Prepared By:
Lorie Gregg, Director of Corporate Services
Date:
December 19, 2019
Subject:
Q3 Financial Results
BACKGROUND
The Leadership Team of the Windsor-Essex County Health Unit (“the WECHU”) monitors financial results on an on-going basis for the following programs:
- Mandatory programs funded to a maximum of 75% (“Cost-Shared”) by the Ministry of Health and 25% by the Corporation of the City of Windsor, the Corporation of the County of Essex and the Corporation of the Township of Pelee (hereinafter referred to as the “Obligated Municipalities”);
- Related programs funded 100% by the Ministry of Health;
- Related programs funded 100% by the Ministry of Children, Community and Social Services (“MCCSS”).
- One-time business cases funded 100% by the Ministry of Health.
The third quarter financial report to the Board includes a budget to actual comparison and narrative for material variances for all programs listed above, as well as forecasted financial results for the year-ending December 31, 2019.
COST-SHARED PROGRAM FINANCIAL RESULTS
The following is the financial information for the Cost-Shared programs including Vector-Borne Diseases and Small Drinking Water Systems for the period January 1, 2019 to September 30, 2019 with forecasted financial results for the year-ending December 31, 2019.
| 2019 Budget | YTD Budget | September 30, 2019 | Forecasted December 31, 2019 | Variance September 30, 2019 | Variance Forecasted December 31, 2019 | |
|---|---|---|---|---|---|---|
| Salaries | 13,255,133 | 9,941,350 | 8,427,236 | 12,000,919 | 1,514,114 | 1,254,214 |
| Employee benefits | 3,575,890 | 2,681,918 | 2,348,178 | 3,231,358 | 333,740 | 344,532 |
| Travel and meetings | 48,752 | 36,564 | 5,910 | 19,374 | 30,654 | 29,378 |
| Mileage | 216,425 | 162,319 | 131,704 | 169,427 | 30,615 | 46,998 |
| Professional development | 109,100 | 81,825 | 25,943 | 48,690 | 55,882 | 60,410 |
| Association and membership fees | 45,000 | 33,750 | 34,457 | 43,833 | (707) | 1,167 |
| Office supplies | 40,000 | 30,000 | 23,362 | 42,000 | 6,638 | (2,000) |
| Program supplies | 714,626 | 535,970 | 457,760 | 938,202 | 78,210 | (223,576) |
| Office equipment rental | 142,000 | 106,500 | 77,907 | 129,862 | 28,593 | 12,138 |
| Advertising and promotion | 8,500 | 6,375 | 709 | 1,362 | 5,666 | 7,138 |
| Purchased services | 105,310 | 78,983 | 65,787 | 101,887 | 13,196 | 3,424 |
| Board expenses | 22,450 | 16,838 | 11,390 | 17,211 | 5,448 | 5,239 |
| Professional fees | 143,300 | 107,475 | 162,904 | 259,912 | (55,429) | (116,612) |
| Bank charges | 20,000 | 15,000 | 14,346 | 18,766 | 654 | 1,234 |
| Rent | 770,000 | 577,500 | 575,878 | 766,215 | 1,622 | 3,785 |
| Building maintenance | 161,300 | 120,975 | 116,011 | 160,097 | 4,964 | 1,203 |
| Utilities | 155,000 | 116,250 | 93,677 | 135,857 | 22,573 | 19,143 |
| Taxes | 221,000 | 165,750 | 173,125 | 211,378 | (7,375) | 9,622 |
| Insurance | 83,500 | 62,625 | 79,749 | 79,749 | (17,124) | 3,751 |
| Telephone | 121,200 | 90,900 | 69,929 | 103,005 | 20,971 | 18,195 |
| Security | 17,500 | 13,125 | 51,445 | 53,396 | (38,320) | (35,896) |
| Vehicle expenses | 2,100 | 1,575 | 694 | 911 | 881 | 1,189 |
| Postage and freight | 33,500 | 25,125 | 20,540 | 34,614 | 4,585 | (1,114) |
| Parking | 91,000 | 68,250 | 68,362 | 91,000 | (112) | - |
| 20,102,586 | 15,076,940 | 13,037,002 | 18,665,201 | 2,039,938 | 1,437,385 | |
| Offset revenue | (200,000) | (150,000) | (143,510) | (187,173) | (6,490) | (12,827) |
| 19,902,586 | 14,926,940 | 12,893,492 | 18,478,028 | 2,033,448 | 1,437,385 | |
| Vector-Borne Diseases | 350,000 | 262,500 | 155,408 | 182,243 | 107,092 | 242,908 |
| 20,252,586 | 15,189,440 | 13,048,900 | 18,660,271 | 2,140,540 | 1,667,466 |
For the period January 1, 2019 to September 30, 2019, cash flows relating to the 2019 program year are as follows:
