Health Budgets & Financial Policy Financial Statements & Accounting Data TMA Office of the Chief...
-
Upload
gwenda-byrd -
Category
Documents
-
view
218 -
download
0
Transcript of Health Budgets & Financial Policy Financial Statements & Accounting Data TMA Office of the Chief...
Health Budgets & Financial Policy
Financial Statements & Accounting Data
TMA Office of the Chief Financial Officer (OCFO)Management Control & Financial Studies Division
2
Health Budgets & Financial Policy
Outline
• Financial Statement Reporting Requirement• Legacy Accounting Systems• Medical Accounts Receivable (A/R)
3
Health Budgets & Financial Policy
• CFO Act of 1990: Integrated Financial Management (FM) systems supporting DoD accounting needs are key to effective financial management
• Federal Financial Management Improvement Act (FFMIA) of 1996: All Federal agencies to comply
– Implement/maintain systems that meet Federal FM system requirements (Joint Financial Management Improvement Program (JFMIP))
– Support Federal accounting standards (Federal Accounting Standards Advisory Board (FASAB))
– Apply US Standard General Ledger (USSGL) at the transaction level
Fiscal Management Requirements
4
Health Budgets & Financial Policy
Financial Statements
MHS Financial Statement Reporting Entities (FSREs)
MHS
MERHCF 1 DHP 3
TRICARE Mgmt.Activity (TMA)
Service MedicalActivity (SMA)
TMA - FOD TMA – CRM 1 TMA-USUHS 2SMA – Army (MEDCOM) 4 (USACE) 5
SMA – Navy (BUMED) 4 (NAVFAC) 5
SMA – Air Force(AFMS) 4 (USAFE) 5
(1) Under Audit(2) All Proprietary Statements Validation Through Examination In Process(3) Includes American Recovery and Reinvestment Act (ARRA) Funding(4) Executes DHP Funds(5) Executes MILCON Funds
MERHCF: Medicare-Eligible Retiree Health Care FundDHP: Defense Health Program AppropriationMILCON: Military Construction AppropriationFOD: Financial Operations DivisionCRM: Contract Resource ManagementUSUHS: Uniformed Services UniversityMEDCOM: Army Medical CommandBUMED: Navy Bureau of Medicine and SurgeryAFMS: Air Force Medical ServiceUSACE: U.S. Army Corps of EngineersNAVFAC: Naval Facilities Engineering CommandUSAFE: U.S. Air Forces in Europe
MILCON 3
5
Health Budgets & Financial Policy
Accounting Data
FSRE Legacy Enterprise Business Rules
Command Control
TMA WAAS DAI TMA TMA
USUHS CUFS DAI USUHS USUHS
Army STANFINS GFEBS Army Army
Navy STARS-FL Navy ERP Navy Navy
Air Force GAFS-R DEAMS Air Force Air Force
6
Health Budgets & Financial Policy
Accounting System Acronyms
CUFS – College and University Financial System
DAI – Defense Agency Initiative
DEAMS – Defense Enterprise Accounting and Management System
FSRE – Financial Statement Reporting Entities
GAFS-R – General Accounting Financial System - Revised
GFEBS – General Fund Enterprise Business System
STANFINS – Standard Army Finance Information System
STARS-FL – Standard Accounting and Reporting System - Field Level
TMA – TRICARE Management Activity
USUHS – Uniformed Services University of the Health Sciences
WAAS – Washington Headquarters Services (WHS) Allotment Accounting System
7
Health Budgets & Financial Policy
• Office of Management & Budget (OMB)– Use commercial off-the-shelf (COTS) JFMIP-certified
software for replacement of core FM systems (OMB Circular A-127)
• New Service FM COTS are JFMIP-certified– Army – General Fund Enterprise Business System
(GFEBS) • SAP COTS
– Navy – Navy Enterprise Resource Planning (ERP) • Oracle COTS
– Air Force – Defense Enterprise Accounting and Management System (DEAMS)
• Oracle COTS
Fiscal Management Requirements
8
Health Budgets & Financial Policy
• Standard Financial Information Structure (SFIS)– A comprehensive, standard “business language”
that defines financial information that supports all DoD-wide budget, cost/performance management, and external reporting requirements
– SFIS is NOT an IT system– http://www.defenselink.mil/dbt/sfis_resources.html
What is SFIS?
