September 2018 Board Meeting - Q2 Financial Results Information Report

Prepared By:

Lorie Gregg, Director of Corporate Services

Date:

September 6, 2018

Subject:

Q2 Financial Results

Background

The Leadership Team of the Windsor-Essex County Health Unit (“the WECHU”) monitors financial results on an on-going basis for the following programs:

• Mandatory programs funded to a maximum of 75% (“Cost-Shared”) by the Ministry of Health and Long-Term Care (“MOHLTC”) and the Corporation of the City of Windsor, the Corporation of the County of Essex and the Corporation of the Township of Pelee (hereinafter referred to as the “Obligated Municipalities”);
• Related programs such as Vector-Borne Diseases and Small Drinking Water Systems, funded on a cost-shared basis to a maximum of 75% by the MOHLTC and certain surrounding municipalities within the geographic boundaries of Windsor and Essex County;
• Related programs funded 100% by the MOHLTC;
• Related programs funded 100% by the Ministry of Children and Youth Services (“MCYS”);
• One-time business cases.

The second quarter financial report to the Board includes a budget to actual comparison and narrative for material variances for all programs listed. Forecasted financial results will be presented as a part of the Q3 and Q4 reporting.

Cost-Shared Program Financial Results

The following is the financial information for the Cost-shared programs including Vector-Borne Diseases and Small Drinking Water Systems for the second quarter of 2018.

For the period January 1, 2018 to June 30, 2018, cash flows on account of the 2018 program year for this program are as follows:

For material variances where the financial captions percentage spent exceeds 50%, an explanation has been provided:

• Benefits: Expenditures in this financial caption relate to amounts paid/payable by the WECHU on account of medical, dental and extended health benefits as well as amounts paid on account of certain other payroll remittances (i.e. OMERS contributions, CPP, EI, EHT, WSIB). The dollar negative variance is not material and will be monitored over the remainder of the fiscal year with any remaining negative variances funded by the Salaries financial statement caption.
• Association and Membership Fees:  Expenditures in this financial caption relate to memberships in an association or other group by virtue of professional requirements or to support initiatives associated with Public Health.  The majority of Association and Membership Fees are paid earlier in the fiscal year.  For the remainder of the year, fees will be lower and thus tracking will be in line with budget as the year progresses.
• Publications:  Expenditures in this financial caption include costs of subscriptions.  The dollar value of this negative variance is not material and will be monitored and offset by other underutilized financial captions as the fiscal year progresses.
• Building Maintenance:   Expenditures in this financial caption relate to amounts paid on account of building maintenance, grounds keeping and house keeping supplies.  At June 30, 2018, the negative variance of $9,254 resulted from:  i) annual elevator maintenance fees for the period May 1, 2018 to April 30, 2019 of $8,546 were paid; ii) grounds keeping costs for snow removal are typically higher in the first half of the fiscal year compared to the latter half (3 months of service from January to March of 2018 compared to 2 months of service from November to December of 2018); iii) additional costs incurred on account of unplanned HVAC repairs.  
• Insurance:  Expenditures in this financial caption include costs associated with general liability insurance, property insurance, director and office insurance coverage as well as cyber coverage.   Insurance premiums are paid at the beginning of the year.  There will be no further insurance premiums in 2018 and this financial caption should remain underspent at year-end.

Risks:  Of noteworthy mention when considering the financial information above are the following:

• Status of collective bargaining agreements – Collective bargaining agreements with CUPE (contract expired December 31, 2017) and ONA (contract expired March 31, 2018) remain outstanding.  As such, the WECHU may be required, dependent upon the results of negotiations, to make retroactive payment for contractual increases not yet reflected in the year-to-date financial results disclosed above.
• Status of other labour related matters – Other labour related matters (i.e. pay equity; impacts associated with grievances) which remain unsettled, have not be reflected in the year-to-date financial results above given the uncertainty associated with the settlement of those matters.

Healthy Babies Healthy Children Program Financial Results

The Healthy Babies/Healthy Children Program is funded through the Ministry of Children and Youth Services.  This program supports 27.0 FTEs comprised of managers (2), nurses (17), family home visitors (4), social worker (1), and support staff (3).  The objective of the program is to ensure a healthy future for children and their families.

