
Maybe. Okay,
did you have expenses last year that you didn't actually realize last year because you didn't do them, but and then you're putting them into this budget this year? Um, that's what I heard. No. So what we do is, we, I mean, the budget from last year is, is, I mean, we, well, we start a new budget, right, based on, you know, salaries and expenses and rates and things and contracts that we have administratively
and so nothing, nothing is, quote, carried over if, I mean, okay, never mind. Then, yeah, okay, I swear I heard that you were carrying salaries forward. And how do you do that when you've got revenue reluctance, Okay, never mind. I'd be talking about when you said she went through and kind of purchase orders, through the purchase order and in order to get a more okay, accurate, accurate budget. So purchase orders are tied to contracts, not salaries and wages. So when you bring a purchase order forward, you're bringing it forward to the expense of the purchase order. But what about the revenue of the purchase order? Such as the money that was, yeah, no, there's
no, there's no bring the revenue forward too, or just let it fall to the bottom line. Or, No, I
mean, the revenue is included in the projections, but, yeah, it's the part of our overall revenue piece. Yeah, alright, thank you. Essentially, what I
was saying, in a nutshell, Mr. McNamara, is that our process was more refined this year, where she actually looked at purchase orders and budgeted the accounts based on the outstanding purchase orders that were out there and the many or those purchases.
Let me be more accurate.
Let me be more accurate. Would I be worried about the fact that
you've got expenses in this budget that
actually may have gotten income in last year's budget, example, because it's happened to me in so many other areas, the airport, my own place, I get a grant for ten million or $5 million or something like that, to build this, build a build a hospital and Seven Mile Road. I get that ten million last year. Because I received that
ten million last year, I had to recognize it as revenue.
Last year, I didn't complete the ten million only did $2 million I now have to do $8 million worth of expense work this year. So the grant gets carried over to the Joe grantee, so that you were allowed to carry them. They let it drop to the bottom line becomes fund balance, and then everybody gets confused and think they got all this money, and everybody starts spending when all that money had to go to the hospital. Yeah. So, so if that's how they're doing it, they're, they're accounting for it improperly. So you're, if you, if
you receive grant funding
up front and and it's unearned, and you did not earn it and spend it. You're supposed to take it out of the income statement and put it as a deferred revenue on the balance sheet. Okay? Thank you. Yeah, I just want to make sure you don't follow because they, we know, generally accepted accounting principles over here. So we don't, we don't, we don't do that. Moving to 4.1 those again, that's the detail and breakdown. A dash five is a summary of our adult children, IDD in our health homes, as you'll see. I mean, given the numbers, it's pretty stag. I mean, it's one. What we budgeted pretty closely to what we budgeted in fiscal 24
a five dash one. I am now going to because I know you guys are tired of hearing my voice, and I am going to pass on and some of this presentation to staff, other staff, so that they can highlight the slides and walk through the some of the other some of the documents. So Steve zawisa, again, he's the director of fiscal informatics. He will now go through some of the more detailed slides. Okay, thank you, Mr. Grant again. My name is Steve, So we saw director of summer,
actually informatics and analytics. So, so what I wanted to do is just provide a little bit of
information about our expenditures over the past several years, sometimes by population, sometimes by provider, sometimes comparing what we've done to our neighboring pihps. So because I'm in analytics and informatics, I'm a firm believer that if we understand and are aware of the history right in the context of where we of the world in which we find ourselves, we can more efficiently move forward, right? So that's what I'd like to do. So on the very first page, the first so what I'll do is, I'll briefly describe the content of the charts, and then maybe point out a few points of interest. The first three charts are expenditures by population over the past six fiscal years. So you're going to find unique members served for each population, IDD, intellectual and developmental disabilities over the years, you'll see the the cost to provide those services, and then you'll see a calculation of the cost per member. So for the IDD population in 2023 we served. Dwin served 13,851
people, um, that was at a cost of $480 million you can see that's an average cost per member of $34,664 now if you look at the next two charts for the AMI population adults with mental illness, You'll see that in 2023 we served 47,536 people. At an average cost per member of 6722 so you may notice, and I think you probably already know, it does cost more per member to serve the folks with the Intellectual and Developmental Disabilities, also for these first two sections, I wanted to point out the number of folks served last year, that's the highest. That's the largest number that we see over the past six years. So we're serving more folks last year than we had in six years, at least. Now within sed we served 11, a little over 11,000 kiddos there last year, average of $5,916 per member to serve those folks. And I'll just keep moving along. So if you have a question, please just jump right in.
