FFY2015 EAP Annual Training August 12 & 13, 2014 St. Cloud

1. FFY2015 EAP Annual Training August 12 & 13, 2014 St. Cloud Performance Measures & Monitoring 1

2. National Performance Measures • Agenda • Background • The Measures • Performance Measures Pilot Test • What You Need to Do

3. Background • US Department of Health & Human Services (HHS) is implementing mandatory national performance measures starting in FFY15 • Required by law (since early ‘90s) • Performance Measures Work Group has been developing the measures since mid-2000s

4. Background • Performance Measures demonstrate your impact to those making decisions at the federal level • MN has been participating from the beginning • MN is in a good position to comply; we are viewed as a leader in performance measures and want to maintain our position of leadership • This is just Phase I. There is more to come.

5. The Measures • Energy Burden Targeting • Prevention & Restoration of Loss of Service

6. The Measures • Energy Burden Targeting • Benefit Targeting Index: Do we target higher benefits to higher burden households? • Burden Reduction Targeting Index: Do we reduce the energy burden of higher burden households more than average? • Prevention & Restoration of Loss of Service

7. The Measures: Why? • LIHEAP Statute Requires it: • Energy Burden Targeting “provide, in a timely manner, that the highest level of assistance will be furnished to those households which have the lowest incomes and the highest energy costs or needs in relation to income” • Resumption or Prevention of Energy Loss • Statute requires energy crisis intervention

8. The Measures • Part I: Energy Burden Targeting • Energy burden = Energy cost ÷ Household Income • It is the % of household income spent on home energy costs • High burden households are those that spend a greater share of their income on home energy costs

9. The Measures • Part I: Energy Burden Targeting • Benefit Targeting Index: Compares the average benefit amount for high burden households (x) to the average benefit amount for all households (y), or x ÷ y • Higher index score is better; should be above 100 • Burden Reduction Targeting Index: Compares the average % change in energy burden for high burden households (a) to the average % change in energy burden for all households (b), or a ÷ b

10. The Measures Energy Burden Measures: Think of them this way (slides courtesy of Verve Associates)

11. Jane and Jim both live alone, and they have the same income of $15,000 per year. For the purpose of this presentation, Jane is considered an “average” household. Jim is a considered a “high burden” household because he pays more of his income toward his energy bill. ENERGY BILL $100 JANE SMITH 123 MAIN STREET ANYTOWN, USA 12345 ENERGY BILL $400 JIM JONES 987 MAIN STREET SOMEBOROUGH, USA 54321

12. ENERGY BILL $100 JANE SMITH 123 MAIN STREET ANYTOWN, USA 12345 • Both Jane and Jim visit their local LIHEAP offices. • Jane is awarded a $20 LIHEAP benefit. • Jim is awarded a $40 LIHEAP benefit. ENERGY BILL $400 JIM JONES 987 MAIN STREET SOMEBOROUGH, USA 54321

13. ENERGY BILL $100 JANE SMITH 123 MAIN STREET ANYTOWN, USA 12345 The Benefit Targeting Index tells us whether high energy burden households receive higher LIHEAP benefits than average households. In this case, the LIHEAP program effectively targeted higher benefits to Jim—who pays a higher share of his income toward energy costs than Jane. ENERGY BILL $400 JIM JONES 987 MAIN STREET SOMEBOROUGH, USA 54321

14. ENERGY BILL $100 JANE SMITH 123 MAIN STREET ANYTOWN, USA 12345 The Burden Reduction Targeting Index tells us whether high energy burden households have a larger share of their energy bill paid with LIHEAP than average households. In this case, even though Jim got a bigger LIHEAP benefit, it still didn’t stretch as far as Jane’s. Jane’s $20 LIHEAP benefit covered 20% of her energy bill. However, Jim’s $40 LIHEAP benefit only covered 10% of his energy bill. ENERGY BILL $400 JIM JONES 987 MAIN STREET SOMEBOROUGH, USA 54321

15. We see this pattern in the “real” data as well. In 2009, the program paid higher LIHEAP benefits to households with higher energy burden.

16. However, in both 2005 and 2009, high burden households had a lower percentage of their energy bill paid with LIHEAP than average households.

17. Performance Measures Pilot Test Results

18. Performance Measures Pilot Test Results We found (FFY13 data): Average Annual LIHEAP Household Income: $17,275 Average Total Annual Residential Energy Bill: $2,003 Average % Reduction in Energy Burden: 33.2%

19. Performance Measures Pilot Test Data - MN • For households in the top 25% of energy burden, we found: • 45% higher average total benefits • 13% greater energy burden reduction • For fuel oil and propane households, we did not target the highest burden households as well as we did for other fuel types.

