Recurring Findings

Mental Health: Recurring Material Internal Control Deficiencies
Federal Program Issue First Year Reported
Department's Assertion Page Number
Block Grants for Community Mental Health Services Mental Health has not yet developed a process to verify whether the subgrantees' actual expenditures of federal grant funds are for allowable activities and costs. 2006-07
Partially corrected. Mental Health established a workgroup in March 2010 to determine the feasibility of having its Program Compliance Division conduct audits of the counties in accordance with Mental Healthís risk analysis procedures and federal requirements. Mental Health had anticipated that this finding would be fully addressed by September 2010. However, due to extensive discussions and issues raised, Mental Health revised its implementation date to December 2010. In March 2011, the workgroup prepared and distributed a draft recommendation to Mental Healthís management. The recommendation included three possible solutions to meet the allowability of costs requirement for fiscal year 2011-12. This new process will ensure that only allowable activities and costs are paid for with the block grant funds. If Mental Health is still responsible for administering the grant for fiscal year 2012-13, then the workgroup recommends that Mental Health consider expanding the process developed in the prior fiscal year. The expansion of the process would further ensure that only allowable activities and costs are paid for with block grant funds. 37
Block Grants for Community Mental Health Services Mental Health still needs to make further refinements to its process for complying with the maintenance of effort (MOE) requirements. Specifically, Mental Health did not provide documentation to support the percentages it applied against the total of managed care and realignment dollars to arrive at the amount it reported as expenditures for children with serious emotional disturbance (SED). Additionally, Mental Health was unable to provide documentation that showed the components and expenditures used to generate the fiscal year 1994-95 threshold of $160 million. For the MOE requirement related to the State's expenditures for community mental health services, we found that Mental Health did not include any expenditures from the Mental Health Services Act, and it could not positively state whether other State agencies fund community mental health programs for adults with serious mental illness (SMI) or children with SED. 2006-07
Partially corrected. Mental Health established a workgroup in February 2010 to research the percentages used to support the managed care and realignment dollars used in its calculation of MOE for children with SED, and examine for revision its methodology for the MOE calculation for community mental health services. Mental Health had anticipated that this finding would be fully addressed by September 2010. However, due to extensive discussions and issues raised, Mental Health revised its implementation date to December 2010. Initially, Mental Health researched legislation on Managed Care and Realignment, as well as internal documents, which explained the MOE requirements. In addition, Mental Health attempted to locate the fiscal year 1994-95 financial statement used to establish the baseline for SED expenditure, but they could not be found. In March 2011, the workgroup developed a methodology, which will enable Mental Health to determine the dollar amount expended on approved actual claims for managed care. After the dollar amount is determined, Mental Health will recalculate the managed care percentage for each fiscal year. Mental Health is researching alternatives to determine the percentage used to support the realignment dollars used in its MOE calculation. If Mental Health is not successful in its efforts to reevaluate the percentages used to support the managed care and realignment dollars, then Mental Health will seek guidance from its federal awarding agency to determine how it can adequately determine the threshold. Also, the workgroup has developed procedures to capture actual expenditure date based on the Governorís Budget for calculating the community mental health services MOE requirement. 40
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