So the next section is kind of interesting. Steve, cannot, can I make one observation? Sed, is serious emotional disturbance. Those are children. Okay? I do want to note, over the last you know, for the six years, you will see, unfortunately, there is a decline in the amount of services in terms of cost that we are providing to children, and also, like, a reduction in number of kids being served. Um, I think I did mention this at the Finance Committee meeting. You know, we don't know if that is a result of behavior health specialists now being in within the schools, but there is we are seeing a reduction, and our children's providers, especially our providers, children's providers that only serve children, are having financial difficulty. I do want to say that Detroit Wayne, we are doing things and being and working with them to make certain that they continue to remain in business and serve children, but we are seeing a reduction and and in revenues and numbers, number of children served in our children's amongst our children's providers. Okay, thank you, Stacy, so the next section, and this one is interesting. So this is. Information comes from what they call the Milliman drive. So that's an online application that Milliman provides on behalf of the state, for all of the PHPs and CMHS to access. There's information about cost of services, amount of services, Medicaid enrollment, lots of stuff like that. So we use that to look at not only our information, and you can see that it's based on the EQI period three, which is essentially our final EQI, our final cost report to the state at the end of last year. So we use that to look at, well, what are the other pihps doing, and how does that compare to what we're doing? So in the first section, you'll see us right? Dwin, and there are seven lines, and the lines are broken out by the type of Medicaid enrollment for the different folks that have Medicaid in the state. Cwp, children's waiver program. Deb, disabled, aged and blind. Hmp, Healthy Michigan. Hsw, habilitation Supports Waiver non Medicaid or the uninsured. Sed, those aren't the kids in general. That's the very specific sed waiver and then TANF, Temporary aid for needy families. So for each of those lines, you can see the member months, those are actually the folks enrolled in Medicaid in Michigan. So we serve a portion of those folks
paid units. Those are the services that
we're providing, utilization per 1000. If you divide out the units by the member months, you'll get that cost per unit is the amount paid, divided by the divided by the paid units. And so once you start to absorb all of that, you'll be able to compare and see, well, how does dwin compare to the other PHPs? So dwin has an average PMPM cost across all of Medicaid of $82.07 Macomb, you can go down to Macomb and see their cost is a little bit lower. They're at $70.76 Oakland, O, C, H, N, they're at 122, and 30 cents. So they're a little higher. CMH, partnership of Southeast Michigan. You might remember, if you're a geography fan, that's just to the southwest of us, 110 and 39 cents. And then region 10, which are the four counties just north of us, $95.70 so we were at 8207 and that's somewhere in the middle of the group. The next set of slides that we have are about the populations themselves and Okay, who are really the biggest crisps by payment volume and by member of a number of members served. So remember that a crisp is not just a big provider, right? They're also a large provider that provides coordination of care for the members, and that's really the key clinically responsible service provider. So within the AMI population, adults with mental illness, the largest provider by number of members and also by cost. That's team mental health services. They serve 9936 adults with mental illness last year. And then you can go down the list and look at the other of the top 13 on the list, these are not the only 13, so cygenx is not the smallest, but there's just a few more after that. So if you divide the cost by the unique members, you can get to a cost per member. And I just want to caution you to think about a couple things. When you look at that number,
when most people think of cost, remember, they're thinking about,
okay, a very specific service. You might have one provider that provides on average six units
of case management per member, and another provider provides on average five units, right?
So that could be
one thing that's contributing to the average cost per member.
However, there's another component which might be even bigger, and that is of the potential array of services that somebody in this population might receive. How many are being provided by this particular provider? So in the case of team, of course, are a large provider. But not only do they, they do serve a little bit more case management than other providers, but what's really driving their 3609, which is higher than anyone else, is the fact that they provide a lot of the other services themselves, therapy, um. CLS, you could go down the list, right? So those are the things you want to think about when you look at that cost. Remember, on the other extreme, you can look at, let's say, NSO, a lot of the folks they serve, it's for a very specific purpose. So they provide these level two evaluations, and that might be the only thing the person needs. And so then you end up with a lower cost of service. And just kind of going through these with an IDD, the largest provider serving a dash five, dash a five, dash three. Oh, thank you. I just want to know, let them know we can move to another slide.
Okay, oops, sorry about that.
