photo by: Josie Heimsoth/Journal-World

HeadQuarters Kansas, 2110 Delaware St., is pictured in February 2026.

HeadQuarters Kansas has requested a one-time allocation of $300,000 from Douglas County after it has projected that it might not be able to meet its financial obligations in 2026.

HeadQuarters has spent the last 18 months reorganizing its operations and financial management to address previous administrative and financial challenges. Over the past two years, the organization’s expenses have significantly outpaced its revenues – by about $1.3 million – completely depleting its cash reserves.

This deficit was driven by reduced grant funding, state reimbursements that covered only about 80% of actual costs, and unusually high expenses tied to financial audits, contracted chief financial officer services, and a required repayment of roughly $340,000 following a state audit.

At the same time, HeadQuarters faces ongoing cash flow problems because its main funding source – state 988 reimbursements – is paid weeks after expenses are incurred. While reimbursement rates have improved in 2026, the delay still creates gaps where the organization does not have enough cash on hand to meet monthly expenses like payroll, which averages around $350,000. As of February 2026, it had only about $75,000 in cash.

HeadQuarters estimates that a one-time solvency allocation of $300,000 from Douglas County would address these cash flow issues, prevent service reductions, and ensure continued delivery of crisis services consistent with Kansas Department for Aging and Disability Services’ requirements and community expectations.

“We believe the requested funds, together with HQ’s 988 funds from KDADS will allow sufficient funding for operations in 2026,” Dan Watkins, interim director of HeadQuarters, told the Journal-World via email.

On Wednesday, county commissioners will consider the request and whether or not they would like to execute related contracts or agreements with HeadQuarters. Watkins said “without this requested county funding, HeadQuarters will experience serious cash flow problems, adversely affecting its operations.”

During the County Commission’s 2026 budget discussions, commissioners reviewed supplemental requests from HeadQuarters for 2024 and 2025. While commissioners expressed interest in providing assistance, they wanted the organization to complete independent audits and reliable financial documentation before any funding could be allocated.

While no direct budget allocations were made for HeadQuarters in 2024 through 2026, the commissioners did reserve $300,000 in funds for solvency support in 2026, which would be considered after they saw HeadQuarters’ audits for fiscal years 2022, 2023 and 2024.

Watkins said HeadQuarters is considering participating in the county’s 2027 budget process as the organization determines its 2027 operating budget.

“HQ is an active member of Douglas County’s Crisis System Operations Team and Crisis Response Coalition,” Watkins said. “The level of any such funding request would be commensurate with that participation and not at prior levels requested.”

HeadQuarters is a 24/7 Lawrence-based mental health crisis call center serving as the primary 988 Suicide & Crisis Lifeline provider for 102 of 105 Kansas counties. Since 2022, it has undergone rapid growth and significant administrative challenges, particularly following the launch of the 988 crisis line and the expanded capacity of the Douglas County Crisis Line.

This transition required moving from a largely volunteer-staffed model to a 24/7 operation with professional staff. While it has improved the behavioral health crisis response system, it has also created financial and operational challenges that HeadQuarters and community partners are working to address.

The County Commission has provided support for the addition of professional staff in the past and its coordination with Bert Nash Community Mental Health Center’s Mobile Response Team, but reimbursement limitations meant HeadQuarters could not recover costs for calls received on the Douglas County line, which represented the majority of local calls. To help address this, Douglas County allocated $280,000 in 2022 and $326,000 in 2023.

However, executive leadership and financial stewardship issues arose in the second half of 2023, including multiple resignations and a pause in state funding, which led to the court appointing two different interim directors and Douglas County declining to execute a service contract for 2024, as the Journal-World reported.

Significant operational changes have since occurred. Mobile Response Team dispatch was moved to the Emergency Communications Center, and as of January, the local Douglas County Crisis Line was integrated with 988. Calls are now geo-routed based on location in Kansas, while local staff continue to provide coordination with county resources.

In order to improve its financial practices, HeadQuarters hired Forvis Mazars LLP as an outside chief financial officer to design and implement internal controls, financial policies, and reporting procedures consistent with generally accepted accounting principles.

With the accounting firm’s help, HeadQuarters completed audits covering 2021 through 2024, revised its financial operations manual, and took actions to ensure grant funds and other resources were properly used and compliant with federal, state, and local regulations. HeadQuarters also engaged SSC Advisors to perform independent audits for 2022 through 2024 to address prior deficiencies in documentation and internal controls.

These audits, along with HeadQuarters’ IRS Form 990 for 2024, were shared with the County Commission, according to a memo in the agenda. SSC has now begun its work on HeadQuarters’ 2025 audit.

The County Commission will consider the funding request at its 5:30 p.m. business meeting on Wednesday in the Douglas County Commission meeting room at 1100 Massachusetts St.