Financial Statement Audit – Fiscal Year Ended June 30, 2023

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Report Summary

Background

The Delaware Health Information Network (DHIN) was created by the General Assembly in 1997 as a public-private partnership to benefit all Delawareans. DHIN became a public instrumentality of the State in 2011.

DHIN is the sole corporate member of the Delaware Center for Health Innovation Inc. (DCHI), a charitable nonstock corporation incorporated in 2014. DCHI was created to further the efforts of the Delaware Health Care Commission (DHCC). The goal of DHIN is to advance the creation of a statewide health information network and to address Delaware’s need for timely, reliable, and relevant healthcare information. DHIN’s major operation is the design and implementation of an integrated statewide health system.

This engagement was conducted in accordance with 16 Del. C. § 10303(a)(18) and 29 Del. C. §2906.

Key Information and Findings

This audit contains an unmodified opinion on the financial statements. An unmodified opinion is sometimes referred to as a “clean” opinion, in which the auditor expresses an opinion that the financial statements are presented fairly, in all material respects, an entity’s financial position, results of operations, and cash flows in conformity with accounting principles generally accepted in the United States of America. There were no findings required to be reported under Government Auditing Standards.

On April 24, 2023, DHIN resigned and withdrew as the sole corporate member of DCHI resulting in DCHI beginning the dissolution process. Upon dissolution, the remaining net position of DCHI will be transferred to DHIN. The statements show a decrease in cash and net position of $62,199 and $34,020, respectively, as a result of the withdrawal.   DHIN presents its financial statements as a single year presentation because DCHI was removed as a component unit during FY 2023 (See Note 12 to the financial statements, Change to the Financial Reporting Entity).

The Organization’s financial statements as of June 30, 2022, contained a $461,722 overstatement of trade receivables, a $38,739 overstatement of results delivery revenue and changes in net position, and a $422,983 overstatement of beginning of year net position.

DHIN provides services to managed care organizations (MCOs) who are contracted with the State of Delaware to deliver Medicaid program health care services on behalf of the Division of Medicaid & Medical Assistance (DMMA). DHIN and DMMA have entered into a professional services agreement for health care claims database (HCCD) configuration and integration services. Total revenue earned during Fiscal Year 2023 was $4,332,953, or 34.4% of total revenue (operating and nonoperating).

DHIN employed approximately 49 employees during Fiscal Year 2023 at a cost of $7.1 million, representing approximately 58.3% of total Fiscal Year 2022 expenses. The average cost per employee in FY2023 was $143,873 which signifies the entity is a highly specialized operation.

DHIN maintained cash and investment balances as of June 30, 2023, totaling $7,991,820, which represents a 55% increase from the Fiscal Year ended June 30, 2018. DHIN recognized a change in net position (net income) of $668,707 during Fiscal Year 2023. DHIN increased its net position by $3.5 million (68.7%) since the Fiscal Year ended June 30, 2018.