So on a dash 5.3 Community Living Services is the largest by number of folks served, and also by the cost of those services, 3560 members served by this organization last year, and then services to enhance potential neighborhood service organization. And you can go down the list as well. On the next slide, a 5.4 we're looking at, okay, so what are the largest crisps serving the kids, the severe emotional disturbance population. So at the top of the list we have, okay, well, okay, this is like the Olympics, right? Who's got more medals and who's got more gold medals? Okay? So we have starfish by payment volume, there at the top of the list, $9.5 million serving 1257 members and the Guidance Center, they served a little bit more. 1469 members and so again, you can go down the list and see who are the other larger crisps serving the SED population. Okay, moving to a five point. Five there's a lot to absorb here. Here, but I'll just go through this quickly. These are the residential. Services. So this is like the personal care and the CLS that. The members receive either in a licensed setting or in an apartment or their or their parents home or somewhere else. Now, one thing to note, you can see that there's a licensed section, and that's at the top, and then the second section is non licensed. So really the distinction there is if a, if a, if a, if a residence, if a home provides personal care, then it's required that they're licensed by the state of Michigan right through Lara, if a person that who might be a little more independent doesn't require personal care. There they have their apartment, they might just need some assistance with some other daily living tasks, so and they receive no personal care. They might be in what's called an unlicensed setting. So just note that all of the homes that require licenses have licenses. So if you look at this, you can go through the years. You can see the number of members served, the cost of those services the cost per member, if you look at last year in the licensed section. So it costs about $46,755 per person for the year to provide those h 2016, which are community living support services for the personal care, which is the T 1020, section. We're looking at about 1592 members at a cost of almost $43 million so if you look to the right, you'll see. Okay, what are the neighboring PHPs doing, and where are they at? So Michigan, on average, for age 2016, cost of $189.32 per unit, we're at 198
Oakland 175
so we're a little higher than, in fact, all the other ones on this list, just by a bit. For t 1020, the personal care the state on average, $81.41 we're at 9431 Oakland, 79 Genesee is a little bit higher, at 117 79
you can go into the non licensed, non
licensed section. And if you look at, well, we've got some history who 43 is a code that's not used anymore, so you're not going to see that in 2023 but if you go down to the green, where it's all sub totaled up, you can see the bottom line, cost per member, or in a non licensed setting, $42,254 on average per person for the year. And again, you can compare that to other PHPs that are near us
in the state, the average for
h 2015, is $5.21
we're at $5.08
right? So pretty close, a little bit below some of the other PHPs are even a little bit lower than that for the for the T, 2027, that's also CLS, but it just have they have a special code for the CLS provided overnight. That's what that is. On average for the state, $3.58 we're at $2.85 so actually, considerably lower. Some of the other PHPs are closer to the state average Genesee doesn't provide or report that overnight service. I think the next slide a 5.6 so here we have the autism providers, same format as before. So if we're looking at the the largest providers here, centria is the largest $37.6 million in payments last year, serving 848 kids with autism. And then again, you can go down the list for reference if you'd like to. And Stacy, did you want me to do the hospital page? Yes, okay, this one, I think. Okay. So this one, there's a lot in on this page, and this is really important. So if I put you to sleep in the first on the last several slides, this one is important. So for these are hospital expenditures, you know? And I should say that, you know, when I was giving my speech about understanding the context in which we find ourselves, etc, sometimes we're going to find good things, right? We're going to find things that we're good. At. And other times we're going to find opportunities, right or weaknesses, or, you know, opportunities to move forward and improve. But so with so again, this is by year. These are hospital expenditures, and it's broken down into the population. So for folks with IDD in 2023
we spent just a little more than $4 million
but you can see that that had been increasing year over year, right? And I don't think I'm telling you guys anything that you don't already know. For sed in 2023 we spent $6 million and again, that have been creeping up. If you're curious about some of the history, you'll probably
notice dips in 2000 22,021
of course, that would be the covid 19, for adults with mental illness, which is where most of the hospital expenditures are incurred. In 2023
we had just almost $75 million in hospitalization costs, inpatient costs for those members.
Just in case you're looking at the detailed columns,
number of members, number of days,
are the the paid days, so that's how many days the folks were
in the hospital, right?
The number of days per member. It's, it's not exactly a length of stay number, but it's similar. It's not a particular admission, but it's, it's the number of days per member across the whole year. So if it's one admission in the year, that would be the length of stay. If it's two, then it's really more the days in the year for that member.
