BILL ANALYSIS �
AB 274
Page 1
Date of Hearing: April 16, 2013
ASSEMBLY COMMITTEE ON HUMAN SERVICES
Mark Stone, Chair
AB 274 (Bonilla) - As Amended: April 10, 2013
SUBJECT : Child care and development services
SUMMARY : Makes several changes to the Child Care and
Development Services Act (CCDSA). Specifically, this bill :
1)Authorizes child care providers to submit attendance records
that serve to demonstrate that the child is receiving services
for which s/he has been certified electronically on a monthly
basis to the Alternative Payment Program (APP).
2)Requires the monthly attendance record to be signed by the
parent or guardian, under penalty of perjury, one per month to
confirm that the child's attendance was recorded accurately.
3)Allows the monthly attendance record to be maintained in
original format or electronically.
4)Allows APPs to maintain records electronically, as permitted
by state and federal auditing requirements, as specified.
5)Requires the California Department of Education (CDE) upon
request of a child care contractor on or after January 1,
2015, to request the State Controller to process the payment
to the contractor through direct deposit.
EXISTING LAW :
1)Establishes the CCDSA to provide a comprehensive,
community-based, coordinated, and cost-effective system of
child care and development services for children from birth to
age 13 with the purpose of enhancing the social, emotional,
physical, and intellectual development of children.
2)States the intent of the Legislature that all families have
access to child care and development services, regardless of
their demographic background, in order to help them attain
financial stability through employment, while maximizing
growth and development of their children, and enhancing their
parenting skills through participation in child care and
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development programs.
3)Defines child care and development services as care and
services designed to meet a wide variety of needs of children
and their families, while their parents or guardians are
working, in training, seeking employment, incapacitated, or in
need of respite.
4)Authorizes local government agencies or non-profit
organizations to contract with the CDE to operate APPs and
provide alternative payments and support services to parents
and child development providers.
5)Establishes requirements and procedures APPs and child
development providers must follow as contracted agencies with
the CDE, including but not limited to tracking and reporting
of attendance, accounting and auditing requirements, and
reimbursement and payment procedures.
FISCAL EFFECT : Unknown
BACKGROUND
Title 22 and Title 5 of the California Code of Regulations
There are generally two types of child development providers in
the state; commonly referred to as either Title 22 or Title 5
programs. Title 22 refers to Division 2 of Title 22 of the
California Code of Regulations (CCR), which is governed by DSS,
and Title 5 refers to Divisions 19 and 19.5 of the CCR, which is
governed by the CDE.
Title 22 establishes general health and safety requirements,
staff to child ratios, and basic provider training
qualifications. In order for any person to operate a child
development program, the program must first become a licensed
provider under Title 22. Title 22 providers set their own rates
and may voluntarily accept child development subsidy vouchers,
along with statutorily established family fees, provided through
the California Work Opportunity and Responsibility to Kids
(CalWORKs) program or other state-funded child care subsidy
programs. Voucher rates are set by the Regional Market Rate
(RMR), which is generally intended to reflect the true regional
cost of care in the private child care market. As established
in AB 1497 of 2012, the education budget trailer bill (Chapter
29, Statutes of 2012), the RMR is currently set at the 85th
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percentile of the 2005 RMR Survey, and the license-exempt child
care providers ceiling at 60% of the Family Child Care Home
ceilings, effective July 1, 2012.
According to DSS, as of February 6, 2013, there were
approximately 47,477 child care agencies with a licensed
capacity to serve up to 1,095,672 children in California.
Title 5 governs the state's subsidized child development
programs, which are overseen by the CDE. These programs must be
licensed by DSS under Title 22 regulations and must meet higher
quality standards established under Title 5 regulations. These
requirements include:
A developmentally- and age-appropriate educational
program for enrolled children;
Staff development opportunities to improve program
quality;
Parental involvement and education, including a parent
survey;
Nutritional standards that comply with federal child
nutrition program requirements, such as the National School
Lunch Program;
A health and social services component to identify and
refer eligible children and their families to community or
public health and social services, such as CalFresh;
A self-evaluation process to continually improve and
enhance their program; and
An environment rating scale that measures education
quality, parental involvement, and staff development and
education.
It is important to note that Title 5 programs, as a condition of
being contracted with the CDE, must accept and serve needy and
eligible subsidized children. Title 5 programs are funded
through the receipt of the Standard Reimbursement Rate (SRR)
based upon the number of children enrolled and the number of
hours of care, as well as statutorily established family fees.
Whereas a Title 22 program accepting a voucher would be
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reimbursed by the RMR, which is generally higher than the SRR
because of its association with the regional private provider
market, a Title 5 program is reimbursed using the SRR.
The SRR is statutorily set and is supposed to be increased
annually with a cost of living adjustment (COLA), however, a
COLA has not been provided since the 2007-08 fiscal year. The
SRR currently stands at $34.38 for one full-day of enrolled
care, which is defined by regulation as six and one half hours
of care. There are "adjustment factors" that are applied to the
SRR to reflect the increased cost of care for the varying ages
and needs of children, i.e. infants and toddlers, special needs,
etc. However, the adjustment factors have also not changed
since they were established in AB 2311 (Chu,) Chapter 435,
Statutes of 2002.
Title 5 programs earn their SRR reimbursement based upon child
days of enrollment, meaning they are reimbursed at the rate of
$34.38 per day for each day the needy or eligible child receives
care. This creates challenges for Title 5 programs, as they
budget based upon the total number of days and children they
anticipate having to serve in a fiscal year. Add into this the
uncertainty of a child's regular and continuous enrollment, a
family being deemed as no longer eligible or in need of care,
and fluctuating statewide budgets, it becomes a formidable
challenge for a Title 5 program to fully earn their contract's
maximum reimbursable amount (MRA). The goal set by CDE for
Title 5 programs is to annually earn no less than 98% of their
MRA.
