Chairperson Harney called the Johnson County Board of Supervisors to order in the Johnson County Administration Building at 1:10 p.m. Members present were: Pat Harney, Mike Lehman, Terrence Neuzil, Sally Stutsman, and Carol Thompson.

Harney: Call to order the Informal Board Meeting of the Johnson County Board of Supervisors for Friday, January 31, 2003. This will be in reference to discussion over Mental Health and Developmental Disabilities and the audit response. Anyone want to take the lead on that?

Thompson: Well, we all have a copy of the memo that Mike and I prepared after we worked with the County Attorney’s work group. We felt like we argued strenuously for a plan that didn’t have any consequences for the providers. But, we weren’t successful. I guess there is no other way to say it. What we recommended, which we thought were the least drastic outcomes for the providers, was that they be allowed 10 years to make the repayment, if they chose, at 1% annual interest.

Lehman: The first question we should ask is, is that an acceptable rate?

Chief Deputy Auditor of State Warren Jenkins: I think in reviewing a repayment plan, you have to look at the totality of the plan and not just at individual characteristics in isolation. I think the other thing that has to be looked at is what is the affect on the taxpayers, as well as the providers, because they are certainly a party to this as well. You need to be fair to the providers. But more importantly, because you have a larger segment of taxpayers in general who will be affected by this, their concerns and their possessions have to be very carefully considered as well.

Thompson: Was that a yes or no?

Stutsman: What do you mean by that?

Jenkins: As I have looked at your proposal in its totality, there are some adjustments that I think are certainly worthy of consideration, in which we would ask for strong consideration. The first is the 10-year length of repayment, which I believe is too long. I think it should be shortened, which I think can be done without severe consequences on the providers, but which will provide a recovery for the taxpayers in a reasonable length of time. What I am looking at is in the neighborhood of 5 years as opposed to 10. The other thing is the interest rate, which I think in order not to put the County at any more of a disadvantage than they already are, that one of the things you should look at is setting an interest rate that is perhaps comparable to what the County Treasurer is earning on investments during a particular year. That is going to fluctuate. But, allowing a 1% interest rate, if any providers have put this money in the bank and conceivably are earning more than 1%, is an enrichment to them and an inducement not to pay the money back to the County where you can use it for services to people who need it. I think another consideration that should be looked at is tying the repayment to the provision of its continued services to the County. So that if for some reason the County and a provider could not reach an agreement on continuation of services, and in essence you would not have a business relationship again, that any amounts then due and owing should be due in full. That would provide an inducement for both the County and the providers to continue working together to provide additional services to those people who need them.

Harney: Is there an area in there where perhaps, in our grant procedures each year, that they could provide us with X number of dollars worth of services as a repayment?

Jenkins: You could, I believe, enter into a written agreement where you can, as opposed to exchanging money, that they could provide specific identified services outside of the normal services that you contract for. So that those services can be clearly identified, they can be tracked, they can be documented and you know what price you are paying for them.

Neuzil: Then you get to work that price down?

Jenkins: Sorry.

Neuzil: Then you can work the amount down?

Jenkins: Yes. It has to be a repayment with services as opposed to cash.

Thompson: But, they would incur cost to do those services, so what is the difference?

Jenkins: It is simply an option that you would have, that for whatever reason might be more acceptable one year or another year, or to one party than the other.

Neuzil: The advantage is they wouldn’t be writing a check.

Thompson: But they would be writing a check to their staff, who provides the service or whatever service they provide they would have to pay for.

Neuzil: Somewhat, yes.

Thompson: I don’t see what the difference is.

Neuzil: They might be able to have some cost savings somewhere.

Jenkins: One possibility is if they have a particular time of year when they are not as busy and their staff does not have as much to do, that the staff could provide services at that point when they would otherwise not be doing as much. So that it may not in fact result in any increase cost, depending on certainly their staffing arrangements and how they are paying their people. That’s a very individualized thing that might be beneficial to some.

Lehman: Is the audience able to hear OK?

Mid-Eastern Iowa Community Mental Health Center Director Stephen Trefz: I didn’t hear that one. I didn’t quite understand that one. Could I hear that one again?

Stutsman: I wonder, Warren, if you could come up to the table.

Jenkins: OK. What I was saying is that, in certain organizations you have times of the year that are busier than other years. In our own office, for example, we have full-time staff, but we have busy times and we have times when they are doing things that don’t have as pressing a deadline as other times. If the providers have the same situation, where they have some times when their staff is not as busy, that they could provide additional services at what may be no additional cost to the provider itself, that would be a way for them to work the obligation down without really incurring any additional cost. Now, it is going to depend on the particular situations at each provider. But, it is an option that could be useful to some.

Stutsman: So, what is the documentation that we would have to have if we did? We would have to have contracts in place.

Jenkins: You would have to have a written agreement saying what services outside the normal contract will be provided. You would have to have documentation requirements to verify that those services were in fact performed and provided to the County, just as you should have for your normal contracts. The agreement would be that for whatever service is provided that the obligation would be forgiven based upon specified rates applied to those services actually provided.

Stutsman: Some of these amounts aren’t all that much. So, I don’t know if it would warrant going through all of that documentation. Is this an either/or? Can we offer these different alternatives or do we have to do it all one way or all another way?

Jenkins: No. I think the choice of how you do it is up to you. Certainly situations are different and so the solutions to each of those situations may be somewhat different. It really is a decision of the Board as to whether you want to have the same solution for everybody or you want to do something that is more individualized. The end objective, the end result is what is most important and there can be variations on how you arrive at it.

Harney: The reason I bring it up that way is I know there are agencies there that don’t have the cash to make repayment. If they can’t make the payment back, I don’t know what we would do. It’s like an uncollectable debt sitting out there. I don’t know how else we would clear that up or is there some other way of clearing that up.

Jenkins: I don’t know that it is appropriate to get into that right now. I think it’s more appropriate to look at getting a workable solution with each one. I think it requires a good faith effort on the part of the providers as well as the County to arrive at a solution that is fair to the taxpayers, as well as to the providers.

Lehman: But, the arrangements made to providers might not all be the same. I mean, we may have to say like on negotiating contracts, this is going to work, partial cash, partial work during down time. That type of thing so we are not locked into one fits all, that type of thing.

Jenkins: No. That would be a Board decision as to whether you wanted a one fits all solution. You don’t have to.

Stutsman: Who do we double check with to make sure that we’re doing… Who has the final say? Do you have the final say or does our County Auditor have the final say?

Jenkins: Certainly there are many people that have a voice in it.

Stutsman: Eide Bailley. Who do we check with to say…

Jenkins: I would say that the final authority would be the County Attorney.

Stutsman: OK. So, whatever we come up with we need to run it by him to make sure that he is OK with that.

Jenkins: I think it’s appropriate to certainly run it by the County Auditor’s Office because I think they need to have a say in whether the mechanics are workable for the County. Whether the documentation requirements are adequate that there will be sufficient tracking of what is being done to satisfy everybody that the objectives are being accomplished. Yes, we would be happy to provide assistance or advice as we can. We are not going to get in a position of making every little decision, but certainly, from a standpoint of providing advice and assistance, we are happy to help you work through it.

Lehman: It may be a chain of… The County Attorney, he may say, check with our County Auditor and Eide Bailley and they may have questions and their questions may go to the State. In the end I would feel much safer that the State is going to OK this. I don’t want to run into another snafu.

Stutsman: Are we going to make a decision today how we are going to approach this? Is that what we were…

Lehman: I think it’s going to be ongoing with each situation of each provider, I think.

Neuzil: Yes, that’s what I think.

Stutsman: I didn’t know.

Lehman: We are just trying to look at a course of action here that we don’t think something and find out that we haven’t run it by somebody and we were sitting back here a couple of months and saying that this won’t fly.

County Auditor Tom Slockett: I haven’t really discussed this with the Board. Early on I did make a suggestion last year to the previous Chair. I don’t know if you have ever discussed it or not. I don’t know why this approach wasn’t taken. But, what I suggested is that bills need to be sent out immediately to everyone that needs to repay the County and see if any of them, or what amount they can return immediately. Then, perhaps you could have your Executive Administrative Assistant, Mike Sullivan, negotiate the rest. That would seem an appropriate method of dealing with it. Have you thought about just billing the agencies to see what would happen?

Lehman: I don’t think that has ever been discussed. We’ve talked about at least notifying them of what their amounts were. I’m sure they are aware of it. I don’t think we’ve discussed that approach.

Neuzil: Does it have to come to that?

Stutsman: Well, I think there was a feeling among the Board members, or the majority of the Board, that we wanted to explore all options to see how we could have the least amount of impact for providers. That’s not what the Auditor wants to hear, but I come from a different point of view of non-profit providers and the dilemma they are faced with especially in these times. United Ways donations are down. This, for some providers, is going to be a real hardship. I’m interested in having a strong provider base in Johnson County. I have to weigh, what is our responsibility with the audit versus having a good service delivery system. So, I wanted to explore all possibilities so that this could have the least amount of impact. So, that is why we didn’t make a decision. I think we wanted to certainly be in compliance with what the audit said, but still trying to work out something that would be palatable to everybody involved.

Jenkins: We are very aware of difficult budgetary times, whether it is at the County level, the State level. We have had significant reductions in our own budget. We know what it is like to have to deal with those problems. Certainly, maintaining a strong provider network is important. But, it is also very important to look out for the interest of the taxpayer who ends up paying the bill. That is one of the reasons that I think it’s important to look at different alternatives with different providers if in fact, a one size fits all does not work the best. I think you need that flexibility. But, I think again, that the interest to the taxpayers has to be looked at. One of the things that comes out of it is when you recover from the providers, either through receipt of cash or through the provision of additional services. The taxpayers are benefiting. The providers can benefit as well, because whatever is repaid to you in cash, you have then to turn around and buy more services with. That’s the key to it, is providing future service that is going to benefit not only the taxpayers, but the recipients of those services. Now, if I might just add one thing to what Tom said. If you chose to send out a bill to each provider saying this is the amount that they owe, it would also provide you an opportunity to invite them to come in and discuss what their individual situation is and what they might have for proposed solutions if you haven’t already talked to them about that. It might be a way to start the process to arrive at specific individual solutions.

Lehman: We need to start the official contact. We just didn’t want to be real cold and have a bill show up without some type of explanation and we weren’t sure what kind of explanation we wanted to send along with it. As far as one size doesn’t fit all, I don’t get in on the individual contract negotiations, but this is going to be a real can of worms of trying to make the shoe fit for everybody out there. But, that might be the only option we have in some cases. They need to have that option rather than trying to collect on delivery of a bill.

Harney: Many of these providers spent dollars specifically for services for the needy, for the people that need assistance. Is there any consideration anywhere if those particular dollars were spent for those actual services compared to administrative costs or something other than that?

Jenkins: If they were providing services that you had already contracted for there would have been no additional payment. You did not receive anything other than what you had already contracted for. My initial reaction is no it does not make a difference.