9
Health Budgets & Financial Policy
Financial Statements
• FSRE Structure Challenges– TMA clear chain of command and
organizational structure– MERHCF actuarial and accounting information– SMA components have two lines of authority
(command and control, and finance business rules) vs dollar flow. Face issues related to MILDEP priorities vs fund flow priorities: financial impact, accounting system, financial business rules
10
Health Budgets & Financial Policy
Financial Statements
• FSRE Structure Challenges (continued)– Solution: single accounting system with
common business rules and chain of command simplifies, streamlines the financial statement, financial reporting, financial performance reporting
11
Health Budgets & Financial Policy
Budget Execution - O&MAs of 30 June 2010
12
Health Budgets & Financial Policy
Budget Execution - O&MAs of 30 June 2010
13
Health Budgets & Financial Policy
Budget Execution Performance-O&M
As of 30 June 2010
14
Health Budgets & Financial Policy
Budget Execution Performance-O&M
As of 30 June 2010
15
Health Budgets & Financial Policy
Budget Execution – RDT&EAs of 30 June 2010
16
Health Budgets & Financial Policy
Budget Execution – RDT&EAs of 30 June 2010
17
Health Budgets & Financial Policy
Budget Execution Performance-RDT&E
As of 30 June 2010
18
Health Budgets & Financial Policy
Budget Execution Performance-RDT&E
As of 30 June 2010
19
Health Budgets & Financial Policy
Budget Execution - ProcurementAs of 30 June 2010
20
Health Budgets & Financial Policy
Budget Execution – Procurement As of 30 June 2010
21
Health Budgets & Financial Policy
Budget Execution Performance – Procurement
As of 30 June 2010
22
Health Budgets & Financial Policy
Budget Execution Performance –Procurement
As of 30 June 2010
23
Health Budgets & Financial Policy
Financial Metrics
• Monthly Reporting, History and Measures – Accounts Receivable (A/R) Public debt > 30 days at
Sep 30, 2009 (Red Metric)• SMA-Army ($22.5 million)
– A/R Intragovernmental Debt > 30 days at Sep 30, 2009 (Red Metric)
• SMA-Army ($17.7 million)• SMA Navy ($17.3 million)
• SMA A/R increased dramatically in 1st Qtr FY 2010 when recording begins
24
Health Budgets & Financial Policy
• DoD Financial Management Regulation (FMR), Volume 4, Chapter 3, “Receivables” dated November 2009
• DoD Financial Management Regulation (FMR), Volume 6B, Chapter 10, “Notes to Financial Statements” dated September 2008
• Located at OSD (Comptroller) Web site:
– http://www.defenselink.mil/comptroller/fmr/
DoD References
25
Health Budgets & Financial Policy
• Two types of A/R in governmental accounting– Intra-governmental (e.g., Coast Guard, VA)
• Expect to get paid 100% of Billed Amount• Disputes regarding claims against other federal
agencies (e.g., Coast Guard, VA) are to be resolved per Code of Federal Regulations 4 CFR 101
– Public (civilian emergencies, TPC)• Need to establish an allowance for bad debt
• MTFs may be reporting collections to higher headquarters but what data is reported regarding outstanding and aged (e.g., >30 days, >120 days) Medical A/R?
Accounts Receivable (A/R)
26
Health Budgets & Financial Policy
Third Party Collections
• Total Third Party Collections (TPC) Billings were in FY 2009 were $496.0 million
• Total TPC Collections in FY 2009 were $240.7 million
• How much is really being written off as uncollectible, and how much is still on the books as Medical A/R?
27
Health Budgets & Financial Policy
Medical Services Account (MSA)
• Combination of both Intra-governmental A/R (e.g., Coast Guard, VA) and Public A/R (e.g., civilian emergencies)
• Total MSA amount collected for medical care provided in MTFs for FY 2009 was $151 million
28
Health Budgets & Financial Policy
Medical Affirmative Claims (MAC)
• Medical Affirmative Claims (MAC) A/R is all Public A/R (e.g., insurance companies, liable individuals)
• Total amount collected for medical care provided in MTFs for FY 2009 was $15 million
29
Health Budgets & Financial Policy
• FMR guidance states:
• The accounting office shall establish an allowance for doubtful debt, which shall provide for reducing gross receivables by the amount of the estimated loss to their net realizable value
• A write-off occurs when an agency official determines, after using all appropriate collection tools, that is it more than 50% likely that a debt is uncollectible
Doubtful Accounts & Write-offs
30
Health Budgets & Financial Policy
• A/R are reported on the annual audited financial statements
• Service Financial Statements located at OSD(Comptroller) Web site:– http://www.dod.mil/comptroller/cfs/fy2009.html
Service Financial Statements
31
Health Budgets & Financial Policy
Accounts Receivable - Policy
• Accounts Receivable Policy Memorandum (with attachment)– Policy signed on May 8, 2008
• Purpose– Establish policy for the recognition (“as rendered”),
classification, recording, aging, collection, disposition and reporting of accounts receivable in order to improve the accuracy of financial statements
– Compliance with DoD’s Financial Management Regulation (FMR) and Generally Accepted Accounting Principles (GAAP)
32
Health Budgets & Financial Policy
Accounts Receivable – Policy (con’t)
• Implementation Date – 1 October 2009 (for FY 2010 reporting purposes)
• Title 10 United States Code, Chapter 55, Section 1095– This policy does not modify the ability of the Services to
use monies collected in the fiscal year collected10 U.S.C. 1095(g) reads as follows: "Amounts collected under this section from a third-party payer or under any other provision of law from any other payer for health care services provided at or through a facility of the uniformed services shall be credited to the appropriation supporting the maintenance and operation of the facility and shall not be taken into consideration in establishing the operating budget of the facility."
