LOS ANGELES COUNTY
DEPARTMENT OF MENTAL HEALTH
  Policy 1003.04 Interest Earned from Mental Health Funds
 
  PROCEDURES
  1. Retention and Reporting

    The following procedures are made to facilitate compliance with the contract requirements:
     
    1. When contractors commingle funds, generally accepted accounting practices are to be utilized which allow clear identification of income by funding source, and facilitate reviews and audits.
       
    2. Contractors who commingle funds should prorate interest earnings among the various funding sources in accordance with generally accepted accounting principles.
       
    3. Contractors should practice progressive fund management and refrain from keeping funds in non-interest bearing accounts. It is sound business practice to earn additional money for the expansion of mental health services.
       
  2. Monitoring/Auditing of Loan Funds Distributed
     
    1. The Los Angeles County Department of Mental Health (DMH/Department) will continue to monitor and report on private contractors’ management of cash flow loan funds disbursed by the County. Additionally, State Medi-Cal auditors will continue to audit interest revenue. Adverse monitoring review or audit findings regarding the management of cash flow loan funds and the reporting of such interest revenues will be a consideration of the County in the decision to loan funds to a contractor.