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Sacramento Bee

September 8, 2010

Sacramento County mental health program faces state audit

State officials are questioning the integrity of Sacramento County's embattled mental health delivery system, and say they will withhold $40 million in funding until the county proves it can properly serve clients in the face of its budget crisis.

The California Department of Mental Health, in a strongly worded letter from chief counsel Cynthia Rodriguez, argues that the cash-strapped county has failed to demonstrate that it has a viable system in place for treating poor people.

The agency plans to conduct a fiscal audit of the county's handling of state Mental Health Services Act funds "as soon as possible" to make sure law, regulations and contracts are being followed, Rodriguez wrote. That money constitutes the bulk of the county's funding for mental health services.

The agency is launching its audit because the county has failed "despite repeated requests" to supply the state with "relevant answers" about how the system will operate and money will be used, Rodriguez wrote in the Aug. 25 letter to interim County Executive Steve Szalay.

The Mental Health Department "is adamant that services must continue to be available" to needy people, she wrote. But the state will continue to withhold funding, she said, until "we have clear understanding of what Sacramento County's intentions are for the funds and the programs."

County supervisors, who are working on a final budget for the current fiscal year, are to begin hearings today on the future of the mental health programs. Those programs have been ruptured during the past 18 months by deep budget cuts amid a suffocating deficit.

The task is complicated because the county, looking to close a deficit that ballooned to $181 million last spring, is contending with court orders that halted its proposed cuts to health care programs.

Without the state funding, the mental health system would be unable to function, said Bruce Wagstaff, head of the Countywide Services Agency. Meetings between the county and the state are scheduled for next week, he said.

"Of course they can't withhold that money forever. It will only add to the overall problem," said Wagstaff. "It's very important that we get this resolved, and we will. From Day 1, our concern has been how do we continue to provide quality service in the face of a fiscal crisis. That is still our goal."

He said the county, because of the lawsuits and potential loss of state funding, no longer plans to cut ties with contractors that provide care to seriously mentally ill people and replace them with county workers. Funds for the outpatient care will come from various pots of mental health money, savings from other programs and by cutting some county mental health jobs, he said.

Assuming that the state restores its funding, "the system may not look very different" in the coming year than it looks today, he said.

The threat of a state audit is the latest in a series of crises to befall the county's mental health system.

Last year, the county shuttered the crisis unit at its mental hospital on Stockton Boulevard, and closed half of the facility's 100 beds. At the same time, more than 4,000 people who got outpatient care through private Regional Support Teams funded by the county were cut from those programs.

Earlier this year, the county proposed severing ties to its nonprofit contractors, affecting 6,500 clients with diagnoses such as schizophrenia and bipolar disorder. But that plan triggered legal challenges and public opposition from some treatment specialists, so officials shelved it and restored funding to keep the Regional Support Teams running.

"There is funding to continue the contracts and keep the status quo for the rest of the year, allow us to have further discussions on the legal issues and meet with various stakeholders" such as mental health providers, hospitals and clients, Wagstaff said.

But clients and their caretakers are worried, said John Buck, chief executive for Turning Point Community Programs, one of the county's contractors.

"The county has constantly been adjusting from a legal standpoint, and nothing is a sure thing," Buck said.

Providers fear that once the pressure is off the county, "everyone is going to be displaced and moved to new programs," most likely staffed by county workers, Buck said.

"This is not about client care and accountability," he said. "It's about saving county jobs."