Ministry of Health
$10,445,165
Corporation of the City of Windsor
2,349,140
Corporation of the County of Essex
1,745,296
Corporation of the Township of Pelee
1,695
$14,541,296
At September 30, 2019, the variance from budget to actual total expenditures amounted to $2,033,408. Specific variances are as follows:
- Salaries and Employee benefits: Expenditures in these financial captions relate to salaries and benefits paid to the WECHU staff in service of the Mandatory Cost-Shared Program. The combined variance from budget of $1,847,854 is attributed to:
- Labour disruption involving the WECHU staff represented by the Ontario Nurses Association (“ONA”) for the period March 8th, 2019 to May 8th, 2019 (approximate savings of $996,000);
- Given the uncertainty that arose with the April 11th, 2019, Ontario Provincial Budget, certain positions, predominantly non-union, remained unfilled (approximate savings of $450,000 );
- Gapping resulting from vacancies (i.e. extended recruitment processes; voluntary departures; unpaid leaves; back-filling positions for unpaid leaves);
- Gapping due to under utilization of certain other compensation related provisions (i.e. overtime, benefits, etc.) (approximate savings of $110,441).
- Travel and meetings, Mileage, Professional Development: The combined variance associated with these financial captions was $117,151. The aforementioned labour disruption had an impact on these financial captions, causing the WECHU to reprioritize certain less essential activities for those more critical to client service delivery, both during and subsequent to the labour disruption. Adding to this was the release of the Ontario Provincial Budget, and the austerity measures that the WECHU put in place to ensure that financial resources would only be directed to mandatory travel, meetings and professional development (similar to those put in place by the Province of Ontario).
- Program supplies: Expenditures in this financial caption support the activities of the departments, those that directly support Public Health Programs as well as those “support” departments such as Information Technology and Communications. At September 30, 2019, the variance compared to budget amounted to $78,210 and can be attributed to: i) The aforementioned labour disruption; ii) Timing of program activities.
- Professional fees: Expenditures in this financial caption include legal, audit and consulting fees paid to third parties. The budget variance in Professional fees relates to an increase in legal costs to support the WECHU with collective bargaining (ONA only) and during the labour disruption (approximate impact $114,090).
- Office equipment rental: Expenditures in this financial caption include the WECHU’s contractual lease payments on account of multi-function copiers and a large format printer used to support client service delivery. While the monthly contractual lease payments are consistent (approximately 44% of the 2019 annual budget or $62,480) the overage costs (the term used to describe utilization) vary depending upon the print volume.
- Utilities and Telephone: Expenditures in these financial statement captions include utilities for the Windsor and Leamington offices as well as all telecommunication (mobile, broadband, etc.). The variance at September 30, 2019 of $43,544 is due to lower than anticipated usage coupled with certain cost-saving measures undertaken by the WECHU.
- Security: Expenditures in this financial caption include security costs contracted on an as needed basis for after-hours events at our Windsor office location. The WECHU incurred additional security costs of $46,984 for the period March 8, 2019 to May 8th, 2019, on account of the labour disruption.