Harney: Even though a service is above and beyond what the contract stated.

Jenkins: But they weren’t services that you contracted for.

Harney: Don’t take this personally, I just have a real problem with… I know in the audit it makes mention of bonuses and things like that. I turn around and read about the State and the Federal government providing I don’t know how many dollars worth of bonuses. It seems to be all right at that level, yet at this point we provide the services to our providers and help them along and have it rejected it kind of irks me. I’m not saying that against you.

Jenkins: I can’t address the Federal bonuses because I read about them in the paper like you do. The State bonuses I will say, and I’m not saying whether I agree with who got what amounts or anything else, but the bonuses were given under a plan that was in place prior to those bonuses being given. That plan had been in place for years. So all they were doing was following existing regulations and paying in accordance with that pre-approved plan. I see that as different than what happened here in the County.

Stutsman: Please bear with me too, I’m just asking these questions to not only from what has happened in the past but in the future.

Jenkins: I understand.

Stutsman: If we were to want to do this again, can you ever do this kind of program and it be within audit regulations? Like if we had had contract in part of the plan, then it would’ve been acceptable to do this? Do you understand what I’m asking?

Jenkins: There potentially could be situations where it would be appropriate if prewritten into the contract. What I’m thinking about would be like an incentive clause where for example, on road construction projects or building construction there is a date to be completed. But if it is completed early you can have in the contract that there will be in essence bonus payments, additional payments made because they have done something more than you asked for. In the case of the providers that you are dealing with, you could have potentially in the contracts, assuming that what is going into the contracts was already in the Mental Health Services Plan, you could have perhaps an incentive payment or some kind of additional payment if specified criteria were met such as you treated more people than originally contracted for. Don’t hold me to these because I’m just thinking of examples off the top of my head. Or if there were better outcomes than were expected or they were able to do things quicker or more timely than originally anticipated. I can’t say that it’s never possible. But it has to be carefully crafted and agreed upon ahead of time so that there are documentable measures and events that will trigger those payments.

Stutsman: Thank you.

Slockett: I think one thing that seems to me that hasn’t been decided in everyone’s mind is that you are going to accept that there is an obligation for repayment to the County. Maybe that is one reason that you weren’t willing to look at billing or starting the process because you haven’t really decided for certain and accepted that there is a necessity to do this.

Harney: I don’t think anyone ever said we were unwilling to…

Slockett: I didn’t say that.

Harney: Yes you did.

Slockett: That’s something that you need to do, is have the Board accept that something needs to be done about this.

Stutsman: I agree with what Tom is saying. I’m not sure that I’m willing to accept that because the problem I have is that to me the providers are the innocent victims. They did what the County asked them to do. That’s why I have a hard time accepting their obligations. I fully accept the County’s obligation or the mistakes that we made, but it’s just real hard for me. They did basically what we thought was OK. They followed the procedure that we thought was an appropriate procedure. It’s just real difficult for me to say…

Slockett: Good. This is what you should be talking about.

Stutsman: Yes.

Slockett: I’m glad you brought it up.

Stutsman: Well you brought it up, I just agreed.

Slockett: Well I want you to discuss this. I think you need to deal with this and not just let it go. The reason why you are not dealing with it are important to me. What do you say about that? They did get additional funding and payment they weren’t expecting to get. The idea is that the taxpayers should receive additional services when their money is being provided to agencies that provide services.

Thompson: They did.

Stutsman: Yes.

Thompson: There were additional services provided at least in some cases.

Stutsman: Or there will be in the future.

Harney: That’s what I was asking about the services that they provided. He’s saying if it wasn’t in the contract it’s not acceptable.

Thompson: But they weren’t in the contract so they weren’t in the plan and therefore they’re unallowable. But that doesn’t change the fact that the providers in good faith provided the services. That is unfair. That is hard to accept.

Stutsman: Yes. These are things that they just didn’t fabricate overnight. I’ve been in the County for a long time and the first thing that is always at the top of the list of unmet needs in the County is transportation. It goes without saying. So what did Chatham Oaks do? They put in for a van to help to address that constant need that we’ve identified over and over in the County. So then now we’re asking them to pay that back because of something that they knew would provide service to people in Johnson County?

Jenkins: That’s one instance. I think we have said that had proper procedures been followed…

Stutsman: We’ll do it next time.

Jenkins: …that some of these things wouldn’t have been a problem.

Stutsman: Yes. Exactly.

Jenkins: But you talk about additional services that were provided and in some cases there were perhaps identifiable things that were done. But there were other cases where there were bonuses, retroactive rate adjustments. It was a gift. There was nothing that was specifically tied to that money. It was simply you unilaterally chose to pay them more for what they had already done and not received any identifiable thing in the future. That’s where the taxpayers could’ve really benefited. I know of 2 ways to correct it. One of which is recovery from the providers. The other thing is, and I say this half jokingly, so please bear that in mind. If you want to hold the providers harmless then the Supervisors themselves could repay it. Now we know that is not feasible and is not going to happen. But that is basically the 2 extremes that there are.

Lehman: Give ourselves a pay increase but we have to document that ahead of time right?

Harney: Some of the providers I think want to make some comments if you don’t object to that. I don’t want anything to be argumentative if you have a statement or a question identify yourself and ask the question or make your statement.

John Watson: It’s actually not a statement or a question.

Harney: Identify yourself.

Goodwill Industries Representative John Watson: John Watson with Goodwill Industries. I guess just going back, who owes whom what? Does the County owe the State some funds because they were disallowed or was it all funds that were spent out of the fund that have to be replenished to the fund to make it whole. Who owes whom?

Thompson: If you recall there were 3 areas in the audit. Unallowable disbursements, questionable disbursements and disbursements for prepayment. The questionable and the prepayments were listed as assets in our year end report so those are… They go against this year’s budget. But the unallowable ones were listed as receivables.

Watson: Are any of those funds owed to the State or is it all just within the fund they shouldn’t have been spent so they have to be restored to the fund. Is that correct?

State Auditor Performance Investigation Division Director Annette Campbell: Right.

Watson: If we do not pay back, if the providers that do not pay, and if the money that was spent is not restored to the fund then the fund is depleted by that amount and there is that much less services that can be provided in the future. Is that correct?

Lehman: Yes.

Watson: I’m not sure there is a huge difference. The difference is that if we can pay it out of the 5 years I’m not sure there is a big difference doing that and just taking less service to provide over the 5 years, except that we can adjust our cost. We can adjust the cost. See what I mean? It all has to come out of the fund or be restored to the fund. Am I making sense, is anybody tracking what I’m saying?

Slockett: It’s a total amount of $424,606.30 that needs to be billed and received by the Board or repaid according to some of the other suggestions.

Watson: That is the amount that was paid to providers correct?

Slockett: Also just a quick footnote I think about $7,000 wasn’t included in your letter.

Thompson: Is that the HIPAA?

Slockett: No. It’s the independent contractor amount that was on page 35 of the audit. $7,012.50, you didn’t include that in your letter.

Watson: Those are not funds that went to providers. I’m just trying to make clear, what is it the providers are going to be asked to pay? Just the money that we received directly about the HIPAA, and the other expenses that were paid by the County that didn’t go directly to the providers. Who is going to repay that, to restore those funds to the… They’ve been paid out. The bills have been paid. That is my understanding. People have been paid and that money is missing from the fund. You’ve identified some money that the providers are asking us to pay that back. What about the other funds that have been saved for other purposes that have also depleted the fund and can’t be used for future services.

Slockett: It is all being billed except for computer equipment and software that the County is planning to use elsewhere. Some of the items are prepayments so actual goods and services were received for them it’s just that they’ll be expended in the current fiscal year rather than the prior fiscal year. But it’s all being dealt with.

Watson: Who is being billed for the HIPAA audit?

Thompson: The providers.

Watson: The providers. We didn’t get paid.

Thompson: For 12 12ths.

Watson: We weren’t paying for that.

Thompson: But in effect we provided you with the service that wasn’t in your contract. If we had contracted for it that would’ve been fine. But instead we didn’t and therefore you were given something that we paid for.

Lehman: It’s something you would’ve been required to do.

Watson: Well we would not have been required to do that. We would’ve had to comply with HIPAA but we would not have had do spend that amount of money to do that.

Reach for Your Potential Representative Ron Schaffer: We wouldn’t have spent $5,000 for a HIPAA, consultant no.

Watson: We had a free consultation from our national office for instance on HIPAA if we wanted that. We didn’t have to spend any money to get that. That was done because we were asked to do it.

Slockett: The problem is you were provided that service at that cost.

Schaffer: We weren’t asked to cover… I don’t think it’s fair to come after the fact and…

Stutsman: Actually Johnson County had a vested interest in having providers be a part of that process and be compliant with HIPAA because ultimately we’re all going to have to work on this together. So we all felt it was a good opportunity to have a training on HIPAA so we’re all on the same page thinking down the road it’s going to save the system some money.

Lifeskills Director Gillian Fox: I’m Gillian Fox with Lifeskills and I would just like to state that we would never have contracted with HIPAA consultants for our agency had it not been offered to us by the County. We would not have contracted for it and we would not have paid for it. We would’ve just muddled through it and figured it out. We couldn’t have afforded to do that ourselves and we never would’ve done that if it had not been offered to us. We graciously accepted the offer but we had no contract and we had nothing that stated we were purchasing that service. It was offered to us freely and accepted freely. I would just like to say that for the record.

Systems Unlimited Director Bill Gorman: Bill Gorman with Systems Unlimited. A couple of observations and a question and comment. I’m only addressing the grants not bonus or gifts, because I think that is the area that I think there is quite a concern. A couple of levels, what I had initially heard, please correct me if I’m wrong was that the grants were for stuff that were already paid for reimbursement. I know our grants we were not doing stuff that we were already contracted to do. We did stuff that specifically is not in our contract. It’s above our contract. As a matter of fact, 7 out of 8 of them, at least in our agency, because I can’t speak for the other agencies, 7 out of 8 of them are really prohibited to do that. Medicaid Waiver does not allow us to buy things for consumers. One grant we did microwaves and equipment to transition people to independent living. We can not go on Medicaid Waiver and buy those things for consumers. Consumers have to buy them for themselves. So the interpretation of that this was something we should be able to do within our rates of reimbursement, I don’t understand that conclusion at all. The technicalities of the Medicaid Waiver prohibit us from doing that. So I have strong concerns about that conclusion at least as it pertains to the grants. So that’s one piece. Now I’m hearing that the services provided even if they were OK services, or whatever you want to call that, needed to be a part of the management plan for Johnson County. Are we now saying that grants that are given out have to be in the management plan for Johnson County to decide to do grants? Can’t the grant proposal with the provider writing a proposal in response to an RFP be the proposal when Johnson County accepts the proposal, they’re accepting an agreement. Why wouldn’t that be sufficient? I mean there was a proposal. The Executive Committee of Johnson County Planning Council, which included Boards of Supervisors, agreed to those grant proposals. Why isn’t that an agreement that’s acceptable to the Auditor’s office to therefore not make it have to be paid back? To me that’s an agreement. The RFP, a proposal, the County accepts it. To me that’s an agreement. And then the provider has to provide whatever they said they would do under the proposal. If they didn’t then that is a different story. If they did follow through and provide those services then I don’t understand why it would have to be repaid. Plus I do agree with Mr. Watson completely, if the money is just going back to the County, we really are just doing a shell game here. Because ultimately we’re going to get less purchasable services, the County is going to buy enough services to make up for lack of the 400 and whatever the amount is, and the providers still going to get less services purchased from that in one way or another. So with the repayment plan, if it’s 5 years of 10 years it really is a shell game because we’re just giving money back to the County and then the County gives it back to us later. It’s just a circular process. But I really think the proposal concept with the provider responding to a proposal and an agreement, or acceptance on the County’s part should be an acceptable agreement. This is just a different way of dealing with it. I thought I should share that.

