1.3 - Financial Reporting and Administrative Costs

1.3.1 - Cost Reporting

Local Agency costs for each Maternal and Child Health Program Grant must be broken down and reported separately.

Technical assistance and a description of each line item and examples of activities which may fall into these categories may be requested by emailing DHS.BMCHEDF@ilinois.gov.

1.3.2 - Allowable Costs

1. Costs associated with activities considered necessary to meet Program objectives by the agency are allowable and may be charged to the grant.
2. Program management activities including accounting, auditing, budgeting, and outreach.
3. Allowable Costs for outreach activities as defined in the Outreach section are allowed. However, health, general education, or other social service activities may not be included as outreach.
4. Salary and other expenses for staff conducting activities required by the grant must be supported by documentation as described in Time and Activity subsection.
5. The agency must maintain an internal system of documenting time and activity; and separating activities performed under separate grants. Agencies may choose to use the SV02 documentation in Cornerstone as this system of documentation.
6. The agency must make its clinical and time reporting records available for inspection by authorized representatives of the Department.
7. When approved in the plan and budget, funds may be used for the direct costs of operating and maintaining the project. The following direct costs may be incurred:
   1. Salaries, including fringe benefits for full or part-time personnel employed for the program. The rates for personal services and fringe benefits shall be comparable to that paid to other employees of the agency.
   2. Fees for consultants and specialists.
   3. Travel of personnel, consultants, and specialists in carrying out the activities approved in the plan. Reimbursement shall be made in accordance with established delegate agency policies.
   4. Transportation of clients at the usual rates for the mode of travel that is consistent with the needs of the client, only once all options through Medicaid Managed Care Transportation Options have been exhausted, may be documented for the Better Birth Outcomes program if these costs are documented in the approved budget
   5. Supplies, as required in the operation of the project. The cost of supplies shall not exceed the lowest charge levels at which they are generally available in the area.
   6. Rental of privately-owned facilities where adequate space cannot be provided by the grantee agency. Rental charges shall not exceed the lowest rate for comparable space within the community as supported by bids.
   7. Equipment used in the operation of the project excluding the purchase of vehicles.
   8. Other expenditures directly related to the provision of project services, such as: telephone service, photocopying and scanning, utilities, etc. Purchases of items or services that do not vary significantly in quality from one supplier to another shall not exceed the lowest charge levels at which they are available in the area. A description for prorating costs must be provided.
8. Indirect costs may be included as a portion of the overall project costs as defined in the Grant Accountability and Transparency Act (GATA) [30 ILCS 708/15] if the indirect costs are budgeted along with the direct costs.

1.3.3 - Unallowable Costs

1. Under no circumstances may the DHS MCH grants be charged in full or in part for the costs of services which are demonstrably outside of the scope of the MCH Program's authorizing statute. For example, the FCM grant may be charged to screen FCM clients for immunizations and refer and follow-up on FCM client immunizations, but FCM may not be charged for the cost to administer the shot, the vaccine, or vaccine-related equipment.
   Further, costs which are specifically disallowed by applicable Federal cost principles outlines in the 2CFR200 may not be charged to the DHS MCH grants.

 B. Project funds shall not be used to pay the following:

 C. Administrative costs shall not exceed 15% of the total grant award. Any deviation from this must be approved in writing by the Associate Director of the Office of Family Wellness after a review of the circumstances which would require such an exception. The Department will consider the following in determining whether to grant an exception:

1.3.4 - Time and Activity

Each agency must be able to document time, and activity spent by each employee on each grant. This documentation will be used to reconcile against reimbursement request of Personnel costs against each grant during audit and administrative review. The specific format of documenting this time may be determined by the agency, however each report must be signed by the employee, and the employee's supervisor. Cornerstone reports may be used to document time and activity; however, it is not required to be documented through Cornerstone.

