MHADA Allocation Grant
Information regarding the special education Mental Health Average Daily Attendance (MHADA) Allocation Grant.MHADA Allocation Grant funds provide educationally related mental health services, including out-of-home residential services for emotionally disturbed pupils, required by an individualized education program (IEP) pursuant to the federal Individuals with Disabilities Education Act (IDEA) (20 United States Code Section 1400 et seq.) and as described in Section 56363 of the California Education Code (EC).
Fiscal Year 2025–26 Updates | Program Authorization | Grant Funding | Allowable Costs | Resources
Fiscal Year 2025–26 Updates
Effective January 1, 2026, the MHADA Allocation Grant transferred to the Fiscal Monitoring and Audits Unit. As a part of this transition, two changes were implemented:
- Regional assignments were consolidated and responses to inquiries were assigned to alternate staff. All inquiries and documentation shall continue to be submitted to the MHADA Team via email at MHADA@cde.ca.gov.
- Expenditure Reports (ERs) are no longer required to be accompanied by the Detailed Summary of Mental Health Expenditures Worksheet, and the Community Mental Health Affiliates and/or Private Providers Expenditures Worksheet/Local Educational Agency (LEA) Transfer Service Provider Worksheet. It is, however, the responsibility of the Grantee to maintain these required supplemental forms within their agency for audit purposes, as the California Department of Education (CDE) may request submission of these forms at any time.
Program Authorization
- In 2011, the California Legislature passed Assembly Bill 114, which repealed the state mandate on special education and county mental health agencies and eliminated related references to mental health services in California statute. As a result of this legislation, school districts became solely responsible for ensuring that students with disabilities receive mental health related services. The budget included $69 million in federal funds to support the costs of mental health services. These funds for mental health services were allocated to special education local plan areas (SELPAs).
- Provision 6 of Item 6100-161-0890 of the Budget Act of 2024–25 appropriates $69 million in federal IDEA funds for mental health related services. Provision 6 reads, “The Superintendent of Public Instruction shall allocate these funds to local educational agencies (LEAs) beginning in the 2024–25 fiscal year (FY) based upon an equal rate per pupil using the methodology specified in Section 56836.07 of the EC.”
- This amendment shifted the CDE’s allocation of federal IDEA MHADA Allocation Grant funds to 1,633 LEAs for FY 2024–25. The MHADA Allocation Grant, (Program Cost Account 15197/Resource Code 3327), is formula-based using Average Daily Attendance (ADA) data and equitable funding distribution and is reliant upon SELPA membership.
Grant Funding
Purpose
The purpose of the grant monies is to provide educationally related mental health services, including out-of-home residential services for emotionally disturbed pupils, required by an IEP. All reported expenditures must be either direct services as stated on a student’s IEP, or indirect costs at the CDE-approved rate for LEAs. Overall, LEAs are responsible for ensuring that all expenditures directly tie to mental health services for a district student as required by their IEP. Funds blended with other federal funds, or funds from other agencies would not ensure appropriate accounting methods in the case of an audit. Thus, LEAs must ensure the accurate expenditure of funds.
Eligibility
The total grant allocation may change from year to year due to shifts in special education local plan area (SELPA) membership. Eligibility for this grant does not require an application separate from membership in a SELPA. LEAs which, for the purposes of special education who generated Average Daily Attendance (ADA) in the prior year, are eligible, including county offices of education, school districts, and charter schools who are LEA members of a SELPA.
How to Receive the Grant Funds
LEAs must complete and return the Grant Award Notification (GAN) (AO-400) with a Unique Entity Identification (UEI) and the MHADA Allocation Grant Expenditure Report (ER) to receive funds. Awarded funds are provided on a reimbursement basis. Grantees may choose to spend their full grant award amount and send in their final report at any time during the 27-month award period.
