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KPMG issues clean FY2014 audit; HSS trust ends year with $92.8 million net assets
Summary
KPMG reported an unmodified opinion and no internal control deficiencies for the Health Service System FY2014 audit; HSS CFO Pamela Levin said the trust held $92.8 million in net assets at 6/30/2014 with $77 million in obligations and plans to use excess premiums to stabilize future rates.
KPMG presented the Health Service System’s fiscal‑year 2013–14 audit results to the board on Sept. 11 and issued two clean opinions: an unmodified audit opinion on the financial statements and a clean report on internal control and compliance under government auditing standards.
Jamie Cavan, Senior Manager at KPMG, highlighted significant year‑over‑year variances: the reserve for claims increased 14% (from $25 million to $29 million) because of anticipated claims incurred but not reported; premium payable decreased roughly 22% (from $17 million to $13 million) mainly due to timing differences; and unearned contributions fell about 24% (from $58 million to $44 million) tied to year‑end payroll timing.
Pamela Levin, Deputy Director and CFO, reviewed the Trust Fund balance: net assets of $92.8 million at June 30, 2014, up $15.5 million from the prior year. Levin identified approximately $77 million of obligations and reserves (contingency, stabilization reserves, ERRP, premium credits and other items), leaving about $15.8 million unobligated. She said $11.9 million of the increase was excess premiums over claims and will be used to help stabilize City plan premiums for FY2015–17.
Levin also explained that a portion of the HSS 205 budget (a trust budget line used for wellness, analytics and communications) is earmarked for projects including the All‑Payer Claims Database; commissioners asked staff to present the authority limits and more detailed budget allocation processes at a future meeting.
