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Office of Mental Health

New York State Consolidated Budget and Claiming Manual Subject: Local Governmental Unit (LGU) Responsibilities Section: 8
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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This section of the manual describes the minimum responsibilities and requirements for Local Governmental Units (LGUs) receiving Aid to Localities (State Aid) funding from one or more of the DMH State Agencies. State Aid received by an LGU may be used to partially or fully fund mental hygiene programs run by county operated or local contract funded not-for-profit service providers.

There are four (4) main areas of LGU responsibility:

  1. Maintenance of LGU fiscal records,
  2. LGU oversight of county operated and local contract funded not-for-profit service provider fiscal record maintenance.
  3. preparation and submission of LGU fiscal reports, and
  4. LGU oversight of county operated and local contract funded not-for-profit service provider fiscal report preparation and submission.

As stated in the first paragraph of this section, the responsibilities and requirements described in this manual are the minimum requirements mandated by the DMH State Agencies. LGUs may, at their discretion, impose additional or more stringent reporting requirements on county operated and local contract funded not-for-profit service providers as long as those requirements do not conflict with or contradict DMH State Agency requirements

Fiscal Record Keeping Requirements

The policies of the DMH State Agencies regarding accountability and fiscal record keeping for LGUs as well as LGU responsibilities governing the oversight of county operated and local contract funded not-for-profit service providers are indicated below:

  1. It is the LGU's responsibility to ensure that all county operated and local contract funded not-for-profit service providers maintain journals and ledgers in compliance with generally accepted accounting standards.
  2. It is the LGU's responsibility to ensure that all county operated and local contract funded not-for-profit service providers' accounting systems are adequate for meeting accountability and reporting requirements.
  3. It is the LGU's responsibility to ensure that county operated and local contract funded not-for-profit service providers account for expenditures and revenues by program category as budgeted for and approved by the funding DMH State Agency(ies).
  4. It is the LGU's responsibility to ensure that fully executed local contracts exist between the LGU and all non-county operated not-for-profit service providers.
  5. It is the LGU's responsibility to ensure that fully executed local contracts contain all mandatory State and, if applicable, Federal clauses.
  6. It is the LGU's responsibility to ensure that fully executed local contracts are provided to the DMH State Agencies as follows:

    OASAS: OASAS does not require copies of local contracts.

    OMH: OMH does not require copies of local contracts.

    OMRDD: Send one (1) copy of all local contracts and budgets to the Bureau of Community Funding in Albany.

  7. It is the LGU's responsibility to ensure that all county operated and local contract funded not-for-profit service providers maintain fiscal records and supporting documentation for a period of six (6) years after the date of the last State Aid payment made by the funding DMH State Agency. The LGU will ensure that these records and supporting documentation can be made available at all times, without prior notice, to representatives of the funding DMH State Agency(ies), the Office of the State Comptroller, the Federal Government and/or any other oversight agency or controlling party.

LGU General Fiscal Reporting Requirements

In the Consolidated Fiscal Reporting System (CFRS) LGUs have a wide range of responsibilities regarding the management and oversight of locally funded service providers. The DMH State Agencies will hold LGUs accountable to the requirements that follow. Please note that the standards presented here are minimum standards. The DMH State Agencies may, at their discretion, impose additional requirements and standards.

The general LGU fiscal reporting requirements and associated responsibilities that follow apply to the mid-year and final year-end claim schedules for the LGU itself, funded county operated service providers and local contract funded not-for-profit service providers. LGUs are required to thoroughly review these claim schedules for compliance with these standards and any other expressed standards for the fiscal reporting period prior to their submission to the funding DMH State Agencies.

OMH Note: OMH does not require the submission of mid-year claims.