The disbursement of federal funds casts the grantee in the role of a subrecipient, and they must comply with the Federal Funding Accountability and Transparency Act (Code of Federal Regulations Part 25 Public Law 109-282 & Public Law 110-252). The act requires that applicants provide a UEI number and maintain current and active registration with the federal government. Please visit the System for Award Management website
for more information on the requirements of requesting and/or maintaining active registration in federal records. Before any grant reimbursement is processed, the CDE requires a UEI number.
GAN Submission
GANs for the MHADA Allocation Grant will be distributed to grantees and returned to CDE electronically using Adobe Acrobat Sign. LEAs must electronically sign and return a completed GAN (AO-400) within 10 days of receipt. There is no need to mail a hard copy or email a digital copy to the CDE. The email will be sent to the LEA Superintendent, Chief Business Officer, and the Special Education Director. Follow the instructions and prompts in the email to electronically sign and return the GAN to the CDE.
Expenditure Report and Instructions
Provision 6 of Item 6100-161-0890 of the Budget Act of 2024 appropriates $69 million in federal IDEA funds for mental health related services.
Provision 6 reads, “The Superintendent of Public Instruction shall allocate these funds to Local Educational Agencies (LEA) beginning in the 2024−25 fiscal year based upon an equal rate per pupil using the methodology specified in Section 56836.07 of the California Education Code (EC).”
Grant funds shall be available only for the purpose of providing educationally related mental health services, including out-of-home residential services for emotionally disturbed students, required by an IEP pursuant to the federal IDEA of 2004 (20 United States Code Sec. 1400 et seq.) and as described in Section 56363 of the EC.
Purpose of Report
The Expenditure Report (ER) is used to determine the grant payment based on the actual expenditures reported during the grant award period. Please refer to the GAN conditions for specific required documentation.
Report Periods
- Report 1: July 1, 2025, to June 30, 2026
- Report 2: July 1, 2026, to June 30, 2027
- Report 3: July 1, 2027, to September 30, 2027
- Final Report: Due October 10, 2027
Please submit all reports by email to the MHADA Team at MHADA@cde.ca.gov.
Report Due Dates
Reports are due within 30 days of the last day of each report period. The Final Report is due on or before October 10, 2027. Grantees are not required to submit all 3 Reports and may mark any report as “Final” once funds have been fully expended.
Payments
- Grantees must complete and return to the CDE the signed GAN and Final Expenditure Report (FER). For auditing purposes, it is the responsibility of the Grantee to maintain a copy of the required supplemental forms and keep on file, as the CDE may request submission of the form at any point. Upon receipt of the FER, payment will be issued on a reimbursement basis.
- In accordance with Title 31 Code of Federal Regulations Part 205.10, the grant payments must be limited to the actual immediate cash requirements of the grantee. Payments will be issued up to the reported expenditures.
- Title 34 CFR Section 80.20(b)(7) requires that if the state’s sub-recipients receive payments, procedures must be followed to minimize the time between the receipt and disbursement of federal funds.
- Upon receipt of the Final Expenditure Report, the CDE will issue up to 100 percent of the total grant award.
Required Assurance
Grantees assure that students served during each reporting period have a valid IEP with mental health service requirements. All reported expenditures are for direct educationally related mental health services as stated on a student’s IEP, or indirect costs at the CDE approved rate for LEAs.
Supplemental Form
Grantees must have available on request the Detailed Summary of Mental Health Expenditures Worksheet and backup documentation of expenditures. For auditing purposes, it is the responsibility of the Grantee to complete the required supplemental form and keep on file, as the CDE may request submission of the form at any point. Upon receipt of the FER, payment will be determined by the expenditures reported and issued on a reimbursement basis.
Naming Conventions for Documents and Electronic Communications
Please refer to your GAN to find your Regional Group (RG) number. File names have a character limit of 50-characters and should be saved as follows:
- Fiscal Year-Regional Group-Local Educational Agency Name-Document/Subject
- (Example: 25-RG1-ABLE Charter-ER 1 and Final)
To maintain organization in the MHADA inbox, the CDE is requesting that all emails to the MHADA@cde.ca.gov inbox contain the following information in the subject line:
Fiscal Year-Regional Group-Local Educational Agency Name-Subject
(Example 1: 25-RG1-ABLE Charter-Submission of ER 1 and Final)
(Example 2: 25-RG1-ABLE Charter-Request for guidance on use of funds)
ERs shall be emailed to the MHADA Team at MHADA@cde.ca.gov.
