6. BHT Fiscal Policies

B. BHSA Fiscal Policies

B.4 Funding Transfer Requests

Starting with the fiscal year (FY) 2026-2029 Integrated Plan (IP), all counties can request changes to the funding allocation percentages outlined in Table B.5.1 below. Counties may ask to transfer funds between these three components to change their funding allocation percentages. However, these changes in funding allocation percentages cannot exceed 7 percent of total funds allocated to the county in one fiscal year from any one component. Counties may only request a maximum of 14 percent of total funds allocated to the county to transfer in any given fiscal year.^[1] Adjusting the distribution of funds within a county according to these guidelines does not exempt the county from adhering to any additional applicable laws or to the sub-allocation requirements.^[2]

In a fiscal year, a county may transfer from its Housing Intervention funds up to 7 percent of its total BHSA allocation for that fiscal year. However, if a county uses Housing Intervention funds (up to 7 percent) to provide outreach and engagement, the amount of funds the county can transfer out of the Housing Intervention component must be decreased by a corresponding amount.^[3] For example, if County A chooses to use 3 percent of its annual Housing Intervention funds for outreach and engagement, then County A would be able to transfer no more than 4 percent out of its Housing Interventions component into another funding component. Counties are not required to utilize Housing Interventions funding for outreach and engagement. Counties are also not required to transfer funds out of Housing Interventions. Counties shall retain discretion to transfer up to a total of 14 percent of its total BHSA allocation in a fiscal year.  

All transfer requests between Housing Interventions, Full Service Partnerships (FSP), and/or Behavioral Health Services and Supports (BHSS) components must be submitted to DHCS through the county portal and include all required information and documentation.^[4] This includes details and rationale for the funding allocation transfer request. The rationale must specify how the transfer request is responsive to community needs and include local data and community input in the planning process. For instance, a county might demonstrate significant need within a particular component by showing that programs are unable to meet the demand of their community. Or, if a county is interested in decreasing a funding allocation percentage for a component, a county should demonstrate that there is limited need or show where there is sufficient funding from other sources.

Counties may submit their funding transfer request within the county portal prior to developing their IP in order to support planning efforts.

DHCS will review transfer requests based on compliance with statutory requirements, evidence of alignment with local priorities, and community input.^[5] For transfer requests, counties are also required to adhere to local stakeholder consultation requirements.^[6] Additional information about the community planning process can be found in Chapter 3.B.1 of this policy manual.

B.5 Funding Component Allowances

The table below lays out the funding allocations and their corresponding sub-allocations for each Behavioral Health Services Act component, beginning July 1, 2026.^[7]

Table B.5.1 Overview of Funding Allowances

B.5.1 Adjusting a Previously Approved Funding Allocation Percentage Change

Approved funding allocation percentage changes are final and cannot be adjusted again for the duration of the three-year plan, unless an annual change is approved by DHCS due to a state or local emergency.^[8] To be granted an annual change, a county shall demonstrate to DHCS that it is experiencing a state^[9] or local^[10] emergency, and the change is necessary because of the emergency. Counties may only request an annual change in funding allocations percentages for previously approved funding allocation percentage changes.^[11] If a county seeks to adjust the percentage allocations that were previously approved by DHCS as part of the IP, the county will submit the funding allocation percentage change request in the county portal. Counties are required to adhere to local stakeholder consultation requirements to adjust funding allocations.^[12]

B.5.2 Process for Approval and Denial

DHCS has 30 calendar days to approve or deny funding allocation transfer requests following receipt of the request. The approval and/or denial of the transfer request will be completed through the county portal. If DHCS does not respond within 30 calendar days, the funding allocation transfer request will be considered approved.^[13] 

If the transfer request is approved, funding allocation adjustments cannot be changed during the three-year IP period, unless an annual change is approved by DHCS.^[14] If the transfer request is denied, justification will be included with the decision. The county will be required to update their Integrated Plan (IP) to reflect the denial. Counties should be transparent with stakeholders throughout the community planning process and acknowledge where the IP will need to be adjusted if the exemption request is not approved.

If the county does not agree with DHCS’s decision to deny the transfer request, the county may submit an appeal to DHCS within 30 calendar days of receipt of the denial. The appeal must include an explanation stating the basis of the appeal and supporting documentation. Appeals must be submitted through the county portal. DHCS has 30 calendar days to approve and/or deny the appeal, starting with the date that DHCS confirmed receipt of the appeal.

DHCS will have 10 calendar days from confirming receipt of the appeal to request additional documentation from the county. Counties will supply additional documentation within 10 calendar days of confirming receipt of the request.

If the appeal is denied, justification will be included with the decision. If an appeal is submitted after 30 calendar days from receipt of the denial, the appeal will be automatically denied.  

If the county already submitted their IP and budget and the county receives notice that their funding transfer request was denied, the county is required to update the IP and budget to reflect the correct allocation amounts within 90 days of receipt of the denial from DHCS, unless the county receives approval for an extension to this timeframe.

B.5.3 Reporting Requirements

Transfers between components will change the required allocation of BHSA funds dedicated to Housing Interventions (30 percent), FSP (35 percent), and BHSS (35 percent). As a result, counties are required to report approved transfers and updated BHSA allocations on the BHOATR, consistent with the transfers approved as part of the IP.^[15]  

Funds transferred between FSP, Housing Interventions, and BHSS components are subject to the same reversion requirements as before the transfer. Transferring funds does not alter the reversion period associated with those funds. The reversion period is the length of time a county has to spend its local Behavioral Health Services Fund (BHSF) money; the reversion period begins the fiscal year in which funds are transferred from the state BHSF to the local BHSF. For more information on reversion, please see the Reversion Section of this policy manual in Chapter 6.B. 

^[1] W&I Code § 5892, subdivision (c)(1)

^[2] W&I Code § 5892, subdivision (c)(2)

^[3] W&I Code § 5892, subdivision (c)(4)

^[4] W&I Code § 5892, subdivision(c)(4)

^[5] W&I Code § 5892, subdivision (c)(4)(A)

^[6] W&I Code §§ 5963.02 and 5963.03

^[7] W&I Code § 5892, subdivision (l)

^[8] W&I Code § 5892, subdivision (c)(4)(C)

^[9] Gov. Code, § 8625

^[10] Gov. Code, § 8630

^[11] W&I Code § 5892, subdivision (c)(4)(C)

^[12] W&I Code § 5963.03(c)(1)

^[13] W&I Code § 5892, subdivision(c)(4)

^[14] W&I Code § 5892, subdivision (c)(4)(C)

^[15] W&I Code § 5963.04, subdivision (a)