Employment Plus Representative Jay Mendenhall: I’m Jay Mendenhall with Employment Plus. I don’t know about anybody else in the room, but this is the first that I’ve seen this plan. So I was a little bit unnerved, when I came in and everybody was talking about interest rates and repayment schedules before the providers had even seen what we were supposedly asked to repay. I will say looking at this that I am extremely offended and outraged at the unfairness at this. I’ll just point out one of the many things. First of all, under the HIPAA repayment or the amounts that are listed here, first of all, I have right here in my bag emails that state that this was no cost, on more than one occasion, a no cost consultation. It was free. It was presented that way to us. We, as a tiny, tiny, little agency, we only have a hand full of people, 6 people that work at our agency. We are being asked to pay the same as Goodwill or Systems Unlimited. The exact same amount, even though the time that they spent at our office was maybe 10 minutes. We were told it would be no cost and we never ever could have afforded this. We never would have purchased it and we were in fact told that we didn’t even have to be HIPAA compliant. That was the results of the consultation for us. So I am extremely outraged and offended at this and I’m just going to leave it at that.

Lehman: That’s one of the reasons this is the first time you’ve seen it, because we weren’t sure how to approach it. But since we’re talking about it, that’s why that got handed out.

Mendenhall: I appreciate you handing it out.

Thompson: One thought that we had in our recommendation was that perhaps we could find some documentation for the amounts of time that those consultants spent at the various agencies and reallocate the amount based on something more realistic. What the Auditors did was, they said, 12 agencies plus the County got the service, so they divided by 13.

Campbell: Given that we didn’t have any other documentation. If we had had other documentation we also would have tried to make a more reasonable basis for allocating that.

Thompson: We’re not all together certain that we can find appropriate documentation, but I think we’re all willing to try.

Harney: Does anyone else have anything? Bob.

Reverend Bob Welsh: As you all know, I’m not a provider. I’m one of the taxpayers. OK. Where I question what you said is at the point of, why does it have to be for services outside the normal services? Why could I not, if I was a provider, and this month I provide 100 units of service at a contracted rate. I asked the County to reimburse me not for 100 units, but for 95 units and to use the unit not being provided toward the repayment.

Jenkins: I have no objection with that.

Welsh: It could be for normal services.

Campbell: Yes.

Welsh: OK. If you all said in relation to the HIPAA, I’ve heard a number of them express this, that that was something that you were going to provide them, the County, free of charge. Then it seems to me, you all have to eat that. So that just reduces your fund balance, $46,000.

Neuzil: They won’t let us.

Thompson: That’s not how it works.

Welsh: You will not let them?

Campbell: The problem still goes back to all these purchases were made in a very short time period with the focus of spending down the fund balance to ensure additional State funding. It wasn’t planned like Warren said earlier, it wasn’t in the Johnson County Mental Health Plan. We are required to go with that Mental Health Services Plan. The County is required to put that together every year and to submit it to the Department of Human Services. That is what the County has planned to provide services. It can be amended through the year. Certainly if grants weren’t included initially and if the County had gone through the process of amending the plan and saying we really want to provide some additional grants, we want to get some additional services for our people, we would have gone with that. If there had been a plan in place to do that, that would have been a different circumstance. The circumstances were the County had about 12 weeks, 10 weeks, to spend $1.3 million to ensure getting their State funding the next year. The intent of that spending was to spend the money, not necessarily to administer the plan. That’s why we’re saying that’s not an allowable use of public funds in this fund. The problem comes in almost any other department in the County, if we had had that problem… If Secondary Roads had to submit a plan and they just spent the money and it wasn’t in accordance to the plan there would have been other funds available to replace that. But the statute in Iowa requires that mental health expenditures only come from the Mental Health Fund, no other fund in the County. So you’re working between a rock and hard place. You’ve got things that shouldn’t have come out of the fund in the manner they came out and you don’t have any other funds to replace them with.

Welsh: So the $546,999 could be charged against the MH/DD budget this year.

Jenkins: I think it would take some additional research and consideration because I’m hearing things today that have not been brought forth before.

Mendenhall: Can we ask like what?

Jenkins: Well for example the fact that I’ve heard a couple of you say that you could have a HIPAA analysis done for free through other resources that you had available. That’s something… We weren’t dealing with that because we were dealing with what the County did and what the County spent. That’s a separate factor that may come into consideration. I don’t know exactly how yet, but it may.

Mendenhall: Can I ask, did anyone from the Auditor’s Department of the State, talk to any of the providers to ask us any of these questions.

Campbell: It wouldn’t have changed our position.

Mendenhall: But now you’re saying though, that you’ve heard things that you didn’t hear before, implying that maybe it would.

Campbell: No.

Jenkins: No. It would not have changed whether the decision of the County was a good one or not.

Campbell: Right.

Jenkins: It would only perhaps change whether you should be expected to repay any of it, but the decision by the County was not a good decision and should not have been made.

Campbell: We’ve also been told that there were other resources available, that other counties wouldn’t have used this format and other counties wouldn’t have spent this level of funding to get a HIPAA analysis themselves. We had to draw the line at the County level and couldn’t go to the provider level. First of all statutorily, we’re not allowed to. So that pretty much shuts the door there.

Fox: I just want to make one more statement. I’m Gillian Fox with Lifeskills. We were sent an RFP from the County for a grant proposal. We wrote a grant to purchase classes for Johnson County consumers. Community based classes through Kirkwood Community College, the Rec Center, Aqua Aerobics. What I’m hearing now is basically… Our grant was approved, we received funds. We started writing checks to educational organizations for actual classes. Our agency absorbed the administrative costs for this grant, so basically what we’re having to do now is pay back thousands of dollars in classes that we just wrote checks for, for consumers because the County approved a grant and told us we had the funds. I find that extremely unfair. It puts us in a compromised position because we had an approved grant. We followed the grant guidelines. We did everything that we were asked to do according to the RFP procedure. We have a letter that says your grant is approved, here are your funds with a check from our County Auditor. I just have to say that this is the same situation with asking us to pay back the HIPAA funds and asking us to pay back for all of these classes that we purchased specifically for taxpaying residents of Johnson County.

Welsh: Did you all approve the RFPs? The County Board of Supervisors.

Thompson: No, they were brought to the Executive Committee. A list was brought to the Executive Committee. No documents, but our plan only says that the Executive Committee will approve agendas. It doesn’t say that they will have any oversight over anything like grants. We didn’t have the plans… Our plan doesn’t have anything about grants in it, so that’s our basic problem.

Welsh: But the Board of Supervisors did not approve the grants.

Lehman: I don’t think we took action on them.

Harney: I don’t recall. Elaine?

Mental Health/Developmental Disabilities Director Elaine Sweet: May I just ask for some clarification. I’m Elaine Sweet head of the MH/DD. My experience with Senate File 69 in Chapter 25 goes back to the days when it was nothing but the brain child of the legislature. I’ve been working with this since 1995. I am very active on the State level. I attend a lot of meetings. I’ve met with a lot of other agencies. The Services Management Plan has never been introduced to CPCs as governing administrative costs. I don’t think you’ll find any County that their Service Management Plan talks about things like HIPAA and administration. It doesn’t do that. It talks about direct services to clients. The administrative part of Fund 10 comes through the budget process and the accrued budget limitations. Chapter 25 also requires stakeholder involvement. Everything that we did was a result of stakeholder involvement. Not just in that last 6 weeks of the year, but a lot of the things that we talked about were written into our plan. Things like the Quality Assurance Review were written in there as strategic goals 3 years ago. So it wasn’t like all of a sudden we were just trying to find a way to spend the money. They were all legitimate administrative costs that never before had been governed by the Services Management Plan. They were governed by the budgeting process and we followed all those rules. We had stakeholder involvement, we had Planning Council, we had committees, we had a public hearing. The community, the taxpayers that now seem to be the ones that are being disadvantaged had every opportunity to comment at the time and there was no dissention. So I’m really struggling with that part of it. It seems like, if that’s the way it’s supposed to be, then we should know that in advance, not retroactively.

Jenkins: The conclusions we arrived at and included in our report were based on preexisting law, preexisting Attorney Generals opinions. When I say preexisting, I mean they’ve been in existence for year and years. They weren’t something that came about in the last year or 2. So that’s what we based on our opinions and conclusions on.

Neuzil: You talk about public good. Do you think the things that they did were for the public good?

Jenkins: I know that what they do provides a benefit to the public. The question is and has always been whether the County satisfied its requirements to provide a public purpose.

Neuzil: Do you think they did that?

Jenkins: What you did not do as a County, is ensure that a good part of the money that you were giving to them was to provide service. You were paying them… I’m talking about the bonuses. You pay them not to provide any additional service. You gave them money that there were no strings attached to. You did not require them to provide certain things in the future to the County in return for what you were paying them.

Neuzil: OK. Now take the bonuses out. What about the other things. I’m just saying, are we saying that that’s not for the public good or is that good for the public.

Jenkins: Well, we’re talking about the actions of the County and whether the County’s actions were in accordance with the laws and Attorney General’s opinions that govern those actions.

Stutsman: Now I’m just asking so I understand. So something doesn’t have to be defined as what is public good as long as it fulfills the way it should be done. Am I tracking right?

Jenkins: There’s an Attorney General’s opinion that says essentially any expenditure has to be for a public purpose. In order for there to be a public purpose there has to be a benefit to the public. You have stewardship responsibilities. Had in the case of the bonuses, had you made a lump sum payment and said with agreement of the providers that this is for services that you will provide from this date forward to X date. You would have been buying service. There would have been a benefit to the money that you were spending. In this case and again I’m talking about the bonus, the retroactive rate adjustment. There was no additional service.

Neuzil: So if the bonus was written in then it would have been acceptable.

Campbell: As like an incentive type. Is that what you’re saying?

Jenkins: If it was…

Neuzil: Back to our shell game.

