-----Original Message-----
From: Kris Boswinkel [mailto:boswinkelk@co.st-louis.mn.us]
Sent: Tuesday, March 10, 2009 9:08 AM
To: Sheila Ellingboe
Subject: change in treatment of MA/IM-RMS funds for single audit

We recently received notice that the treatment of IM-RMS administrative revenues and MA payments such as waiver case management reimbursement will change. It sounds as if all those funds will once again be subject to single audit testing, which likely to increase audit costs considerably. The change will be effective for year ending 12/31/2008. DHS will publish a bulletin.

#4 - FYI - there will be a significant change to how we now audit federal programs. I have already discussed this with Jan Seafolk. The DHS will soon be posting to its website IB 09-32-01 effective for 2008 that modifies who is considered a sub-recipient of federal funding. I sent a preliminary copy to Jan today since she requested it. In the past, according to an agreement with the DHS, some of the federal funds passed through to the State have been designated as vendored, and Counties were not considered sub-recipients. We did not include these in our Single Audit testing. That generally affected admin aids and the MA Program. The DHS has changed its position on this, and all of this is going to be considered federal for 2008. Counties are now considered subrecipients of these funds. What we formerly reported in the Intergovernmental Revenue Schedule in our audit report as Reimbursement For State Services, will all have to be reclassified to federal. Last year, that amounted to approximately $19 million. As things now stand, this will affect determination of major programs that are required to be tested under the Single Audit, and bring in MA as a major program. It is unclear at this time as to whether we may end up testing MAXIS again.
I will keep you posted as further information is forthcoming.

Kris Boswinkel
Budget and Finance Director
Department of Public Health and Human Services St. Louis County 320 W 2nd St Duluth MN 55802-1495
Telephone: 218-726-2053
Cellular Phone: 218-390-2126
Fax: 218- 733-2970
E-Mail: boswinkelk@co.st-louis.mn.us