For the second quarter of 2018, the HBHC program is $92,277 underspent due in part to staffing vacancies associated with leaves of absence (i.e. maternity leaves, unpaid absences, etc.).  
Refer to the Risks discussion noted in the Cost-Shared Program Financial Results section of this report, as this would be relevant to this program.

Nurse Practitioner Program Financial Results

The Nurse Practitioner Program is funded through the Ministry of Children and Youth Services.  This program supports 1 FTE (nurse practitioner).  The objectives of the program are to promote healthy pregnancy, birth and infancy for children, improve parenting and family supports, strengthen early childhood development, learning and care.

The 2018 budget submission to the MCYS includes a one-time grant request for $5,210 representing the forecasted overage in Salaries and Benefits for the year-ending December 31, 2018.  As at the date of this report, our one-time funding request has not been approved.  The WECHU will continue to monitor this unfavourable variance and anticipate that it will ultimately be funded by the Cost-Shared Budget.

Financial Information for Related Programs Funded 100% by the MOHLTC

The 2018 Annual Service Plan and Budget Submission included a budget of $1,529,700 for Healthy Smiles Ontario (“HSO”), inclusive of the $120,900 augment approved by the MOHLTC on May 7th, 2018.

At June 30, 2018, the net underspent budget amounted to $79,974.  Material variances are detailed below:

• The base funding approval of $120,900 included an addition of 1 FTE (dental assistant) of $71,471 Salaries and benefits that the WECHU would not operationalize until such time as an approval was received.  The budget impact of this deferral resulted in an approximate underspend of $35,735. 
• In Q2 of 2018 additional Program Supplies costs of $16,425 were incurred on account equipment replacements.
• Purchased services were underspent at June 30, 2018, due to the following:  i) The May 7th, 2018 augment to base funding included additional funding for purchased services of $36,400 for contract dentistry.  The WECHU is currently in the process of completing the requisite policy work to procure the services of a contract pediatric dentist.  It is anticipated that this dentist will be in place by Q4 of 2018.  ii) The WECHU had only 2 contract dentists for Q1.  A third contact dentist was added in March of 2018 servicing our Leamington dental clinic; iii) Fees paid to contract dentists are typically one month behind.
• Offset revenue of $6,300 was earned in Q1 of 2018 on account of the sale of three autoclaves using a third party auction site as required by the WECHU policies and procedures for disposing of tangible capital assets.

Refer to the Risks discussion noted in the Cost-Shared Program Financial Results section of this report, as this would be relevant to this program.

Enclosed above is the financial information associated with the WECHU’s requirements to:

• Comply and adhere to the Electronic Cigarettes Act:  Public Health Unit Guidelines and Directives: Enforcement of the Electronic Cigarettes Act;
• Comply and adhere to the Smoke-Free Ontario Strategy:  Public Health Unit Tobacco Control Program Guidelines and the Directives:  Enforcement of the Smoke-Free Ontario Act. 

At June 30, 2018, the total unspent budget amounted to $17,135.  The most notable variance relates to the Professional Development financial caption.  In Q1 of 2018, an individual was sent to a non-violence conflict resolution train-the-trainer course amounting to $4,180.  The unfavourable budget variance in the Professional Development financial caption continues to be monitored with any remaining budget overage to be offset against the favourable variance Program Supplies financial caption.

Refer to the Risks discussion noted in the Cost-Shared Program Financial Results section of this report, as this would be relevant to this program.

A description of other related programs is included below:

Chief Nursing Officer Initiative:  Under the Organizational Requirements of the Ontario Public Health Standards, the Chief Nursing Officer role serves to enhance health outcomes of the community at individual, group and population levels:  i) Through contributions to organizational strategic planning and decision making; ii) By facilitating recruitment and retention of qualified, competent public health nursing staff; iii) By enabling quality public health nursing practice.  This funding envelope supports 1 FTE meeting certain qualifications as required by the Ontario Public Health Standards.  At June 30, 2018, there are no negative variances to report on.

Enhanced Food Safety – Haines Initiative:  Base funding for this initiative supports the enhancement of the Board of Health’s capacity to deliver the Food Safety Program as a result of the Provincial Government’s response to Justice Haines’ recommendations in his report “Farm to Fork:  A Strategy for Meat Safety in Ontario”.  At June 30, 2018, there are no negative variances to report on.  It is anticipated that these funds will be fully expended by Q4 of 2018.