Jenkins: What it comes down to is specifying ahead of time what the obligations and responsibilities of both parties are. That is an objective you should have in any contract that the County has whether it’s for Mental Health Services, whether it’s for road construction, whether it’s for delivery of printed ballots or whatever.

Neuzil: Because when you talk about public good, it seems the message is that we were not doing things for the public good. That’s where I disagree. Definition wise, maybe it’s just 2 different kinds of definitions, but as far as I was concerned, the decisions that this Board made were for those of the public good for the people who needed those services and those services were provided.

Jenkins: In the case of the bonuses, again, I don’t know what the providers did with them. It comes down to a decision of the Board that you did not require them or agree with them that you were going to get some future benefits. That’s where the public purpose was not satisfied. It does not go back to what the providers did with the money. It goes back strictly to the actions of the Board or the County.

Neuzil: But as long as we put into our Service Management Plan that bonuses could be allowed as long as it’s incentive based, you could do that.

Thompson: So if we had said we’re going to have our management… What did the consultants do for us, what do you call that?

Stutsman: HIPAA.

Thompson: The review of our services by those consultants.

Stutsman: Quality assurance.

Thompson: Right, the quality assurance and then if everyone, the people who have the best quality assurance reviews will get additional money. Is that the kind of thing that would have?

Lehman: We need some type of measurable criteria ahead of time. You can’t do it after the fact.

Jenkins: Right.

Lehman: We needed something ahead of time that you had a benchmark, you fulfilled it.

Thompson: It should have either been in our contracts or in our plan, or probably preferably both.

Harney: Or is what he is saying, in essence we gave them what they call the bonus for services, but there was never anything in writing so it’s just somebody’s word. There’s no documentation that anything was every done.

Neuzil: You keep mentioning bonuses and I just want to know there’s more on the list than just bonuses. My point is, are we talking about apples to apples or are we talking about apples and oranges on the list here. In other words, are they all in the same category or not.

Jenkins: Do you mind trying to explain that one.

Campbell: They’re still on this. Again, stopping at the County level, not what actually happened with those dollars, whether classes were bought or equipment was purchased at the provider level. Stopping at the County level, according to the Board’s minutes, those dollars still flowed out of the County with the intent of bringing down that fund balance. That was our evaluation piece. Had the County’s plan said, we’ll do grants if we have the funding available at the end of the year. I would have been fine with it. But that piece wasn’t there and the piece that was there that really overrode it was the intent to just get that money out the door.

Neuzil: OK.

Campbell: Again, not going to the provider level. I don’t disagree that the services were provided at the provider level. I agree that you’re in a very tough position. That the County did get services for those monies. It’s just things weren’t done the way they were supposed to be done and because of the restriction on the Mental Health Fund in the statute, really is the tying point on this.

Neuzil: OK. Let me throw out something with all these different things. You’re saying that bonuses or incentives are potentially allowed as long as they are truly written up before hand. An example, if we said to our providers that if they’re HIPAA compliant, if they meet those standards that they would have an incentive. That would be an incentive for us as a County, that if they were HIPAA compliant that would save us in the long run and if that was written out, then would they be allowed then an incentive and a bonus.

Campbell: In that case, that’s a hard call to make, because they’re required to be HIPAA compliant anyway with the Feds. That’s Federal regulation, everybody in the business is going to have to be. So the County really gets no additional benefit by them being HIPAA compliant. If you want to make them compatible with your system, to exchange data, that one I’d say yes. You’re getting a return there. They’re meeting you half way. It’s appropriate to compensate them for that, but given the nature of the business…

Jenkins: If the provider is paying the cost to become compatible.

Campbell: To become compatible, right. Does that answer your concern?

Neuzil: Yes. It seems like there’s a lot of opportunities out there.

Campbell: Yes. I think we are dealing with different things. We’re dealing with block grants, the bonuses. You’re dealing with grants that were for a specific thing. You’re talking about having different options with different providers. You may want to look at different repayment options given the type of money. You’ve given a bonus versus a grant for a service. It’s just something else to consider.

Thompson: In the case of the HIPAA, if they pay us back for that, can they then include that in their audit costs for their rates next year? It is something they purchased.

Campbell: I would say, if I were their firm, if they’ve got a supported expenditure and they have a benefit for it that’s related to delivery of service, I don’t see why not.

Harney: Steven.

Trefz: I’m Steven Trefz, Director of the Mental Health Center. I have another meeting I have to go to, so I appreciate your time here today. Just a segue on your last comment, it might be helpful for us providers if perhaps helpful to the Board of Supervisors if you could give us names of other providers and other Boards of Supervisors that have been audited to this degree and the counties that we could work with them to resolve these problems much as those other counties have resolved those. Because I’m sure there are probably other counties that you’ve worked with to this degree to help them resolve these issues that they’ve tried to spend down. So that might be something you could help us out with.

Campbell: We’re currently working with Human Services. We believe this is not a Johnson County isolated instance. Human Services, we believe also has some oversight and we are working with them to provide that oversight. There are a lot of parties involved at the local level, at the State level, so that is something that we are considering. I don’t want Johnson County to think they are the only ones that are being reviewed.

Trefz: I didn’t think that for an instant. I’m sure that there were other folks out there that had been looked at too. I guess one of the things we’re talking about is taxpayer benefit. I’m assuming that’s Johnson County taxpayer benefit as well as Iowa State taxpayer benefit. I think one of the things that was attempted by the Board of Supervisors, was to get those Johnson County taxpayers the most benefit that they could by getting under that fund balance. Whether it was done in an appropriate manner or whether it wasn’t from an accounting point of view… I’m beginning to understand that it wasn’t. If we could have gotten down under that 10% if Johnson County taxpayers would have gotten an additional $600,000. Because we didn’t get under that the taxpayers of Johnson County and the beneficiaries of that, it seems are being penalized the $600,000. One of the things that we do at the Mental Health Center is we manage the Johnson County Mental Health Medication Fund. One of the things that we have done in that process is go to, I believe its 10 pharmacies in town that then write prescriptions. We said to those pharmacies, we’re going to be bringing a lot of business to you, could we get a 10% discount on the prescriptions that you write? Johnson County pays the bills for those prescriptions. The pharmacists being good businessmen and businesswomen said sure, we’ll give the County a 10% discount because we know there’s going to be a lot more volume coming in. Rough calculations were that we saved the County $32,000 by going to the pharmacies and negotiating with them a 10% reduction in those costs. I think that may be one of the things that we certainly didn’t put in our contract with the County to say we’re going to go to pharmacies and negotiate a lower rate for writing those prescriptions. There is no benefit to the Center. There’s certainly a benefit to the County and to the taxpayers, but it wasn’t written in a contract. It was just something that we said we know there’s a limited amount of funds to go around. We know that medications a very important thing. If we can save the County some money, then we’re going to do it. It’s good business sense and getting more benefit for the taxpayers. I suspect somewhere along the line the County Board of Supervisors or CPC may have said boy that saved us a lot of money. It wasn’t in the contract. We didn’t negotiate that, but we certainly appreciate that and acknowledge that. I think another thing is there hasn’t been rate increases for providers here in Johnson County for 3 years. If in fact, the "bonuses" were some acknowledgement that no rate increases had been given for 3 years, those bonuses were probably a pretty good buy to the taxpayers for not getting any rate increases for the past 3 years. So just comments and I certainly do appreciate you coming out and helping us resolve this because it certainly is one of those things that is complicated. We appreciate all the help we can get from the State in regards to sorting out these difficult issues. I think that in a sense is saying, now we’re in a negotiation phase, how are we going to get this done so providers can be supported and we can get the books balanced and we can get the best bang for the buck. So thank you for coming out today.

Neuzil: So are there any counties you’re doing this too?

Jenkins: I’m not sure what you mean by we’re doing it to.

Neuzil: Helping.

Stutsman: Yes, helping. Clarifying.

Neuzil: Are you auditing any other counties?

Jenkins: We audit about half the counties in the State.

Neuzil: To the level that you’ve done to Johnson County? To the level that you’ve audited Johnson County?

Jenkins: We audit based upon what we find. So we have found other things in other areas as significant to them as this is to Johnson County, but we’re not looking at every other county in the Mental Health Fund to the degree that we have Johnson County, because we did not find the same situations.

Neuzil: But there are other counties that you’ve audited the Mental Health Fund in this past year?

Campbell: We have. Because of the way the legislation was written, we have changed our audit procedures for our clients to look at the nature of the spending during the last quarter of Fiscal ’02 of our clients. We have not found any of our clients that have had this problem of spending this level of money during that time period that would lead to subsequent additional procedures.

Lehman: All counties are required to be audited. In our case, we hire an independent firm, Eide Bailley. But when we first sat down even with a representative of Eide Bailey thought some of this should have been allowable. So I mean your still going in? Are you looking at some of the Mental Health budgets in counties that are done by other firms?

Jenkins: We look, throughout the course the year, we look at work done by CPA firms. That’s one of the things that as we look at their 2002 audits that’s one of the things that we will be specifically looking at. Is what have they done to determine if there is a similar situation in other counties.

Lehman: We might get to the point where misery loves company, but I didn’t know maybe you’re going out and checking everybody because of the problem that’s arose here and other places because of this legislation. You’ve got enough to do.

Jenkins: I think we’re better off looking at a representative number first to see what the situation is and then reassessing to see if we need to go out and do more.

Harney: I guess I’m uncomfortable standing here pointing fingers at other people. We need to resolve the issue here at hand. Do you want to go ahead with your?

Mendenhall: Thanks. I wanted to make a comment about and this is probably to the County. But about the repayment. Throw out the bonuses, I wish we could just get those off the table so we’re not keying on them. But the grants, so for things, for instance in our case we bought a computer for clients to use to look up jobs on the Internet, to do their resumes and probably the HIPAA stuff too would apply to this analogy. What it feels like is that we’re told you can have this free service, this free consultation on HIPAA, you can have this free computer. So we say well great, so we provided the service. Now we’re being asked to pay that back or in some cases, money we didn’t even get we’re being asked to pay back because supposedly the County made a mistake. Now if we follow that argument to its logical conclusion, when we got the computer that we got for the grant, we said to clients come in, you can use this computer free, you can do Internet time, you can do your resume on it. If we follow this to its logical conclusion now, we could go out to all the clients that we allowed to do that and say oh by the way there was a mistake made so we’re going to bill you at a dollar a minute for all the time you were on that computer or the time you spent on the resumes or the paper you used and all that kind of thing. It’s this game of who is left holding the bag and if the providers are going to be asked to be left holding the bag. What’s to prevent us then from going out to all our clients who were actually the ones that benefited from this and say OK we need you to pay us back. Then again, it circles around and just gets nowhere. So I’m just…

Lehman: I was going to say, this might be a case for you and maybe some other people where Mental Health buys the computer back, we amend the plan, put grants in it and you buy it back. I don’t know if we’re allowed this type of… To get the end result, but you’re saying we didn’t do it right the first time. The other portion of the County, Information Services is buying the computers back from… I don’t know if there’s ways.