In addition to the budget to actual analysis above, the WECHU has provided forecasted financial results for the year-ending December 31, 2019. These forecasted financial results consider actual year-to-date results at November 30, 2019, as well as estimates of expenditures for the remaining 31-day period. Total forecasted expenditures for the year-ending December 31, 2019 are anticipated to be $1,424,558 underspent when compared to budget. Material variances between forecast to budgeted financial results are detailed below:
- Salaries and Employee benefits: For the year-ended December 31, 2019, Salaries and Employee benefits are forecasted to be $1,592,568 underspent. This is attributed to:
- The aforementioned labour disruption (approximate savings of $996,000);
- Austerity measures taken by the WECHU resulting from the release of the 2019 Ontario Provincial Budget (approximate savings of $617,526);
- Gapping resulting from vacancies (i.e. extended recruitment processes; voluntary departures; unpaid leaves; back-filling positions for unpaid leaves);
- Finalization of negotiations with the WECHU employees represented by the Canadian Union of Public Sector Employees (“CUPE”) resulting in a one-time bonus to said staff. The Board of Health approved a one-time bonus to the non-union group of the same amount (approximate impact of $126,000).
- Program supplies: For the year-ended December 31, 2019, Program supplies are forecasted to be overspent by $223,576. This is primarily attributed to:
- Costs associated with translation of the WECHU’s food handler courses into multiple languages (approximate impact of $17,000).
- Implementation costs associated with the Ceridian Dayforce Project (approximate impact of $26,000).
- Acquisition of two vaccine fridges to replace existing vaccine fridges nearing “end of life” (approximate impact of $21,042).
- Acquisition of nicotine replacement therapy/tobacco cessation supports (approximate impact of $50,000).
- Acquisition of information technology hardware (i.e. computers, servers, etc.) to replace existing equipment before “end of life” due to hardware defects (approximate impact of $30,000) and accelerating replacement to reduce budgetary pressures in 2020 (approximate impact of $20,000).
- Professional fees: For the year-ended December 31, 2019, Professional fees are forecasted to be overspent by $116,612. The forecasted variance in Professional fees is attributed to the labour disruption.
- Security: For the year-ended December 31, 2019, Security is forecasted to be overspent $35,896. The forecasted variance in Security is attributed to the labour disruption.
HEALTHY BABIES HEALTHY CHILDREN PROGRAM FINANCIAL RESULTS
| 2019 Budget | YTD Budget | September 30, 2019 | September 30, 2018 | Variance 2019 Budget | |
|---|---|---|---|---|---|
| Salaries and benefits | 2,629,189 | 1,971,892 | 1,628,323 | 1,826,354 | 343,569 |
| Mileage | 60,000 | 45,000 | 36,672 | 36,443 | 8,328 |
| Travel and meetings | 3,000 | 2,250 | 92 | 7,678 | 2,158 |
| Professional development | 10,400 | 7,800 | 1,220 | 21,408 | 6,580 |
| Program supplies | 38,252 | 28,689 | 12,997 | 6,425 | 15,692 |
| Purchased services | 15,000 | 11,250 | 3,379 | 4,350 | 7,871 |
| 2,755,841 | 2,066,881 | 1,682,683 | 1,902,658 | 384,198 | |
| Funding - MCCSS | (2,755,841) | (2,066,881) | (2,066,885) | (2,066,885) | 4 |
| - | - | (384,202) | (164,227) | 384,202 |
The Healthy Babies/Healthy Children Program is funded through the Ministry of Children, Community and Social Services. This Program supports 27.0 FTEs comprised of managers (2), nurses (17), family home visitors (4), social worker (1), and support staff (3). The objective of the Program is to ensure a healthy future for children and their families.
For the period January 1, 2019 to September 30, 2019, the HBHC program underspent compared to budget in the amount of $384,202. Factors contributing this include: i) Labour disruption involving the WECHU staff represented by the ONA for the period March 8th, 2019 to May 8th, 2019. This resulted in a variance in Salaries and benefits of approximately $280,000 and Mileage of $6,000 and likely attributed to under utilization of Professional development of $6,580 and Program supplies of $15,692; ii) Lower than anticipated Purchased services (i.e. translation) because of our use of an Arabic speaking nurse to address the needs of our community.
As reported at the November 4th, 2019, Budget meeting, the MCCSS modified the funding year for this Program from the calendar year to an April to March timeframe, aligning the funding year to the Province of Ontario’s fiscal year. It is the WECHU’s understanding that reporting for this Program will be for the 15-months ending, March 31, 2020. Administration will report forecasted financial results in February of 2020 for this program.
