John R. Kasich, Governor Tracy J. Plouck, Director, ODMH Orman Hall, Director, ODADAS (Future) Department of Mental Health & Addiction Services May 9,

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FY 14 Block Grant Planning

John R. Kasich, GovernorTracy J. Plouck, Director, ODMHOrman Hall, Director, ODADAS

(Future) Department of Mental Health & Addiction Services

May 9, 2013

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Agenda

• Objectives for FY 14 plan• Brief review of FY 13 circumstances:• SAPT• MH• Sequester

• Discuss philosophy• Review, discuss scenario options• Logistical/fiscal items• Identify next steps

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Objectives

• Where appropriate, adopt a consistent philosophy and process for both block grants

• Review with community partners:• The cash challenges of the SAPT Block

Grant• SFY13 SAPT sequestration impact • Funding Scenarios: “What if sequester

continues?”

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FY 13 Circumstances - SAPT

• $62.7MM• Basic requirements:• 20% prevention• $10.9MM womens’

(MOE requirement)

• Cash availability has been a challenge in recent periods

5%

63%

30%

2%

FY 13 SAPT BG Budget Total

3G40 Admin

3G40 Allocation

3G40 Grant

3G40 Allocation & Grant

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FY 13 Circumstances - SAPT

• Historically, ODADAS has used SAPT resources in concert with GRF and rotary funds (i.e., Fund 4750)

• Reductions to any one of these sources result in a need to refine all three types of community allocations in order to maintain parity approach among grantees• We will be adjusting the budget

planning process to reach a solution for predictability

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FY 13 Circumstances – MH BG

• $15MM (includes carryover)

• Approx. half disbursed by formula (qtrly)

• Grants designated by Department priority area (w. Planning Council input)

5%

50%

45%

FY 13 MH BG Budget Total

3A90 Admin3A90 Allocation3A90 Grant

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FY 13 Circumstances – MH BG

• MH block grant “base” allocations ($7.5MM) to boards are formula based and separate from other subsidy allocations, i.e., different approach than SAPT

• Projects are granted through Notice of Award• Some are competitive; others non-

competitive• Priority areas determined by SAMHSA,

Planning Council and Director

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FY 13 Circumstances - Sequestration

• Communication to field 3/25 regarding reductions to major federal grants:

5% reductions against FFY13 Notice

of Award

MH block grant $721,932

SAPT block grant $3,463,988 (reduction of $164,420 from SAPT12 to SAPT13 award plus $3,299,568

SAPT13 sequester reduction)

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FY 13 Circumstances - Sequestration

• FY 13: No reduction impacts to the field during SFY13 as a result of the following; o Utilized AoD state resources to realign

originally awarded SAPT dollarso Cancelled unobligated balances and

projects that have not yet begun (MH & AoD)

• FY 14 plan: determine approach in concert with community partners o Application of SAPT13 sequestration

reduction over SFY14/15 biennium (8 qtrs)

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Philosophy

• Promote transparent planning & monitoring

• Apply outcomes & accountability to make informed funding decisions • Anticipate changes over time based on

our work with the field in these planning sessions

• Begin commitment to address known challenges over a reasonable period of time

• Support predictable, user-friendly processes

• Responsive to persons receiving MH/AoD services

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The Known Sequester

• As a new consolidated organization, we are committed to sharing a strategy across grants to the extent possible• Examples: shift some SAPT spending related

to dual diagnosis; relieve other shared administrative obligations where possible

• Limited opportunities

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The Known Sequester

• SAPT13 SequestrationAward Amount

Subsidy (95%) Admin (5%)

SAPT13 Award 65,991,361 62,691,793 3,299,568

Sequestration 5% reduction

(3,299,568) (3,134,590) (164,978)

Reduced SAPT Award

62,691,793 59,557,203 3,134,590

Reduced SAPT13 Award

Award Amount Subsidy 95% Admin 5%

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The Known Sequester

• For SAPT:• Maintain women’s MOE and prevention

set-aside• Shift some project grants to other

sources• Apply selective reductions to project

grants• Timing

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The Known Sequester

• For MH BG:• Maintain formula awards to Boards• Maintain priority pops – SMI, SED• Shift some responsibilities to other

sources• Apply selective reductions to project

grants• Timing?

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If Sequester Continues

• No formal communication received from SAMSHA to indicate this will happen, or that the 5% initial sequester reduction amount would be the actual amount reduced

• Amounts if a 5% carries forth (based on FFY13 awards):• SAPT: $3,299,568• MH BG: $721,932

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If Sequester Continues

• Frame the options• Across the board? • Notwithstanding MOE and other

requirements • Amount on “base” v. amount on

grants

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Scenarios

• We want to achieve two plans by the end of this process:• FY 14 with FFY13 total sequester impact

of $4.1MM (both MH and SAPT)• FY 14 with continued sequester against

FFY14 MH and SAPT Block Grants • Both scenarios must contemplate SAPT

alignment activities

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SAPT Alignment: the Problem

• Basic Information:• Feds allow the state 8 quarters to spend the

grant, but we spend SAPT in the first four quarters of the federal award.

• Historically resources obligated to the field in July include an October SAPT Award.• Example: SAPT13 October Award supports

SFY14 1st quarter and SAPT14 October Award supports SFY14 2nd, 3rd, and 4th quarters

• Only 25% of cash for the SFY is liquid and available for disbursement.

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SAPT Alignment: Proposed Solution

• Stretch SAPT Award allocation over more quarters in order to come into alignment with the amount actually available to support SAPT revenues

• Will result in less cash to the field in short term, but more predictability in short and long term• What terms need considered?• How may impacts be managed?

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SAPT Alignment: Proposed Solution

Based on SAPT13 Award

Subsidy Portion (95% of Award)

Subsidy 4 QTR Distribution

Subsidy 5 QTR Distribution

Quarterly Reserve for Alignment

Original 62,691,793 15,672,948 12,538,359

Sequester (3,134,590) (783,647) (626,918)

Revised Amount

59,557,203 14,889,301 11,911,441 2,977,860

• Proposed SAPT alignment solution for reserve

Alignment applied over a 5 quarter period would build an SAPT reserve at the Department to off-set federal cash delays.

Restored SAPT funding decisions could resume after the initial 5 quarters.

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SAPT Alignment: Proposed Solution

• Need to “catch up” approximately $3MM each quarter in order to align with federal award availability:• No other resources available to cushion

the gap that occurs during alignment process

• Component for consideration:• Programs funded with multiple sources

(Block Grant, State GRF, Rotary) and how to manage the Block Grant Reduction fairly.

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Logistical and Fiscal Items

• NEED TO FRAME OUT:• Push vs. draw• Reporting• Other?

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Next Steps

• For SAPT alignment• Logistical/fiscal• Other?

• Next meeting or specific assignments