Thompson: But we haven’t agreed on that yet. That’s just the proposed…

Lehman: I’m just saying there’s a way… It wouldn’t take care of all of your problem, but… Other situations, I don’t know. That might be allowable, but that’s something that we’d have to propose.

Thompson: Would the computer be like the HIPAA. Could that be an expense in their next year’s expense report or this year’s? After they pay it back?

Jenkins: We would have to look at that in more detail.

Lehman: What you’re saying is it would raise their rates for doing business, they’d be reimbursed, but it wouldn’t be in one year.

Mendenhall: Except, can I make a comment about that? Based on the conversations you’ve had. Our costs have nothing to do with the rates we get. We’ve been through that whole issue already because what we put in our CRIS reports has nothing to do with the rates we get, so that’s already been established. So the argument that we can put this expense into our budget for next year and that’s going to somehow benefit us, is false.

Schaffer: Can I address that too. Ron Schaffer from Reach For Your Potential. Yes, we can put that in our expense report, but it would be considered administrative costs and so it wouldn’t be a direct cost when we’re doing our cost report. So it wouldn’t be per dollar per dollar when you’re talking about that. Like the computer or the… One of the grants that we got was for moving the consumers this summer from non-Section 8 housing to Section 8 housing. It was not in our contract with the County. Moving consumers was not in that contract. I backed out all the Johnson County clients. We only applied for a grant for Johnson County clients. So what he was saying, are we going to pass that on to our clients? I go back and say no, we spent $4,000 moving you. This was not a part of our service contracts, so now you’re going to pay this back to Reach For Your Potential? It doesn’t make sense that you’re asking us to pay this back when we…

Lehman: Did it in good faith.

Stutsman: You did what you were asked to do.

Schaffer: Exactly. The same for the HIPAA. How come you’re not going back and asking the consultant to pay for the cost? Why not ask them to pay the money back? You’re asking us. This doesn’t make sense.

Harney: Bob?

Welsh: What I gather the original statement was there was 2 ways that this $417,000 could be done. It could be paid by the County or by the providers. I think you said…

Jenkins: Not by the County.

Stutsman: By the Board of Supervisors.

Welsh: By the Supervisors. That would be through the MH/DD funds?

Stutsman: No.

Neuzil: It’s out of our pocket.

Lehman: Pass the hat.

Thompson: Personally, out of pocket.

Welsh: Oh, personally. That’s an idea.

Jenkins: Those are the 2 extremes.

Welsh: Let me tell you what I came up with. The question seems to be much more… I appreciate Mike handing this out. Column 1 and Column 4 really seem to be where there’s the greatest question. It seems to me when I listed to the providers question Column 2 and 3, have some very logical rationale. Is one alternative to say Columns 2 and 3, which total $190,830 will be absorbed out of the MH/DD Funds. Why not?

Thompson: That’s what’s not allowable. We tried to do that. We paid it out of the MH/DD Fund. It’s not allowable out of that fund.

Stutsman: But the State dollars. We didn’t get any State dollars. Isn’t that part of…

Neuzil: No, we got $630,000 less in State dollars, that they took.

Stutsman: If this were just County dollars? Was the audit triggered because State dollars are involved with this?

Jenkins: No.

Neuzil: I think it is.

Jenkins: It was triggered because of the items that were in question.

Welsh: Let me ask another question. I guess this has to be addressed to you. If the County and they’re the County, we are citizens that elect them and they’re responsible to us, but they make the decisions on our behalf. Sometimes I agree with them, sometimes I don’t, but that’s the thing. How could we do it if the County said, on Columns 1 and 4, let’s look to the agencies to repay us on a 5 year basis as you suggested at a low interest rate, how could Columns 2 and 3 be addressed without it coming out of the pockets of the Board of Supervisors? And without coming out of the providers reimbursing for something on one hand they didn’t need?

Slockett: I’ve got a question and the answer might be useful. That is, my understanding is that the Mental Health Fund is not limited in funds it can receive except for additional tax dollars. So if the County could identify non-tax income to put in the Fund, would that be acceptable in order to reimburse for some of these costs if that’s what they chose to do?

Campbell: Are you talking like a one-time gift? I mean is that the essential nature?

Slockett: Perhaps from one of the other funds.

Lehman: Donations?

Neuzil: No. It’s OK if it’s our pocketbook here, but not…

Slockett: I’m trying to figure out the answer to the question. For example we have funds that…

Neuzil: Trust funds.

Slockett: …trust funds that the County has available.

Campbell: There were no tax dollars involved in that? If I remember correctly, that was like proceeds from an agreement with the Federal Government.

Slockett: Coralville that’s where the funds were from, the roads.

Stutsman: But it’s the original trust, but then there’s interest monies that are there.

Slockett: It’s not tax dollars.

Thompson: But is there $417,000?

Jenkins: It would depend upon what the trust could be used for. If the trust could legally make a donation to someone outside the County who could then donate it back on behalf of the providers, then… We’d have to run it by the County Attorney obviously. There would be some possibility, but the question would be whether the trust could legally make a donation to someone outside the County.

Slockett: It’s County funds.

Thompson: Why couldn’t the trust just pay the MH/DD Fund?

Stutsman: It’s not the principal, it’s the interest that is earned from the principal.

Jenkins: And the trust is set up for what purpose? Is this from the Coralville Lake?

Stutsman: It was a one-time settlement and the County has never used those dollars for damage to roads. Instead, we let the money sit there and then we collect interest on that. We use the interest for gravel on the roads. We used the interest one time to pay back a settlement.

Neuzil: We’re going to use it to pay off that land.

Lehman: Borrow it.

Neuzil: We’re going to borrow it. We’re not going to use the whole part.

Slockett: It was also used as restoration funds for the old insane asylum at the County facility.

Stutsman: Was it?

Lehman: The principal’s never been touched, but interest.

Neuzil: You’re just talking about the interest.

Slockett: It’s traditionally been used… Well that’s a Board decision to keep the principal, but you could spend the principal too if you wanted to. What the Federal Government did, is they supplied it and said this is repayment for damages done by changing level after the Coralville Reservoir was built. They made it clear that it was a one-time payment and there would be no additional payments coming to us.

Harney: It was put in place for damages plus future damages.

Slockett: But they said that it could be used for any County purpose.

Stutsman: Yes, I was going to say that there were no restrictions that it had to be used to fix the roads there. That was our choice if that’s what we wanted.

Slockett: Yes, that’s been a traditional decision, but it’s not a limitation.

Jenkins: It would I think ultimately come down to a legal decision because the attorneys would first have to decide is there a public purpose to satisfying a liability of a private provider. Secondly, is the benefit that the taxpayers would otherwise receive from the other things that you would spend that money on, whether that would be greater than satisfying the obligation’s of private providers. Because even in that proposed or potential transaction, you still have to look at what is the public purpose and what is the benefit to the taxpayers. So which one is better?

Harney: This is kind of off the path a little bit here. Every decision that was made on providing these funds to the providers was done in open session in the Mental Health Planning Council. The providers had input, citizens had input, the Board of Supervisors was part of the Planning Council. There was verbal and there was discussion on what this money was going to be used for when it was given to them. Are there any procedures for review that might allow some of these expenditures to be acceptable? Whether it’s by provider base or case by case, whatever it might be.

Jenkins: Well, let me first address the fact that all of this was done in open session, which I think is the way it should have been done. Had it not been done that way we would have had other items to cite, but the fact that it was done in open session with input from different people does not mitigate the other situations.

Harney: I understand the contractual part of it. But I’m not sure if it’s in all the minutes or not, but at least to me I thought we had some sort of verbal contract that this is what we’re going to spend it for and this is what it’s for even though it wasn’t a pre-written contract.

Jenkins: At this point, I’m not sure that there is anything that can be provided to us to change our opinion about what we’ve reported on. I won’t completely rule it out, but we took an in-depth hard look at what happened and we made decisions about what we believe the proper conclusions were and have reported those. If you and the providers can go back and renegotiate some things and enter into new agreements, perhaps some of those can be mitigated. I won’t rule out that possibility. But I think again, that’s why it’s important for you to discuss with individual providers, what individual circumstances and situations are.

Harney: I guess that’s what I’m asking. What do we need? It’s going to be very difficult to come up with the dollars, to get them to pay those dollars back. I think some of those are very legitimate expenditures that they made. But if there’s some middle ground, granted, hey I’m not going to do it again. I don’t think there was any intent of defrauding anyone or making false expenditures. But the same time I think there needs to be some type of middle ground, or perhaps if there is some good basis for this that perhaps we can come to some type of agreement that OK this could be acceptable or we can do this or do that. I’m not sure how to go about doing that.

Jenkins: Again I think it just depends on you sitting down with providers. There has to be in essence a quid pro quo that you’re not just forgiving something, but there is an equal exchange of benefit to both sides and not something based upon what happened in the past.

Thompson: Which means that in order to get the money, the agencies have to incur new expense, so it doesn’t help them. We went over and over this in our meetings at the County Attorney’s Office.

Harney: Is that right? I thought perhaps there was some type of reviewing where the expenditures may have gone that maybe some of these may be acceptable.

Jenkins: Well one possibility that was mentioned was if one of the agencies bought a computer. Possibly if the County buys the computer back from them. It would probably be easier if there were physical assets involved as opposed to services, but that might be a case where you can enter into some new agreement, which would mitigate what happened in the past. I won’t rule it out.

Thompson: So like the van for example. We could buy the van back.

Jenkins: Potentially. I won’t say absolutely and certainly the County Attorney’s Office is going to have something to say about it.

Assistant County Attorney Janet Lyness: I was going to ask you a question about that kind of thing because it seemed like the problem with the grants, not talking about the bonuses, was a lot of those, basically those things were not covered in the Services Management Plan. That seemed to be the big objection.

Campbell: Well just the provision for grants in total.

Lyness: So if we amended our Services Management Plan and let’s say the van, using that just as an example, if that was sold to somebody, we could then have a grant and we could… If we amended our Services Management Plan to allow for grants, we could then again take requests for proposals and they could ask for that money back and repurchase that van. Would that be acceptable as long as we had it in the Plan, that the Plan had been amended to include that kind of thing? Would that be acceptable? I mean it would be like…

Jenkins: You would have to be very careful that it did not come across as having pre-ordained conclusions.

Thompson: Could we own the van and lease it back to them or somehow allow them to use it?

Campbell: For continued services. For continued transportation services, something like that.

Jenkins: Potentially. You would have to address the liability issue. If they’re leasing it from you, who has to maintain the insurance, who is liable for repairs, that kind of thing. Obviously there are other factors to be considered, but yes, it’s a possibility.

Lyness: The same thing then for other, I mean I think other parts of the grants, like I think Lifeskills, she was talking about… I don’t think all of those expenditures are what we had initially offered the grants for, for educational services. If those haven’t been used, we could still do… If we wanted to amend our Services Management Plan, say one of the things we’re looking at is classes, they could apply again and we could fund the rest of those.