The documentation must at minimum contain the following information:

1. Identification of the staff person.
2. The date on which the activity was conducted.
3. Activity type - At a minimum, categories must identify case management; outreach; administration of outreach and case management; accrued benefit time; and other direct services, as follows:
   1. Time Spent - The amount of time spent on each activity.
   2. Program - The employee is working in. (FCM, HRIF, and BBO)

1.3.5 - Prior Approval for Purchases (revised October 2022)

Prior Approval is not needed for:

1. Activation of clients
2. Clinical costs necessary to provide program services, including referrals
3. Outreach to prospective program clients as included in outreach plan and approved budget
4. Rental or purchase of non-computer equipment (any nonexpendable item costing the lesser of $5000 or amount determined in the provider agency's capitalization policy)

Costs allowable with prior approval from the Department:

1. Rental space costs - new sites / locations
2. Any computer software purchases, such as: word processing, spreadsheet, database, email, presentation, or anti-virus applications
3. Any computer equipment purchases, such as: personal computers, monitors, printers, and modems, regardless of cost
4. Any items costing more than $5,000
5. Purchase of capital assets, such as: buildings, land, and improvements to buildings or land that materially increase their value or useful life and cost more than $5,000

All requests for prior approval must be in writing on Local Agency letterhead from the agency to the Department via the Administrative Contract Coordinator. The request must include:

1. Item Description
2. Model Number/Serial Number
3. Unit Cost
4. Justification for Purchase
5. Percentage of time the product will be used for each program
6. Number of Program Full Time Equivalents present in the Local Agency

1.3.6 - Outreach (revised October 2022)

"Outreach" means any activity to find and inform potential program clients of available services. The primary objective of outreach activities is to inform potential program clients of available services, eligibility criteria, and method of accessing services (for example, the name, address, and phone number of the agency). This is not to preclude the use of nontraditional methods of outreach that may be necessary to identify potential participants in hard-to-reach populations, such as persons who abuse substances or engage in prostitution. Acceptable Outreach methods are outlined in Section 1.3.7 of the Program Policy Manual.

The primary purposes of outreach are the following:

1. Build and maintain strong relationships, including execution of Linkage Agreements, with primary care medical providers, including but not limited to physicians, certified nurse midwives, nurse practitioners, physician assistants, and hospital labor and delivery and emergency room personnel.
2. Establishment of a working relationship between the FCMBMCH Agency and Medicaid Managed Care Organizations serving individuals within the Local Agency's service area, as directed by the Department of Human Services.

Costs for outreach may be documented on monthly PFRs for reimbursement if they have been documented in the approved budget under line item 15 known as the Grant Exclusives Line Item.

Costs for Outreach may not exceed 10% of the overall grant amount.

1.3.7 - Allowable Cost for Outreach and Case Management Activities (revised October 2022)

Costs incurred for outreach activities as defined in section 1.3.6 of the Policy & Procedure Manual are allowed. However, health, general education, or other social service activities may not be included as outreach.

1. Salary and other expenses for staff conducting outreach and case management activities must be supported by documentation. Expenses incurred for the provision of any other direct service (including client teaching) by staff conducting outreach and case management activities must be excluded. If program staff provide other direct services in addition to outreach and case management, the grantee's time and activity reporting system must distinguish between allowable and excluded costs.
2. Outreach can include community campaigns such as door-to-door canvassing, production and distribution of handbills, design and publication of newspaper announcements, and production and broadcast of public service announcements or paid advertising on radio or television.
3. Outreach efforts can be used to establish and maintain Linkage Agreements with social services agencies and other community-based organizations, including WIC agencies and local Public Health Departments (if the Local Agency is an FQHC or other community-based organization), for purposes of early identification and referral of potentially eligible pregnant individuals and infants and for overall coordination of care for enrolled clients.
4. The agency is expected to pursue partnerships with various community sectors that can provide additional support and services that enhance outreach efforts.
5. The agency is responsible for identifying more global strategies emphasizing a community-wide approach for all reproductive-age individuals in the targeted services area with an emphasis on the importance of a healthy lifestyle and habits before, during and after pregnancy; the importance of early prenatal care; and preconception/inter-conception health education and safe sleep practices for the infant.
6. Agency will evaluate outreach activities annually for effectiveness.
7. Appropriate approved billable Outreach includes, but is not limited to:
   1. Printing and distribution costs associated with distribution of pamphlets, brochures, flyers, posters, tear-off info posters & similar printed materials about the case management program.
   2. Printed materials may be given to local entities such as schools, churches, social service agencies & local area service providers.
   3. Attendance at health fairs promoting contact information and program services, speaking engagements with facilities and their staff as listed above.
   4. Costs associated with the purchase & distribution of the paperback "What to Expect When You're Expecting" to OB-GYN offices to make available to potential pregnant clients with non-removable attached program contact information
   5. Costs associated with dissemination of information about the program services through channels such as local community news articles, on the local radio station or TV channel.
8. Outreach expenditures should be concentrated on activities which access and activate eligible clients to FCM, HRIF, and/or BBO program services.
9. Written approval must be obtained from the Department for awareness campaigns / promotions, and billboards prior to purchase and/or implementation.
10. Raffles are not allowable as a means of outreach

