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Health Service Board accepts clean audit, hears FY2025 fund projections
Summary
The San Francisco Health Service Board unanimously accepted an unmodified audit of the employee benefit trust fund and heard staff warn the benefit trust is projected to decline about $19 million in FY2025 amid higher medical claims and settlement costs.
The San Francisco Health Service Board unanimously accepted an unmodified audit of the Other Employee Benefit Trust Fund and reviewed financial projections showing pressure on reserves.
MGO partner Craig Harner told the board the audit of the fund for the year ended June 30, 2024, received an unmodified (clean) opinion issued Oct. 21 and found no material internal control deficiencies or reportable noncompliance. "We issued an unmodified opinion on the financial statements," Harner said, summarizing the audit's findings.
Separately, Principal Administrative Analyst Yuri Galagorski presented the SFHSS financial report through Sept. 30, 2024, projecting the benefit trust fund to decrease by about $19,000,000 for the fiscal year. Galagorski attributed the decline to roughly $9,000,000 in stabilization and settlement charges and to higher-than-expected medical claims in the year's first three months. He also reported projected pharmacy rebates of about $16,000,000 and interest income near $3,000,000. "The decrease is due to $9,000,000 in stabilization and settlement and higher medical claims," Galagorski said.
Board members asked about the Health Care Sustainability Fund, which Galagorski projected to fall by roughly $2,000,000 to an ending balance of about $4,600,000. Iftikhar Hussain, SFHSS chief financial officer (joining remotely), explained that a budget decision moved certain wellness activities into the trust fund, increasing near-term use of the sustainability fund. "So that's causing a higher use. We are still solvent," he said, noting the assessment and usage would be monitored.
Chair put the audit report to a roll-call vote; the board voted unanimously to accept the audit. The board asked staff to continue monitoring reserve levels and to return with any recommended adjustments to assessments or uses of one-time funds.
The meeting adjourned with no additional formal fiscal actions taken; staff will present more detail on open enrollment outcomes and operational dashboards at a future meeting.
