Counties Awash in Mental Health Money Amid Oversight Concerns

Nick Gerda/Voice of OC

In 2004, when California voters said yes to a ballot initiative that taxes millionaires to fund mental health services, they were told there would be strict state oversight of the spending.

Now, more than a decade after that promise, government accountability watchdogs say there is a glaring lack of oversight of the more than $1 billion raised each year by the initiative, known as the Mental Health Services Act or MHSA.

Counties across the state, including Orange, have been able to stockpile hundreds of millions in cash while the public has limited information about where the money’s going and what impact it has had on major goals.

“After 10 years, the state cannot provide basic answers to basic questions: Has homelessness declined? Are programs helping Californians stay at work or in school? Who is being served and who is falling through the cracks?” wrote Pedro Nava, chairman of the bipartisan Little Hoover Commission, in a letter to legislative leaders earlier this year following an investigation by the commission.

The investigation and its fallout come amid questions as to why Orange County has built up about $220 million in unspent MHSA funds, while issues such as shortages of psychiatric beds and months-long wait times for psychiatrist appointments persist.

“When you have this money that’s specifically earmarked for mental health services in our community, I lose the rationale for a contingency,” county Supervisor Todd Spitzer said in 2013, when the reserves were much smaller than they are today.

“In my opinion, every single dollar shouldn’t be in a bank…it should be out on the street, helping people get services.”

(Click here to read the Little Hoover Commission report.)

Many officials and mental health advocates describe the act as an invaluable resource that has made a huge positive difference in the lives of Californians with mental illnesses.  Well over 1,000 different programs are supported statewide, like crisis beds and early intervention services.

But advocates say there continue to be problems with transparency and accountability over how those dollars are spent.

“If a county is not adhering to the vision of the [MHSA], there is no statewide oversight body with authority over county MHSA funding distribution that would be able to oversee the process,” Jessica Cruz, executive director of the National Alliance on Mental Illness’ California chapter, told the Little Hoover Commission.

Years of Concerns

The concerns raised by the commission are not new. In fact, in 2013 the state’s top auditor found that “none of the entities charged with evaluating the effectiveness of [Mental Health Services Act] programs…have undertaken serious efforts to do so.”

Counties “rarely developed specific objectives to assess the effectiveness of the programs,” according to the auditor’s findings.

In testimony last year to the commission, state officials were direct in acknowledging that they are lacking in data to show whether people are doing better because of the law’s services.

“Do we know the efficacy of these programs?” asked Karen Baylor, deputy director of the Department of Health Care Services. “No, we don’t.”

Expanded collection of MHSA data by the department won’t start for another five years or so when a new computer system is finished, according to spokeswoman Carol Sloan.

Asked why it’s expected to take so long, Sloan said the project is still “in the beginning stages.”

County mental health directors, meanwhile, dispute the report, saying counties do report data on outcomes to the state and that publicly-available data on the “full-service partnerships” that receive 40 percent of MHSA funding shows major drops in homelessness, hospitalizations and incarcerations.

More Harm Than Good

In a letter to legislative leaders and Gov. Jerry Brown, the county directors warned that the commission’s report could harm services for people with mental illnesses.

“The report increases the risk that people whose lives have improved because of the MHSA will have fewer mental health resources to improve the quality of their lives and – by logical extension – the quality of life in communities across California,” wrote the County Behavioral Health Directors Association of California.

Also heavily involved in the issue is the Steinberg Institute for Advancing Health Policy and Leadership, a nonprofit founded by former state Senate leader Darrell Steinberg.

Its executive director says that while much data is being collected, it’s important to present it to the public in an understandable way to show the law’s success.

“We think data’s really, really important,” said Maggie Merritt, who emphasized that the law has made a huge positive impact. “I think the biggest problem is that everybody’s collecting data in their own little silos and that whatever data has been reported on has been reported in such a convoluted way that it’s not resonated, it’s not digestible.”

When the Little Hoover Commission’s report first came out, there was interest among policymakers to step up state oversight in significant ways, according commission Executive Director Carole D’Elia. But county mental health directors pushed back, she said, sending their January letter to legislative leaders.

The county directors and the Steinberg Institute also released a study they commissioned showing big drops in homelessness and arrests among participants in full-service partnerships in the 2012 fiscal year.