Campbell: But again if they haven’t been used, the cash should be there. They can give it back to the County. You can, if you amend your Services Plan and still want to provide those services, yes, you could do that.

Lyness: Can I ask another question with the HIPAA. One thing about HIPAA is it’s not unique to Mental Health/Developmental Disabilities. It is one of the things that the whole County is having to look at.

Campbell: Right. That’s how other counties are handling it. They’re not handling it on a departmental level, but handling it as a Countywide project.

Lyness: Because it’s not specifically a Mental Health thing, would there be any problem with having funds to pay for the HIPAA compliance, the County’s part of it let’s say.

Campbell: You would have to look at what those… I’m not sure if those consultants’ work went beyond the Mental Health cases.

Lyness: But it’s kind of like it’s a whole County thing that has to be done. Rather we hire a consultant for the Jail separately versus Mental Health versus Public Health. I mean it’s something that’s a good for the whole County. It’s something the whole County has to be in compliance with. We’re going to have a plan that encompasses all of the County so that it’s not a unique plan really for MH/DD versus Public Health etceteras, couldn’t we count that and pay for that HIPAA out of non-Mental Health/Developmental Disabilities funds anyhow.

Thompson: What they disallowed was the part we spent for providers, not for the County.

Lyness: Right, but there wouldn’t be any restriction would there if it wasn’t MH/DD Funds about the County deciding that they were going to pay for additional things.

Jenkins: There would be a problem with the County paying for services to outside organizations.

Lyness: It gets back to public good then? OK. I’m trying to figure out some way, because that’s not a unique thing to Mental Health.

Campbell: Right. I agree.

Lyness: Just because we hired them from Mental Health doesn’t mean that we couldn’t have… I mean we could have hired the same consultants to do 5 different County departments.

Campbell: Right.

Lyness: If they said they needed to go to those providers to be able to give us our product that we wanted, figuring out how we could do that if there was some additional expense that we could bill to the County, not out of the Mental Health Fund.

Campbell: Yes. To be honest we didn’t get into the work product to know if it extended beyond just the Mental Health. It may well have looked at other issues with the County. I’m just not able to answer that.

Schaffer: Could we back up to the HIPAA also. In terms of the amount of time spent, they were at our agency for one hour. I don’t know how much time they spent with the County, but I don’t think it’s fair that we pay 1/12 when the amount of their consulting time was different for different agencies and for the County and the agencies.

Lehman: That’s just the scenario we put out, but one of the things that we’re trying to do is go to that consultant to find out, do you have any documentation of how much time you did spend so we could prorate it out and make it fairer. We haven’t got that done. That’s why a bill wasn’t sent to you. We’re still in the thinking stages.

Schaffer: No. I’m just looking on here where it says Reach has $4,000 that we owe and I don’t…

Harney: That’s why those were not distributed before, is because there was no actual dollar to who should really have how much for what.

Mendenhall: Could you chose another way to distribute that based on the size, for instance on how much money we get in contracted fees from Johnson County and prorate it on that basis or something.

Lyness: Yes. I think there’s definitely different ways of looking. I don’t think that you have any dispute that there’s different ways of breaking up that HIPAA bill. That’s, we’re just trying to figure out an equitable way of doing that. Because I think from what we’ve heard from the consultants at least, in terms of what they would have charged the County had they not gone to any provider… Let’s say we said you can’t go to any provider. They would have charged us quite a bit more than 1/13 of that cost. We’re trying to get it so that we can figure out what that cost is and then try to figure out if they say they would have had to have spent or that they spent additional funds that they wouldn’t have billed us for because they went to the providers, then figuring out how to equitably divide that. But I think that’s one of the things that’s going to definitely… Those numbers that you see on the sheet are probably very, very likely going to change. I would think that the amount for each provider is going to go down considerably once we get that all straightened out. Because you don’t have any problem. You just did that because it’s like 13…

Campbell: Because like you said, there’s been no other source right now to base it on. I think we may have even said that in the report is that the County needs to consider a more reasonable basis.

Trefz: Steven Trefz again. One of the things that we were talking about earlier is that there weren’t contracts in place for some things that we’ve gotten. If the providers didn’t sign any contract for the HIPAA audit, are we responsible for any of that HIPAA stuff? I didn’t sign any contract for anything.

Neuzil: Good point.

Trefz: I didn’t submit an RFP. I didn’t submit anything. I think the contract was, somebody else signed it. I didn’t sign it. So am I responsible for any of it? I think that’s what we were taken to task for before, that we didn’t have contracts in place, signed, sealed, and delivered. So I guess I would say on your advice, hey I didn’t have a contract, I’m scott free on this one. But I don’t know.

Lehman: County Attorney?

Lyness: I think you make a really good point Steve.

Welsh: That does seem to me, at least from my standpoint. I can tell you what’s been clarified for me, is all 4 of those categories, not necessarily need to be handled the same way.

Harney: I would agree. I think I could pass that all back to the…

Welsh: Number 2, the way you deal with each provider does not have to be the same way. I think the 3rd one, which Janet has referenced to and Tom, is that there are probably some creative ways of legally juggling funds to cover some of the expenditures in the $417,000 other than from the providers.

Thompson: We’re tried really hard to think of them Bob.

Welsh: I know. But I’ve already thought about this since the interest from the Coralville… I’m just saying I think that those are feasible alternatives that could be examined.

Slockett: What we’re really suffering from in resolving this is the lack of specificity because we’re talking about hypotheticals so often. It’s not a good idea to answer in terms of hypotheticals, but if we bill the agencies and then we had specifics to deal with and we could work with the County Attorney’s Office and Eide Bailley and the State Auditor’s Office. At that point, having specific information I think it would be easier to answer these types of questions.

Harney: I know what you’re saying Tom. I agree, but at the same time I can’t see one provider having a specific issue here or maybe having 3 specific issues that they feel should be acceptable and want to have some input and discussion with them and Eide Bailley. If you do this with every group, you’re going to be days and months trying to work through those on a one by one basis. I’m trying to find an equitable way of doing it that would be proficient and actually be up front and to meet the needs that we need. We need to start somewhere. I’m not sure where we go from here. That’s what I’m looking for, is some kind of a direction I guess.

Slockett: The problem is the one size fits all problem then applies. There may be some agencies that could just pay back a big chunk of what they owe and then you’d be dealing with a smaller amount. Others may have to struggle with the whole thing. Then it seems, I’m not sure but it may be in cases that where specific services were provided and they can be documented that, we could at least look at a new contract approving that and putting it in the plan and so forth. I don’t know that. It might not work, but there might be a way once you add specifics of addressing some of those points.

Stutsman: I understand what you’re saying Pat. I don’t think we have a choice. The only way we’re going to do this quickly and without a lot of individual working with every agency, is if we just say here’s your bill and pay it back in 5 years at 3% interest or whatever.

Thompson: We’ll sit down with them and work it out.

Harney: What about the ones that didn’t get those services.

Stutsman: No, I’m saying that’s the quick and easy way to do it otherwise we are going to invest immeasurable amount of time and quite frankly I don’t think we have a choice. I think we have a responsibility to the providers to work it out as best we can. I agree with Tom, send out the letter and let’s get working on it. Take each individual agency and sit down.

Neuzil: I agree. I’m on your side.

Stutsman: That’s what we have to do. We have to just say where you’re at and go from there.

Watson: There’s some work still to be done on HIPAA.

Stutsman: Yes.

Watson: Including consideration whether we really do owe that, period.

Welsh: I would eliminate that from the bill right now.

Stutsman: I don’t think we can, can we?

Thompson: No.

Harney: It has to be paid back somewhere.

Stutsman: It has to be part of the discussion.

Welsh: Probably Janet can figure out a creative way of handling that $46,000.

Slockett: I don’t think you can make that assumption.

Welsh: Well I’ve got faith.

Neuzil: And he’s a minister and he’s got faith.

Stutsman: You know Bob, if we’re willing to work it out. If we’re willing to work it out, we can work it out.

Jenkins: In regards to the HIPAA, the first thing that needs to be resolved is can you get any better information from the consultant because as we said we just divided it equally. We have no objection. We think it’s, in fact, appropriate if you have better information to divide it up on a better basis, do it. Then you will find out what the real amount in question is. It may not in fact be the $46,000. It may be a much smaller portion.

Mendenhall: I disagree. Wouldn’t the first order of business in that be to decide whether if we owe anything at all. Steven’s point about whether there was a contract. That should be first, not how to split it up.

Jenkins: No. I think the first thing is to find out if you can from the consultant, what would it have cost for them to do the County alone. Maybe, it’s $45,000 out of that $47,000. Then you’re trying to look at how to resolve $2,000 as opposed to $46,000. Maybe it’s a matter that the County Attorney can say that is something that provided a benefit to the County because they knew what your HIPAA situation was. It may, in which case, that you wouldn’t have to pay back anything. Maybe the County Attorney has a position that you’re not liable for any of it anyway. I think there are some things that could still be pursued there to find out where the negotiating point really is.

Neuzil: But the point is, I don’t think it’s appropriate to send somebody a $5,000 bill if that’s what we don’t know if the bill is.

Harney: Inaccurate.

Neuzil: You know what I mean?

Harney: I guess I kind of question what you just said there because if you’re saying this is not allowable and need to be billed back, how can the County Attorney say it’s forgiven.

Jenkins: No, I’m saying if there is better information than we had, then that ought to be used. We acknowledged that in our report. So find out what the split really would be if the consultant can tell you, with detailed records if possible or with the best educated information they have.

Lyness: Go back to one other thing too, because you were talking about… Tom was talking about trying to use the interest. I think we had addressed this in one of our meetings before. The concern that you had expressed then is Chapter 331.424a of the Code about appropriations specifically authorized to be made for the Mental Health, Mental Retardation Developmental Disabilities Services Fund shall not be made from any other fund in the County. Because when we had addressed that issue before in some of our meetings, that might… I mean I would love it if we could just pay all of this back out of that interest. From what you were saying a minute ago, how does that fit into this?

Campbell: I think you have to look at the definition of what County Fund is there. There are a lot of different contexts that’s used in the Code: General Fund, Mental Health Fund, County funds in term of dollars.

Lyness: OK. So that’s what you’re talking about Tom, if it’s not tax money, that might be a possibility.

Campbell: That’s the first issue you need to look at. Then, like Warren said, there may be restrictions on the trust that you need to consider also.

Jenkins: Plus you also have to look at the public purpose.

Lyness: Right. I mean the public purpose issues, recognizing that.

Slockett: What was the Code section again Janet?

Lyness: 331.424a sub-section 5.

Thompson: Talk about the public purpose a little more. What would we have to show to verify the public purpose?

Jenkins: I’m sorry?

Thompson: What would we have to show to verify the public purpose?

Jenkins: Ideally what you would have is a… If you were to do this, if the County Attorney’s Office decides that it’s legal for you to do it and you choose to do it, then you should have some type of recitation in your Board minutes where you’re going to approve it, to say why you’re doing it and why the public purpose of any other uses of that money… Why it’s more important to use it for this purpose than any other benefit to the citizens.