20. Performance Measures Pilot Test Results In MN: Benefit Targeting Index Results In 2013, high burden households received a benefit 45% higher than the average household. [Index Score: 145]

21. Performance Measures Pilot Test Results In MN: Burden Reduction Targeting Index Results In 2013, high burden households had 37.6% of their annual home energy bill paid, compared to the average of 33.2%. [Index Score: 113]

22. The Measures • Part I: Energy Burden Targeting • What data is necessary? • Household Income • Fuel type • Main heating fuel cost • Electric fuel cost (heat and/or non-heat)

23. The Measures • Part II: Restoration of Home Energy Service • Number of all LIHEAP-assisted households that had: • Energy service restored after disconnection • Fuel delivered after ran out of fuel • Repair/replacement of inoperable home energy equipment • Part III: Prevention of Loss of Energy Service • Number of all LIHEAP-assisted households that had: • Past due notice or utility disconnect notice • Imminent risk of running out of fuel

24. Performance Measures Pilot Test Results • Restoration and Prevention of Loss of Home Energy Service • Restored service after disconnection: 3,299 • Repaired/replaced inoperable equipment: 6,026 • Past due or utility disconnect notice: 21,378 • Imminent risk of running out of fuel: 7,727 • This includes empty tanks

25. The Measures • Restoration and Prevention of Loss of Home Energy Service • What data is necessary? • Crisis reason • Fuel type • Post-delivery verification information (% of fuel in tank prior to delivery) • ERR repair/replacement

26. What you need to do • Help us demonstrate all you do to help MN Households • Make sure the data is accurate • Be prepared for more: • Reduced # of service interruptions after receiving benefits • Homes use less energy (EAPWX) • Households change how they use energy (A16) • Etc.

27. Monitoring, Auditing & Oversight • One comprehensive system- its all about the money • HHS monitoring DOC • OLA Auditing DOC • EAP Auditing SP • SPs are audited by independent auditors • SP monitoring of Energy Vendors

28. Monitoring, Auditing & Oversight • National, State and Local efforts • Federal level • Increased funds staffing, monitoring, training, oversight • State level • Increased scrutiny, systems, controls, requirements • Local level • Self monitoring, risk assessment, oversight

29. Monitoring, Auditing & Oversight • All of us • Play a role • Are responsible • Need to get better at these activities

30. Monitoring, Auditing & Oversight • It’s about the money because . . . • Need to understand that is as important as providing the service to the household • If the program does not have integrity it can’t be here to help those who need it • It’s about the households

31. Federal Monitoring • All federal grantees are being monitored • Next week feds are monitoring FFY12 • Two days in the State Office • Three days at local service providers • CA of Mpls • Renville County • S-C-D CAP

32. Federal Monitoring • Areas of interest • Monitoring Weatherization Components • Timely Delivery of Crisis Assistance • Notice of Fair Hearing • Administrative Costs • Vendor Refunds • Documentation for the Leveraging Incentive Program • Assurance- 16 of them (Aman’s work)

33. OLA • Every year the Program gets audited by the Office of Legislative Auditors • Several weeks in the State Office • Based on the State fiscal year

34. OLA • Two findings • The Department of Commerce did not submit complete and accurate financial reports to the federal government for the Low-Income Home Energy Assistance Program • The Department of Commerce did not pay accurate indirect cost amounts from some federally-funded programs, including the Low-Income Home Energy Assistance Program. This finding includes an unresolved prior issue

35. DOC conducts two types of on-site visits Initial Program Assessment Visit (iPAV) Full Program Audit Visit (fPAV) Team approach to auditing (more than just the PPAs) Internal review to PAR Working to be consistent Internal review of responses from SPs to PAR State Monitoring

36. Initial Program Assessment Visit (iPAV) Focus Review findings and recommendations from previous year(s) Review Local Plan – discuss DOC questions and SP changes Ensure SP has necessary resources and is ready for FFY15 File review Provide Training and Technical Assistance (T&TA) Prior to visit Send T&TA requests to your Program Performance Auditor Do not save questions for the visit, send immediately to your PPA or eap.mail State Monitoring

37. Full Program Audit Visit (fPAV) Focus In-depth review of SP’s program implementation Review of Primary Heat, Crisis and ERR files Review payroll records Inventory Additional documents as needed Prior to visit Full Program Audit Tool (fPAT) Send T&TA requests to your Program Performance Auditor Do not save questions for the visit, send immediately to your PPA or eap.mail State Monitoring