  1. It is the LGU's responsibility to ensure that claim schedules are prepared and submitted by county operated and local contract funded not-for-profit service providers in a timely manner. LGUs are expected to establish submission dates that will allow for proper LGU review of these materials prior to their submission to the funding DMH State Agency(ies) by the prescribed due dates.
  2. It is the LGU's responsibility to submit the required claim schedules for all local funded service providers to the applicable DMH State Agency(ies) by the prescribed submission due dates.
  3. It is the LGU's responsibility to ensure that expenditures and revenues are reported properly and in accordance with specific funding DMH State Agency requirements.
  4. It is the LGU's responsibility to ensure that the expenses reported are necessary and reasonable for proper and effective program operation.
  5. It is the LGU's responsibility to ensure that the expenses and revenues reported are consistent with and in compliance with each funded service provider's approved budget.
  6. It is the LGU's responsibility to ensure that correct program categories, program codes and program code indexes are used.
  7. It is the LGU's responsibility to ensure that correct funding codes and funding code indexes are used (See the service provider's approved budget and/or the LGUstate Aid Approval Letter).
  8. It is the LGU's responsibility to ensure the mathematical accuracy and proper distribution of costs for shared programs. Shared programs are program categories funded by more than one DMH State Agency (OASAS, OMH and/or OMRDD).
  9. It is the LGU's responsibility to ensure the proper application of the weighted units of service methodology where appropriate.
  10. It is the LGU's responsibility to ensure that total LGU administration expenditures (program code 0890) are allocated to each DMH State Agency in accordance with the DMH approved 1988 percentages found in Appendix K of this manual and the CFR Manual.
  11. It is the LGU's responsibility to ensure that agency administration expenses are reported on all county operated and local contract funded not-for-profit service providers claim schedules and are allocated in accordance with the service provider's approved budget.

    Note: At a minimum, total service provider agency administration expenses must be allocated to each funding DMH State Agency and each non-DMH State Agency funding source using the ratio value allocation methodology.

  12. It is the LGU's responsibility to ensure that any expenses reported that are prohibited by Federal, State or Local laws, regulations and/or policies are adjusted out prior to the reimbursement of State Aid. Please refer to Appendix X of this manual and the CFR Manual for a list of some, but not all, unallowable expenses.
  13. It is the LGU's responsibility to ensure that reported expenses are not allocable to or included as an expense of any other program in a prior, current or subsequent fiscal reporting period.
  14. It is the LGU's responsibility to ensure that revenues are credited to the appropriate program categories and are reported in accordance with the revenue allocation methodology in each service provider's approved budget.

    OMH Note: Participants of Community Support Program (CSPs) should refer to the CSP Guidelines. These guidelines may be found in the general provisions section of the spending plan guidelines.

  15. For programs with measurable units of service, it is the LGU's responsibility to review county operated and local contract funded not-for-profit service providers' mid-year claims to ensure that each program is on track to deliver the total units of service committed to in the service providers approved budget (CBR). Furthermore, it is the LGU's responsibility to follow up with those service providers demonstrating serious deviations from their budgeted service delivery commitment to determine the need for technical assistance, budget modification and/or other corrective measures.
  16. LGUs will ensure that Article 28 hospital providers approved to use the “Medicaid Option” by the funding DMH State Agency(ies) have reported expenditures and revenues consistent with the “Medicaid Option” procedures described in Appendix Y of this manual and the CFR Manual.
  17. It is the LGU's responsibility to identify service provider expenditure overruns, revenue shortfalls, and significant service delivery performance variances If warranted, it is the responsibility of the LGU to ensure that the affected service providers:
    • receive needed technical assistance and/or
    • prepare a budget modification in accordance with specific DMH State Agency and LGU requirements and/or
    • take the appropriate corrective measures to rectify fiscal and/or programatic deficiencies.
  18. It is the LGU's responsibility to ensure that service providers use the same method of accounting to budget for and report expenditures and revenues. Service providers cannot change their method of accounting without expressed written approval by the funding DMH State Agency(ies) prior to implementation.
  19. It is the LGU's responsibility to ensure that service providers have taken any and all appropriate measures to maximize the revenues they receive from all other sources.

LGU Mid-Year Fiscal Reporting Requirements

The LGU fiscal reporting requirements and associated responsibilities that follow apply to the mid-year claim schedules for the LGU itself, funded county operated service providers and local contract funded not-for-profit service providers.

Note: OMH does not require the submission of mid-year claims from LGUs.

