01/06/2014 – Financial Report

Nov 2013 Financial Report

Dr. Bell will be here for the Business Meeting.

Mr. Bowers (Finance Department)

First Page – Revenues
We have collected $454 million compared to $428 million in prior year.  We are tracking ahead of anticipated local revenues.  Will this continue?  We hope so and are optimistic, but can’t be for sure.

Heery Settlement
$6 million was deposited in December.  It will be reflected in the December financial report.  There will probably be a special line item for settlements.

Page 3
We are $900,000 under projected, but that will be made up with excess local revenue.  We are hoping to have a slight increase in state revenue.  We will know more when our March FTE counts come in.

Page 1 – Expenditures
$252 million versus $255 million in the prior year.  We have 3 areas of concerns: Workers’ Comp, Transportation Salaries and Legal Fees.  In February, we plan to have a mid year adjustment where we adjust expected revenue and expenditures.

Coleman
Can we get more detail on those over runs except legal fees.  We know about that.

Bowers
The transportation salaries were under budgeted.  Historically they have always been under budgeted and our budgeting process hasn’t caught up to that.

Coleman
Do we have new transportation expense projections?

Bowers
I don’t know.

Coleman
We are running double the rate of expected workers’ comp expenditures.

Thurmond – Superintendent
Dr. Bell will be here at 7 and he can provide a more detailed response to some of these questions.  As it relates to workers’ comp, we terminated the services of one of the providers.  After that termination, they submitted a substantial high number of bills that they had been hiding that the district was not aware of.

Ramsey – Chief Legal Officer
That is correct.  We terminated the vendor last year.  We are currently getting good report on efficiency.  We have had a lapse in leadership for quite some time in that area and we were able to hire somebody about two and half months ago.  After that, a number of billings came into us that we were not aware of.

That contributes to some of the cost over runs.  The district has also been settling some stale workers’ compensation cases.  We thought it more prudent to settle these cases to save money in the long run.  We do have a plan in place to remediate and reduce those expenditures going forward.

During the budgeting process last year, we cut the workers’ compensation budget in anticipation of having some cost savings procedures in place this year. But, because of the change board and leadership, we were not able to affect some of those policies.  But, we are putting those in place now.  We should see cost savings going forward.

Coleman
It sounds like we front loaded a lot of costs to clear house on workers’ compensation claims.  Do we expect the costs to run at a lower rate the second half the year?

Ramsey
Correct

Thurmond
We had several meetings with Ms. Alexander.  She presented me with a detailed inventory of outstanding workers’ comp cases that have been on the books.  I asked her to move expeditiously to resolve many of the claims.  They were relatively small.  I believe we will see a reduction in costs going forward.

You never know what’s in the closet until you start cleaning up.  By the provider, that’s the thing that really surprised me the most, that primarily these medical costs that they have been withholding that previous administrations were not aware of, that the costs were out there.  They had not been paid.  After we terminated the provider, they then forwarded thousands of dollars in bills we didn’t know existed.

Ramsey
Tens of thousands of dollars in bills

Coleman
Are there timing issues with the beverage taxes and other sources revenue?  It seems to be slower than last year.

Bowers
We believe the beverage tax is a timing difference, but it’s hard to say.

Mayfield
When we are evaluating the trends of annual expenses in workers’ comp, is this an anomaly?

Thurmond
I can’t speak historically.  In the past we weren’t as aggressive in expediting and resolving the issues.  I felt like maintaining open cases was more expensive.

Mayfield
Do we have the management protocol in place to evaluate those costs.

Ramsey
We have those in place now.  You’ll see those numbers improve.

Dr. Morley
A lot of it is being expeditious and being on top of these cases and not letting them lie.  We have some stop gaps in place to be able to rectify those situations when they come about instead of allowing them to sit around and waiting for something to happen that you don’t know what’s going to happen.  Right Mr. Superintendent?

Thurmond
Yes, but I don’t know all the history.

 

Personal notes during financial report …

We have tracking compared to last year’s budget, but that doesn’t tell us how we are tracking against what we expect for this year.

$6 million was received from Heery in December. Heery Settlement not reflected here.

Disbursements – areas of concern.
Workers comp
Transportation
legal fees

February will be a mid year adjustment

Board Questions
Coleman – More detail in those over runs.

Transportation – was under budgeted

Coleman – do we have new projected costs for those items?
Answer: no

Thurmond: Bell will be here for the 7pm meeting and will be able to answer these questions in more detail

Ramsey:
Regarding Workers Comp over-runs
* terminated vendor last year
* getting good efficiency reports
* We’ve had a lapse of leadership in that area (that would be Josie Alexander?)
* After the firing, a bunch of bills came in that we were unware of. (How is it we were unware of these bills??)
* Who was fired. Who was hired? Who did the hiring? Where was the lapse of leadership?
* We have settled a number of claims that were sitting out there instead of litigating them.
* We have a plan in place to remidiate and reduce those expenditures going forward. (What’s the plan?)
* We cut a lot from the workers compensation budget last year in anticipation of having some procedures in place this year, but because of the change in the board we were not able to affect some of those policies in a timely manner. We are putting those in place now in a cost savings manner going forward.

Coleman: Are you saying that we front loaded costs and expect the costs to run at a lower rate the second half of the year.

Ramsey: Correct

Thurmond: We had a meeting and she presented me with all the outstanding Worker’s comp cases that have been on the books. We resolved many of the cases. I believe you will see a reduction in the cost going forward. We’re cleaning up. We didn’t know that the provider was holding thousands of dollars of bills.

Mayfield: When we look at Workers Comp expenses, is this an anomally?

Thurmond: I can’t speak historically. Maintaining open cases costs more.