1.3.8 - Transportation (revised October 2022)

1. Agencies are expected to assist clients in arranging for client transportation as necessary for prenatal care visits and appointments, visits for specialty medical care and/or other appointments specific to the individual's health needs and outlined in the plan of care.
2. Agencies must work closely with MMCOs to utilize transportation services provided.
3. Transportation costs that are incurred due to inability or lack of availability of MMCO transportation services or for clients not enrolled in Medicaid or a MMCO, may be documented for reimbursement on a monthly basis.
4. Agencies should be able to provide proof of attempts to use other means of transportation for clients whenever possible.
5. The number of Gas Cards / Public Transportation Tokens purchased for clients should not exceed monthly assigned caseload without prior written approval from the Department.
6. Transportation costs may be documented on monthly Periodic Financial Reports (EDFs) for reimbursement if they have been documented in the budget under line item 15 known as the Grant Exclusives Line Item.
7. Costs for Transportation may not exceed 5% of the overall grant amount.

1.3.9 - Pediatric Primary Care

In specific circumstances where clients meet the income eligibility requirements for Medicaid, however, due to religious reasons, are unable to enroll in Medicaid services, BMCH funds may be used to pay for Primary Care costs as outlined below.

Agencies may complete the Pediatric Primary Care Determination Worksheet (Addendum 1.3.9 Determination Worksheet) for pregnant individuals, and children to determine if they meet the following criteria:

1. Family income is at or below 318% of the Federal Poverty Level as determined by the current federal poverty guidelines (Poverty Guidelines | ASPE (hhs.gov)
2. Are otherwise uninsured (i.e., do not have private insurance) and,
3. Are unable to enroll in state of Illinois Medicaid due to religious reasons.

Once eligibility has been determined, the health department may provide the following services:

1. prenatal healthcare office visits for enrolled clients
2. infants or children under 2 years of age with > 30% developmental delays per Early Intervention (EI) global assessment who need periodic developmental screening
3. immunization administration
4. vision screening and, or glasses
5. hearing screening
6. pregnancy testing
7. head-to-toe physical assessment (EPSDT visit) on enrolled clients who do not have a recorded EPSDT with their primary care physician
8. routine and medically indicated dental services for FCM enrolled infants or pregnant individuals

It is expected that Health Departments will keep a monthly record of claims using the Primary Care Monthly Claim Form (Addendum 1.3.9 Claim Form). The CPT / Procedure Service code and Reimbursement Rate should be commensurate with the current HFS Fee Schedule which is found at: School Based/Linked Health Center Fee Schedule | HFS (illinois.gov)

The claim form along with completed Determination Worksheets for any clients that claims are being processed for must be submitted to the MCH Nurse Consultant. Once the claims have been approved the agency will complete the Primary Care Quarterly Summary Report (Addendum 1.3.9 Summary Report) and submit it along with the Periodic Financial Report (PFR) for the last month of the quarter.

The PFR will include the claim amount documented on the Grant Exclusive line item of the PFR.

1.3.10 - Inventory Management

Each local agency must maintain full and complete records concerning program operations. This includes maintaining property records as described below.

1. The Local agency must tag all equipment, valued at $100 or greater at the time of purchase, with a unique identification number
2. An inventory must be maintained of all tagged items purchased in full or partially with program funds. The inventory must include:
   1. Tag number/Inventory Number
   2. Item description
   3. Model Number/Serial Number
   4. Date of Purchase
   5. Unit Cost
   6. Location
3. Agencies using a blended inventory of all items must have a method to clearly indicate items purchased with program funds.