  1. The LGU will receive mid-year Agency Quarterly Fiscal Summaries (CQR-1s) from all county operated and local contract funded not-for-profit service providers receiving State Aid through the LGU. These mid-year CQR-1s will report expenses, revenues, net operating costs and funding code information for the first six (6) months of the fiscal reporting period.

    LGUs should follow up immediately with service providers that are delinquent in reporting to ascertain the reasons for lateness and to obtain an estimate of the submission date. If the LGU has good reason tobelieve that a delinquent reporting service provider will not submit its mid-year or final claiming schedules prior to the required claim submission deadlines, the LGUshould proceed with completion of the CQR-3 and State aid claim package.

  2. It is the LGU's responsibility to ensure that county operated and local contract funded not-for-profit service providers have completed their CQR-1s in accordance with the instructions contained in this manual.
  3. It is the LGU's responsibility to review county operated and local contract funded not-for-profit service providers' mid-year claims to ensure that the fiscal information reported is in compliance with the service provider's approved budget.
  4. After receipt and review of all county operated and local contract funded not-for-profit service provider's mid-year claiming schedules, the LGU will prepare an LGU Quarterly Funding Summary (CQR-3) in accordance with the instructions provided in this manual. Service providers and/or programs funded by a direct contract with a funding DMH State Agency are not included on the mid-year CQR-3.
  5. LGUs will prepare a Mid-year claim package for each funding DMH State Agency consisting of:

    OASAS: OASAS expects all county operated and local contract funded not for profit service providers to complete Mid-Year Fiscal Reporting documents and to submit those documents via the Internet. At this time, paper copies are still required to be sent directly to OASAS' Bureau of Financial Management.

LGU Final Fiscal Reporting Requirements

The LGU fiscal reporting requirements and associated responsibilities that follow apply to the final year-end claim schedules for the LGU itself, funded county operated service providers and local contract funded not-for-profit service providers.

  1. LGUs will receive final year-end State Aid claiming schedules from all county operated and local contract funded not-for-profit service providers. The final year-end claiming schedules are included as part of the year-end Consolidated Fiscal Report (CFR) and are referred to as the Consolidated Claim Report (CCR). CCRs consist of CFR schedules CFR-i, CFR-iii, DMH-2, DMH-2A (OASAS and OMRDD Only) and DMH-3.
  2. It is the LGU's responsibility to ensure service providers have completed their CCRs in accordance with the instructions provided in the Consolidated Fiscal Reporting and Claiming Manual.
  3. It is the LGU's responsibility to ensure that service providers have prepared their CCRs using the same methodologies and principles used in their approved budgets and mid-year claims.
  4. LGUs will prepare a final claim package for each funding DMH State Agency consisting of:

    OASAS: OASAS expects all county operated and local contract funded not for profit service providers to complete Final Fiscal Reporting documents and to submit those documents via the Internet. At this time, paper copies are still required to be sent directly to OASAS' Bureau of Financial Management.

    OMH: OMH does not require LGUsubmission of paper final year-end claim packages. The Aid to Localities Fiscal System (ALFS) will create the LGU claim and summary.

    OMRDD:

    1. Paper copies of CCRs for each county operated and local contract funded service provider funded through a local contract.
    2. A paper copy of an LGU Fiscal Summary (CQR-3) reporting funding code information for all county operated and local contract funded not-for-profit service providers.
    3. A State Aid Voucher (AC-1171) with an original signature completed in accordance with Section 21 of this manual.

    Please see section 17.0 of this manual for more instructions on the preparation and submission of LGU final claim packages including where to mail the paper copies.

  5. LGUs will submit the completed final year-end claim package(s) for receipt by the funding DMH State Agency(ies) as follows:

    OASAS: LGU final claim packages are due for receipt by OASAS no later than 120 days after the end of the fiscal reporting period.

    OMH: LGU final claim packages are due for receipt by OMH no later than 135 days after the end of the fiscal reporting period. (165 days if 30 day CFR Extensions have been submitted.)

    OMRDD: LGU final claim packages are due for receipt by OMRDD no later than 135 days after the end of the fiscal reporting period. (165 days if 30 day CFR Extensions have been submitted.)

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