And I think there was a question about earlier, about, well, what do we pay per day for the hospitals? You can see the average cost here, $620 per day last year. Consider this is net of any third party payers that might have contributed toward like Blue
Cross, or some of the other payers that may pay first, right. Okay, are there any questions about any of that,
or if you wanted to add anything? Mr. Rand, no, I think, I think the, if you'll notice, though, that the our hospital cost is definitely spent with the adult population as $74 million
okay, thank you. Thank you so much. Thank you, Madam Chair,
yes, this word. I recall years back, there was somewhere around $50 million a hospital cost, and we did that contract with cult Burt people
on the hospital. How did they go up another
go high. What do we try and hurt people? So if you look at the history of this chart on five, 5.7 I don't think that our hospital cost, in totality, has been $50 million since 2018 when you add up all the different populations. So I'm, not quite certain. Maybe it's not that, but it has gone up. And the whole reason why we did the COPE diversion was sort to go down and asking, why are we seeing it going up? And I could say that it could go have gone up even more if you didn't have covid. Do right? And I think the next slide will get to our diversion efforts in terms of contracts such as cope under and a and a 5.8 the net is going to go through this slide, but this is our diversion analysis. So to your point, commission, hospital, hospital costs have risen, but they could have risen even more. Good afternoon. Danetta Brown, Deputy CFO, I am presenting on slide
eight, a dash 5.8 the hospital
diversion analysis. Sorry, this particular slide, big difference, provides four years of activity by adult and child population. It provides you with the information on the individuals that were diverted to a lower level of care from the hospital to a lower level of care. And as you can see, the adult population.
Are actually the number of claims, as well as the dollar estimated cost value have increased over the course of the four years. There was a slight dip throughout 21 and 22 but overall, there has been an increase in a number of claims and days for those hospital stays. The we have had a decrease in the number of diversions, though I did want to point that out, and even
if you can, I ask you a quick question, yes, do we have? Although it appears they have, well, we know that they've increased in 2023, and a lot of the things we attribute to the dip in 20 and 2021,
as a result of covid. Do you have 19? Are we back at the level? Are we? Do you know if we're above where we were? So I don't have at 2020, you're at nine, 673, yes,
I do not. Probably would assume, based on, well, you probably are, Madam Chair, if, if, if, if, we may, I'll add 19 to the slide for the final budget, so that you will have
19, which would be pre covid. But I do want to note that this particular
slide is about hospital diversions, not this. This slide is not about hospital cost. It's about the estimated savings because we diverted it to other levels of care. We did other things to make so that person did not go into the hospital. This is what the estimated cost would have been had they gone in the hospital. So, right, so my, I got that my question is, so the number of claims, so we were doing diversions prior to covid, right? Yes, so where were we? I'll add saying I'm just trying to follow them. You're trying to include a year
that is does not go out. It's coronavirus, right? Yes, so I will add
19 to this slide for the final budget package. Okay, thanks.
Sorry. I'm sorry. That's okay. That's okay. And so again, for the child, child
category, 19 will be added, but the same, the data points are, are similar between children and adults. On slide, 5.8 the next slide, slide a 5.9
is the may drop hospitalization analysis, and this, this particular slide addresses
individuals who were enrolled, enrolled in the mayor drop and then how they fared after they were enrolled in the mayor drive center, and it's by crisp, so you can see the number of
distinct members by crisp. And as you can see,
there was a decrease in the hospitalization cost after they were enrolled in in the mayor drive so
and I do want to point out that this information is
as of June 22 of 2023
actually, is that? Is that a typo? Is it 2023 or 2024 it's 2020 okay. That's
okay. I'm sorry. We'll make we will make sure we correct that.
So that's fiscal year 2024
through June, not the fiscal year, okay. That is through June, June, 20 as of June, correct. 24 Okay, gotcha. Gotcha. Are there any additional questions?
Thanks. Thank you. A dash six is the Sud budget. As you the the reduction in revenue and expenses
are directly related to the ending of covid grants,
to the tune of, I believe it was about $5.5 million in covid grants.
A dash 6.1 is Su D services. This is a similar analysis that Steve went through for our. IDD, but this is for Sud
and This lists the providers that provide services, outpatient services. It this is, this is this does not include any prevention activities. These are purely treatment providers and treatment services. So yes, so let me, let me. Let's go back one second. So the Sud budget,
so we're we're at a two what a $2.2 million deficit in our projections, am I reading? I'm sorry, what? What do you do year 2025, requested, we're at a $2.2 million deficit.
Um, you know,
no, so, let
me think, what is that you're looking at things the revenue was 62 and
expenses are 64 well, so
med Medicaid. When we receive our Medicaid and Healthy Michigan, we budget the Medicaid and Healthy Michigan based on
in the respective business units, based on what we will think we will receive. So when we get our Medicaid revenue from the state, it distinguishes autism. It tells us which population the Medicaid is for, however, it's all pulled together and is used as it's pulled and used as one pot of
money. So two point we're estimating that $2.2 million
of our mental health Medicaid will cover the Sud Medicaid, that's but it's okay. We budgeted it separately, but it's, it's pulled together and used in totality. Okay, we probably want to say that
it has
gone the other way. I can give you a budget where we
had more Sud revenue and supported mental health services. It goes, No, I'm talking about when you see that, and you're like, wait a minute.