When submitting an email with a report or a question, please adhere to the following naming conventions:
Subject line: FY-RegionGroup-LEA Name-Subject
- 25-RG2A.03-Jupiter Unified-Request for guidance on use of funds
Document file name: FY-RegionGroup-LEA Name-Document Type
- 25-RG2A.03-Jupiter Unified-ER1andFinal
Declining Grant Funds
Reasons for declining funds
- The LEA determines they do not have students with an IEP who are eligible to receive mental health services using the grant funds.
- The LEA determines that the amount of documentation, time, and effort required for the grant exceeds the value of the award.
- The LEA determines they cannot spend the award amount during the period of performance.
How to decline funds
- Open the GAN via email from Adobe Acrobat Sign.
- In the top left corner, select “Options”, followed by "Decline to Sign."
- Follow the instructions to inform the CDE that you are declining the grant funds.
LEA Memorandum of Understandings
- LEAs may elect to continue working with their SELPA in a collaborative relationship to best serve the needs of students. A Memorandum of Understanding may be enacted as a means of allocating the award to another agency to leverage services otherwise unavailable. All funds expending under agreement must conform to grant assurances and conditions.
Allowable Costs
Allowable Direct Costs
Acceptable uses only when included in a student’s IEP:
- Mental health services
- Individual and group counseling and guidance
- Parent counseling and training
- Social work services in schools
- Psychological services
- Behavior intervention
- Residential placement (room and board) and treatment
Services may be provided by LEA staff or under contract with qualified individuals and entities, and these funds may pay for such services regardless of the relationship of the provider to the responsible LEA.
Allowable Personnel Costs
Salaries and benefits, when the duties directly support the provision of the mental health services:
- Administrative Staff
- Program Director
- Supervisor
- Technical, Office, and Support Staff
For staff who have a combination of responsibilities, a portion of which are to support mental health service provision, these funds may only be used to pay for the portion of the staff time dedicated to supporting the provision of mental health services.
Unallowable Costs
- To pay for the delivery of mental health services to students who do not have IEPs.
- To pay for the delivery of mental health services to students on IEPs if the IEP does not include those mental health services among the related services to be provided the student.
- To pay for prevention and/or early intervention services to students who do not have IEPs, or for such services generally provided to the full student population.
- To pay for training, professional development, or certification programs for staff, even if such training is intended to support the development of the agency’s capacity to provide mental health services, or to support improved implementation of such services to students.
Resources
Funding Profile and Funding Results by Fiscal Year (FY)
FY 2025–26
FY 2024–25
Indirect Cost Rates (ICR)
- Indirect Cost Rates web page
Lists of department-approved rates for local educational agencies, frequently asked questions (FAQs), and letters.
California School Accounting Manual (CSAM)
- CDE Accounting, Definitions, Instructions, & Procedures
Guidance from the California School Accounting Manual (PDF; 4MB) for accounting and financial reporting by local educational agencies.
Updating LEA Information
Acronym and abbreviation definitions
LEA = Local Educational Agency
FY = Fiscal Year
RG = Region Group
SPED = Special Education
LEA Special Education Director changes may be sent to MHADA@cde.ca.gov, using the following naming convention example:
Subject line: FY-RegionGroup-LEA Name-Staffing Change
- 25-RG2A.03-Jupiter Unified-SPED Director Change
Details: Please ensure that you supply an effective date in the body of your message, following the detailed example:
- The SPED Director change, new Director name and contact details, is effective February 10, 2026.
LEA Superintendent and Chief Business Official updates may be updated through the CDE California School Directory.
SELPA Director updates may be sent to SELPALocalPlan@cde.ca.gov.