38. State Monitoring • File Sample Review – What do we look for? • PH – 30 files, plus: • 5 Self employment • 5 No income • 5 Denied • All consumption >$5,000 • Crisis – 30 files • ERR – 5 files, plus • All tasks >$5,000

39. State Monitoring • File Sample Review – Why so many files? • Statistical significance • Each SP has a “population” of files • We can’t review all of them • By reviewing a random sample of the whole population, we can get a relatively good representation of the whole • Even 30 files out of 1000+ is not entirely representative

40. State Monitoring • File Sample Review – What do we look for? • PH – Application Processing • Applications are dated and signed by applicant • Applications are date stamped and logged the day they arrive • Income statements for all HH members are complete & well documented • Accurate income calculation of the EAP household • Complete documentation verification case notes (Who, When, What) in paper file or in eHEAT • Copies of any correspondence with the applicant, if applicable • Documentation of research done in response to a question, complaint, or appeal, if applicable • Delivery of timely program services • Maintain proper EAP data security practices

41. State Monitoring • File Sample Review – What do we look for? • PH – Eligibility Determination • Household member info • Household income documentation & calculation • Housing type and status (e.g., subsidized, heat in rent) PH – Benefit Amount Determination • All of the above, plus: • Fuel type • Home heating system status (e.g., dual fuel) • Consumption

42. State Monitoring • File Sample Review – What do we look for? • Crisis – Eligibility Determination • HH’s past due bills in file or documentation of emergency • Documentation of energy vendor verification • Available PH payments did not resolve the emergency. Check if PH payments were made payable after Crisis benefit determined • SP - HH correspondence notes in file or eHEAT • Check that eHEAT Crisis reason matches documented rationale • Are SPs doing reasonability checks for delivered fuel?

43. State Monitoring • File Sample Review – What do we look for? • Crisis – SP Response • For HH in a life-threatening situation the LIHEAP law requires that the threat to life be removed within 18 hours of a household requesting crisis • No heat in the house • No heat distribution • For HHs experiencing immediate energy emergencies that are not life threatening SPs must approve crisis services within 48 hours • Compare crisis reported date to completion/approval/ payment date

44. State Monitoring • File Sample Review – What do we look for? • Crisis – Benefit Amount Determination • Compare the crisis amount with the vendor verification documentation and PH benefit amount • Is the SP properly using the Crisis amount and fees boxes in eHEAT?

45. State Monitoring • File Sample Review – What do we look for? • ERR – Eligibility • Documentation of proof of ownership (if required) must be in paper file or eHEAT. • Documentation of a qualified dwelling. • Documentation of valid request for repair or replacement, including description of the problem. • Documentation of eligible heating system (e.g., not redundant). • Determine if ERR-related application information matches eHEAT information. • Verify that changes to application are documented.

46. State Monitoring • File Sample Review – What do we look for? • ERR – SP Response • For HH in a life-threatening situation the LIHEAP law requires that the threat to life be removed within 18 hours of a household requesting crisis • No heat in the house • No heat distribution • For HHs experiencing immediate energy emergencies that are not life threatening, SPs must approve crisis services within 48 hrs • Compare ERR reported date to completion/approval/payment date • Documentation that temporary heat was provided appropriately, if applicable

47. State Monitoring • File Sample Review – What do we look for? • ERR – Benefit Amount Determination • Documentation of the contractor's determination of need for response to the ERR request (i.e., need for repair or replacement) • Documentation of "Manual J" calculations

48. State Monitoring • File Sample Review – What do we look for? • ERR – Other • Inspection Certificate • 50% of completed furnace replacements & retrofits inspected • Must be inspected prior to contractor payment • Completion Certificate • Required for all repairs & replacements > $1,000 • Signed and dated by homeowner & contractor • Must include model and serial numbers • If inspected, inspector signature • Itemized Invoices

49. State Monitoring • Findings & Recommendations • Meant to point out areas that should or must be improved • By identifying areas for improvement, we can take meaningful action • We want to ensure that we: • Deliver the highest quality of service to their communities • Comply with applicable laws • Not meant as punishment or to reprimand • Use the audit as a tool to improve services to HHs • Approach to PARs and Responses are done as a team • Need for timely response to your PAR

50. Questions During the Program Year DOC EAP staff are here to help you Call or email your Program Performance Auditor Can also email your questions to eap.mail Emails with private household data must be sent via secure email Check with your IT staff about how to do this State Monitoring