We doing a budget. And we Yeah, no, okay,
I got you, Mr. Parker, just one item, the opium settlement
revenue. Yes, last year we have what? This year we have 1.7
you only projecting 380
from this year? Yeah. So what happened with the settlement? They went back and gave us going.
They went back to 2023 and in 2024 they
went back and gave us multiple years of settlement funding. So that's why the 1.4 is a lot higher than future years, because it included multiple fiscal
years. So the one we're getting this year 300 we're at
what we project. That's the estimation. Yes, thank you. And
I do want to note that last week we got
1.9 I think, in settlement monies again, these months, these amounts
are estimated when they give it, but I think it was, think it was 1.9 we actually end up getting, and
we just got our payment for the opioid
settlement last year. I'm sorry.
Last week, we got our first payments from the settlement money, thank you. We got 1.9 but we were we were estimating one
point. Three, seven, and
I don't hold me that, for some reason I believe it's 1.9 1.9 cents
in my head. But
we estimated it to be 1.7
for fiscal year 2024, yeah, yeah. So we got a little bit more $100,000 yeah? Okay, yes. Miss, miss, appear in postpartum pilot.
PW, yes, I. As a grant. Yes, we not. We didn't receive grant again this year. Nope, we're
is is budgeted at Four. 267,000 are you looking above that? At the PFS, we're a zero she gets. My little Yeah, no, yeah. PPW is budgeted for this year. Okay, all right, I see it. Okay. I'm sorry, that's okay. We are not getting the covid grants. Those are the ones that we didn't budget for. Oh, this is for so that's the parent postpartum pilot. That's separate from the Women's specifics. That's separate from, I'm sorry, the people. Those are two different programs. Which one says women specific service payments first, and then it's parent postpartum pilot. What are you are you looking at the expense of the rep? Which one I'm gonna a six. So, so you talked about the WSS. Oh, sorry, are you referring to WSS? Where's WSS is women's specialty services, yes, and parent the PPW project. Those are two separate grants. Yeah, Army, yep, two separate grants. Okay, okay, all right, yes, ma'am. Any other questions on the Sud budget?
Okay, 6.1 again, similar to what present presented before,
in terms of number of members served and cost, and average cost per member. And this is for the issued again, Sud treatment only eight. Seven is our wayne county budget. The budget remains the same as fiscal year 20, 488, a dash eight. So general fund allocation,
I do want to note that these amounts are based on projected costs that we plan
on incurring in fiscal year 24 I think I reported to the Board at our last finance committee meeting that we were projecting almost at least a ten million overspend as it pertains to general fund. I have included that over that additional included that as part of this budget, and
have allocated a line for the use of local funds to balance that item. So I just want to be be clear that in the fiscal year 25 budget, we are allocating a significant amount of local funds agenda to cover
cost.
I'm sure. Yes, Mr. Parker, the services to priority population, the spin down is equal to the amount of money we get to the state, 21 million. I'm sorry say it again. The services to priority population, which is 14 million. Spend down for consumers, is 7,400,000 which is the 21 million that we're getting from the state.
We are not getting adequate funding from the state to fund. Yes, in essence, we're utilizing their money to pay that population that we need to find a way to have Medicaid pay
because we're I mean, anybody come, I understand that person's not on Medicaid to come in
and get the services we're building here, but
if we sign them up for Medicaid, couldn't they be billed to Medicaid? Oh, absolutely. I mean, that's the push is for Medicaid enrollment. But not all persons meet the requirements, and we're required regardless of insurance. Mental health for covid requires, regardless of insurance. We are the we're
the catchment for uninsured services. So we're required
by mental health code to pay, and
that's these are profit amount of money that we spent last year in 23 this is what we're projecting to spend in fiscal 24 Yes, spend down is
the deductibles that if we didn't pay, the members would have to pay out of their SSI,
which is probably around, I guess, a little less than $1,000 a month, which many of them use their use that money to pay room and board and cannot afford to pay deductibles. The thing is, the individuals that we have with Troy Police Department for behavioral health specialist that go out with the police on 911, where is that at in the budget? Is a general fund. No, we that is in the Health Quality Initiative program that's funds for that is Medicaid. Medicaid, Yep, those are the, those are the, that's the programs, those are the programs I was saying that are considered to be admitted. Straight of doubt. It's considered to be administrative costs, like our admin is, but for the MLR, we don't have to include that in the rate.
So we increase that amount, it will all be billed to Medicaid. Yes, and I believe those police, the the jail, those diversion programs or the ride alongs? I believe that they aren't. Yes, those are deal diversion programs.
