attention, they have had to work harder and we have had to work harder and we are just about finished. we are also switching to pay as you go. so there will be a skipped pay period and i'm going to make sure that the retirees get that in their retiree newsletter. that first pay retirement will not have a health care deduction in it. but you will have coverage but we are not paying in advance, we are paying as you go and reporting requirements for coverage which requires some reconfiguration. passing health care reform has been a labor intensive effort. i wanted to highlight a couple of things and end with some numbers about our flu shot clinic which were really

spectacular. when stephanie and i traveled to hetch hetchy, we took workers comp with us and we had a very fruitful engaging inspiring covering about what to do to inspire people three hours up and back. it was great for the two groups to be together and for both management and employees up at hetch hetchy to see that we are really invested in their well being. anyway, it was very successful to spend time with peg and meet with folks up there. the community college system as you know continues to have difficulties. it took a london -- long time to get the rates. we took last year's rates and applied them

and marina worked very hard on that and published them on a two rate because they were not ready and we are working closely now that they have someone in place trying to have city college on having a better handle on what their benefits are. the other two things i wanted to highlight where i was asked to represent the executive director of the pacific group on health david landsky. they were on the kennedy compound in massachusetts. patrick kennedy you may recall left congress and he is committed. he sponsored the kennedy forum and committed to the mental health parody is enacted. rules put forth

implementation and oversight has not been implemented. i represented the business group on health and a variety of people there we spent go days talking about mental health parody and how employers really will be key to pushing the implementation of it because public health departments don't really have the clout that employers have in washington. it was extremely moving and wonderful to be in president kennedy and senator kennedy's house. and there is a lot of follow up work that i said i would help with and we are looking very closely at mental health. i know we'll have a presentation by kaiser on mental health coming up and making sure we treat mental health just like we treat a physical illness. there should be no difference. that was very exciting and then i attended a

presentation with consumer reports with johnson funded program called "choosing wisely" and many organizations have signed onto it and tries to help consumers ask the right questions of the doctors and not just ask for another mri or another ct scan. i will be bringing some of that information to this board and perhaps scheduling someone from pbj to come and present wisely. they have incredible communication tools in english, spanish, mandarin and i think it would be a worthy thing for us to consider entertaining. it goes for each different diagnosis. so that concludes my directors report. >> any comments? >> >> would you care to talk or

make comments about icm? >> >> thank you. i needed that prompt. so there are two other reports in your packet. one is on the integrated care management fee and commissioner scott, because you spent so much time attending the meetings, i imagine that proported -- prompted you to remind me. the integrated care management fee was brought up at the may health service board meeting and it was discussed that it was made up, it was 17 percent of our total spend. over the course of the last year, meetings were held at first almost every week and then every month to look at the different things that the integrated care management fee is spent on. and those are

things that can't be coded because they don't have a diagnosis code. there is really no way of quantifying how much they cost or how many of them are done. kaiser shared the eight categories that they look at and kaiser also shared you know whether they were clinical or administrative. we with assistance took the medicare guidelines and walked through every single one of them until we got agreement i think on all but a couple in terms of spending that money. now, when you are looking at a non-staff model, health plan, those fees are just built in to the price. they aren't separated out so the care management, the communication

will electronically, the health education, all of those fees are just built into charges that are then of course built into our capitation rate and kaiser being more transparent on how much it spends on medical care and how much it spends on care coordination and it graegs, -- integration pulled them out in 2012 and we did not see a commensurate increase in the prices. so the prices stayed the same, but the fee came out and in some cases the prices went down. so we felt like we concluded our work. kaiser learned a lot, we learned a lot and they have agreed that there are some areas that they will continue to look at and try to tease out more information. they are not sure how they are going to

handle coding with telemedicine and even telephones with picture video, they are just afraid of, it's few confusing for cms at this point. so they can't do those. the way the fee is allotted is based on our utilization. if we have very very high utilization, then we get the high i cm fees. if it's very low, we get the icm fees. it's not a fee per class attendance. i will let you ask questions or add your comments since is you participated in most of the meetings. >> are there kaiser representative here today? >> >> yeah. >> i just want to say publically that while it was dredgeary going through page

by page, cell by cell, all the details for going through with us, i wanted to commend you for doing it. there is questions to be raised by employers and yourself, but the fact that you took it with clarity and commitment is commended. we thank you for doing it. we started in a vast place trying to understand what it is you are doing and why you did it and we came out of it with a little bit more clarity. my great hope is that your systems and efforts in the systems which we phrase with you will indeed take route in the organization and make continuing commitment to pursue tracking, analyzing an confirming not just because volume driven but there is actual data behind the volume that says for our organization this needs to be done. but i

