Travis County Commissioners Court
October 26, 2004
Item 17
17 is to consider and take appropriate action on issues regarding the implementation
of the Travis County hospital district. A, memorandum of agreement for the
Travis County auditor to provide services to the Travis County hospital district.
Good morning.
>> good morning. We have executed a memorandum of understanding
which is really an agreement between the hospital district, the county auditor's
office and the Commissioners court because you are the ones that fund my office,
so it obviously concerns you. And I want to talk about what the services are
and what they are not so that we all have a clear understanding. We spent
a lot of time to make sure that the financial policies that you'll wanted
the hospital district to follow, we followed in doing the accountening and
financial for the hospital. One of the things that we thought is that at no
cost, the auditor's office could do the accounting, financial reporting, the
payroll, and the payroll tax reports and the bank reconciliations by spreading
that work out through the office so it just takes a small bit of several people's
time. And we felt we could absorb that work. And so we'll be able to tell
that as the year goes on when we see what that actually entails. We thought
that that was the right thing to do because it saved the taxpayers money and
it also allows the hospital district district board to start focusing on direct
services and delivery of services while we help with, you know, for some would
seem like mundane things, but important financial activities regarding taxpayers'
money. So that's why we agreed to do that. That's the first reason. The second
is that the financial statements of the hospital district will be part of
the county's financial statements, and so we are very concerned that they
are correct and that the financial position is good so that it doesn't impact
negatively the county's financial position and our ability to get favorable
bond ratings and therefore interest rates when we have to issue debt. So that's
another reason. One of the things I want to point out is the role of what
the county auditor is and is not in that agreement so that you know that.
I told you what we did do, what we are going to do. What we will not do is
I will not be their auditor. And what difference does that make. I am your
auditor, so when you sign contracts and you define the services you want to
deliver, we do not pay those bills until there has been documentation that
those services have been delivered. And then I sign it, I sign the check,
it moves forward to you and you know we've looked at that. We will not be
doing that for the hospital district. So, for instance, the $41 million contract
with the city of Austin, we will not be determining whether those services
were rendered. The hospital district will make that decision themselves. They
will sign off on it and then they will pass it on to us merely to have it
paid. So we will not be into the auditing function, and that's very different
than the services that we render for you. I will not be their chief financial
officer. That means I will not sign their checks. I will not sign their annual
report. We will prepare the accounting report, but that is their responsibility
to sign it and to do the management representation letter, and basically they
will direct the outside audit. They will hire an outside auditor. It may or
may not be the same auditor that Travis County has hired for their books.
But we have concern who they will hire because our auditors must look at that
work and they must sign off on it. So we do have a concern about that. The
quality of that audit. So if it is not good, if the audit on the financial
statements does not meet the standards of our auditor, then that will have
to be redone until it does because our auditor signs off on our statements
including those. So that will be an issue. One of the things that my staff
did was we prepared a time frame for their audit because it is important that
that is done in a timely manner so that Travis County can put together its
financial statements in a timely manner. And so we have got that down. The
other thing is that there will be many complex issues in setting up the hospital
district and what assets are valued at, you know, how things are accounted
for, and we are not paying our outside auditors to answer those questions,
and so the district has to hire a firm that will deal with those questions.
We, of course, will be working with that firm because we'll be doing the accounting
for the district. But I just wanted you to have a pretty good idea of what
we're agreeing to and what we're not agreeing to. The memorandum of understanding
allows either party to discontinue the arrangement if it does not work. And
one of the things that we have said is one of the ten anyways in there is
we will train whoever replaces us. And I made it real clear to members in
the finance committee of the hospital district that if they want us to do
that, that transition needs to be at a time when we have the staff to train
them, like not right now where we're closing our books and putting our own
[inaudible] together. This time of the year would not be the time to do that.
That's in a nutshell so you all know what Travis County, the auditor's office
and y'all are committing to do and what not to do. I think this is going to
be a really good arrangement. I think it is. I think it's going to work out.
I would suspect that there will be some minor changes as we go on and see
how they are operating and things they would like to do. You know, these quasi
governmental agencies, one of the real stkaeugsz, and I watched the board
on t.v. Thursday night, is tom young said, I just wasn't aware of all the
controls governments have and that's right, it not our money, it's not their
money, it's taxpayers' money so there are a lot more controls. There are controls
the state requires of counties and you have required that of them and we have
absolutely agreed with that. So I think we're off on a really good start.
