Report 2012-122 Recommendation 2 Responses

Report 2012-122: Mental Health Services Act: The State's Oversight Has Provided Little Assurance of the Act's Effectiveness, and Some Counties Can Improve Measurement of Their Program Performance (Release Date: August 2013)

Recommendation #2 To: Health Care Services, Department of

To ensure that it monitors counties to the fullest extent as the MHSA specifies and that it implements best practices, Health Care Services should conduct comprehensive on-site reviews of county MHSA programs, including verifying county compliance with MHSA requirements.

Annual Follow-Up Agency Response From August 2017

DHCS' Triennial Medi-Cal review includes MHSA questions, and compliance data from FY 2014-15 through FY 2016-17. There are 16 total questions in the review protocol. For 8 of the questions, 100% of the counties are in compliance with all requirements. For the other 8 protocol questions, there are 1-4 counties out of compliance. DHCS continues to conduct fiscal audits of local MHSA funds and, if needed, targeted audits of state administrative funds. To date, there are five counties that have been or are being audited and approximately two more scheduled for the next production year. There remains to be a high amount of carryover work from FY 16-17 to FY 17-18. DHCS is recruiting staff to perform onsite program reviews of county performance contracts. Once staff are hired and the review process and protocol is finalized, DHCS will begin performing onsite program reviews of county MHSA programs. DHCS is planning to combine these onsite reviews with the triennial Medi-Cal reviews, which are expected to begin in the Fall of 2017.

  • Estimated Completion Date: Fall 2017

California State Auditor's Assessment of Annual Follow-Up Status: Partially Implemented


Annual Follow-Up Agency Response From September 2016

DHCS' Triennial Medi-Cal review includes MHSA questions. DHCS continues to conduct fiscal audits of local MHSA funds and, if needed, targeted audits of state administrative funds. In July 2016, AB 1618 was signed into law requiring DHCS to conduct program reviews of county performance contracts, with each county being reviewed on a triennial basis. DHCS expects to complete the process and protocol for program reviews and begin county reviews by June 2017. Once program reviews are implemented, this recommendation will be fully implemented.

  • Estimated Completion Date: June 2017

California State Auditor's Assessment of Annual Follow-Up Status: Not Fully Implemented


Annual Follow-Up Agency Response From October 2015

DHCS has incorporated MHSA questions in the department's Triennial Medi-Cal review. Each county is reviewed at least once every three years. The Department has begun to implement fiscal audits of county mental health department's MHSA expenditures. The department has not implemented comprehensive program reviews as it is continuing to work on obtaining additional resources to implement those reviews. Once comprehensive program reviews are implemented, this recommendation will be fully implemented. In the meantime, DHCS is continuing to respond to concerns and questions that are raised through our Issue Resolution Process. (See Rec. 2 Attachment)

  • Estimated Completion Date: December 2016

California State Auditor's Assessment of Annual Follow-Up Status: Not Fully Implemented


1-Year Agency Response

Program reviews for FY 2013-14 were completed in June 2014. During FY 2013-14, Sutter/Yuba, Kings, Orange, Merced, Alameda, Stanislaus, Santa Barbara, San Mateo, Ventura, Humboldt, Contra Costa, Sonoma, San Francisco, Tuolumne, San Benito, Marin, Nevada, and Shasta counties were reviewed. Final reports have been issued to six counties; of these counties five are in compliance with the MHSA Section of the Medi-Cal Specialty Mental Health Review Protocol. Final reports for the twelve remaining counties are expected to be released by early October 2014.

DHCS is developing the FY 2014-15 Medi-Cal Specialty Mental Health Services review protocol. MHSA questions have been revised and new questions are being added to Section J: Mental Health Services Act. The final review protocol and schedule will be released during August 2014.

DHCS is currently developing a review tool which will be utilized to conduct onsite program reviews. Approximately 10 county site reviews will be conducted per year.

DHCS Audits and Investigations (A&I) began its MHSA audit of San Diego County on February 18, 2014. A&I expects to complete the audit for Fiscal Year's (FY) 07-08 and FY 08-09 by September 30, 2014. A final audit report is expected to be issued by October 30, 2014. Based on the San Diego audit, A&I will further refine the audit protocol.

