New York State Consolidated Budget and Claiming Manual
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Office of Mental Health

New York State Consolidated Budget and Claiming Manual Subject: Introduction to State Aid Claiming in the CFRS Section: 16
For the Periods:
January 1, 2009 to December 31, 2009
July 1, 2009 to June 30, 2010
Issued: September 9, 2009

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An integral component of the Consolidated Fiscal Reporting System (CFRS) is the claiming process for programs financed through Aid to Localities (State Aid) funding. The instructions contained in the following sections of this manual detail the procedures not-for-profit and county operated service providers should follow when completing intra-year and final, year-end claiming forms. Intra-year claims may be required quarterly or at mid-year at the discretion of the funding Department of Mental Hygiene (DMH) State Agencies or the LGU if the service provider is funded through a local contract.

Provision of State Aid

The DMH State Agencies are authorized to provide financial support for local services in Articles 25, 26 and 41 of New York State Mental Hygiene Law.

State Aid funding can be provided two (2) different ways:

  1. LGUs, county operated programs, and not-for-profit service providers can receive State Aid funding through the Approval Letter process. State Aid Approval Letters are issued to an LGU by a DMH State Agency and provide the LGU with their authorized funding allocation for a specific fiscal reporting period. These Approval Letters have the same effect of law as fully executed legal contracts. Each DMH State Agency's Approval Letter displays their authorized State Aid allocation differently.
  2. Not-for-profit service providers and governmental entities can also receive State Aid funding through a fully executed direct contract between the service provider and a DMH State Agency.

These sections of the manual only apply to service providers receiving State Aid through the State Aid Approval Letter process or through a direct contract with a DMH State Agency. Service providers meeting one or more of the following criteria are not required to complete State Aid claiming documents:

Differences between Cost Reporting and State Aid Claiming

Cost reporting to DMH State Agencies is accomplished using the core schedules of the year-end Consolidated Fiscal Report (CFR). The CFR core schedules are CFR1, CFR-2, CFR-3, CFR-4, CFR-4A, CFR-5, CFR-6 and DMH-1. These schedules are completed using full accrual accounting; major equipment and property assets are depreciated; and agency administration expenses are distributed to all of a service provider's funding sources and programs using the ratio value allocation methodology.

State Aid claiming is accomplished using intra-year claim schedules (CQR-1s) and the CFR-i, CFR-iii, DMH-2, DMH-2A and DMH-3 claiming schedules of the Consolidated Claim Report (CCR) that is included as part of a complete CFR submission. State Aid claiming schedules may be completed using accrual, modified accrual or cash accounting and major equipment assets may be completely expensed in the year of purchase. Additionally, the total agency administration expenses allocated to OASAS and OMH using the ratio value methodology may be redistributed between programs within the OASAS and OMH schedules using an allocation methodology other than ratio value (OMRDD funded service providers must use ratio value on their claiming schedules as well as on their CFR core schedules).

For all funding DMH State Agencies, the method of accounting, the method of reporting major equipment assets (depreciating or expensing), and the agency administration allocation methodologies used must be identical to those utilized in the preparation of the service provider's approved budget. Any change to a service provider's method of accounting, reporting of major equipment assets and/or agency administration allocation methodology must be approved in advance by the funding DMH State Agency(ies) and LGU (if funded through a local county contract).

Programs Funded by More Than One (1) DMH State Agency and/or LGU

Service providers may operate programs funded by more than one (1) DMH State Agency and/or more than one (1) LGU. Service providers may also operate shared programs. Shared programs are a single program that is funded by two (2) or more DMH State Agencies. State Aid claiming schedules for these three types of funding are completed using the following instructions:

Number of DMH State Agencies DMH State
Agency Funding
Number of Funding LGUs Reporting Requirement
Individual Shared
1 X   1 DMH State Agency specific schedules for the funding LGU
1 X   >1 DMH State Agency specific schedules for each funding LGU
>1 X   1 Sets of DMH State Agency specific schedules for the funding LGU
>1   X 1 The shared program expenses are allocated between the DMH State Agencies and separate DMH State Agency specific schedules are prepared for the funding LGU.
>1 X   >1 Sets of DMH State Agency specific schedules for each funding LGU
>1   X >1 The shared program expenses are allocated between the DMH State Agencies and separate DMH State Agency specific schedules are prepared for each funding LGU.

Expenses, revenues and net operating costs should be allocated between LGUs and/or DMH State Agencies using units of service or New York State approved percentages, whichever is appropriate. Service providers should verify the allocation methodology to be used with the funding DMH State Agency(ies) and or LGU(s).

LGU Administration Expenses (Program Code 0890)

LGU administration expenses (program 0890) include those expenses necessary to carry out the duties and responsibilities outlined in Article 41 of the Mental Hygiene Law (MHL). Administrative expenses related to the duties and responsibilities in MHL Article 41.47 are not to be included in the LGU administration expenses reported in program code 0890. Administrative expenses pertaining to MHL Article 41.47 should be reported in program code 0870, Monitoring and Evaluation (CSS). Agency administration expenses for county operated programs should not be included in program code 0890, LGU administration or program code 0870, Monitoring and Evaluation (CSS). Agency administration expenses for county operated programs should be reported on the agency administration line of all non-0890/0870 programs using the appropriate allocation methodology.

For budgeting and claiming purposes, LGUs must use the approved percentage splits for LGU Administration expenses established in 1988. See Appendix K of this manual and the CFR Manual for a listing of the approved 1988 percentages.

Note: LGUs cannot allocate indirect costs following the guidelines issued by the Federal Office of Management and Budget (OMB) in their circular 74-4. New York State policy regarding OMB Circular 74-4 can be found in The New York State Accounting System User Procedures Manual in Section 6.0400 – Special Payments – Municipal Overhead Costs.

Additional information regarding LGU administration expenses as well as the text of Section 6.0400 of The New York State Accounting System User Procedures Manual can be found in Section K of this manual and the CFR Manual.

General State Aid Claiming Requirements

Supporting worksheets used to complete State Aid claiming schedules may be requested by the funding DMH State agency at its discretion. LGUs and/or DMH State Agency Field Offices and Regional Offices may establish additional requirements for the preparation and submission of State Aid claims as long as these requirements do not conflict with instructions contained in this manual and the CFR Manual.

It is the LGU's responsibility to ensure that county operated service providers and local contract funded not-for-profit service providers are aware of and understand the DMH State Agency requirements published in this manual and the CFR Manual. It is also the LGU's responsibility to ensure that these service providers are aware of and understand any additional LGU-specific requirements.

Comments or questions about the information on this page can be directed to the Community Budget & Financial Management (CBFM) Group.