IPCRB Rates Behind the Scenes. Marj Beck and Larry Smith November 2018

Transcription

1 IPCRB Rates Behind the Scenes Marj Beck and Larry Smith November 2018

2 What s New? Electronic Private Facility Calendar submission Effective August 2018 Electronic submission completed via ISBE Web Application System (IWAS) All operating agencies that submit a private facility calendar must have an IWAS administrative account for which such account may grant access for ISBE submission to agency personnel Questions? Contact IPCRB staff (ILPCRB@isbe.net) or by telephone 217/

3 What s New? (cont.) Electronic Calendar Submission Electronic calendar submission information is available on the IPCRB web page ( Purchased-Care-Review-Board.aspx) Webinar PowerPoint: Facility-Calendar-Webinar.pdf Webinar Video Submitted Questions and Answers: Calendar-Webinar-QA.pdf

4 Available Helpful Tools Special Education Listserve Provides pertinent information to private facility providers Contact IPCRB staff to be added/removed from this list Private Facility Search engine ( tysearch/pfsearch.aspx

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6 Rate calculations are based on IPCRB Rules (89 Illinois Administrative Code, Chapter V, Part 900)

7 How is the rate calculated? do I know that my rate is right? do I proceed if I think I need to appeal?

8 Why did the rate increase or decrease? is the census different from the enrollment days on the CFR?

9 Where are my rates? is my rate letter? (and when) do I find inflation factors and medians?

10 Out-of-State Providers IPCRB Rules (f) Still subject to IPCRB Rules No non-allowable costs Government unit sets rates State or Local Government (Rules (f)(2) Usual and customary rate Five or fewer students placed by IL public schools (Rules (f)(1)) If threshold crossed at any time during the school year, future rates will be calculated

11 IPCRB Cost-Based Formula: Rate = Allowable costs Census

12 Allowable costs CFR costs Rate = Allowable costs Census - Non-allowable costs - Costs over 125% median caps - Revenue off-sets + Inflation add-on = Total Allowable Costs

13 Non-allowable costs Non-allowable costs can be found in the Rules ( ) List non-allowable costs on both the Cost Schedule (line 47) and the Supplemental Schedule for each program (indicate line where the non-allowable cost is reported; e.g., Line 42, etc., not line 47) If the cost center is not clearly identified, non-allowable costs will be subtracted from Program costs

14 Common non-allowable costs Membership dues Medical expenses Non-straight-line depreciation Bad debt Fundraising In-kind expenses Clothing and allowances Cost of advertising and public relations See IPCRB Rules for other non-allowable expenses

15 Related Party Transactions A Related Party ( (i)): Directly or indirectly controls, or is controlled by, the provider Influences, or is influenced by, the provider in terms of financial and operational policies Is controlled or influenced by another organization that also controls or influences the provider Related party transactions should be noted in the audit Related party transactions must be identified in the annual CFR Supplemental Schedule

16 Related Party Transactions Providers may not build a profit for related parties into their cost structures. Non-allowable Costs (IPCRB Rules (a)(4)) Rent Expense Costs to the related party only, reported in the appropriate cost centers ( (a)(4)(F) Interest Expense Disallowed if paid to a related party Goods and Services Cost to the provider cannot exceed the cost to the related party Should be reported in appropriate cost center ( (a)(4)(F))

17 Related Party Transactions IPCRB may request: Evidence of related party expenses Breakout of all costs charged by the related party to the provider Summary of methodology for determining charges to provider by related party Breakout of actual costs to the related party Failure to provide requested information will result in all related party costs being disallowed in the rate calculations

18 Revenue offset examples Nutrition Program revenue (Federal or State) Transportation revenue Rental revenue Revenues from unrestricted investments must be offset against interest costs Revenues from local educational agencies for diagnostic services Revenues from workshop programs must be offset against the cost of those programs A gain on a sale of an asset in which the State has any monetary interest Revenue over IPCRB rate (Excess revenues)

19 125% Median Caps Allowable costs for support, administration, and occupancy have a ceiling of 125% of the median Medians are calculated from the CFR data received each year for rate calculations Medians are published on the IPCRB web page after Board approval (typically after the May meeting)

20 Inflation add-on Reported costs are updated for inflation experienced and projected for the time between the period covered on the cost report and the middle of the current school year. Inflation rates are published on the IPCRB web page after Board approval (typically after the May meeting)

21 Allowable costs

22 The cost centers: Program Support Admin Dietary and housekeeping Occupancy Capital Administrative

23 Census Rate = Allowable costs Census Census is not necessarily the same as the CFR enrollment days: Census = CFR enrollment days CFR school days * current # days School calendar days as approved by ISBE for current school year

24 Census differences If school districts report a higher number of enrollment days than what is on the CFR, we must use the number reported by the school districts (IPCRB Rules, (g)(2)). Similarly for residential rates, we use the larger of reported enrollment or 90 percent of capacity (IPCRB Rules, (g)(1)).

