Title
Mental Health Department recommending Auditor-Controller be authorized to make cash advances from the General Fund to the Mental Health Special Revenue Fund on an as needed basis to prevent a negative cash balance in said fund; advance funds are to be reimbursed, with interest, as determined by the Auditor-Controller.
RECOMMENDED ACTION: Approve.
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Fiscal Impact/Change to Net County Cost:A General Fund advance would provide temporary operating cash only, and is therefore, not considered a General Fund expenditure, requiring no appropriation. Additionally, as stated above, a General Fund advance will be repaid, with interest, as determined by the Auditor-Controller.
Background: The Mental Health Special Revenue Fund is the day-to-day operating fund for all of the Mental Health Departments programs except for those funded by the Mental Health Services Act. The main source of revenue/cash for this fund is Medi-Cal, which is paid to the Department on a reimbursement basis. The Department has been able to deal with this cash flow situation in the past because it maintained a sufficient fund balance in cash. However, as the FY 2006-07 mid-year estimate and FY 2007-08 budget request show, this fund balance is on the decline. This, coupled with the States increasing delays in paying its Medi-Cal claims, may cause the fund to temporarily have a negative cash balance. At these times, a General Fund advance would carry the fund until reimbursements are received.
Reason for Recommendation:Advances from the General Fund to the Mental Health Special Revenue Fund may be needed at times to carry temporary negative cash balances.
Action to be taken following Board approval:Upon approval of the recommendation, the Auditor-Controller will have the authorization to make cash advances from the General Fund to the Mental Health Special Revenue Fund (Fund Type 11, Fund 110, Sub-fund 001) as needed to cover negative cash balances in the fund.
Contact:John Bachman, Mental Health
Concurrences: