R.V. C.S.H.B. 1734 75(R)BILL ANALYSIS
PUBLIC HEALTH
C.S.H.B. 1734
By: Delisi
4-18-97
Committee Report (Substituted)
BACKGROUND
The Texas Performance Review's, Disturbing the Peace, found that despite a
1987 law requiring the Texas Department of Mental Health and Mental
Retardation (TDMHMR) to enter into a memoranda of understanding with other
state agencies that contract with community mental health and mental
retardation centers, widespread duplication of monitoring continues to be
a problem. Specifically, TPR cited duplicative financial auditing and
performance monitoring.
PURPOSE
CSHB 1734 would reduce duplication of financial and program audits of
community mental health and mental retardation centers ("community
centers").
RULEMAKING AUTHORITY
It is the committee's opinion that this bill requires the Health and Human
Services Commission (HHSC) to make a ruling on the procedures no later
than 30 days after the date TDMHMR prescribed the procedures in SECTION
6(b).
SECTION BY SECTION ANALYSIS
SECTION 1. Amends Section 533.035, Health and Safety Code, as follows:
Subsection (b) adds the language "including a case-rate or per capita
arrangement" to the provision regarding fund allocations by TDMHMR.
Subsection (e) is added and requires the TDMHMR to develop by September
1, 1998 a plan of action as established in this subsection.
SECTION 2. Amends Subchapter A, Chapter 534, Health and Safety Code, by
adding Section 534.036 as follows:
Section 534.036. FINANCIAL AUDIT. Subsection (a) requires TDMHMR to
establish procedures for financial audits of community centers. Requires
TDMHMR to develop procedures with the assistance of the state agencies and
departments that contract with community centers, and consolidate the
financial and compliance requirements of all contracting agencies and
departments into a single audit. Requires TDMHMR, prior to prescribing or
amending procedures, to set a deadline for those state agencies and
departments to submit to TDMHMR, proposals relating to the financial audit
procedures. Requires that the procedures may not conflict with
requirements associated with federal funding received by the community
center. Prohibits TDMHMR from implementing the procedures without the
approval of HHSC.
Subsection (b) requires each state agency or department that contracts
with a community center to comply with the procedures developed under this
section.
Subsection (c) requires TDMHMR to develop procedures allowing additional
financial audits with the approval of HHSC.
Subsection (d) requires TDMHMR to evaluate the fiscal impact of this
section and to report a complete evaluation to the Legislature by December
1, 1998. Establishes this subsection expires by January 1, 1999.
SECTION 3. Amends Subchapter A, Chapter 534, Health and Safety Code, is
amended by adding Section 534.037 as follows:
Sec. 534.037. PROGRAM AUDIT. Subsection (a) requires TDMHMR, with the
approval of HHSC, to coordinate program audits based on risk assessment
with agencies that contract with community centers. The procedures
adopted under this subsection must be consistent with requirements
connected with federal funding received by the center.
Subsection (b) requires a program audit of a community center to be
performed in accordance with procedures developed under this section.
Subsection (c) establishes that this section does not prohibit the
investigation of complaints against a community center or prevent contract
monitoring by a department or entity providing funding to the center.
Subsection (d) requires a program audit under this section to evaluate:
the community center's achievement of desired results; effectiveness and
whether the center is in compliance with applicable laws.
Subsection (e) requires TDMHMR to evaluate the fiscal impact of the
procedures adopted under this section and report them to the legislature
by December 1, 1998. Establishes this subsection expires on January 1,
1999.
SECTION 4. Amends Section 534.060 (b), Health and Safety Code, by
replacing the requirement that local mental health or mental retardation
authorities receive annual program audits at least once each fiscal year
with a requirement that they be audited "in accordance with a risk
assessment and evaluation system appropriate to contract requirements."
SECTION 5. Repeals Section 534.034 and 534.054(b) and (d), Health and
Safety Code, regarding Memorandum of Understanding on Program and
Designation of Provider.
SECTION 6. Subsection (a) establishes the effective date is September 1,
1997.
Subsection (b) requires the procedures set forth in Sections 1 and 2 must
be established by TDMHMR and approved by HHSC by January 1, 1998.
Requires the HHSC to make a ruling on the procedures no later than 30 days
after the date TDMHMR prescribed the procedures.
SECTION 7. Emergency clause.
COMPARISON OF ORIGINAL TO SUBSTITUTE
SECTION 1. The substitute inserts provisions to specifically authorize
risk-sharing arrangements between TDMHMR and local MHMR authorities. It
would also require TDMHMR to develop a plan for identifying optimal local
MHMR authorities ad establish criteria for contracts between authorities
and service providers.
SECTION 2. The original bill would have required HHSC to prescribe
procedures for, and perform, a single financial audit of a community
center. The substitute places the responsibility for prescribing
procedures with TDMHMR. The responsibility to perform the audits is not
mentioned in the substitute, because the audits are performed by
independent auditors. The original would also have required the State
Auditor to review and comment on the prescribed procedures while the
substitute would not. The original would have required HHSC to evaluate
the fiscal impact of the financial audit procedures and report these
findings to the legislature. The substitute places this responsibility
with TDMHMR.
SECTION 3. The original bill would have required the HHSC to develop
procedures and conduct a single performance audit. This section of HB
1734 also contained the established effective date of the Act. The
substitute requires TDMHMR to develop procedures for coordinated program
audits. The original bill established the general scope of the
performance audit, and the substitute sets general parameters for program
audits. In addition, HB 1734 required the HHSC to evaluate the fiscal
impact of the performance audit procedures and report to the legislature.
CSHB 1734 requires TDMHMR to evaluate and report on the fiscal impact of
the program audit procedures developed.
SECTION 4. In the original bill this section is the emergency clause.
The substitute provides for program audits of community centers based on a
risk assessment and evaluation system appropriate to contract
requirements.
SECTION 5. CSHB 1734 repeals existing statutory requirements regarding
memorandums of understanding and designation of power. This was intended
to reduce duplication in audit activities of community centers.
SECTION 6. CSHB 1734 establishes the effective date of the Act, and
requires TDMHMR to prescribe procedures for audits with the approval of
HHSC by a date certain. CSHB also requires HHSC to make a ruling on the
procedures by 30 days after the date TDMHMR prescribed the procedures.
SECTION 7. Emergency clause for CSHB 1734.