Yes, you're correct. Stacey Brooke Blackwell, Chief of Staff, if I can add I know we've been talking about increasing our general fund ask over the last year or two, as we find found new ways to find services that we can build Medicaid for, like our behavioral health
techs that are working over 911 and other programs like that, as you guys go through this
priority list for general fund local dollars, When we have our conversations with our lobbyists and we meet with legislators, the more that we can make arguments to them, to say that you know what, we're finding programs and supports that we can build Medicaid for. It makes our argument stronger to ask for increased GF dollars, to say that we're finding new and inventive ways to build Medicaid for like staff that we have over at some of our CO response officers, the DHS workers, align for the DHS workers. We do have six DHS workers that are assigned to dwin, and they assist our members and getting enrolled in Medicaid and any other food assistance, cash assistance, any other health and human services that the member may qualify for. We've got those DHS workers that are stat you know that's and two of them will be in 707 once we get that building completely open, two are in 707, and the other four are at physically located at providers, at providers, the they will be, Oh, I'm sorry, madam chair, so they'll be DHS workers. They'll just be stationed with us. They're, they're state employees. We pay for them. Acts are we paying? Oh, yeah, they're $432,900 but it's a great resource to remember. We cannot use Medicaid, you know, to pay for that. And then there's a grant the Department of Labor, Mrs. Grant, where there's a three to one match we get. We give them 443,000 we get three times that amount with through a with a grant. I think it's an employment grant. It's Mrs. An employment grant. It's an employment grant that employs our members. It's important of employment, consumer housing, very small amount that we set aside. Every now and then we come across, you know our I can remember one year where a family, I think a siblings, had were had, were displaced, and they needed clothing, and they were in a residential home, and they needed some extra services, some basic needs. So we utilized the funds, general funds for that, the $5 million is your jail, Wayne, county jail, autism. There's some benefits in the autism program that are not Medicaid. I do want to note you know that the Autism Program is a $90 million program, so there's a very small amount, 500,000 that is general fund funded. The homeless is the former. I know it's not the tsunami center. I think it's the NSO, it's there, it's a, it's a, it's, yeah, I can't remember the name, but it was the formerly. I think the tsunami center and guardianship cost.
That is funding that we provide that if we did not pay for the guardianship fee,
it would come out of the SSI check of the members. So we fund that pmto, we're actually, I'm going to get rid of that amount, and I'm going to increase the guardianship costs by the 50,000
and move that line item up, because we no longer, we actually have a grant now that funds that 50,000
so I am going to move that 50,000 up to the guardianship cost summer youth programs. Those are obviously the summer youth programs that we have had for a number of years that tend to be pretty popular. The state elite supplemental ethnic funding, $18,700 this has been some additional funding for the child. Chinese American ethnic program. Unfortunately, years ago, you know, they didn't have
the lobbying that some of
the other ethnic groups had, and they got a significant cut from the state. So they've asked that we fund a very small amount in order to sustain that that program.
So we've done so so that mister perfect question, wasn't there funds in here for state of Detroit, for the program they had in northwest Detroit? The goal is that the goal line, again, commission, that was one of the very creative programs that we fine tune the outcomes, and was able to use Medicaid funding for that and as a part of the health care initiative line item that I had spoke about earlier, yes,
a dash nine is just a list of all the positions, people, vacant positions, field positions that was at this that the point in time that we prepared this document, obviously, this list is forever changing, just depending upon hiring and the movement of people to different either out of the organization or new people that are filling vacant positions. But that does conclude the budget presentation for fiscal year 25 budget, and I can certainly take any additional questions. Mr. Parker, yes, I want to talk a little about what the reserve funds have. 64 million in reserve funds. Yes, local, yes. We have a Medicaid, Medicaid reserve funds is our, our contractual requirement of 7.5% which is approximately, hold on, let me go on another it's, it's a statutory amount. So by contract, we're required to maintain seven and a half percent of an ISF and our Medicaid. And we are contract. We are we have met that contractual requirement, and right now that amount
is about $72 million Madam
Chair, one of the things I want to
look at and see they
have $64 million of local funds, and we know there's a great need still out here for medical mental health services. I would like to guess that we provide a behavioral health specialist that are serving the population Wayne County, which are they are
from the, I would say, probably the main source of people that need health services
at the family call.
