3 FY 2009 Reforecast Summary 1.Delayed hiring of personnel 2.Reduced spending on communications 3.Reduced use of consultants and professional support 4.Strategically leveraged resources and reduced/delayed spending on Commonwealth Care Premium Billing project Effect of such changes result in an estimated decrease in expenses of 11% Due to an estimated 12% reduction in administrative revenue, the Connector has:
5 Explanation of Significant Variances – FY2009 Administrative Budget 1.Operating Revenue – ($4,702,194) unfavorable variance –Variance due to revised CommCare membership projections based on conservative membership scenario 2.Salaries, Benefits & Payroll Taxes – $606,365 favorable variance –Variance due to delayed hiring of staff 3.Appeals Program – $678,071 favorable variance –Variance due to lower than expected caseload in the first half of FY09 –Based on recent activity level, expect caseload to increase significantly in early calendar year 2009
6 Explanation of Significant Variances – FY2009 Administrative Budget (cont) 4.Communications - $498,466 favorable variance – Variance due to a decrease in procurement of calendar year 2009 advertising and media contracts 5.CommCare Customer Service & Premium Billing – $889,509 favorable variance –Variance due to revised CommCare membership projections as well as lower than expected vendor transition costs
7 Explanation of Significant Variances – FY2009 Administrative Budget (cont) 6.Consulting & Professional Support - $772,385 favorable variance –Variance due to less than anticipated use of the following professional services: $353K due to actuarial services for CommCare $289K due to IT consultants for premium billing $170K due to legal services 7.Outreach Grants – ($500,000) unfavorable variance –Variance due to one-time contribution for FY09 outreach grants
9 FY 2008 Audited Financial Results Unqualified Auditors Opinion Year-end Operating gain of $2.2 Million; with Investment Income, gain of $3.1 Million –Higher than July BOD update of $0.5 Million Other Post Employment Benefits (OPEB) liability of $163,500 –Due to ramp up of full-time employees in calendar year 2008, expect FY09 liability to increase significantly
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