Lehman: Do you agree?

Harney: If we use that money for paying back this, is there anything illegal about us paying that fund back that we borrowed it from or took it from like the Road Trust Fund?

Thompson: Where would we get the money from?

Harney: Eventually pay back so much every year or whatever.

Thompson: From where?

Harney: Your General Fund somewhere.

Thompson: No.

Harney: So if you take it from the Road Trust it’s gone.

Slockett: No. We’ve put money back.

Harney: That’s what I thought.

Slockett: We’ve spent down the principal in the past and then replenished it. It was a loan.

Harney: That’s the only way I would consider it.

Stutsman: Where would we pay the loan back from for the Mental Health Fund?

Budget Coordinator Jeff Horne: We would take it straight out of the General Fund.

Neuzil: No, but the use of…

Thompson: The General Fund is tax monies.

Slockett: Another possibility would be to somehow isolate revenues that aren’t tax dollars. I don’t know. I’m thinking out loud here, but I still think it would be a lot easier to think these things through if we knew specifically what we are talking about.

Neuzil: See the faith thing’s starting to happen.

Slockett: The what?

Neuzil: Bob’s faith in you is starting to happen.

Slockett: No. The notion that you can just juggle things around and make this go away is something I don’t have confidence at all in. I don’t want anyone to feel like they’re not going to have to deal with this.

Lehman: I think as we work this thing through we’re going to have to look at scenarios. Probably send them, make sure that we’ve got the green light so that we’re not sitting back here again arguing about why we can’t use a certain scenario possibly to have providers pay us back if we choose that route.

Slockett: I think if we could look at the specific situations and come up with something that the County Attorney felt would be acceptable to him, then we ran it past Eide Bailley and Annette and Warren. That would be a way to figure out what we can and can’t do. So we’re not just mired to a hog feeder.

Harney: So if we sit down with each of the providers and say you spent dollars for this, this and this and you can document what you spent your dollars for. At that point, we would sit down with the County Attorney and the Auditor’s and say now is any of this allowable?

Slockett: Just say this is what they spent the money on that they received that we feel they owe us. This is documented and we know what fashion it can be documented. Then it would be easier to figure out if there’s any way to handle it other than just billing them for it. Warren also talked about tying that payment to revenue streams so that it would come due immediately if they no longer had a working relationship with the County. But if they did they would know that they are going to continue having a revenue stream so that they will have a capability of paying it back to us in terms of either revenue or services that they can provide above what they otherwise would in that amount of money. I can’t think of an easy way to do this without going through that process.

Thompson: So perhaps if we didn’t call it a bill, if we just notified each provider including the ones who aren’t here today about the amounts that are now on the list and said that we would meet with them individually to work out a repayment plan.

Gorman: I would suggest almost the opposite strategy. I have heard every single Board of Supervisor, correct me if I’m wrong, I’ve heard the State Auditor say that this is a County mistake, not a provider mistake. I would suggest the County make every effort to look for alternative strategies to fix this or reduce the total amount. First get it down to as low as possible, whether with the trust. Find out if interest from the trust fund is possible, I don’t know what the amount is. If you looked at those strategies and get the dollar amount down to whatever you can get it down to, then go to the providers. I think it’s wrong to go the providers first because I think it puts the providers in a really strange situation. I think you understand what I’m about to say, those that are being more magnanimous will say we’ll go ahead and pay back as much as we can. But another provider can quibble and hold back and say, no we can’t do anything. Then that’s not fair either. We get into this shell game of whoever gripes the most pays the least. I don’t think that’s fair either. I suggest that you look at what the County can take care of to the greatest extent possible and I appreciate some of the suggestions that were made, get it down as much as you can and then come back to the providers.

Slockett: I think what the County ought to do is related to what we think each provider owes. Until we know that, because we do have to represent the best interests of the taxpayers. So my information is that at this point in time without further knowledge, specific knowledge that the providers owe this money. I don’t know how we cut that back until we have other information that they don’t and we know how else it’s going to be paid. I just don’t know how to work it through. I don’t know how we would proceed to eliminate anything from the bill without specific information from providers.

Thompson: Well there would be the matter of material things like the van or the computer that they could give back in lieu of giving us money. We would have to verify that with…

Slockett: You would have to talk to the providers to do that.

Harney: But they give those items back, they’ve spent the money and don’t have the money how are you going to get any money back if its not there?

Thompson: That’s the problem.

Lehman: Services.

Slockett: Yes, services.

Harney: But they don’t have the money to provide more services what will they do?

Stutsman: Well are there 3 Board members that want to have the County do their homework first before we present a bill to the providers or do we just want to send them a letter saying this is what you owe the County and we’ll talk later.

Lehman: I think they may have that in their hands. That’s just one scenario. I would like to send them a letter. That’s just a scenario. That’s not a payment schedule. I would just as soon sit through and see if we can’t shave some things off, look at some scenarios and then sit down.

Slockett: Well since the State Auditors Office is here I would just try to focus in on what the snarly issues are, the difficult issues. It seems to me one of them is where the providers in good faith and thinking they were operating according to instructions from the Board of Supervisors did in fact provide services to clients at a cost. How can they pay those back? That’s focusing in, distilling the question. I think what the State Auditors Office has said is one way is for them to agree to provide additional services over what is contracted for at a specified rate in order to pay it back.

Welsh: But they also said you could use the standard services.

Slockett: Yes, that’s right over the contracted amount.

Thompson: But Tom, if they have expenses they have to pay for those, they have to pay the staff to do those services. It doesn’t really make any difference whether they incur the expense to provide the services or just give us the money really.

Slockett: You are ignoring the examples that Warren gave. Of course it wouldn’t be easy. I’m not saying that.

Schaffer: The first question to ask is why should we pay it back?

Stutsman: Or what should they pay? Which are…

Schaffer: Yes, not how.

Stutsman: I guess maybe that’s what I…

Slockett: That’s a good…

Watson: Especially on HIPAA is there a reasonable basis for repayment from the providers.

Thompson: That has been asked several times. Could you address that a little bit?

Jenkins: Regardless of the funding source, it is not appropriate for the County to pay for services to benefit a private organization without some public purpose. As we said in the report, we just took the cost, we divided it equally because that is the only information we had. If there is a better way to divide it, that’s fine.

Thompson: But since we had had no contract with them can we make them pay it?

Watson: As a matter of fact, they paid it themselves.

Campbell: That’s not a question for us, that’s a question for the County Attorney as far as legality.

Jenkins: What we’ve really taken issue with is the County paid for that service when it should not have. Now since based upon the information to us at the time there was a benefit to the providers to the County having paid for that, that’s why we said it should be repaid.

Thompson: But they were told it was free.

Jenkins: If there is now information that says it would not provide a benefit to them then legally there may not be any client.

Welsh: That’s what I heard several of them say.

Thompson: If that’s true where does the money come from then?

Lyness: It’s probably uncollectible. If we don’t have a legal basis for going after the providers to get them to repay it, then it’s probably uncollectable. Without saying anything more, it’s like if we figure out that there is $2,000 or whatever that can’t be incorporated into what the County pays and we can try to go after the providers and then there is a question of whether we have a legal basis to go after the providers and that’s what we’ll have to figure out.

Thompson: So you will research that?

Lyness: Yes.

Schaffer: Will you look at how much time the consultants spent with the County and each of the providers?

Lyness: Yes.

Schaffer: I keep records of how long they were at our office and I’m sure the other agencies can come up with records on how much. I think that needs to be looked at.

Thompson: I had one other question, the amounts of these receivables were shown in our annual report as amounts that were included in our carryover balance. That was one of the reasons that we weren’t below the 10%. Do the amounts of the unpaid, if this goes on year after year, do the unpaid amounts continue to go against our carryover?

Jenkins: They would to the extent that they are annually determined to be valid receivables. It would be determined annually.

Lehman: We have to keep that in mind as we do our receivables.

Slockett: One implication of that is it won’t go away. This isn’t a one year thing. If you don’t deal with it, it will be on next year’s audit. Then it will be on the one after that. It needs to be dealt with.

Stutsman: I don’t think anybody is denying that we’re not going to deal with. It’s just how we go about it.

Slockett: There are some really serious implications to some of these things being discussed because if there is no public purpose and it’s against the law to spend County funds on something for no public purpose.

Harney: I don’t think it has ever been said it wasn’t for a public purpose. I think what they’re saying was there was never a contract in place to allow it.

Stutsman: We didn’t do the process right.

Slockett: If it was spent…

Harney: It’s not like we went out and bought plaques for people or anything.

Slockett: For example, HIPAA, that is the implication of saying that the money spent for HIPAA was without benefit to the public. That would mean that there was no public purpose. So there are serious implications to things that are being expressed here that you need to be thinking about before you decide something.

Thompson: There was one item in the unallowables. Tom you asked before about the $7,000, I think all of the items that were listed as questionable or as prepayment were counted as assets in the annual report. So that wasn’t really part of what we had to address here today. But the one other was…

Slockett: No the $7,000 was included.

Thompson: As an asset?

Slockett: No, as a receivable.

Thompson: But we got it back. Didn’t we get it back already?

Slockett: No. This is from the independent contractors.

Thompson: So we still have to recover that too?

Slockett: Yes. We have to bill them.

Stutsman: The independent contractors?

Thompson: I thought they had all paid it back?

Lyness: No I thought that was the prepayment issue on those.

Stutsman: Yes.

Lyness: Diane Blackburn there is some question about hers, but the rest of them were just prepayments because they were paid in June and did the work in July.

Slockett: Check page 35.

Campbell: There were 2 issues with the independent contractors. There were the prepayments that were paid back. What's on page 35 and totals at $7,000 is the amount of time that those contractors may have been working for their primary employer and we had asked the county to follow up and see who they were actually working for. That $7,000 may or not be something that we need to bill for.

Lyness: I think we have verification for everybody except for one. Those should be legitimate expenditures whether it was last year or this year. I think there is only one that we are still trying to figure out exactly how much she is actually owed.

Thompson: That one is $2,687.

Slockett: Well that needs to be worked out in order to get that removed as a receivable.

Thompson: The other one is the computer equipment and software for providers that is called A3 on page 23 of the audit. That equipment was to be installed at provider agencies and to help them with the HIPAA compliance and also make their equipment compatible to our new software. We still have that. It’s stored here at the County. We’ve been told by Jean Schultz that they could purchase that as part of this years County equipment purchase.

Harney: It would be our normal purchase.

Thompson: Do you want to do that?

Lehman: That’s an action we need to document.

Thompson: So maybe we should have that as part of our plan? Is that OK with everyone?

Stutsman: Do we need to have that on the formal agenda and have a motion?

Lehman: We’re going to deal with this all at once.

Harney: It’s our normal yearly computer purchase but instead of buying it from a vendor we would be buying it from MH/DD.