I've asked the question of and what that cost will be, is that cost of that service, I would like to think that we offer that at possibly 80% of the costs departments take out our reserved hours, have them get really committed to it, down to around 6 million. Take out our reserve order to have behavioral health specialists go out for tonight, 911, like it is being done in Detroit. All the other local police have expressed a desire not just leave the money, rather create programs
it's going to serve. I don't know what the process would be. Asked staff to look
at that exactly what that come back to us at the meeting September, that our amount would be, I don't know how many police departments there are counties, I may not be interested, but to offer them a grant 80% of what a cost. I'm not sure how you want to um, Commissioner Parker is speaking. There was a document. I don't know if Lillian shared the document with the other board members, but when we were at when we were asked for board members to submit questions, we did receive questions from Commissioner Parker, and I think Lillian is passing out the responses that we provided. And I think that that particular question, it does state how much and I did work with Andrea on this, according to she said there's 12. And I don't have that document in front of me, but in the chart, it states, I think there's 12 police stations
within the city of Detroit. And then she mentioned that each county. Okay, thank you. Okay. Yes. So, yeah. So she mentioned that each Wayne County, town,
count, city and township has one
police department and each one, so there's 42 of them. So that's 42 behavioral health techs, Detroit has apparently 12 police stations, and then wcso, I think is Wayne County Sheriff office, maybe, and that has been included as well at a average salary of $70,000 for behavioral health 70 70,000 for salaries fringes at a 35% rate. So I'm in direct cost. So we're looking
at a total for one FTE for one shift.
So I do want to note this is for one shift,
Monday through Sunday. Of $7.2 million roughly. And if he mentioned, he mentioned 80% obviously you would take 80% of that would be the amount that is the request. My My suggestion is not to do all 12 precincts. Rather, I think they have two, but 911, response. But
if we did it for the 42
different police departments,
less than 3 million,
we did it for 1000 times a seven. So you don't want to do any in Detroit.
Well, they they respond by 911,
by precincts already
have two behavior
at 911, that are dispatched. So increasing that really was just about one for each Police Department. Bonds to mental health crisis and with
behavioral health specialists go out
that if you use 70,000 was wrong. I think it's a small amount for
us. On I'm not following, let me, let me, because I want to make certain that I incorporate what you're referring to. So 70,000 Well, you said 70, but it's not 70,000 it's 100 once you add in 70,000 is the salary got fringes plus indirect time. So it's roughly about 109,000 per Okay, under
4 million. So 5.4 million for 42 Wayne County cities. And is that what you're referring to? That's the amount
with the fringes. Okay, so what's the 5.4 so that's like a $4.4 million
if you do 80% of that, you take the 80%
that's all I said is how much 4.404
point 4 million and no and nothing. So there's 12 Detroit police stations. You're not but they all respond to 911,
calls on to that's the part I'm not understanding. A person calls in the 911 and they say they're having
fun or something, they're dispatched from 911 but every health person, they are a thought. So you're talking about not staffing 911 No, no, would you mind? I just have a core responsibility on my youth, right? So there's, there's 12 Police Department, 12 the police stations in the city, when 911 is called whatever. I guess maybe based on what the geographic area of that car, that police station would respond. So if it's 12th precinct, are you saying that there should you don't want a behavioral health specialist stationed at 12 precinct. Because I'm asking, what is the process right now, I thought they were stationed
at the 911, they responded No matter what precinct it was in. I don't know that the right along. I think you're talking about people going along with the police department or meeting them there or right? So I don't, yeah, Madam Chair, could I don't, yeah. Could I just make a point when you were talking about having the behavioral specialists at departments, you're talking about the entire city's Department. So Detroit would be one, even though it has 12 precincts, it's one department. So those specialists would be assigned to the department, and then they would be sent out based on 911 calls that have mental health issues, but, you know, and so that's what I think. But the other thing is, if we're going to
do this, we need to consider some criteria for which departments we would want to assign
those behavioral specialists to, because some departments don't. Get calls like this, or get very little compared to Detroit if you call, if you compare Detroit to a smaller, you know, suburban department, they may not get that many calls where Detroit gets 1000s. I just want to make certain that the request is clear, you know, I'm clear on
the request, because what I'm hearing is, is that you don't want any um behavior
health tech stationed at police stations like the so, you know, Mister um McNamara, there was a police station
is, that's Van Buren Township. Okay, so Van Buren townships Police Department would have a behavioral health persons that they're responding when there needs to be a call that goes out to, you know, to Van Buren to go out, right? I just want to make certain that we're not skipping over Detroit and this 12 police stations that
they have where there will be a behavioral health tech, similar to what we're saying for these other 42
police state, because these are stations. These are, you know, these are precincts within a department. Yeah. So we have to decide, are we going to, you know, assign people to a department, as opposed to, well, let me ask. Let me ask.
