Mental Health Agency Errors Throw Off State Budget by $300M
Department of Mental Health officials on Monday told a Senate committee that several bookkeeping errors will cost the state $300 million, the Los Angeles Times reports.
The errors occurred within the department's Early, Periodic Screening and Treatment Program, a $1 billion initiative that provides mental health treatment to children and families. The services are provided by counties, which in turn are reimbursed by the state.
The department in fiscal year 2006-2007 largely underestimated the number of beneficiaries the program would serve, leaving a deficit of tens of millions of dollars. Officials also overbilled the federal government by $100 million, and the state now is repaying that amount.
Stephen Mayberg, director of the Mental Health Department, said an ongoing federal audit into the overbilling and other accounting issues could result in major fines for California and further drain the budget.
Mayberg said that the agency thought there was adequate funding to cover the deficit but explained that officials were unaware that any unspent money in the account at the end of the last fiscal year would be deposited into the state's general budget for other uses.
The errors have put a financial strain on counties that are seeking reimbursement from the state for services counties provided as far back as three years ago.
Officials in Gov. Arnold Schwarzenegger's (R) administration asked the Legislature to cut other budget expenditures, such as cost-of-living increases for welfare recipients, to help repay the counties.
However, Shawn Martin, an official at the legislative analyst's office, told the Legislature to delay reimbursing the counties until the department exhibits reforms (Halper, Los Angeles Times, 3/13).