wanted to say thank you for doing it and it was educational and very very useful. >> the last item was the transparency resolution that was passed by the board of supervisors and i'm seeing my simplified report is not in here. but essentially i have begun meeting with the vendors and they were all mailed a copy of the resolution and they were going to meet with me to discuss how they were going to comply with the resolution. i have not met with dmp and united health care. they are a little bit more transparent. i have a meeting scheduled in november and december with blue shield and kaiser. so we are going forthwith that and we'll be setting up a convening of meetings to set up experts by

how can a local entity have more transparency. so that concludes my report. it has been a busy 60 days. >>president jean s. fraser: do we have anything else? >> >> i would like to commend you on the mental health parody. we realize they are often caused by physical issues that the distinction is not real. it's one we made up many years ago and unfortunately both creates much more stigma around mental health issues which we should have which prevents people from getting treatment but it also classifies them as others and we also know that mental health illnesses are very large in terms of productivity and of course quality of

life. any and all efforts to bring parody to the mental health illnesses will benefit society in general. thank you for this. all right. public comment? >> good afternoon commissioners, clara, representing retired employees. most of what you said was lost because you are not into microphone, anyway. it was lost. speak into the the microphone. thank you. i want to also comment on mental health. the -- it is an extremely issue for retirees because depression is a significant issue and a lot of times it is not diagnosed or misdiagnosed as we get older and it is a problem in the aging community. it's very

significant for our population. i'm also glad that you went to hetch hetchy. everybody is always glad when there are visits and they appreciate having that specific attention where they can get information that otherwise they would miss. this year, your offices, you brought us kaiser for shots at our health fair at our acs october meeting and i want to thank you very very much and margaret wag -- was incredible and how she coordinated that and we couldn't have done it without the wellness group and everyone who came to our health fair in october. it was wonderful and some of the last goodies they brought for leftovers. vft brought us some wonderful little

magnifying rulers and those went. they disappeared very quickly. a lot of us put them in our books, they are really great wechl had to sort of, we remembered that health fair and we were grateful. the flu shots were a success. i thought there were more given out and there was a confusion about whether or not you have to be a kaiser member. we let them know that it's not a criteria. my expectation there will be close to a hundred to get a shot. be merge, we are all forced into emerge. we were led down the path as a commission and as an office when i was serving on this board that we had to participate in emerge and we had to support it and we couldn't get our own system. i think we really need to impress upon them that they

need to make changes in that system so benefits can function more independently. that was part of why we were brought in to be part of the emerge thing. it took many many many years. they are still not serving us 100 percent. i want to commend the staff for what you did for this year. i think it's great. i think it's a big step but i think there is more that can be done and i hope you all press for it. thank you very much. >> dennis kruger active and retired firefighters. i looked at the report from kaiser and see they were able to code in integrated care management fee. i just hope next year that that fee will

be shown whatever it is minus the coded so that all will see what kaiser will be charging us and i hope that the board is satisfied with what was produced and if it isn't, that they continue to pursue further transparency for that. on a second related issue, i'm sorry that you are leaving. i know you have spent time down in san mateo and this could be a journey, but i would like to recommend one name as a possible replace many and that would be clara savsky. >> madam chair, i neglected to give you the number of flu shots, could we? >> >> sure. >> i don't know if the board remembers but we started flu shots three or four 4 years ago and we started with two

or three sites. we did them at the wellness fair and there was a request from the unions when we were going through prop c or prop b, to bring thins -- things to the work site to go to the wellness fair, so we attempted to do that. and the numbers are staggering and we had a celebration today and congratulated margaret on her efforts to go from 3 clinics to 19 clinics. >> great. thank you. although open enrollment is traditionally a very business i -- busy time for hhs, we decided to add 19 flu shots clinics to the mix. so i appreciate mitchell's comments about letting us tagalong.

it's been an amazing process but thinking about the hhs support team and in addition to all the things they were doing for open enrollment and expansion there. we also rolled out two initiatives. i do have the numbers of the 19 clinics. we had our first evening clinic at the wellness center, we had our first retiree only clinic, thank you. so those are a couple of the highlights. you have right now the numbers for the 17 of the 19 clinics. the last clinic is on monday. if anybody missed their flu shots, you can go between 9th floor and still get your flu shots. this shows you the growth over time. the first year there were 5 clinics and just over 1,000 people

vaccinated. this year we are at 19, we'll be having more than 2800. i think for me i heard stories about how it was challenging to get people to have a flu shot clinic let alone come to it. it was very different this year. i was looking at the e news rate and everybody wanted to know where they were and instead of asking us to come. i hope they all pass the flu shots and instead of us having to do so much promotion. that's what you will see on the slides. a last thank you, yes, it takes margaret and it takes kaiser and the flu shots

