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OAC staff report $188.2M cash on hand and low rate of unallowable costs in monitoring
Summary
Staff reported a January trust‑fund balance of $188.2 million and said invoice processing has paid roughly $73 million to date; fiscal monitors found unallowable costs in about one‑third of site visits but unallowable amounts totaled about 0.46% of paid invoices year‑to‑date.
OAC staff on March 4 presented a fiscal update that included the current trust fund statement, invoice activity, and results from fiscal monitoring of community grant recipients.
Mary said the trust fund statement (current to January) showed net cash on hand of $188.2 million. Melissa, who leads fiscal monitoring, told the council that invoices and payments move through BCMS and Edison and that Mark and David on staff “process and make sure that they go to the Department of Mental Health so that they are paid through Edison.”
Melissa reviewed common unallowable costs found during monitoring: sales tax charges (on purchases for which grantees are tax‑exempt), lodging charges above the state maximum, and misapplied indirect cost rates (for example, applying indirect rates to capital purchases). She said that, of 51 site visits completed, 17 had at least one unallowable cost (about one third), but the total unallowable amount identified was about 0.46% of amounts paid year‑to‑date.
On oversight and remediation, staff described two remediation paths for unallowable costs: (1) the grantee refunds the amount to the department, or (2) the OAC reduces the next invoice to recoup the amount, depending on size and grantee risk profile. Corrective action plans (CAPs) and exit reports document required steps; staff said CAPs are closed after verification of recoupment.
Why it matters: the OAC is distributing hundreds of millions of dollars in settlement funds and staff emphasized internal controls and monitoring to limit ineligible spending while moving funds to community services.
What’s next: staff will continue routine fiscal and program monitoring, perform targeted site visits for open CAPs, and resume program monitoring activities that were temporarily paused to execute cycle two contracts.