NURSE PRACTITIONER PROGRAMS
| 2019 Budget | YTD Budget | September 30, 2019 | September 30, 2018 | Variance 2019 Budget | |
|---|---|---|---|---|---|
| Salaries and benefits | 146,617 | 109,963 | 85,217 | 101,671 | 24,746 |
| Mileage | - | - | 181 | - | 181 |
| 146,617 | 109,963 | 85,398 | 101,671 | 24,565 | |
| Funding - MCCSS | (139,000) | (104,250) | (104,254) | (104,254) | 4 |
| 7,617 | 5,713 | (18,856) | (2,583) | 24,569 |
The Nurse Practitioner Program is funded through the Ministry of Children, Community and Social Services. This Program supports 1 FTE (nurse practitioner). The objectives of the Program are to promote healthy pregnancy, birth and infancy for children, improve parenting and family supports, strengthen early childhood development, learning and care.
At September 30, 2019, this Program is underspent by $24,569 due to the labour disruption involving the WECHU staff represented by the ONA for the period March 8th, 2019 to May 8th, 2019.
As reported at the November 4th, 2019, Budget meeting, the MCCSS modified the funding year for this Program from the calendar year to an April to March timeframe, aligning the funding year to the Province of Ontario’s fiscal year. It is the WECHU’s understanding that reporting for this Program will be for the 15-months ending, March 31, 2020. Administration will report forecasted financial results in February of 2020 for this program.
FINANCIAL INFORMATION FOR RELATED PROGRAMS FUNDED 100% BY THE MINISTRY OF HEALTH
| 2019 Budget | YTD Budget | Actual September 30, 2019 | Forecasted December 31, 2019 | Variance September 30, 2019 | Variance Forecasted December 31, 2019 | ||
|---|---|---|---|---|---|---|---|
| Salaries and benefits | 1,207,326 | 905,495 | 866,391 | 1,185,063 | 39,104 | 22,263 | |
| Admin and accommodation | 31,445 | 23,584 | 23,584 | 31,445 | - | - | |
| Travel and meetings | 8,000 | 6,000 | 361 | 500 | 5,639 | 7,500 | |
| Mileage | 10,000 | 7,500 | 10,498 | 13,429 | (2,998) | (3,429) | |
| Professional development | 5,500 | 4,125 | 2,386 | 3,024 | 1,739 | 2,476 | |
| Association and membership fees | 300 | 225 | 535 | 535 | (310) | (235) | |
| Office supplies | 4,500 | 3,375 | 44 | 500 | 3,331 | 4,000 | |
| Program supplies | 100,229 | 75,172 | 107,981 | 158,591 | (32,809) | (58,362) | |
| Purchased services | 162,400 | 121,800 | 91,075 | 136,613 | 30,725 | 25,787 | |
| Total expenditures | 1,529,700 | 1,147,275 | 1,102,855 | 1,529,700 | 44,420 | - | |
| Funding - Ministry of Health | (1,529,700) | (1,147,275) | (1,147,281) | (1,529,700) | 6 | - | |
| - | - | (44,426) | - | 44,426 | - |
The Healthy Smiles Ontario (“HSO”) program is funded through the Ministry of Health. This program supports 14.25 FTEs comprised of a manager (0.75), dental assistants (5.5), dental hygienists (5.5), a health promotion specialist (0.5), and support staff (2). This program provides preventative, routine, and emergency and essential dental treatment for children and youth, from low-income families, who are 17 years of age and under.
For the period January 1, 2019 to September 30, 2019, the HSO budget is underspent $44,426. The most notable variances are as follows:
- A variance of $39,104 related to Salaries and benefits. This is due to the reallocation of FTE resources to other program initiatives such as the Ontario Seniors Dental Program (approximate savings of $21,645) as well as gapping resulting from timing of recruitment (approximate savings of $7,500).
- A variance of $32,809 related to Program supplies. The timing of the acquisition of Program supplies varies annually.
- A variance of $30,725 related to Purchased Services, which includes professional services provided by dentists as well as translation. As reported in at Q1 of 2019, there were fewer available dentists’ hours in the months of February and March. Subsequent to March 31, 2019, additional dentists’ hours are available.
