309-013-0130 Definitions (1) “Audit” means the examination of documents, records, reports, systems of internal control, accounting and financial procedures, and other evidence for one or more of the following purposes: (a) To ascertain whether the financial statements present fairly the financial position and the results of financial operations of the fund types and/or account groups in accordance with Generally Accepted Accounting Principles and federal and state rules and regulations; (b) To determine compliance with applicable laws, rules, regulations and contract provisions; (c) To review the efficiency and economy with which operations are carried out; and (d) To review effectiveness in achieving program results. (2) “Capital Construction” is an expenditure related to construction or remodeling of physical facilities with a projected cost of $250,000 or more. (3) “Capital Improvement” is an expenditure related to construction or remodeling of physical facilities with a projected cost of more than $5,000 but less than $250,000. (4) “Capital Outlay” are purchases of equipment and tangible personal property of a non-expendable nature which have a useful life of more than one year. The minimum dollar threshold for determining if a purchase is capital outlay can not exceed the amount set for state purchases of capital outlay. The current threshold for the State of Oregon is $5,000, however, a lessor amount may be used. (5) “Community Mental Health Program (CMHP)” means the organization of all services for individuals with mental or emotional disturbances, developmental disabilities or chemical dependency, operated by, or contractually affiliated with, a local mental health authority, operated in a specific geographic area of the state under an intergovernmental agreement or direct contract with the Division. (6) “Direct Contractor” means a person or organization which operates under a direct contract with the Division to provide services to persons with mental or emotional conditions and/or developmental disabilities. (7) “Internal Auditor” means auditors within the Audit Unit of the Division. (8) “Internal Control Structure” means the plan of organization including all of the methods and measures adopted within a business to safeguard its assets, check the accuracy and reliability of its accounting data, and promote operational efficiency and adherence to management’s policies. (9) “Local Mental Health Authority (LMHA)” means the county court or board of county commissioners of one or more counties who choose to operate a CMHP; or, if the county declines to operate or contract for all or part of a CMHP, the board of directors of a public or private corporation which contracts with the Division to operate a CMHP for that county. (10) “Addictions and Mental Health Division (Division)” means the Oregon Health Authority (Authority) Agency responsible for the administration of the State mental health and developmental disability services to persons who qualify for certain programs under federal and state laws, rules and regulations. (11) “Mental Health Organization (MHO)” means a Prepaid Health Plan under contract with the Division to provide covered services under the Oregon Health Plan Medicaid Demonstration Project. MHOs can be Fully Capitated Health Plans (FCHPs), CMHPs or private MHOs or combinations thereof. (12) “Non-allowable Expenditures” means expenditures made by a contractor or subcontractor of the Division which are not consistent with relevant federal and state laws, rules, regulations and contract provisions. To be allowable, expenditures must be necessary and reasonable for the proper and efficient performance of the contracted services. If only state funds are involved, expenditures will be evaluated based on state laws and rules, the contract provisions, and whether they are necessary and reasonable for the proper and efficient performance of the contracted services. When federal funds are involved, determination of allowable expenditures includes, but is not limited to, those rules and regulations itemized and referred to in applicable Office of Management and Budget circulars. (13) “Office of Medical Assistance Programs (OMAP)” means the office of the Oregon Health Authority responsible for coordinating the Medical Assistance Program within the State of Oregon. (14) “Reasonable Cost” means a cost that in nature or amount does not exceed that which would be incurred by a prudent person under the circumstance prevailing at the time the decision was made to incur the cost. Consideration shall be given to whether the cost is of a type generally recognized as ordinary and necessary for the operation of the organization; what restraints or requirements exist such as those imposed by factors of generally accepted sound business practices, federal and state laws and regulations, and terms and conditions of the contract; whether the individuals concerned acted with prudence in the circumstances, considering their responsibilities to the organization, their employer, their clients, the public and the governments; and whether significant deviations from the organization’s established practices unjustifiably increase costs. (15) “Service Element” means a distinct service or combination of services as defined in Part III of the Intergovernmental Agreement for persons with mental or emotional conditions and or developmental disabilities provided in the community setting by a contract with the Division or through a subcontract with a local mental health authority. (16) “Service Provider” means a public or private community agency or organization contracted by the Division that provides recognized mental health or developmental disability service(s) and is approved by the Division or other appropriate agency to provide these service(s). For the purpose of this rule, “provider” or “program” is synonymous with “service provider.” Statutory/Other Authority: ORS 179.040, 413.042 & 430.640 Statutes/Other Implemented: ORS 414.018 & 430.610–430.695 History: MHD 15-1998, f. 8-12-98, cert. ef. 9-1-98, Renumbered from 309-013-0020 MHD 9-1978, f. & ef. 12-11-78