A RISK ANALYSIS OF SEVEN HILLS FOUNDATION

A RISK AND FISCAL ANALYSIS OF SEVEN HILLS FOUNDATION

What is Seven Hills Foundation?

It is an organization dedicated to providing services and programs to those with significant challenges.It offers support and services to 30,000 individuals with disabilities and life challenges throughout Massachusetts and Rhode Island.It is regarded as a leader in identifying the unmet community needs and promoting professional and compassionate models of service.

What is its mission?The mission of Seven Hills Foundation is: to promote and encourage the empowerment of people with significant challenges so that each may pursue their highest possible degree of personal well-being and independence.This is a very broad mission which has warranted the organizations multifaceted set of services

What are those services?Mental HealthDomestic AbuseParental SupportHIV PreventionChild CareAdult ProgramsRespite CareResidential TreatmentGlobal Outreach

How is it structured?Presidents OfficeBusiness, HR, IT, Facilities DepartmentsProgramDirectors

SWOT Analysis Strengths:Has a high employee satisfaction through career mobility, tuition reimbursement, and great training programsServices are highly diversifiedStaff is provided with ample training opportunities

SWOT Analysis (contd)Strengths (contd):It performs well in audits by the MA Departments of Developmental Services & Public HealthIt is financially stable as its budget which started off at $4 million in 1998 is now $160 million.It has a large workforce with 3,500 strong

SWOT AnalysisWeaknesses:Recruitment system is slow and unresponsive and thus there are too many vacanciesIts open to liabilities due to its low submission rate for restraint reports and informed consent forms.

SWOT Analysis (contd)Weaknesses (contd):Although they have a diversification of activities, they have too many to maintain excellency in all of them.Managers have mixed priorities as they are left to cover many of the shifts of absent employees

SWOT Analysis (contd)Weaknesses (contd):Low salaries for direct support staffStaff turnover in some programsOutdated technology Communication issues amongst and between levels

SWOT AnalysisOpportunities:The federal government is adding rules to Section 503 of the Rehabilitation Act which will improve the process of hiring individuals with disabilities. Newly available federal & local grants

SWOT AnalysisOpportunities (contd): The increased need to care for returning veterans with post-traumatic stress and brain injuries will provide the organization with a new group to provide services for

SWOT AnalysisOpportunities (contd):Increasing interest in formalized internship and volunteer programsEarly intervention expansion in RIChanging bidding system which sees families having a greater role in the awarding of contracts

SWOT AnalysisThreats:Decreasing state and federal fundingOther non-profit organizations such as the May Institute and Vinfen, Advocates Inc. etc. who are competing for the same contractsCompetitors specialize in certain services

SWOT AnalysisThreats:Competitor salaries for like positionsUnions Changing bidding system which sees families having a greater role in the awarding of contracts

Accountability Dimensions Legal Accountability (compliance):MA Depts of Developmental Services, Social Services, Public Health & Mental HealthMA Dept of EducationCommission of Accreditation of Rehabilitative Services

Accountability Dimensions (contd) Negotiated Accountability (responsiveness):National Alliance on Mental IllnessPublic MediaCitizen Advisory Boards

Accountability Dimensions (contd) Discretionary Accountability (judgment):Quarterly Balance Score CardAnnual Satisfaction SurveyBi-annual Team Monitoring ReviewsFamily/Guardian Satisfactory SurveyOffice of Compliance & Quality Enhancement

Accountability Dimensions (contd) Anticipatory Accountability (advocacy):It has expanded abuse prevention training for employees & clients in anticipation of the DDSs Impact/Ability project

Accountability InfrastructureFinancial Resources:Nearly 98% of its revenue comes from payments made by the state and federal government for program services performed.It thus relies too heavily on the revenue it secures from payments made by the government.

Accountability Infrastructure (contd)Human Resources:Staff is highly skilled, committed & trained Staff responds well to increased standardsStrong leadership across all levelsBottom-level staff suffers from low motivation

Accountability Infrastructure (contd)Information Resources:It has recently implemented a new IT system entitled MIS which meets all of its current and future clinical, business, and analysis needs. Its employees are consistently informed about emerging legislation and regulatory standards.

Accountability Infrastructure (contd)Legal Mandate:It has a low degree of freedom to comply with the spirit of the DDS rulesAs a 501c non-profit, it has limited authority to lobbyInternal controls must fully comply with MA and Federal laws

Accountability Infrastructure (contd)NetworksMass Providers CouncilBridgewell Commission on Accreditation of Rehabilitation FacilitiesAssociation of Developmental Disabilities ProvidersClose contact with state legislature

Accountability Infrastructure (contd)Public Image/Credibility:2012 Employer of Choice Award-Mass Chamber of Commerce2012 Top Workplace- Worcester Business JournalTwo Years with Distinction- DDS (12 years in a row)Staff Recognition Award- CABUnder Facebooks star rating system, SHF has garnered 3/5 stars.