Policymakers, including members of the mental health law’s oversight commission, then backpedaled, saying they shouldn’t take away counties’ autonomy, according to D’Elia.

One concern is that if there’s a lack of data to back up the law’s successes, the funding could be at risk in the next economic downturn.

“It was really difficult for us to just get a number of how much money” was going where, let alone what it was doing, D’Elia said. “If you don’t document how you’re spending it, you’re very vulnerable to losing it.”

It’s unclear where legislative leaders currently stand in regard to the issues outlined by the Little Hoover Commission.

It is possible that a push for more oversight could come from the state Legislature’s mental health committees. However, neither of the committees’ chairmen – Sen. Jim Beall (D-San Jose) and Assemblyman Sebastian Ridley-Thomas (D-Los Angeles) – responded to calls for comment.

A member of the law’s oversight commission, meanwhile, noted that some of the report’s recommendations are in the midst of being implemented.

For example, to improve financial transparency, the commission is putting together online documents to better show citizens how each county’s money is being spent among seven funding categories, according to oversight commission Vice Chair John Buck.  They’re expected to be posted online within a year.

As part of that effort, counties – many of which haven’t filed financial reports to the state in years – are being told to file up-to-date reports by December, he added.

And as for the years it’s expected to take to report system-wide data on outcomes, Buck said that in the meantime, the oversight commission has hired analysts to study and report data on specific programs.

Rose King, a statewide mental health advocate and co-author of the MHSA, said there wouldn’t be such controversy and criticism if the law would have been implemented as originally intended.

The initial idea was to have counties analyze the biggest gaps in their systems – such as a shortage of mental health clinics – and develop plans to meet those needs using the law’s funding, said King, who served as chief of staff to former Lt. Gov. Leo McCarthy.

But, she said, the law was later re-crafted to focus on having counties hire contractors with ideas for new programs, without state reviews of those plans.

The act was supposed to be “about fixing the systems,” said King. “They were not supposed to create 1,600 new programs statewide. It’s totally a gift to the contractors.”

That approach has contributed, she said, to the mental health system becoming “so very fragmented, so mysterious, so chaotic.”

“They just invent things to get contracts and spend this money. And so everybody’s bright idea is on the table for consideration for what’s good for mental illness…instead of seeing a psychiatrist and a therapist and a case manager and a social worker.”

In an effort to ensure people who need mental health treatment receive it, King and her supporters are trying to get a bill introduced that establishes “mental health parity,” a right to medically necessary mental health treatment under the state’s low-income insurance plan, Medi-Cal.

People with mental illnesses “should not have to navigate two separate health care programs” for physical and mental health, she said.  “Mental health should be in the medical system.”

It would be “a whole lot cheaper,” she added, to provide services in “top-notch outpatient clinics” than for people with mental illnesses to continue ending up in emergency rooms, jails, hospitals, prisons or the street.

You can contact Nick Gerda at, and follow him on Twitter: @nicholasgerda.

  • OCservant_Leader

    The OC Board of Supervisors- have blood on thier hands for the deaths and suffering of the mentally ill and their families in Orange County.

    We know the OC is a ticking time bomb for a horrible disaster.

    They cannot distance themselves from the corruption, mismanagement and incompetence of this Agnecy which THEY created.

    They have brought thier unique brand of “graft” into the County’s Mental Health System.

    The first MHSA Manager – was an EA.

    They have used the funds as a slush fund to hire EAs and run campaigns to keep themselves in power.

    Nick please do some digging and report how many lawsuits from injured families the BOS have quietly paid off?

    How many are pending?

    How many lawsuits from abused employees who have tried to speak up?

    Why are the bureaucrats apparently all deaf/mutes talking about “soft” policy directives from the BOS?

    The stockpile of funds is just the tip of the iceberg of this horror show.

    • Jacki Livingston

      Better yet, how many employees have they driven to worker’s comp for stress injuries and depression, after being assaulted and abused by management?

      • OCservant_Leader

        Why doesn’t the V of OC find and post those numbers?

        • Jacki Livingston

          It’s public record. Of course, Todd has his wife in charge of the Anaheim office, and she assigns his former clients and friends to sit as judge on county employee cases. Can you say “conflict of interest”?