GUIDELINES FOR DISPOSAL OF PROGRAM EQUIPMENT

1. To dispose of equipment purchased with Program funds:
   1. If the item is on a depreciation schedule, and the time frame of depreciation has not elapsed, the local agency must submit a request in writing, on agency letterhead, to the Department at DHS.BMCHEDF@illinois.gov which includes:
      1. Item description
      2. Date of purchase
      3. Unit cost (if available)
      4. Justification for disposal
      5. Specification of which program(s) item is allocated to
      6. Copied to Regional Nurse Consultant
      7. Email Subject should read as follows: Agency Name - Disposal of Program Equipment
2. If the request is approved, a letter will be sent granting approval to dispose of the equipment. The letter must be kept on file with the inventory records.
3. Computer equipment approved for disposal must have all client information erased prior to disposal.

1.3.11 - Local Agency Accounting Procedures

1. Accounting System
   Each Local Agency participating in a DHS MCH Program must have an established financial management system, which provides complete, separate, and accurate accountability of Program funds. The accounting system in the Local Agency must provide original evidence of:
   1. Transactions
   2. A chart of accounts
   3. Ledgers for posting
   4. Complete accountability of all obligations, payments, and reimbursements
2. Expenditure Documents
   Source documents for expenditures must be available for audit, and records of payment of such expenses must allow for clear audit trails. To qualify for payment, an expenditure must be:
   1. A documented program expense related to the grant
   2. In compliance with federal and state regulations including the Illinois Grant Accountability and Transparency Act (GATA) and Federal Uniform Guidance (2 CFR 200)

1.3.12 - Financial Documentation and Grant Payments (revised October 2022)

The method of payment to Maternal and Child Health grants is by reimbursement of expenditures, unless otherwise specified. Repayment and reconciliation methodology will be documented in the annual agency agreement.

1. Local agencies will receive MCH grants payments from the Department, reconciled based on submitted monthly documentation. Failure of the Provider to submit documentation may result in a reduction to the total award. All payments will be reconciled based on submitted documentation. Supporting documentation must be available to the Department upon request including, but not limited to:
   • Receipts from a vendor.
   • Invoices.
   • Electronic order confirmation from a vendor.
   • QuickBooks invoices.
   • Back-up documentation.
   • Monthly narratives.
2. Detailed instructions along with the Expenditure Documentation Form (EDF) are provided by the Department at the beginning of the contract period and are sent to the designated Program Administrator and Fiscal Contact.
3. Local agencies must adhere to the specified payment terms in their contract agreement.

1.3.13 - Program Audit

1. Local Agencies are required to be audited annually in accordance with 2 CFR Part 200.501 Audit Requirements
2. 2 CFR 200.425 states "A reasonably proportionate share of the costs of audits required by, and performed in accordance with, the Single Audit Act Amendments of 1996 (31 U.S.C. 7501-7507), as implemented by requirements of this part, are allowable. Agencies should follow regulatory references in 2 CFR 200.425 for allowable and unallowable and unallowable audit costs. Any direct cost being charged to the program would be based on an organization's written costs allocation policy which meaningful allocation base and methodology would be included therein.
3. Allowable and unallowable Audit Costs are addressed in 2 CFR 200.425 (Subpart E - Cost Principles). The Department retains the right to conduct audits of any and all Local Agency MCH Programs. There is no charge to the Local Agency for these audits.
4. No other audits are required in the MCH Program, nor will outside audits be paid for from MCH funds. The requirements for Audit are set forth in 2 CFR 200 Subpart F and reflected in 44 IL Adm Code 7000.90; allowable and unallowable Audit Costs are addressed in 2 CFR 200.425 (Subpart E - Cost Principles.

1.3.14 - Local Agency Sanctions/Recoveries

The Local Agency shall have the right to appeal any sanction or recovery given by Programs or the financial review team to the Chief of the Bureau of Maternal & Child Health

1. The appeal shall indicate the reason why the sanction should not be imposed and/or why this recovery should not have been made.
2. The appeal shall be made within thirty (30) calendar days of this imposition of the sanction and/or the recovery of monies from the reimbursement voucher.

1.3.15 - Closeout Reporting Procedures

The State Fiscal year runs from July 1 through June 30.

1. Costs must be separated so that expenditures are charged to the fiscal year in which the obligation was incurred.
2. The separation of costs must occur between the months of June and July to close out the state fiscal year.