Forecasted financial results for the year-ending December 31, 2019, indicate that the HSO program budget will be fully expended with amounts from Salaries and benefits being redirected to fund operating expenditures (more specifically Program supplies).
| 2019 Budget | YTD Budget | Actual September 30, 2019 | Forecasted December 31, 2019 | Variance September 30, 2019 | Variance Forecasted December 31, 2019 | |
|---|---|---|---|---|---|---|
| Salaries and benefits | 546,350 | 409,763 | 413,762 | 577,709 | (3,999) | (31,359) |
| Mileage | 30,000 | 22,500 | 25,382 | 35,680 | (2,882) | (5,680) |
| Travel and meetings | 3,045 | 2,284 | 784 | 2,392 | 1,500 | 653 |
| Professional development | 3,380 | 2,535 | - | - | 2,535 | 3,380 |
| Program supplies | 28,725 | 21,544 | 7,315 | 36,077 | 14,229 | (7,352) |
| Purchased services | 25,200 | 18,900 | 12,525 | 22,992 | 6,375 | 2,208 |
| Total expenditures | 636,700 | 477,525 | 459,768 | 674,850 | 17,757 | (38,150) |
| Funding - Ministry of Health | (636,700) | (477,525) | (466,779) | (636,700) | (10,746) | - |
| - | - | (7,011) | 38,150 | 7,011 | (38,150) |
Base funding for the Smoke-Free Ontario Strategy Initiative must be used in the planning and implementation of comprehensive tobacco control activities across prevention, cessation, prosecution, and protection and enforcement at the local and regional levels. Boards of Health must comply and adhere to the Smoke-Free Ontario Strategy: Public Health Unit Tobacco Control Program Guidelines and the Directives: Enforcement of the Smoke-Free Ontario Act.
At September 30, 2019, this program is underspent by $17,757. In May of 2019, the Ministry of Health approved certain one-time funding up to March 31, 2019 for cannabis related activities. The total one-time funding approval amounted to $96,700, of which, $37,656 was expended in fiscal 2018, and $44,158 was expended in Q1 of 2019, thus taking pressure off the calendar 2019 budget for this program initiative.
Forecasted financial results for the year-ending December 31, 2019, indicate that this program budget will be overspent $38,150. This overage relates to an additional FTE resource (Tobacco Enforcement Officer) added for fiscal 2019 only, to assist with increased work load with the legalization of cannabis in October of 2018. The overage for this program will be funded from the Cost-Shared Mandatory Program Budget.
| 2019 Budget | YTD Budget | Actual September 30, 2019 | Forecasted December 31, 2019 | Variance September 30, 2019 | Variance Forecasted December 31, 2019 | |
|---|---|---|---|---|---|---|
| Nursing Initiative | 437,253 | 327,940 | 264,498 | 392,100 | 63,442 | 45,153 |
| Enhanced Food Safety - Haines Initiative | 53,800 | 40,350 | 42,269 | 53,800 | (1,919) | - |
| Enhanced Safe Water | 32,900 | 24,675 | 13,786 | 32,900 | 10,889 | - |
| Harm Reduction Program Enhancement | 250,000 | 187,500 | 170,378 | 228,760 | 17,122 | 21,240 |
| Infectious Diseases Control Initiative | 466,517 | 349,888 | 326,924 | 444,304 | 22,964 | 22,213 |
| Needle Exchange Program Initiative | 63,000 | 47,250 | 47,250 | 63,000 | - | - |
| Total expenditures | 1,303,470 | 977,603 | 865,105 | 1,214,864 | 112,497 | 88,606 |
| Funding - Ministry of Health | (1,253,500) | (940,125) | (940,146) | (1,253,500) | 21 | - |
| 49,970 | 37,478 | (75,041) | (38,636) | 112,518 | 88,606 |
A description of other related programs is included below:
Nursing Initiative: The Amending Agreement for 2019 received August 20, 2019, aggregates the following program initiatives under “Nursing Initiatives”. These include: the Chief Nursing Officer Initiative; the Infection Prevention and Control Nursing Initiative; and the Social Determinants of Health Nursing Initiative. Base funding for these initiatives support the salaries and benefits of 4 nursing FTE’s or greater, with certain specific qualifications. At September 30, 2019, the aggregate underspent budget amounted to $63,442, which resulted from the labour disruption involving the WECHU staff represented by the ONA for the period of March 8th, 2019 to May 8th, 2019. At December 31, 2019, this program initiative is forecasted to be underspent by $45,153. The 2019 budget for this initiative included salary and benefit overages ($45,153) associated with three of the four assigned FTEs, which, subsequent to the labour disruption, are forecasted to be negated.