but we need contacts in all of those departments. these are all the departments that listed and had flu shots and all of those departments were able to help. thanks to all of those. >> congratulations on the wonderful results. >>president jean s. fraser: all right nichlt -- any public comment. all right. next item. city clerk: presentation of audited financial statements for fiscal year 2013-2014. >> pamela levin. >> pamela levin deputy director chief financial officer. i have with me jamie kaufen, she's a sr. manager

and she will give a presentation on the audit and i will give a presentation on the financial statement. >> thank you for having me return second year here. just as pamela indicated my name is jamie cabin a manager with kmg and i will presenting the audited report for the health services system trust fund. this presentation will address the required communications to the board in accordance with the state standards. no. 114 and 15 and a summary of the 2014 audit. so to start with the scope of our audit we performed it with the

general auditing standards in regular guidance to support an audit. >> we have a presentation sf govtv? >> okay. go ahead. >> i believe you have the packet and the financial statement. in this process and our required guiding process we assess the financial statement and free of errors and we also look at the is estimate and evaluate the financial statement presentation. upon our conclusion of the audit we issue two reports. 1st is the independent audit report on the financial statement of which we issued an unmodified and clean opinion and next we issue a report on the

controller of the financial reporting in compliance and recording government audit standards and this is claim report which noted no deficiencies and no instances of non-compliance. in regards to audit results, there are three highlights based on significance is variances from prior years that we would like to point out. first one the reserve for claims which is 14 percent from $25 million to $29 million from prior year. this is due to the increase in the anticipated claims incurred but not reported. as the blue shield plan switches to a flex plan in january 2013, we had an estimate reserve considered for historical data for a proper full year. next we have the premium payable which decreased 22 percent from $17 million to $13 million

primarily due to the timing of payment and timing of plan changes compared to prior year and current year. next the unearned contributions decrease from 24 percent to $44 million attributed to payroll deduction. in 2014 there was only one pay period processed compared to two pay periods prior to year-end. to continue on with our required communications and our responsibilities under the general accepted auditing standards we first consider the control necessary to design an effective audit approach however not for the purpose of providing an opinion ora insurance of operating effectiveness of internal controls as you do

with a publically traded company we design based on understanding of the trust as to the absence of the material in the statement in the financial statement and this means that we develop an audit performance materiality and we audit to that threshold so we sample transactions and analytically test accounts so we do not test all transactions. we also perform a systems compliance with regulation with laws and contracts only to the level that can have a direct material effect on the financial statement and last we'll pine on the financial statement and compliance based on audit results as indicated earlier. we had two clean opinions. okay we

communicate significant accounts that require judgments or estimates. we consider these areas higher inherent risk because of the significance to the financial statement and because of the possibility of future events affecting that may differ from management's current judgment. the significant estimate hyphenated by systems in the reserve claims and estimate for the reverse in the health plan is based upon an actionary analysis for debts incurred but not reported. our audit consist of our own actuaries analysis reviewing the method and data and as far as the audit procedure we test the underlying data that both actuaries reviewed and were reasonable and fall within the range allowable understand

the standards. in terms of the audit adjustments, overall noting the department does have the materially clean and reconciled books. we have no disagreement or difficulties with management. the finance and accounting department were prompt with request and had knowledgeable staff and complied with all of our audit request and we appreciate the assistance of pamela and her team of getting the audit completed on time for the city's requirement. in regards to no consultation with other accountants. we note to the board that to the best of our knowledge that management has not consulted due to management not agreeing

with our analysis or interpretation of accounting literature. we have no major issues discussed with management prior to retention, prior to our contracted services we have not had discussions outside the normal course of the audit and maintain independence with the system and the city and county and with regards to material written communication we have an engagement letter with the city and coined of -- county of san franciscans and a letter from management completed to finalize audit. i stand for any questions. >> any questions? >> >> yes, you are very clear about the limitation of why you are view around internal controls and i think it's on page of the audit statement

where you refers -- reference this. you make clear where you don't have an opinion of effectiveness of internal controls. >> krenth. >> my question is what would it take for you to have such an opinion? >> >> that type of opinion is not required under the government auditing standards for this organization. it can be an add on request and opt to, what it would require is additional procedures and thorough procedures performed over all the processes and key internal controls with the organization. throughout our audit process we do evaluate the processes key to financial statement and test design of controls and to the point of limiting the risk that we've identified in over all inherent risk on financial statement accounts. so we do

an overall for the purpose of determining rick in the audit and control process. we just do not perform to a separate extended level of audit of issue of report. >> i know it's another topic of the role of the treasurer and getting an understanding on how that operates and works. you make a brief reference to the role of the treasurer and you move on. is there anything that you think we ought to know as we try to understand this better, this process in relationship with the city treasurer's office? >> >> with the city treasurer's office in regards to our audit procedures we do confirm and evaluate the processes and the