Lyness: I think we can do that. How did it get allocated? I think we may have to do a…

Thompson: …a resolution or something?

Lyness: Yes. I’ll check into that. I’m sure there is a way to do it. Do you know how?

Horne: Just buy it as a vendor. I don’t know why we would treat it any differently.

Harney: It’s already been here. It’s delivered.

Horne: But what I’m saying is MH/DD should just bill us.

Slockett: MH/DD will have to bill us.

Lyness: MH/DD will just bill Information Services right?

Horne: Then we’ll just pay the MH/DD fund.

Lehman: That should be done fairly soon and separate otherwise we could be sitting here 3 months from now and be into the next year.

Horne: Within this fiscal year we should finish it.

Thompson: They would like to use the equipment.

Stutsman: In IS?

Thompson: Yes.

Horne: It will come from the Technology Fund.

Harney: Any other questions pertaining to the…

Welsh: I guess I’m suggesting to you in light of what I’ve heard for what it’s worth is that an employee said that HIPAA analysis can’t be billed back to the providers and need to work out whether or not that’s just an unpayable bill.

Slockett: I think the County Attorney ought to be consulted with on the authority of making such decisions. That is your conclusion but I don’t know if the Board…

Welsh: I don’t see how you can expect based on what they’ve said, Tom I’ve known for years from Goodwill Industries. He has said we would’ve gotten HIPAA compliance through our national corporation. They didn’t sign any contracts. To me all of those things make sense. That’s why when I sit down with them I wouldn’t be discussing that. I would say the County Attorney’s Office and The Board of Supervisors and the Auditor need to work out some way of handling that.

Harney: Bob, that’s what’s going to happen is the County Attorney is going to review this and they will define whether they feel things are collectible or uncollectible and what avenues we need to take.

Slockett: But I don’t think you are thinking about what the implications are of handling that. Because then the question becomes… Somebody is liability for that. As Warren said, one of the options is it’s the Board of Supervisors who are personally responsible. That’s one extreme. So there are some serious implications that need to be thought about.

Welsh: I would sit down with them on column number 2. I would ask them to repay columns one and 4.

Stutsman: I have a couple of questions for the State Auditor just for my own clarification. We’ve spent time talking about what applies to the MH/DD funds. Do the same kinds of things apply for other County funding? What we’ve been talking about, public good, contracts and all of that kind of stuff.

Jenkins: Those general requirements apply to any expenditure from any County fund. Any City funds, School funds, State funds. Those are general overriding principles that apply to government funds in general.

Stutsman: So if we do block grants, we do a number of block grants to human service agencies, we have to have a contract in place for those block grants. What is included in that contract? Just the specific services, like fee for service?

Campbell: Typically block grants are used when you can’t do a per unit fee for service basis. If you are dealing with counseling that could be a one hour, one session thing. But if you are doing outreach for a program there is not a unit of service you can bill so block grant is an acceptable payment method for that type of service. So your contract would just need to describe what you want that provider to do for you or that vendor to provide to you.

Lehman: Has to be measurable criteria involved too?

Campbell: That would be the ideal yes.

Stutsman: I wonder if we said we want to give $10,000 to 4C’s to provide childcare resource and referral services for the community.

Neuzil: And prevention.

Campbell: You would still want some measurable feedback like if you want services you would hope that they would be able to provide a directory of childcare providers or a listing of what providers are CPR certified. Whatever you want you should be as specific as you can in that contract so that you can show what you expect from the provider, the provider knows what to provide. It’s just the more you can document… I realize you can’t document everything and there are certain parameters on that.

Stutsman: Another question if somebody provides clerical services for a board and County dollars are used to pay for those services does a contract need to be in place for that?

Jenkins: Clerical services for what type of board?

Stutsman: Civil Service Board.

Jenkins: So the clerical service is not provided by a County employee?

Stutsman: No. It’s by a member of the board.

Jenkins: Are they using a temporary service?

Campbell: By a member of the board you said?

Lyness: A member of the Commission.

Stutsman: A member of the Commission.

Lyness: They kind of hire their own person and then bill us because that’s an expense of theirs.

Campbell: The clerical person isn’t a board member, it’s just the board is hiring somebody.

Lyness: The Commission has hired somebody and then the Commission bills us for their expenses including this clerical person who they hired.

Jenkins: How much time is spent by this person?

Lyness: The question is how much do we have to go into so everybody who bills us for things do we need to be looking at everything and requiring… How much documentation do we need to require for everyone who does service for the County or with the County and things like that? Because I think that is what your question is Sally.

Stutsman: Yes.

Campbell: The County can choose to set parameters of contracts in general.

Jenkins: What I was getting at is if this clerical person provides one hour per month I would look at it differently than if they are providing 20 hours per week.

Stutsman: OK.

Jenkins: If it’s one hour per month and somebody on the Civil Service Board certifies that this person spent that hour and sends it on, that’s fine. If there is something 20 hours per week you might want to have something more, an agreement with the person as to whether they are entitled to any benefits, any specific working hours, are they on call, are they supposed to be there at any certain time? The ramifications change as the amount of time changes.

Stutsman: Then is there anything in auditing procedures as to determine cost for fee for service? Do we have to do it a certain way in determining costs or is that between the County and the provider? Are there any auditing principles that we need to be taking into consideration when we determine costs for fee for service?

Jenkins: I don’t know of any auditing principles that would apply.

Stutsman: OK.

Jenkins: It would be more likely that there would be grant requirements or guidelines that might apply but that would vary depending upon the type of grant or specific funding.

Thompson: I think Sally was asking like when we set the rates for the various providers are there rules for how those have to be set?

Jenkins: Depending on the specific service, State law might provide guidelines on what the rates are.

Stutsman: The State Auditor’s Office doesn’t have specifics.

Thompson: So if you were auditing our rates how would you do that?

Jenkins: I would look to see if you paid the rate that was contracted and whether the service that was contracted to be provided was actually received.

Thompson: Regardless of what the rate was.

Jenkins: Within some parameters.

Campbell: There would be a reasonableness check. If things look reasonable… If we were just doing a regular audit test of an expenditure to make sure it agreed with a contracted rate, we’d make sure that contracted rate is reasonable based on our experience with other rates we’ve seen in other counties. Or whatever rates we’ve seen with other vendors if they’re providing the same service within a county, if something really looks outrageous we might ask, was it competitively bid, or we might ask the parameters of that contract being established.

Jenkins: If you are hiring a plumber for $300 an hour it’s going to raise some questions. But if you’re contracting with one provider at $15.50 per unit of service and another one at $15.75 there’s certainly some reasons for differences in cases. It doesn’t have to all be the same rate. The County is expected to utilize the same diligence in expending County money as you would with your own funds. You have to… There are some prudent perks and philosophies that are embodied in different code sections where basically it just says you should do what the normal prudent person would do, or I guess conversely if you do what the normal prudent person would do you are safe.

Stutsman: OK.

Sweet: May I just ask for clarification. You say that if you were to audit that you would look to see that we paid the rates that were contracted for and that the service was provided. What is our responsibility at the County to be sure that that service was provided? Does that mean that we are expected to actually go into the agencies, look at the services and look for that documentation and if the documentation is there. Is that an adequate interpretation?

Jenkins: If you are contracting to receive a service you have an obligation to ensure that you can say that service was actually received before you pay County money in return for that. The mechanics of receiving that assurance will vary depending upon the type of situation.

Harney: I’ve got one other thing. One of the things in the audit brought up paying in advance for services that hadn’t been completed. Hypothetically if I have an employee working for the County and I’m paying them a week in advance is that wrong?

Campbell: If you were a regular audit client of ours we would comment on it. We wouldn’t say it was wrong. We would just say it is not a prudent business practice and we would recommend that you pay each employee after they’ve completed their pay period at the end of their pay period. Does anyone have anything else?

Slockett: On that I think I know what Pat is getting at because he has put an item on our next elected officials meeting agenda. We have a situation in the County and I don’t know if you run into this very often. But years ago the County used to pay once a month. They actually paid people on the 25th through the end of the month. When we went to our current system of paying every other week, as you can imagine, it was quite a hassle getting that extra week or so, 5 or 6 days back to the employees in order to pay them just through the end of the current week they are working. So there are still people that have been grandfathered in and some departments currently have kept the practice of paying through the end of the current week. We do that. For example in our department all new employees are paid after they’ve completed their work. But the people that have been there for a long time are still paid on Friday for the work done that week. It’s possible that they could have overtime and they could miss work and then there will be an adjustment on some checks. The question is what to do about that and my feeling is that it is too draconian to ask people to give up a weeks worth of pay in the middle of service to the County. It all comes out even in the end when people leave, unless they don’t have any accruals there could be a small amount owed, in which case they could be billed. But the best solution is on a day forward in my opinion to hire all of your people and to pay them according to continue this practice for the current employees rather than having them lose a weeks pay. Do you have any views on that or is that thinking incorrect?

Jenkins: There are a number of situations I can think of where when policies were being changed that grandfather clauses were enacted to provide a transition. There are a number of instances in the Code of Iowa where I can remember where different criteria applied depending upon the date you were hired, or the date you retried, again as a transition. So there is precedent for doing that. Without getting a legal opinion on your specific situation the courts take note of precedence and I will then defer the legal opinion to the County Attorney’s office.

Slockett: Sorry for that digression but it’s a current matter before us.

Jenkins: It’s not unusual for the Code to put different requirements in at different steps and for the same situation to affect different people differently because of policy transitions that are in the works are fully known by the policy makers and agreed to.

Harney: The issues that fall behind that basically is that sometimes there is uncollectibles when people leave and don’t have money coming. They don’t have sick leave, they don’t have vacation. They get paid and then they’re off a day sick coming up so they have to go back and change. In prudence like you said I think it’s probably in the best interests of everyone to get on the schedule. Is there anything else about MH/DD?

Stutsman: Where do we go from here? Are we going to set up a group?

Thompson: Janet is going to research the HIPAA question.

Stutsman: I’m sorry. Was that decided?

Lehman: No, but I wonder if that same work group shouldn’t we just keep working on the issues talked about here.

Harney: I think we should keep talking about it.

Lehman: The HIPAA.

Slockett: But you are still not going to bill people?

Stutsman: Not at this point. I think we’re going to get some questions answered. That was my understanding.

Harney: Yes. Get some questions answered and then go from there. If we have to bill or if we have to sit down with each provider.

Stutsman: But then we’ll sit down and bill and then we’ll sit down with each provider once we have a clear accurate bill to send out. Is that right?

Lyness: That’s what it looks like.

Harney: I’m not sure if it will be a bill or a notice.

Lyness: A bill or a notice.

Stutsman: Exactly.

Lehman: We need dialogue before they open up the mail.

Stutsman: Thank you very much for coming out.

Harney: Meeting is adjourned.

Adjourned at 3:25 p.m.

Attest: Tom Slockett, Auditor

By Casie Parkins, Recording Secretary