  • The largest gap in services here in OC surrounds patients who are high risk on the MORS chart, unengaged from services, lack mental ability to self direct their care, and dont have the capacity to understand an informed consent. We need make the conservatorship process easier for private guardians, who are willing to take on the responsibility to provide food, clothing and shelter, and assist these families/patients with long term, outpatient services regardless of whether they have public or private insurance. OC HCA needs to have the ability to bill private carriers-otherwise they are missing 75% of our population. The most common brain disorder with this need are the Schizophrenia Spectrum Disorders-which are “cousins” to Autism and Alzheimer’s. We have greatly overlooked these disorders, requiring them to “fit into programs designed solely for substance abuse and mood disorders”. There also needs to be a major increase in financial support for police training (CIT), and for Judge Joe Perez, our Superior Court Judge over OC’s Mental Health Court programs. He is humanely trying to help OC’s Veterans to our homeless population, obtain medical care and services in lieu of jail time. MHSA money is Orange County’s money. There are very few regulations or laws that restricts the use of this money. Although some departments may state otherwise, in reality they are just following guidelines set up by the Mental Health Directors Association. In reality its up to our BOS how we spent OC’s MHSA money. They ultimately approve the MHSA budget, where and how the money is spent.

    • OCservant_Leader

      You are right – the BOS has “interpreted” the law in OC which is directly responsible and thereby liable for a broken system.

      Injured families should unite and sue. If they want to know how it operates on the “inside”…all they need to do is contact current & past employees.

  • MsPolly

    I want to start out by agreeing wholeheartedly with how Rose King characterizes the original intent of the MHSA. MHSA was hijacked and very few people have actually benefitted from the various crappy, ineffective programs despite their clever names and initials.
    What a shame, though, that Ms. King’s keen insight is buried inside this “journalist’s” so-called investigative piece. Journalism is at its’ best to at least appear impartial and really should be undertaken as objectively as possible. This young man, Mr. Gerda, and I assume by proxy the publisher have an agenda that is not even as honestly expressed as Fox News’ agenda. Be careful reading the dribble that tries to pass as investigative journalism.
    Back on the MHSA because that’s where the real suffering rests–rests on the shoulders of those suffering from mental health problems while the rest of HCA blindly goes forward spending money, hiring dimwits, starting yet another program all while the benefits far underperforms against the cost.
    I could really go on here but I’ll wait for the haters to comment on my reaction to this subject/article–except to say two more things.
    The union called OCEA is partially responsible for the lack of care because the ineffective clinicians as described in the article cannot be fired or reasonably disciplined or caused to improve. The remaining good clinicians are overworked to the extreme and to the point of having health problems themselves. They are overworked with extremely high caseloads in programs that were essentially forgotten once MHSA came around due to the very point that Ms. King brings up.
    I am reluctant to bring politics and economics into all of this because it is that poor person out there and their family who is suffering and dying. However, this is another example of how broken the system is and you cannot expect it to be fixed by those that broke it or by the common person even when the common person gangs up with good intention. This needs a fresh look by people who really study “evidence based” care and this is by real researchers at universities and not all these therapists from the diploma mills that pop up on every street corner.
    I’m sorry to go on so much. It’s just so sad. MHSA was to be a kind of revolution but instead it is a de-evolution at a great human and financial cost. There needs to be a better revolution but the BOS and HCA administration will quietly play their game to string us all along.
    Good night and good news.

  • Jasenn Zaejian

    The OC health care agency mental health program is an antiquated system, using antiquated, ineffective treatments that are termed “evidenced based” while failing on innovation and creativity. Why is this. An old Rabbinical expression tells it all, ‘the fish stinks from the head.’ OC needs innovative mental health care, not the same old as practiced by their staff. I have had at least one person tell me that they were psychologically and emotionally abused by a mental health staff counselor because she disagreed with the counselor, complained about it to their supervisor, and was given a sarcastic response by the supervisor. This was one symptom that highlights the nature of competence in the “mental health” agency, purported to be awash with cash from MHSA funds. This problem is a likely result of the patronage system that permeates OC government whereby friends of friends or associates are awarded positions, or recommended for positions by politicians, and others who have political power, regardless of their competence or knowledge of what it takes to do the job.

  • Judy Allen

    Is there ANYTHING these fools do (or don’t do) on our tax dollars that isn’t disappointing?

  • Paul Lucas

    This is very disappointing.