25 What causes the rate to increase or decrease? Rate = Allowable costs (Avg. enrollment) * (# of school days) Allowable costs are for FY reported Average enrollment is for FY reported Number of school days for rate school year

26 Rate = Allowable costs Census Example change in cost Prior year Rate = $1,000,000 (30) * (200) = $ Current year $900,000 Rate = = $ (30) * (200)

27 Rate = Allowable costs Avg. enrollment * (# of sch. days) Example change in enrollment Prior year Rate = $1,000,000 (30) * (200) = $ Current year $1,000,000 Rate = (35) * (200) = $142.86

28 Calendar change Calendar Census Rate Change Change Change For example: Initial calendar has 200 school days for average of 50 students. Total allowable costs are $1,500,000. Rate = $1,500,000 / (50 * 200) = $ Calendar days are amended to 195: Rate = $1,500,000 / (50 * 195) = $153.85

29 How do I know my rate is right? Understand the rate calculations Ask questions Why did you move my clerical salaries, and why doesn t it match what I have on line 2 of the cost schedule?

30 Clerical expenses Clerical salary expenses are moved to the administrative cost category Amount of reclassification: Salary + fringe benefits Clerical fringe benefits: % total program fringe benefits = (clerical salaries) * (total fringe benefits) (total salaries)

31 Can a rate decision be appealed? Appeal Read IPCRB Rules. Make sure you meet the requirements ( ff). What is your requested rate and how is it calculated? NOTE: 125% caps cannot be exceeded, even for appeals.

32 What do I need to submit for the rate calculations each year? Web-based CFR (with the Supplemental Schedule) Use rounded numbers on the CFR Electronically-submitted school calendar (IWAS) Audit send us a copy via or a paper copy via mail or delivery service. Include a Crosswalk and other supporting documentation with the audit

33 Crosswalk Crosswalk is important Helps rate setters understand how costs were categorized and adjustments already made by the provider Speeds up the rate setting process (you get your rate faster)

34 Hours Please report the hours on both the Program Personnel and Program Consultant (Contractual) Schedules ANNUAL TOTAL ALL STAFF

35 Web-based CFR Electronic notices are typically sent in November to all Provider Admin accounts for those who submitted prior year CFRs Link to online CFR: New providers - contact IPCRB staff for temporary administrative ID and password

36 Web-based CFR Don t forget to complete your Supplemental Schedule to CFR for each ISBE program Need ISBE program numbers (only way to see supplemental schedule)

37 Supplemental Schedule Required for all calculated rates For non-allowable costs, detail the specific line number on the Cost Schedule where costs are located. Do not use line 47. Make sure total of non-allowable costs equals Line 47 on the Cost Schedule. COST SCHEDULE LINE 47 = SUPPLEMENTAL SCHEDULE PAGE 2

38 What are the for-profit requirements? For-profit organizations need to provide more detail in their audit in order for us to calculate the 115% profit as per Rules. Include Statement of Functional Expenses with audit, not in place of the audit Reminders are typically sent in November to the Provider Admin accounts for-profit providers

39 Where are my rates??? Web-CFR is due January 15 th or 90 days after the end of your fiscal year (whichever is later) (Rules (c)) As soon as IPCRB staff have an approved calendar, rates are calculated using the FIFO method. Both the audit and the CFR must be submitted before a provider is placed on the list. Initial rates for a new school year are introduced no earlier than the June Board meeting prior to the beginning of the school year May use prior year s rate until current school year rate is approved

40 What if my schedule needs to be different? Make sure you meet any extension request deadlines New programs must have program approval and budget CFR submitted at least two weeks prior to the IPCRB meeting

41 Where is my rate letter and who is ILPCRB? Letters are no longer sent through the mail Make sure we have the correct address for recipients is the general address; SQL6 is the server that sent the automated letters in previous years Computation sheets need to be requested separately after the Board has acted on the rates X

42 Rate Appeals (Rules ff) Notify IPCRB Staff within 60 days of receipt of rate notification letter (Rules ) - 30 days after becoming aware of special circumstances described in Rules Board must act within 90 days of receipt of appeal notice, unless additional information is requested or a delay at the request of the provider (Rules (e)) Provider must give the basis for the appeal (Rules (a)), supply documentation supporting the appeal basis (as well as any additional documentation requested), and a requested rate Conditional Increases Under Rules (a)(3), (a)(4), or (a)(5), the provider may appeal due to projected cost increases. However, within 45 days of the effective date of the increase or notification of the increase (whichever is later), the provider must submit documentation that the costs upon which the appeal was based have occurred Board will then re-affirm appeal rate; or If no documentation, Board may re-affirm prior rate

43 When are the inflation factors and medians available? Inflation factors are calculated after April 15 (before the beginning of rate school year) Medians are calculated using data received by April 15 after inflation factors are determined (Rules (b)(3))

44 Dates of Interest Mid/Late November Reminder to Provider Admin accounts for upcoming audit/cfr submissions January 15 CFR/Audit Submission (Rules (c)) March 31 Final Deadline for CFR/Audit submission w/o extension (Rules (c)) April 15 Deadline for CFR submissions for use in median calculations (Rules (b)(3)) May Board Meeting Deadline for initial rates; presentation of medians and inflation factors June Board Meeting Earliest action on upcoming year rates (Must wait for medians/inflation factor approval) July Board Meeting Last action on current year tuition rates (Rules (b)) August Board Meeting Last action on current year residential rates (Rules (c))

45 Our web page Available information includes: Medians and Inflation Factors Medians are published as per diem medians and are inflated. IPCRB Rules IPCRB Meeting Dates CFR Instructions Calendar submission instructions Certification forms Extension Request forms

46 General: Marj Beck Larry Smith Phone Fax Division of Funding and Disbursement Services (E320) Illinois State Board of Education 100 North First Street Springfield, IL 62777