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Closeout Report

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Issued April 30, 2025 at program close. The integration delivered what it was chartered to deliver. It did so 13 weeks later than planned on transitional services, $3,456,000 over its cost baseline and $744,000 inside its authorized funding, having deferred $1,900,000 of scope to named owners. This report states the closing position on each dimension and is explicit about which of them are recoverable and which are not.

Contents

Part I — Outturn
  1. The closing position
  2. Cost
  3. Schedule — late but whole
  4. Scope: what was deferred
Part II — Benefits and Handover
  1. Synergy: two measures, two answers
  2. What transfers to operations
  3. What remains open at close
Part I — Outturn

1. The closing position

DimensionPosition at closeRecoverable?
Day 1 integrityHeld throughout. No member-facing failure attributable to integration.
Cost$59,400,000 against $60,144,000 authorized — $744,000 returnedClosed
Transitional servicesExited at roughly 15 months against a 18-month contractual maximumClosed
Synergy run-rateYear 3 target of $85,000,000 forecast to be metOn track
Cumulative synergy capture$14,200,000 behind the deal model across three yearsNo — permanently forgone
Scope$1,900,000 deferred to a Year 2 backlog with named ownersRetrievable, not retrieved
Data integrityIdentity resolution completed; review queue closed with the audit cleanClosed

The third column is the one worth reading. A closeout report that lists outcomes without saying which are final and which are still moving hands the receiving organization a summary rather than a position. Cost is closed — the number will not change. The run-rate is a forecast that somebody now has to keep true. The cumulative shortfall is the only line that is both final and negative, and it is the one a reader is most likely to skip because the line above it says the target is met.

2. Cost

LineAmount
Post-close cost baseline (Class 2)$55,944,000
Management reserve authorized$4,200,000
Total authorized funding$60,144,000
Approved change requests$7,600,000
— absorbed by contingency$4,144,000
— drawn from management reserve$3,456,000
Actual outturn$59,400,000
Against authorized funding−$744,000
Management reserve returned$744,000

The full reconciliation from baseline to outturn, request by request, is the Change Control Log. It is not restated here: two artifacts computing the same total independently is how they drift.

Against the pre-close deal model the program spent $11,100,000 more than the $52,500,000 originally authorized, and that comparison is the one most likely to be quoted. It is also the least meaningful. The deal model was a Class 5 estimate produced under a legal prohibition on examining member-level data; the post-close re-baseline was the first estimate anyone was permitted to build from evidence. Moving from the first to the second was a re-baseline event, not a change — change control governs movement away from a baseline and cannot govern the arrival of the first credible one. The program is accountable against the baseline it was actually given, and against that baseline it finished inside authorization.

3. Schedule — late but whole

Transitional services were planned to exit at twelve months and exited at roughly 15, consuming 92 days of the margin between the exit plan and the contractual maximum. 90 days of that margin remained unused at exit.

This is the distinction the program most wants a reader to take away, because it separates a governance failure from a governance decision. Breaching the contractual maximum would have meant returning to the divesting parent to ask for something ACME had no right to and could not operate without — a negotiation entered from no leverage, at the worst possible moment, over a service the acquirer had already proven it could not yet replace. Spending margin that was deliberately bought at signing, for the risk that then materialized, is that margin doing exactly what it was purchased for. The six months between plan and maximum were not float thrown off by the schedule network; they were negotiated, they cost something at signing, and the program's willingness to spend them under a real constraint is what retroactively justifies having bought them. A program that returned every one of those days unused would not have been better governed — it would have been over-insured.

4. Scope: what was deferred

$1,900,000 of scope left the program under two deferrals, each accepted by a named owner rather than imposed: provider network rationalization phase 2, and the care management advanced analytics module. Neither was canceled and neither was delivered.

Both remain visible in synergy reporting rather than being removed from the denominator, which would have raised every remaining percentage and made the program look better for having delivered less.

Scope is the constraint the charter allows to flex first, and a closeout that reports only cost and schedule movement has quietly failed to test its own priorities. Every commitment cannot be equally load-bearing; a program that never puts anything down has not decided what matters, it has simply absorbed the pressure elsewhere. The honest position at close is that the deferred value is retrievable and nobody in the receiving organization has yet accepted responsibility for retrieving it. The named owners accepted the deferral; accepting a deferral is not the same as owning the recovery, and the distinction will decide whether this value ever appears.

Part II — Benefits and Handover

5. Synergy: two measures, two answers

Run-rate against the Year 3 target

SourceYear 3 targetRun-rate achieved%
Platform & IT consolidation$24,000,000$21,120,00088%
Provider network rationalization$19,000,000$11,970,00063%
Vendor & contract consolidation$18,000,000$18,000,000100%
Corporate function consolidation$16,000,000$15,040,00094%
Facilities & other$8,000,000$7,200,00090%
Total run-rate$85,000,000$73,330,00086%

Run-rate at close of the transaction was $68,400,000; it stands at $73,330,000 at program close and is forecast to reach the full $85,000,000 in Year 3. The deal case is intact.

Cumulative capture against the model

PeriodDeal modelActualVariance
Year 1$22,000,000$19,400,000−$2,600,000
Year 2$58,000,000$47,600,000−$10,400,000
Year 3$121,000,000$106,800,000−$14,200,000

Both statements are true and a report containing only one of them is misleading. The Year 3 run-rate target is met — by then the annualized saving is exactly what the model promised. Cumulative capture finishes $14,200,000 behind, and no future period recovers it. The mechanism is simple and worth stating plainly: a synergy delivered late catches up on run-rate because the curve shifts right, but it never rises above target to compensate for the months it was absent. Three months of duplicate running cost under the extended transitional services were paid and never recovered; claims run-out delayed the network savings behind their signature dates; and the deferred scope contributed nothing at all. "Synergies are on track" is accurate about the target and silent about the cash, and a reader who hears only that will not know to ask which was meant.

6. What transfers to operations

ItemReceiving owner
Benefits tracking — both measures, carried forward as a seriesVP Financial Planning & Analysis, ACME Health
Year 2 backlog: network rationalization phase 2J. Kirkendall, VP Network Management
Year 2 backlog: care management analytics moduleDr. M. Ellsworth, Chief Medical Officer
Preserved care management capability — ongoing ownership and fundingDr. M. Ellsworth
Business associate agreement with the divesting parent, surviving until certified destructionF. Underhill, Legal & Regulatory
Identity stewardship — residual queue and false-positive auditDr. A. Ravindran, Data & EMPI
Integration layer decommissioning and the permanent home for the care management feedK. Stallworth, Director, Enterprise Integration

A program closes before its benefits land, and saying so is more useful than implying otherwise. A Year 3 target cannot be verified by a program that ends in Year 2, so the measures transfer rather than conclude. What transfers with them is the requirement that both are reported — and that is the item most likely to be dropped after handover, because it is the one that makes the reporting less comfortable.

7. What remains open at close

Related artifacts: 44 — Change Control Log · 41 — Synergy Realization Tracker · 47 — Lessons Learned · 1 — Integration Charter