Enhanced Food Safety – Haines Initiative: This initiative was established to support implementing the Food Safety Program Standard under the Ontario Public Health Standards (“OPHS”). At September 30, 2019, there is a minor negative variance of $1,919 due to timing of purchases. This program initiative is not forecasted to be overspent at December 31, 2019.
Enhanced Safe Water: This initiative was established to increase the Board of Health’s capacity to meet the requirements of the Safe Water Program Standard under the OPHS. At September 30, 2019, there is no negative variance to report on. This program initiative is not forecasted to be overspent at December 31, 2019.
Harm Reduction Program Enhancement: Base funding for this initiative supports the Board of Health in the activities associated with its Local Opioid Strategy. More specifically it supports 2.5 FTEs dedicated to working on activities associated with: i) Our local opioid response; ii) Naloxone Distribution and Training; iii) Opioid Overdose Early Warning and Surveillance. At September 30, 2019, the budget for this program initiative is underspent by $17,122, which resulted from the labour disruption involving employees represented by the ONA (approximately $15,000) for the period March 8th, 2019 to May 8th, 2019. At December 31, 2019, this program initiative is forecasted to be underspent $21,240. In addition to the labour disruption noted above, gapping associated with certain other positions resulted. Recruitment is currently underway but is not anticipated to be concluded before year-end.
Infectious Disease Control Initiative: This initiative was established to support the hiring of infectious diseases control positions (4.5 FTEs) and supporting these staff to monitor and control infectious diseases. They serve to enhance the Board of Health’s ability to handle and coordinate increased activities related to outbreak management. At September 30, 2019, the budget for this program initiative is underspent by $22,964, which resulted from the labour disruption involving employees represented by the ONA for the period March 8th, 2019 to May 8th, 2019. The 2019 budget for this initiative included salary and benefit overages ($4,817) associated with the 4.5 FTEs allocated to this program, which, subsequent to the labour disruption, are forecasted to be negated.
Needle Exchange Program Initiative: This initiative was established to support the purchase of needles and syringes, and their associated disposal costs, for the Board of Health’s Needle Exchange Program. At September 30, 2019, there are no negative variances to report on. This program initiative is not forecasted to be overspent at December 31, 2019.
FINANCIAL INFORMATION FOR RELATED PROGRAMS FUNDED 100% BY THE MINISTRY OF HEALTH
| 2019/2020 Budget | YTD Actual June 30, 2019 | Variance to Budget | % Spent | |
|---|---|---|---|---|
| Mandatory Programs: Enhanced Mosquito Surveillance | 60,000 | 27,805 | 32,195 | 53.6% |
| New Purpose-Built Vaccine Refrigerators | 11,600 | 10,521 | 1,079 | 90.7% |
| Public Health Inspector Practicum | 10,000 | 10,000 | - | 100% |
Mandatory Programs - Enhanced Mosquito Surveillance:
This one-time funding supports an enhanced surveillance program. Eligible costs include salaries for students, supplies and additional equipment, identification and testing expenses, promotional costs and mileage. At September 30, 2019, there are no negative variances to report on.
New Purpose-Built Vaccine Refrigerators:
This one-time funding supports the acquisition of one new twenty-five (25) cubic foot purpose-built refrigerator used to store publicly funded vaccines. At September 30, 2019, the new purpose-built vaccine refrigerator has been acquired. No additional costs are anticipated.
Public Health Inspector Practicum Program:
This one-time funding supports the hiring of approved Public Health Inspector Practicum positions. Eligible costs include student salaries, wages and benefits, transportation expenses associated with practicum positions, equipment and educational expenses. This funding relates to practicum placements for the four-month period, which commenced May of 2019 and concluded in August of 2019. At September 30, 2019, the funding has been expended.
APPROVED BY
Theresa Marentette, CEO