We're talking about two different things. So what I think we're talking about is you'll sign one for Detroit, you'll sign one to Kent, you'll assign one to Van Buren, you'll assign a one to Belleville, and they
would cover all of those precincts within that police department, there's only one that was saying there's only one precinct, though, in Van Buren
County, regardless of the fact that their
swearing has 12, he's saying one person. Let him. What? No problem, one for every precinct in Detroit, also no, okay, okay, but I guess I
would hope that the staff could analyze that. As Eva said,
there may be some precincts that in the suburb that gets very little call, right? And you don't have to do but based on number of calls. Calls, maybe we could use that as a criteria and see what that number was. Creative. Just be creative. If it's a local district outside. Side of Detroit, even if you assign, I got more. I got it. No, I gotta. I just wanted to be clear and that and that, with the 12 police stations that are in Detroit, that we're not assigning one person
to the city of Detroit for 12
precincts, because that
that that's not equal. You
know what I'm saying is we need to have criteria on how we're going to assign that. It could be Scout car area, it could be the area. It could be two or three cities that are small, that can have one person. Absolutely we have to set the criteria. I'm just asking staff and analyze it and see what that could look like, and then what the budget could be for that got it, I understand. So now my next question, Madam Chair, if I could add the annual, you're talking the annual amount this, this is an annual amount. So this is something that would be done. Yes, this is every year. No, now, but this, this, this is what I'm going to say about this. Wow. Not that there is. There's a need for this, and there's a need for a whole lot of other things. We have been in a position where we have not always had $64 million and we were operating as usual, as normal this, and I'm sure there's a lot of other things that are very beneficial to the community, to support what it is that we're here or we've been assigned to do at dwihn.
Be very careful, understand, because it's easy to do. It's easy, it's hard to take away things absolutely when you already have
it out there. So we have to be very careful
and prepared
not to say this is not something we would want to do. I'm not saying that, I
know. I'm just saying that it's very difficult to take things away, you know. So if this is not something that we're looking to do long term in the future, just be very careful on how we structure it, how we, you know, come back creatively.
You know, figure out this progress. Because, as we just denoted in our general fund budget, yeah, we're already taking 10 million every year to support. We can't get anything else. I'm just, you know, a 10, 10 million a year, that's
right, you got 60 million. That's only six years. I'm just saying absolutely. So I just, you know, I'm just just, you know, I'm like, I said, this is, this is a great idea, great opportunity. Just be careful. That's all I have to say. Any other questions to respond? I was very encouraged when you said that you're able to charge the behavioral health specialist to Medicaid through that process. So if we do that, we be taking none of the money out of the reserve. It would all be billed to Medicaid. It'll just come out Medicaid reserves. So yeah, and the Medicaid reserves are, are 7.5% or 72 million per our contract. I mean, I, you know, if the board decides to move in that direction, that's definitely the direction that I would recommend. Is it, come on, I would also recommend that, you know, maybe, and instead of 80% maybe we do 50% you know, I don't care what I just, like she said, a geographic, it might be based on, you know, the span of people, her number of calls, I don't know, you know, just do your thing with that. Anybody, any
other questions? Okay, I'm sure if I could real fast when we started the DPD pilot program. Mr. Burke, if you recall, what was it, almost, almost three and a half years ago, part of the
contract that we had with DPD was that in order to sustain it, that they had to have a supplement on their end so that it could be sustainable. We do have, like you had mentioned, the behavioral health techs over at 911, but we also support their CO Response Program, as Stacey had mentioned, in all 12 of their precincts. So we train all of their CO response officers in both Mental Health First Aid training and CIT training.
It's something that, through Andrea Smith and her staff, that we make available to all of the other 43 municipalities in Wayne County. So if that is something that we're going to make available through what you guys proposing. Now, when we've had these conversations
over the last several years
with the other municipalities throughout the county,
they have
expressed an interest in us having a program like this, but in order to do so, they would have sustained it,
as you had mentioned earlier, the 80% i. Know that Miss Durant had suggested 50% but those other municipalities would have to make sure that it could be sustainable
beyond what we are proposing on our end. So that
has been kind of just for historical purposes. Come back exactly recommendation how it can be done. I'm not alright, alright. Wait until exactly what I said. I just think we need to use some of our funds to help other police departments. Okay, thank you mental health calls.
Thank you Madam Chair, thank you. Any other questions, any other statements, any other concerns, okay, great. Um, budget, hearing, meeting, um, thank you all. We are at the point where we're looking for a public comment. Do we have anyone in person or on the line that would like to make public comment? Madam Chair, we do have members of the public with us. Members at this time, we invite them to raise their hand if we wish to speak public comment. Okay, okay, do I need to read this? Well, then you got to read it. He Mr. Parker basically said what I was going to say. If no one raises their hand, you don't have to read it. It's up to you. Over German, properly moved and supported. Meeting adjourned. Oh, all those in favor, aye, I know I want to stay. Recording stopped and.