Accountability Infrastructure (contd)Management Controls:Quarterly Balance Score CardAnnual Satisfaction SurveyBi-annual Team Monitoring ReviewsFamily/Guardian Satisfactory SurveyCompliance Hotline open to anyone

RisksIncome risks:With its many facilities across MA and RI, the chance that an accident, natural disaster or employee death at one of its revenue generating locations is high.It is high especially in the residential facilities, were there is cooking and high uses of electricity.

Risks (contd)Liability risks:Given the level of interaction with clients and the high number of those interactions, there is a good chance that harm will be down to either the clients or even the staff members themselves.

Risks (contd)Reputation risks:The intense and constant spotlight put on mental health issues has lead to scrutiny on those who service individuals with disabilities.This scrutiny thus lends to a high chance for reputation loss no matter the issue.

Accountability StrategiesDue to the many liability risks, Seven Hills needs to invest in a legal department rather than contract out its legal needsIts limited lobbying authority warrants oversight over its public affairs department that performs such activities.

Accountability Strategies (contd)It should promote its mission and programs through social media in order to raise awareness and strengthen its imageIt should adjust its compensation policies for its direct care staff in order to attract and retain qualified and low risk health professionals

Financials-Income Statement

Financials

Fiscal AnalysisNet Income:Revenue Expenses$144,627,534 - $146,724,382

Net Income: -$2,096,848

Fiscal Analysis (contd)Savings Indicator:Revenue ExpensesTotal Expenses$144,627,534-$146,724,382 $146,724,382

Approx. -1.4%

Fiscal Analysis (contd)Defensive Interval:Cash + Receivables (minus doubtful receivables)Average monthly expenses$9,295,232 + $14,508,128 = $23,803,360$146,724,382/12 months = $12,227,032 Approx. 2 monthsAvg. HSO: 5 months

Fiscal Analysis (contd)Liquid Funds Indicator:Total Net Assets-(restricted + fixed assets)Average Monthly Expenses$141,508,406-($6,034,165) = $135,474,241$146,724,382/12 months = $12,227,031Approx. 11 monthsAvg. HSO: -1.4 months

Fiscal Analysis (contd)Revenue Proportion (ratio):Program Services FeesTotal Revenue$137,184,382$144,799,605 Approx. 94.7%

Fiscal Analysis (contd)Program Expenses Proportion:Program Service ExpenseTotal Expenses$136,506,746$146,724,382Approx. 93%

Fiscal Analysis (contd)Contributions/Grants proportion:Contributions + grantsTotal Revenue$2,900,578$144,799,605Approx. 2%

Financials-Financial Statement

Fiscal Analysis (contd)Asset to Liability Ratio:Assets (minus doubtful receivables): Liabilities$141,508,406- ($80,332): $96,859,108Approx. 1.5:1Assets (minus accounts receivable): Liabilities$141,508,406-($14,588,460):$ 96,859,108Approx. 1.3:1

Financials-Functional Expenses

GAP AnalysisConsidering its current allocation of resources, there is little to no gap between what it can offer in services to what it does offer.However, there is a clear gap in funding for grant writing, compensation and outreach activities.

Goals & Objectives- 2013-2015Goal 1: SHF will be a national leader in the delivery of integrated & individualized supportsGoal 2: The SHF Human Resources office, in conjunction with each operating affiliate, will recruit & retain a quality and diverse workforce

Goals & Objectives-13-15 (contd)Goal 3: SHF will expand its pool of available clinical, medical, & other allied professionals to respond to the changing needs & preferences of persons supported.Goal 4: SHF will further its commitment to individual, family, & other natural supports.

Goals & Objectives-13-15 (contd)Goal 5: All SHF & Affiliate facilities, program sites & offices will be regularly maintained so as to meet or exceed the standard of regulatory agencies, local community expectations, & internal aspirations of Seven Hills Foundation.

Goals & Objectives-13-15 (contd)Goal 6: SHF will implement a comprehensive communications strategy directed at internal & external audiences reflective of its visions, mission, & values.Goal 7: SHF will review its current organizational structure intended to facilitate integrated coordination of services.

Goals & Objectives-13-15 (contd)Goal 8: SHF will be proactive & innovative in preparing for & responding to changing funding & service delivery models.Goal 9: SHF will establish an array of strategic & innovative collaborations with other professional, political, & related organizations.

In a NutshellSeven Hills Foundation is very successful at its mission.It consistently complies to its accountability standards.It has a great image albeit a poor visibility.It faces many liability and income risks due to the number of programs and services it umbrellas.Its compensation policies are weak but its internal controls are strong.It faces a changing bidding system and it has seen its revenue dip in recent years despite being financially strong.It has a strong network system and strong client-base.

So what should it do?Seven Hills Foundation should: invest in a legal departmentincrease its grant writing activitiespromote its image through social mediaimprove on its compensation policiesfind ways to cut back on expenses