Enhanced Safe Water:  Base funding for this initiative supports the enhancement of the Board of Health’s capacity to meet the requirements of the Safe Water Program Standard under the Ontario Public Health Standards.  At June 30, 2018, there are no negative variances to report on. It is anticipated that these funds will be fully expended by Q4 of 2018.

Harm Reduction Program Enhancement:  Base funding for this initiative supports the Board of Health in the activities associated with its Local Opioid Strategy.  More specifically it supports 2.5 FTEs dedicated to working on activities associated with:  i) Our local opioid response; ii) Naloxone Distribution and Training; iii) Opioid Overdose Early Warning and Surveillance.   At June 30, 2018, there are no negative variances to report on.

Infection Prevention Control Nurses Initiative:  Base funding for this initiative supports one additional infection prevention and control nursing FTE having certain qualifications.  At June 30, 2018, negative variances of $4,273 have resulted as salaries and benefits for this position have exceeded the approved funding.  Negative variances will be absorbed by the Cost-Shared Budget.

Infectious Disease Control Initiative:  Base funding for this initiative supports the hiring of infectious diseases control positions (4.5 FTEs) and supporting these staff to monitor and control infectious diseases.  They serve to enhance the Board of Health’s ability to handle and coordinate increased activities related to outbreak management.  At June 30, 2018, there are no negative variances to report on.
Needle Exchange Program Initiative:  Base funding for this initiative supports the purchase of needles and syringes, and their associated disposal costs, for the Board of Health’s Needle Exchange Program.  At June 30, 2018, there are no negative variances to report on.

Social Determinants of Health Nurses Initiative:  This initiative was established to support 2 public health nursing FTEs with specific knowledge and expertise in social determinants of health and health inequities issues, and to provide enhanced supports internally and externally to the Board of Health to address the needs of priority populations impacted most negatively by the social determinants of health.  At June 30, 2018, negative variances of $7,098 have resulted as salaries and benefits for these positions have exceeded the approved funding.  Negative variances will be absorbed by the Cost-Shared Budget.

Refer to the Risks discussion noted in the Cost-Shared Program Financial Results section of this report, as this would be relevant to these programs.

Financial Information for Related Programs Funded 100% by the MOHLTC

Mandatory Programs:  Potassium Iodide Distribution Program:  One-time funding to improve nuclear emergency preparedness and increase knowledge amongst residents living within the primary and secondary zone of the Fermi 2 nuclear generating station.  Eligible costs include Potassium Iodide pill packs, and staff salaries, project materials, printing and postage associated with the distribution of KI packs and ongoing communication campaigns.  It is anticipated that funds will be utilized by March 31, 2019.

Mandatory Programs:  Public Disclosure System:  One-time funding must be used to update software and inspection forms to meet the new disclosure requirements under the Ontario Public Health Standards.  Eligible costs include software update, disclosure, and migration.  Implementation of the disclosure system is planned for November of 2018 and will require 3rd party resources as well as internal resources for support (i.e. Information Technology; Healthy Environments).  It is anticipated that funds will be utilized by March 31, 2019.

Needle Exchange Program Initiative:  One-time funding for extraordinary costs associated with delivering the Needle Exchange Program.  Eligible costs include purchase of needles/syringes and associated disposal costs.  One-time funds were expended in Q3 of 2018.

Public Health Inspector Practicum Program:  One-time funding must be used to hire the approved Public Health Inspector Practicum positions.  Eligible costs include student salaries, wages and benefits, transportation expenses associated with practicum positions, equipment and educational expenses.  The practicum placements commence in May and conclude in August annually.  It is anticipated that these funds will be utilized in Q3 of 2018.

Vector-Borne Diseases Program:  Enhanced Mosquito Surveillance:  One-time funding must be used for an enhanced surveillance program.  Eligible costs include salaries for students, supplies and additional equipment, identification and testing expenses, promotional costs and mileage.  It is anticipated that these funds will be utilized by Q4 of 2018 with the conclusion of this year’s surveillance program.

Capital:  One-time funding must be used to assist with costs to complete the capital planning requirements for a Stage 2 – Business Case submission.  Utilization of these funds is dependent upon the status of the work being completed internally and by third party consultants based upon the direction from the WECHU’s Board. 

Approved by:

Theresa Marentette