I think this is a good arrangement to have with the district. Y'all set the
tax rate, you set the budget, you are used to our preparing financial statements
for you, and I think this is going to work well. I think it's a good cooperative
arrangement between y'all, our office and the hospital district. So that's
just kind of an overview, a tremendous amount of work went into this and I
want to thank the staff in my office that did this. Diana w, kimberly walton,
mike wicker, jose and charles worked a lot during the worst time of the year
for us and I wasn't here. So I really appreciate the effort. And the hospital
district, tom young, clyde worked very hard on it as well.
>> susan, do we believe that the board of managers appreciates
the various points that you made?
>> we have tried to make them appreciate that, judge. There
has been many discussions, but I am willing to meet with them or talk to them
and probably will as we're going on so that they do -- do understand that.
I mean, none of these things seem important until you've got a problem, and
then you've got -- and then they are really important. And it's not the kind
of things -- even I sensed watching them Thursday, and I absolutely understand
this, they are chomping at the bit to get into the medical care, that's what
they are interested in, but these things have to be taken care of. I think
they do. We're going to know as it starts progressing and we actually start
doing work for them. If I think there's not a clear understanding, I will
meet with them. If we think there is a real problem with our report, then
I?m going to come back to the Commissioners court because it impacts you as
well. But I think that -- do you think they do, diana? You've been meeting
with them.
>> I do. And I think if we can look at the r.f.q. To make
sure it's got the deadlines in there and evaluations.
>> yeah, and we're concerned with that they get someone who
has worked with hospital district accounting. It's not like other things.
We need someone who has done that and has the ability to do that because what
we do not want is a mess at the end of the year where we find out that dwight
is not happy with the work and then -- I mean that's a problem. Timing-wise
it's a problem. So I?m hoping we're not going to get to. That but I do think
diana is absolutely right and she's communicated in writing, we need to make
sure their r.f.q. Gets the kind of credentials we believe that's going to
be necessary to report this part of the statement. We have an interest in
that.
>> in terms of the auditor that they have.
>> right. And that is absolutely their decision.
>> right.
>> but we need qualifications.
>> do we think that the 12-page memorandum of understanding
does a pretty good job of laying out what we believe the auditing requirements
are?
>> this is more on the accounting services we're performing.
In the financial policies, we set deadlines. You know, the audit has to be
completed by December 31st. So from that what we did for the time line was
to back it up. If you have to have your -- the audit -- the opinion issued
by the 31st when you start the audit and when do you have interim completion
dates. That's what we laid out and gave to mr. Young, jim collins and ms.
Mendoza to give to the board.
>> that's the one-page summary?
>> that's the one page plus the specific requirements we
gave --
>> r.f.q.?
>> right, that section. We gave them that. We had given back
in September the evaluation factors that we've used in our r.f.q.s with the
county.
>> okay. I may well just inform -- let them see -- we believe
that we're in agreement and, I mean, if we're not, it's time to address the
issue.
>> it's now. I agree. And cyd is writing the r.f.q. For them
because they are required to use the -- comply with the county purchasing
act and use the county purchasing officer. That's really the only concern
that we have, and you are right, judge, deal with that now rather than when
there's a problem.
>> is this a proposed memorandum, judge, that we're sending
off to the hospital district saying we would like for you to sign this or
have they already signed off on the memorandum and are waiting on us?
>> they signed and I signed for you to approve.
>> anybody else here on this item? Who would like to give
comments today? Okay.
>> thank you very much.
>> move approval of the memorandum of agreement with the
Travis County hospital district regarding the described services.
>> seconded.
>> discussion? All in favor? That passes by unanimous vote.
Thank you very much, susan. Are you doing all right? Looking well. Good to
see you. Any other matters regarding the hospital district, john that is correct
we need to take care of today?
>> not at this time. Just to let you know that the services
agreement, you know, the big interlocal agreement will be presented at jim
collins for -- he's starting to review later on in the week and i'll give
you a copy at the same time.
>> we're looking toward having that on maybe November 9th?
>> that would be a good day to shoot for.
>> we didn't think about this last week, we didn't talk about
it a whole lot, but next Tuesday is election day. So far the agenda looks
pretty light so it probably is a good idea to keep it that way. The other
thing in terms of a schedule is that on the afternoon of November 9th, or
the 10th or 11th, we need to do the executive managers and about 30 minutes
of strategic planning. [indiscernible] we had kind of talked about earlier.
>> yeah, I?m just looking at the timing. I?m out all of next
week as well, and just a reminder November 11th is veterans day, so the 11th
won't work because that's a county holiday.
>> what about the 10th? I know it's pre-veterans day.
>> have to check calendars.
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Last Modified: Wednesday, October 26, 2005 3:27 PM