DHCS will also conduct an MHSA audit of Solano County for FY 08-09 and FY 09-10. The entrance conference is scheduled on September 10, 2014.

  • Completion Date: June 2014
  • Response Date: August 2014

California State Auditor's Assessment of 1-Year Status: Partially Implemented

This recommendation is partially implemented because Health Care Services' Medi-Cal Specialty Mental Health Review Protocol includes a limited number of questions targeted to MHSA and thus, is not a comprehensive on-site review. Moreover, Health Care Services is still developing a tool to conduct onsite program reviews.

  • Auditee did not substantiate its claim of full implementation

6-Month Agency Response

DHCS performs a Medi-Cal Specialty Mental Health Services system review of each County Mental Health Plan on a triennial basis. MHSA reporting requirement questions were added to the FY 2013-14 Annual Review Protocol for Consolidated Specialty Mental Health Services and Other Funded Services. The FY 2013-14 reviews will begin in October 2013. Eighteen counties will be reviewed during the FY 2013-14. .

Any county out of compliance with any items will be required to submit a plan of correction, which DHCS will monitor for implementation.

DHCS performs fiscal audits (FA) of county cost reports annually. Currently, DHCS Audits and Investigations (A&I) is reviewing FY 2008-09 fiscal records and reconciling to the FY 2008-09 county cost reports. MHSA funds and the MHSA Annual Review and Expenditure Report will be included in the scope of the cost report audits. The goal of the FA is to help ensure funds are being spent according to the statutory requirements. These audits may include, among other protocols, tracing MHSA funds from the State Controller to the counties and providers and ensuring MHSA funds earn interest, have appropriate prudent reserves, and have not supplanted other funds.

Counties are selected for audits based on 1) a risk assessment performed by DHCS A&I or 2) a referral from DHCS MHSA programs. Currently, DHCS is finalizing the audit and appeals process and drafting corresponding regulations. Once finalized, DHCS will share the audit and appeals process with the Mental Health Services Oversight and Accountability Commission (Accountability Commission) and California Mental Health Directors Association (CMHDA). The three audit positions received as part of Assembly Bill 1467, Statutes of 2012, have been filled. The MHSA fiscal audits plans to commence January 2014.

  • Estimated Completion Date: Spring 2014
  • Response Date: February 2014

California State Auditor's Assessment of 6-Month Status: Partially Implemented


60-Day Agency Response

Program Reviews

DHCS performs a Medi-Cal Specialty Mental Health Services system review of each County Mental Health Plan on a triennial basis. MHSA reporting requirement questions were added to the FY 2013-14 Annual Review Protocol for Consolidated Specialty Mental Health Services and Other Funded Services. The FY 2013-14 reviews will begin in October 2013. Eighteen counties will be reviewed during the FY 13 - 14. .

Any county out of compliance with any items will be required to submit a plan of correction, which DHCS will monitor for implementation.

DHCS performs fiscal audits (FA) of county cost reports annually . Currently, DHCS Audits and Investigations (A&I) is reviewing FY 2008-09 fiscal records and reconciling to the FY 2008-09 county cost reports. MHSA funds and the MHSA Annual Review and Expenditure Report will be included in the scope of the cost report audits. The goal of the FAis to help ensure funds are being spent according to the statutory requirements. These audits may include, among other protocols, tracing MHSA funds from the State Controller to the counties and providers and ensuring MHSA funds earn interest, have appropriate prudent reserves, and have not supplanted other funds.

Counties are selected for audits based on 1) a risk assessment performed by DHCS A&I or 2) a referral from DHCS MHSA programs. Currently, DHCS is finalizing the audit and appeals process and drafting corresponding regulations. Once finalized, DHCS will share the audit and appeals process with the Mental Health Services Oversight and Accountability Commission (Accountability Commission) and California Mental Health Director's Association (CMHDA). The three audit positions received as part of Assembly Bill 1467, Statutes of 2012, have been filled. The MHSA fiscal audits plans to commence January 2014.

  • Estimated Completion Date: Fall 2014
  • Response Date: October 2013

California State Auditor's Assessment of 60-Day Status: Partially Implemented


All Recommendations in 2012-122

Agency responses received are posted verbatim.


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