140 Allstate Parkway
Suite 210
Markham, ON
L3R 5Y8
Tel: 905-948-1872
Fax: 905-948-8011
Toll Free: 1-866-392-5446
http://www.lhins.on.ca
140, Allstate Parkway
bureau 210
Markham, ON
L3R 5Y8
Tél: 905-948-1872
Téléc: 905-948-8011
Sans frais: 1-866-392-5446
http://www.lhins.on.ca
CENTRAL LHIN BRIEFING NOTE
INITIAL BASE ALLOCATION FOR THE CENTRAL LHIN HEALTH SERVICE PROVIDERS (TRANSFER PAYMENT)
ACTIVITY FOR FISCAL YEAR 2008/09
April 22, 2008
ISSUE:
How is the Central LHIN processing initial base allocation for its health service providers (transfer
payment) activity for fiscal year 2008/09?
PURPOSE:
To seek the Central LHIN Board approval for initial base allocation for the Central LHIN health service
providers (transfer payment) activity for fiscal year 2008/09.
BACKGROUND:
The Central LHIN began funding to health service providers effective fiscal year 2007/08. The process
for funding initial base allocation to health service providers in 2007/08 was as follows:
ƒ For 2007/08, the Ministry set up initial allocations. These were based on the 2006/07 approved
base allocations.
ƒ The Ministry confirmed details of the initial base allocation on August 19, 2007 as part of the
signed Minister-LHIN Accountability Agreement.
ƒ The Central LHIN staff verified that the details were consistent with the Ministry summary.
ƒ The Central LHIN Board approval for initial 2007/08 allocations was sought as part of the
Minister-LHIN Accountability Agreement approved by the Board.
ƒ The details by sector of the initial allocations for 2007/08 are as follows:
Transfer Payments by Sector
As per MLAA
June 21, 2008
Operation of Hospitals
936,621,187
Grants for Municipal Taxation
216,450
Long Term Care Homes
254,682,324
Community Care Access Centres
169,710,208
Community Support Services (incl. ABI)
30,640,900
Assisted Living Services in Supportive Housing
15,055,400
Community Health Centres
4,459,400
Community Mental Health
53,263,250
Addictions Program
3,600,445
TOTAL 1,468,249,564
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ANALYSIS:
The process for funding initial base allocation to health service providers in 2008/09 is similar to the
process used by the Ministry in 2007/08:
ƒ
ƒ
ƒ
On February 4, 2008, the Central LHIN received a listing of initial allocations for 2008/09 from
the Ministry.
The Ministry requires approximately six weeks advance notice to set up these initial allocations in
their system.
The Central LHIN staff verified that these initial allocations reflected 2007/08 initial base
allocations plus any in-year base approvals approved by the Board during 2007/08.
SYNTHESIS/CURRENT STATUS:
The Central LHIN staff determined that four allocations approved by the Central LHIN were not reflected
in the initial base allocations prepared by the Ministry. These are explained in the “Explanation of
Variance” column in the table below. This table summarizes the initial allocation for 2008/09. The first
column represents initial allocation for 2008/09 received from the Ministry and the second column
reflects corrections made by the Central LHIN staff.
2008/09 Initial Base Allocation by Sector
Received from
Ministry
Sector
LHIN
Submission
Variance
Explanation of variance
Ministry data did not include high growth
929,594 funding which was cash flowed in February
2008.
-
Operation of Hospitals
945,352,500
946,282,094
Grants for Municipal Taxation
Long Term Care Homes
Community Care Access Centres
259,778,444
169,710,208
259,778,444
169,710,208
32,580,118
32,580,800
1.5% base increase for Chippewas of Georgina
682 Island processed March 2008 after budget
issue was resolved.
18,240,630
18,240,630
-
4,524,937
4,524,937
-
53,461,889
53,463,250
4,175,457
4,177,157
1,487,824,183
1,488,757,520
Community Support Services (incl.
ABI)
Assisted Living Services in
Supportive Housing
Community Health Centres
Community Mental Health
Addictions Program
TOTAL
1.5% base increase for Markham Stouffville
1,361 Hospital processed March 2008 after budget
issue was resolved.
Adjustment to reflect total 3% base increase
1,700 for Early Childhood Development program as
per ministry announcement on Feb 04, 2008.
933,337
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The variance of $933,337 is due to timing differences in processing as follows:
ƒ The Hospital Growth workgroup had to develop the hospital growth funding formula before the
Central LHIN approved the distribution by hospitals.
ƒ Secondly, there were outstanding questions associated with the review of three community
agency budgets for 2007/08, and therefore, the increase for inflation was not processed until
Feb/Mar 2008. However, in order for the Ministry to set up cash flows ahead of time as explained
above, the Ministry was using information as of January 31, 2008 whereas staff processed
additional base increases in Feb/March 2008 (as explained in the variance column above).
The Ministry distributes these initial allocations evenly through 24 payments. This implies that all health
service providers have equal cash flow needs throughout the fiscal year. During the year, depending on
health service providers and the program that is delivered, there may be a need to amend the cash flow.
The amendment takes the form of reducing cash flow on a particular date and increasing the cash flow
on a different date, the overall impact is nil.
DELIVERABLES/IMPACT ON CARE: (How will it be measured?)
Deliverables are identified in:
•
Service Level Agreements, which are being renegotiated in 2008/09 for the Community sector.
•
Annual Budget submissions: Each health service provider submits an annual budget which provides
information on prior year actual and planned targets for the current year (financial and service
delivery). Staff review and approve their budgets during the year.
•
In addition, all health service providers are required to submit settlement forms and audited financial
statements to the Ministry to account for final expenditures for the year. This happens after the
year-end following completion of the health service provider audit. According to the Minister-LHIN
Accountability Agreement, the Ministry reviews these reports, and determines the final settlement.
The Ministry may send the settlement letter to the CEO for signature. Note: The audited financial
statements provide financial information only, not service targets.
COMMUNITY/STAKEHOLDER CONSULTATION/RESULTS:
Health service providers have been encouraged to deliver programs that promote the IHSP. Workgroups
and meetings are held to strategize on the optimal use of funds.
COMMUNITY/STAKEHOLDER IMPACT AS A RESULT OF THE PROPOSAL:
As much as possible, community organizations are encouraged to spend their base funding to promote
community programs since any final year-end surplus is recovered and returned to the Ministry of
Finance.
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”Planning target” letters will be communicated to the health service providers in the near future. Actual
funding commitment must wait until the Provincial Budget is passed.
ALIGNMENT WITH IHSP:
Base funding is targeted to programs or purposes that promote the IHSP mandate as one of the criteria
to review and approve community budgets.
DIVERSITY/EQUITY:
The base funding process does not have any negative impacts with respect to diversity.
RECOMMENDATIONS:
It is recommended the Board approve the initial base allocation for the 2008/09 fiscal year.
SOURCES OF FUNDING:
The source of funding is based on the Ministry approved allocations for 2008/09.
Template Updated – January 15, 2008
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