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Office of Mental Health

New York State Consolidated Budget and Claiming Manual Subject: Advance Payments Section: 9
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 outlines the policies and procedures regarding the development and processing of Aid to Localities (State Aid) advance payments. Advance payments are provided two (2) ways:

  1. to Local Governmental Units (LGUs) for pass through to county operated and local contract funded not-for-profit service providers, and
  2. to county operated and not-for-profit service providers funded through a direct contract with one or more of the DMH State Agencies.

Advance payments are provided to these two (2) groups of funded service providers to facilitate the consistent and timely flow of State Aid used to finance approved program operations. The policies and procedures regarding advance payments are different for LGUs and direct contract funded service providers. Additionally, each DMH State Agency has differing advance payment policies for LGUs and direct contract funded service providers.

Specific advance payment policies, procedures and requirements for LGUs and direct contract funded service providers are described below.

Advance Payments - Local Governmental Units (LGUs) – All DMH State Agencies

The policy of the DMH State Agencies is to provide regular periodic advance payments to LGUs based on the following conditions:

  1. Subject to State appropriations availability, DMH State Agencies will make advance payments to county local governments as follows:

    OASAS: OASAS may provide advance payments to LGUs from State funds and/or Federal funds as follows:

    State Funds: Advance payments will be developed quarterly for payment within the first 10 days of the first month of each calendar quarter (January, April, July and October).

    Federal Funds: Advance payments will be developed monthly for payment within the first 10 days of each month (January, February, March, April, May, etc.).

    For LGUs receiving State Aid consisting of both State and Federal funds, each quarterly advance will include three (3) months of State funds and one (1) month of Federal funds payable within the first 10 days of the first month of each calendar quarter. The LGU will then receive two (2) one (1) month advance payments for the remaining two (2) months of the quarter payable within the first 10 days of each month.

    State and Federal funds are identified on the OASAS Approval letter by the alphabetic funding source code associated with the three (3) digit numeric funding code (i.e. 001S, 013F, etc.).
    Please see Appendix N of this manual and/or the Consolidated Fiscal Reporting and Claiming (CFR) Manual for a description of OASAS alphabetic funding source codes.

    OMH: Advance payments for LGUs will be processed quarterly for payment within the first 10 days of the first month of each calendar quarter (January, April, July and October) in accordance with Article 41.15(d) of Mental Hygiene Law.

    OMRDD: Advance payments for LGUs will be processed quarterly for payment within the first 10 days of the first month of each calendar quarter (January, April, July and October) in accordance with Article 41.15(d) of Mental Hygiene Law.

  2. OASAS and OMRDD advance payments for the April - June quarter and the quarters that follow are subject to:
    1. the timely passage of New York State Budget appropriations for the fiscal reporting period,
    2. approval of budget certificates by the NYS Division of the Budget, and
    3. segregation of the appropriated funds by the Office of the State Comptroller.

    OMH April - June advance payments are not affected by passage of New York State Budget Appropriations in April. However, July – September and October – December advance payments are subject to the three (3) conditions stated above.

  3. Generally, 100% of an LGU's approved State Aid allocation will be advanced for a fiscal reporting period. However, at the discretion of the funding DMH State Agency, total advance payments provided may be limited to ninety percent (90%) of an LGU's approved State Aid allocation.
  4. At the discretion of the funding DMH State Agency, advance payments may be adjusted to reflect the actual fiscal reporting experience of county operated and local contract funded service providers.
  5. At the discretion of the funding DMH State Agency, LGU advance payment amounts may be reduced as a result of delinquent county operated and local contract funded service provider budgets, contracts or claim submissions, delinquent submission of signed State Aid funding Authorizations (OASAS only), Disproportionate Share (DSH) Memorandums of Understanding (OASAS only) and/or serious under spending. Generally, these reductions will not be applied to those service providers that have established cyclical spending patterns.
  6. LGUs must forward advance payments to all local contract funded service providers within 30 days of the advance's receipt by the LGU. Advances should be made in accordance with the contractual advance payment schedule. LGUs shall have discretionary authority to withhold advances from service providers not in compliance with reporting requirements.
  7. DMH State Agency processing of LGU advances for payment by the Office of the State Comptroller is also predicated on the following requirements:
    Quarter Requirement Due Dates Counties NYC
    1 Receipt of current year Workscope & CBR by Field Office (OASAS) October 1st of prior fiscal year April 1tstof prior fiscal year
    2 Receipt of current year final budgets (OMRDD) February 15th of current fiscal year Use NYC DOHMH guidelines
    Receipt of signed current year State Aid Funding Authorization (OASAS) February 15th August 15th
    3 Receipt of current year LGU contracts (OMRDD) April 30th December 31st
    Receipt of prior year final claim (OASAS) May 1st November 1st
    Receipt of final claim (OMH & OMRDD) May 15th November 15th
    Receipt of current year final budgets (OMH) November 1st October 1st
    4 Receipt of mid-year claim for the current fiscal year (OASAS & OMRDD) August 15th February 15th

