​​​​​​​​​​MHSA Fiscal Oversight

DHCS is responsible for overseeing the use of Mental Health Services Act (MHSA) revenue and expenditures. This is done by reviewing expenditure reports and conducting onsite financial audits. DHCS reviews county MHSA Annual Revenue and Expenditure Reports on an annual basis to determine consistency of expenditures with county planning documents, ensure reporting of interest, and to review prudent reserve levels. Upon review of county Annual Revenue and Expenditure Reports, DHCS is also responsible for calculating and managing the amount of Mental Health Service Funds subject to reversion.  ​

​Annual Revenue & Expenditure Report   

Per Welfare and Institutions Code (WIC), Section 5899(c), counties must submit a completed Annual Revenue Expenditure Report (ARER) to DHCS by the end of each calendar year, December 31st. The purpose of the ARER is to identify Mental Health Services Act fund expenditures, identify interest earned and unspent funds, and determine reversion amounts.

Reversion Calculations

 WIC Section 5892(h)(1) requires reverted funds be placed into the Reversion Account and made available for other counties in future years.​​

Reports detailing the amount of funds subject to reversion by county, by component.

​​Legislative Reports

  • Per WIC 5813.6, DHCS shall submit to the Legislature information regarding the   projected expenditure of Proposition 63 funding for each state department, and for each major program category specified in the measure for local assistance.

​Prudent Reserve        

Per WIC 5847(b)(7), counties are required to establish and maintain a prudent reserve (PR) to ensure children, adults, and seniors can continue receiving services at current levels in the​ event of an economic downturn. The Prudent Reserve is funded with monies allocated to the Community Services and Supports component and cannot exceed 33% of a county's average distribution for the previous five years.


Redistribution of Reverted MHSA Funds



Other Resources

Last modified date: 9/1/2020 4:22 PM