California Auditor Finds Counties Retain Excessive Reserves For Mental Health Service Act Funds

An audit of county use of funds generated by the California Mental Health Services Act (MHSA) found that in 2015, the state’s 59 counties and local mental health agencies maintained excessive reserves, retained unspent funds and the interest on those funds. In total, the counties have amassed $2.5 billion in unspent MHSA funds, which includes $535 million in accumulated reserves to cover contract expenses. The MHSA, enacted in 2004, is a state tax on people with earnings of more than $1 million. The proceeds are distributed to the counties to fund non-Medicaid community-based mental health services . . .