    Note: In accordance with Section 41.18(b) of Mental Hygiene Law (MHL) local governments shall be granted State Aid for approved net operating costs pursuant to an approved Local Services Plan. No State Aid may be paid without an approved Local Plan.

    Federal regulations prohibit making payments from Federal funds to any service provider that has not filed the required Federal compliance assurances with the funding DMH State Agency(ies).

  8. Each individual DMH State Agency will carefully monitor performance in meeting the above requirements. Requirements not met in a specific quarter will be carried over to succeeding quarters. Non-compliance with these requirements may result in advances being reduced or not processed at all.
  9. If the LGU or individual service provider comes into compliance within 30 days after the beginning of the quarter, an individual DMH State agency may process an "off-cycle" advance payment; otherwise, the individual DMH State Agency may postpone payment until the next scheduled advance payment date.

Advance Payments - OASAS Direct Contractors

Advances are made in accordance with the payment schedule indicated in Appendix C of each fully executed contract. Advances may be withheld or reduced if any of the conditions specified in the contract or guidelines have not been met.

  1. The policy of OASAS is to provide advance payments to direct contract-funded service providers based on the following criteria:
    1. A contract between OASAS and the direct contract-funded service provider has been approved and fully executed by the State Attorney General and the Office of the State Comptroller; and
    2. The direct contract-funded service provider has submitted to OASAS the appropriate number of State Aid Vouchers (AC-1171s) for advance payment processing (see note following Item 4 below). These vouchers should be submitted when returning the service provider signed copies of the contract agreement to OASAS or in response to receiving the initial Contract Budget and Funding Summary (Appendix B) for each budget period of the contract.
    3. OASAS may provide advance payments from State funds and/or Federal funds as follows:

      State Funds: Advance payments will be developed quarterly for payment within the first 10 days of the first month of each calendar quarter (January, April, July and October).

      Federal Funds: Advance payments will be developed monthly for payment within the first 10 days of each month (January, February, March, April, May, etc.).

      For contractors receiving State Aid consisting of both State and Federal funds, each quarterly advance will include three (3) months of State funds and one (1) month of Federal funds payable within the first 10 days of the first month of each calendar quarter. The Contractor will then receive two (2) one (1) month advance payments for the remaining two (2) months of the quarter payable within the first 10 days of each month.

      State and Federal funds are identified on the Appendix B by the alphabetic funding source code associated with the three (3) digit numeric funding code (i.e. 013S, 013F, etc.).

      Please see Appendix N of this manual and/or the Consolidated Fiscal Reporting and Claiming (CFR) Manual for a description of OASAS alphabetic funding source codes.

  2. A final payment, if needed, will be made to the direct contractor based on the fiscal data reported on the DMH-2, DMH-2A and DMH-3 State Aid claiming schedules of the Consolidated Fiscal Report.
  3. An optional fifth quarter payment may be provided at OASAS' discretion , based on the following criteria:
    1. Service provider receipt of a Written Directive signed by OASAS.
    2. Must be allowed for in the current service provider direct contract agreement.
    3. The service provider has submitted a State Aid Voucher (AC-1171) for the fifth quarter payment.
  4. Prior period overpayments and/or audit recoveries can be recouped against any payment OASAS makes to a direct contract-funded service provider. The recoupment generally begins with the first payment made to the direct contract-funded service provider following OASAS identification of the overpayment and/or audit recovery amount.