33
Health Budgets & Financial Policy
Financial Metrics - SMA
• Implementation of Medical A/R Policy in 1st Quarter of FY 2010 had a large impact – Accounts Receivable (A/R) Public Debt > 30
days at July 31, 2010 (Red Metric)• SMA-Army ($213.9 million), • SMA-Navy ($5.6 million)• SMA-Air Force ($ 78.0 million)
– Total reported Medical A/R was $527.9 million
34
Health Budgets & Financial Policy
Financial Metrics -TMA
• Implementation of MARR A/R in 4th Quarter of FY 2009 had a large impact – Accounts Receivable (A/R) Public debt > 30
days at Mar 31, 2010 (Red Metric)• TMA-CRM ($175.0 million)
35
Health Budgets & Financial Policy
Management of Accounts Receivable
• Revenue Recognition – All Defense Health Program (DHP) funded activities will
recognize and record a receivable when it establishes a claim based on goods or services provided (“as rendered”)
– Financial statements have two A/R classifications: • Intragovernmental and Nonfederal (public)
• Debt Management (Debt Collection Improvement Act (DCIA)
– Working with OUSD(C) to potentially add language to the FMR to better clarify medical debt and when to “turn-it over” to DFAS
36
Health Budgets & Financial Policy
Management of Accounts Receivable (continued)
• Proprietary vs. Budgetary– Recommended accounting entries are:
Debit USSGL 1310 (Accounts Receivable) and credit USSGL 6790 (Other Expenses Not Requiring Budgetary Resources)
– This will ensure a correct financial statement entry without the potential for a appropriation violation and maintain USC 1095 flexibility
37
Health Budgets & Financial Policy
Accounts Receivable - Revenue Recognition
• All Defense Health Program (DHP) funded activities will recognize and record a receivable when it establishes a claim based on goods or services provided (“as rendered”)
• There are two classifications of accounts receivables:
– Intragovernmental – Nonfederal
38
Health Budgets & Financial Policy
Accounts Receivable - Going Forward
• Accuracy in reporting– Accounts receivable reports will be better than what we have now– Reports will include aging data– Visibility of all accounts (including TPC accounts receivable older
than prior year 2)
• Will become more accurate as procedures, systems and data collection become more standardized
• Central reporting will improve as funded systems change request have been submitted to:– “Push” accounts receivable data from TPOCS and CHCS/AHLTA
(both MSA and inpatient TPC), and– Calculate interest in both MSA and TPOCS
39
Health Budgets & Financial Policy
Accounts Receivable - Going Forward
• Do not want to impact ability for billing contractors to develop and/or use their own billing management system
• Possibility of accounts marked as transferred in MSA, but documentation never forwarded to the Defense Finance and Accounting Services (DFAS) Support Center
• Some joint ventures are generating Department of Veterans Affairs bills on Excel spread sheets
40
Health Budgets & Financial Policy
Accounting System – Going Forward
• SMA Audit Committee will work with the SMA – Army, SMA – Navy, and SMA – Air Force to establish procedures for recording AR
• Provide your UBO Service Manager and Service RM monthly AR data in the following categories:– Intragovernmental
• MSA, TPOCS, Unbilled, changes to Allowance– Nonfederal
• MSA, TPOCS, Unbilled, changes to Allowance
41
Health Budgets & Financial Policy
Accounts Receivable Service Points of Contact
• Army – • Navy – • Air Force –
42
Health Budgets & Financial Policy
Outline
• Financial Statement Reporting Requirement• Legacy Accounting Systems• Medical Accounts Receivable (A/R)
43
Health Budgets & Financial Policy
Questions?
TMA OCFO/MC&FS