Part 820 Residential Services Request to “Not Apply” Surplus Revenues 

Effective Immediately 

Eligibility: 

• Providers may request to “not apply” surplus revenues in funded, certified Part 820 Residential programs for up to three consecutive fiscal years beginning with the year of certification and the two succeeding years.
  • In the event the Part 820 program is certified in the last quarter of the provider’s fiscal reporting period, the provider may submit a request in writing to have Year 1 of the three consecutive years start with the next immediate fiscal reporting period.
• The Part 820 Service may be a new program or a conversion from a non-Part 820 service.
• Surplus revenues or unspent State aid must be used for Part 820 program purposes, either in the program earning the surplus, in another Part 820 program operated by the provider, or in other SUD programming within the provider agency that directly improves service delivery to the part 820 program by determination and at the discretion of OASAS Regional Office (RO), Division of Addiction Treatment and Recovery (ATAR), and the Commissioner.
• Requests to “not apply” surplus revenues submitted for other program types will not be considered as part of this process.

Procedures: 

Providers must submit a written request to “not apply” surplus revenues to their RO Program Manager (with a copy to the Local Governmental Unit, if applicable). Please see below table and notes describing due dates for provider submissions to the RO to allow sufficient time for review and recommendation prior to the final submission to the OASAS Bureau of Budget Management (BBM). 

• All dates listed refer to the date immediately after the fiscal period for which the request applies.
• Requests received by BBM after the Request due date will only be eligible for approval up to 50% of the surplus revenue.
• Requests received by OASAS BBM after the Final Date for Acceptance will be denied.
• Complete, revised CFRs reflecting any approved adjustments to revenue must be received by OASAS by the date listed or they will not be processed and funds will be recovered as appropriate.

The request must specify the following:

• The amount and source of the projected surplus.
• A rationale why the money is needed and specific details of how it will be spent to the betterment of a Part 820 program.
• Acknowledgement of satisfied and/or intended compliance with applicable sections of the Administrative and Fiscal Requirements for OASAS-Funded Providers prior to implementation of initiative.
• Common uses might include:
  • Hiring of staff including any related recruitment costs. The provider must acknowledge that ongoing costs related to new staff will be included in the annual budget for the program and financed through revenues in future years and that no additional State aid will be requested.
  • Requests to provide one-time salary increases must comply with the established RO policy regarding bonus payments to staff.
  • Equipment
  • Supplies
  • Building renovations/maintenance. Building renovations are limited to a Part 820 site and will be reviewed by the RO and other bureaus, as applicable, including in relation to existing and pending major capital and minor maintenance projects. Approval may impact future minor maintenance eligibility. Any enhancements that include space/capacity expansion will require a Certification application.
  • IT expenditures in the areas of equipment, software programs and required annual licenses, other related fees, or needed system upgrades.
  • Consideration may also be given for the establishment of contingency accounts to address specific needs such as the transition to Medicaid Managed Care or private insurance billings. Such requests will be reviewed on a case-by-case basis and may not exceed 25% of the approved annual operating expenses of the Part 820 Program.
• Appeals to adjust the start date of the three-year period due to a last quarter conversion must be included in the first “not apply” request submitted to OASAS for the specific program. Otherwise, OASAS will assume Year 1 to be the actual year of conversion.

OASAS Review:

• The respective OASAS RO will respond via email to the provider indicating receipt of the request and copying Budget Management at [email protected]. RO will review the request with appropriate ATAR and other OASAS staff, as needed, for reasonableness and practical benefit to OASAS residential programming. RO will follow-up with the provider for any necessary information or revisions, including reminders of the deadlines listed above. RO and the provider are expected to act promptly on any requests and revisions and maintain written documentation of all communications.
• The RO will then forward the request with any backup documentation and make a recommendation regarding the request to OASAS Budget Management, who will review the submitted request including the RO recommendation, in terms of fiscal impact, magnitude, OASAS policy, previously submitted requests, and prior decisions. Budget Management will consult with other units within Division of Fiscal Administration (DFA), as needed. Further information may be requested from the RO.
• When DFA has completed its review, Budget Management will inform the RO of approval, denial, or advise the RO that the request must be moved forward to the Commissioner for review. Items that require Commissioner review and approval include but are not limited to:
  • Requests to “not apply” revenues in excess of $500,000.
  • Requests that would set a precedent.
    • Such requests may include provision of ongoing salary increases, program expansions (rather than improvements), etc.
  • Requests from programs with known programmatic or fiscal concerns.
• If needed, RO will schedule a meeting to include DFA to review the request with the Commissioner for approval.
• The RO will notify the provider in writing (with a copy to the Local Governmental Unit, if applicable) of OASAS’ determination with a copy to BBM and the Payments Unit of the OASAS Bureau of Financial Management. 

Additional Information:

• Providers that receive approval to “Not Apply” revenues will make a revenue adjustment on the DMH-2, line 39 Other Non-GAAP Adjustments and identify the entry as “OASAS Not Applied Revenues”. The amount entered must match the amount approved in writing by the RO. Any amount in excess of the approved amount will be used to offset State Aid.
  • If prior approval has not been obtained, all surplus revenues will be used to offset the State Aid. Claims will be adjusted to apply the revenue if prior approval was not obtained.
• Approval to “Not Apply” revenue will be made on a case-by-case basis and is solely at the discretion of OASAS.
• OASAS cannot approve requests to “not apply” revenue that would cause a negative net revenue, and thus result in retention of unspent State Aid. Unspent State Aid will be recovered through the usual reconciliation process.
• Programs will still be subject to all reporting and performance monitoring.
• OASAS reserves the right to revise or discontinue this procedure without notice. 

For further information on appropriate uses of any surplus revenues, email [email protected]. Questions related to reporting the revenue adjustment on the DMH-2 should be sent to [email protected].