    Note: Direct contract-funded service providers receiving NYS General Fund State aid only must submit four (4) advance vouchers annually.

    Direct contract-funded service providers receiving Federal funds as all or part of their approved State Aid must submit 12 advance vouchers annually.

    Vouchers should have the Name and Address sections completed, reference the contract number in the Description section and be signed by an authorized official in blue or black ink.

    State and Federal funds are identified by the alphabetic funding source code associated with the three (3) digit numeric funding code on Appendix B of OASAS direct contract agreements (i.e. 013F, 001S, etc.).

    Please see Appendix N of this manual and/or the Consolidated Fiscal Reporting and Claiming (CFR) Manual for a description of OASAS alphabetic funding source codes.

Advance Payments - OMH Direct Contractors

The policy of the Office of Mental Health is to provide four advances to contracts that are operational, plus one optional payment if needed. Start-up contracts receive an initial advance and the remainder as specified in the contract/guidelines.

The payment of an advance is based on the following conditions:

  1. The contract has been approved by the State Attorney General and the Office of the State Comptroller.
  2. Requirements stated in the contract/guidelines have been met, such as the submission of an expenditure report or a program report.
  3. The optional payment or fifth quarter payment is based on the following:
    1. A Written Directive signed by the Director of Community Budget Service.
    2. Must be allowed for in the current contract.
  4. Advances are made in accordance with the payment schedule in each contract. Advances may be withheld or reduced if any of the conditions specified in the contract or guidelines have not been met.
  5. Prior period overpayments and/or audit recoveries can be recouped against any payment OMH makes to a direct contract service provider. The recoupment generally begins with the first payment made to the direct contract service provider following OMH identification of the overpayment and/or audit recovery amount.

Advance Payments - OMRDD Direct Contractors

The policy of the Office of Mental Retardation (OMRDD) is to provide quarterly advance payments to direct contracts based on the following:

  1. The contract has been approved by the State Attorney General and the Office of the State Comptroller.
  2. Direct contract agencies shall submit to OMRDD a State Aid Voucher (AC-1171) requesting an advance representing the approved limit established in the approved contract.
  3. The combined amount of the first and second quarter advance shall be limited to fifty percent (50%) of the annualized State Aid contract amount.
  4. The State Aid Voucher submitted for the third quarter advance shall be accompanied by an agency Fiscal Summary (CQR-1) and, if appropriate, an Agency Quarterly Program Report Summary for the first quarter. The amount of the third quarter advance will be adjusted to reflect fiscal activity reported in the first quarter (CQR-1) and in no case shall exceed 25% of the State Aid contract amount.
    1. For Direct Sheltered Workshop contracts, either the first quarter approved net expenditures or contract sales, whichever is lower, is the basis for adjusting the third quarter advance.
    2. For all other contracts, the third quarter advance will be adjusted to reflect fiscal activity reported in the first quarter and in no case shall exceed 25% of the State Aid contract amount.
  5. The State Aid Voucher submitted for the fourth quarter advance shall be accompanied by an agency Fiscal Summary (CQR-1) and, if appropriate, an Agency Quarterly Program Report Summary for the second quarter. The amount of the fourth quarter advance will be adjusted to reflect fiscal activity reported on the second quarter less a 10% hold back of the total contract amount. An exception to this would be made for the Direct Sheltered Workshop contracts. For them, either the second quarter approved net expenditures or contract sales, whichever is lower, is the basis for adjusting the fourth quarter advance.
  6. A final payment, if needed, will be made to the direct contractor based on the fiscal data indicated in the Consolidated Fiscal Report.

    For Direct Sheltered Workshop contracts, the basis for final payment will be either approved net expenditures or contract sales, whichever is lower.

  7. The optional advance payment is based on the following:
    1. Payment of the optional advance payment must be approved by the local DDSO.
    2. The receipt of a voucher (AC-1171) by the Bureau of Community Funding. Prior year overpayments and audit recoveries can be recovered against any payment being paid to a voluntary local service provider. Usually recovery will begin against the next available payment.
  8. Prior year overpayments and audit recoveries can be recovered against any payment being paid to a voluntary local service provider. Usually recovery will begin against the next available payment.

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