According to CDE, as of the 2009-10 fiscal year, there were
approximately 1,420 service contracts with nearly 770 public and
private agencies supporting and providing services to 489,200
children. Title 5 providers contract with the CDE and include
school districts, county offices of education, cities, local
park and recreation districts, county welfare departments, other
public entities, community-based organizations, and private
agencies.
Alternative Payment Programs
There are currently 81 APPs contracted with the CDE, funding
through state and federal funds, to provide an array of support
and payment services to enable low-income and eligible families
to access subsidized child care. APPs do not provide direct
child development services or programs, rather they provide
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families who are participating in welfare-to-work activities
under the California Work Opportunities and Responsibility to
Kids(CalWORKs) program, or who are low-income but do not qualify
for CalWORKs, with subsidized child care vouchers.
Child care vouchers can then be used to access child care at
either a Title 5 or Title 22 child development center or with a
license-exempt child care provider, as specified. However, as
noted above, the voucher can only be used at a Title 22 program
that accepts them, whereas all vouchers must be accepted at a
Title 5 program.
Typically, a family who receives a voucher from an APP will then
be referred to a local child care resource and referral (R&R)
network. The R&R network, also funded through state and federal
dollars, will assist the family in helping identify and access
the appropriate and desired child development program for the
child or children. However, due to lack of state resources and
ongoing cuts to the CCDSA, access to programs able to accept
vouchers is limited. Should the family be unable to find
appropriate care, they will be placed on a waiting list, if one
is available.
Supply and demand
In 1997, the state developed a nine county pilot program to
consolidate waiting lists for subsidized child care programs to
better organize and prioritize enrollment of eligible and needy
children. This nine-county pilot was expanded statewide and
made permanent in 2005. Referred to as the Centralized
Eligibility List (CEL), it not only became a valuable tool to
help prioritize enrollment based upon eligibility and need, it
also helped to demonstrate the need for subsidized child care
and funding county-by-county and statewide.
The state annually appropriated $7.9 million to operate all 58
county CELs and the statewide CEL. Unfortunately, due to the
ongoing budget deficit at the time, funding for CEL was
eliminated in the Budget Act of 2011 (Senate Bill 87, Chapter
33). At the time of its elimination, there were approximately
240,000 eligible and needy children waiting for a subsidized
child care slot to open up. Since then, some counties have
pursued maintaining their own CEL with existing local funds, but
it remains difficult to accurately estimate the total number of
needy and eligible families and children waiting for subsidized
child care.
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However, using the number of eligible and needy children who
were on the statewide CEL in 2011, and taking into account the
nearly $700 million, or 42% of subsidized child care funding
that has been cut from the budget over the past five years, it
is not unreasonable to estimate that the number of eligible and
needy children waiting for subsidized child care surpasses
300,000 children in need of care statewide.
COMMENTS :
Monitoring and Reporting of Attendance
The CCDSA authorizes the State Superintendent of Public
Instruction (SSPI) to adopt all rules, regulations and
guidelines necessary to facilitate the funding and reimbursement
of procedures. Under this authority, current regulations
require contractors to submit periodic reports that must
include:
1)Days and hours of enrollment and attendance;
2)Total days of operation; and
3)Services, revenues and expenditures relating to care provided
for subsidized and unsubsidized children.
Under Section 18065 of Title 5 of the CCR, parents must
physically sign-in and sign-out their child when they drop off
and pick up their child from the program each day.
Over the years, there have been disputes about how attendance
must be recorded, whether it is through the parents or program
staff, whether it is noted in pencil, pen, or different or
similar colored ink, and how exact the time-in and time-out is
recorded. This has created, at times, ambiguity, concerns over
incorrect attendance reporting, and resulted in confusion and
increased administrative burdens for program, APP and CDE staff.
In an effort to help resolve this ambiguity, the CDE's Child
Development Division (CDD) issued Management Bulletin (MB) 12-17
in September, 2012. Although this MB was issued with the intent
to clarify some of these issues, there remains concerns about
how providers continue to be held accountable for how parents
sign-in and sign-out their child.
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This measure seeks to build upon the progress made with MB 12-17
by placing attendance reporting requirements in statute, which
would supersede Section 18065 of the CCR. Rather than submit a
daily sign-in/sign-out sheet, AB 274 would allow providers to
submit a monthly attendance record, signed by the parent, under
penalty of perjury, and by the provider, and submitted to the
APP as an invoice for reimbursement. It would also allow the
monthly attendance record to be maintained in its original
format or electronically. Daily attendance recording would not
be eliminated under AB 274, rather the bill would change how it
is reported to the APP for purposes of reimbursement.
It is unclear, however, why the parent is required to sign the
monthly attendance sheet under penalty of perjury and not the
provider staff. Since monthly attendance sheets are proposed to
be used to affirm that that the child received care by virtue of
the parent's signature and for purposes of reimbursement to the
provider, should the provider also be required to sign under
penalty of perjury? It is also unclear what "or other
ascertainable means" signifies for purposes of verifying the
monthly attendance sheet.
Additionally, although AB 274 allows attendance to be reported
monthly, it does not require the APP to accept it. AB 274
should be amended to ensure that monthly attendance sheets are
accepted by the APP for purposes of reimbursement.
Electronic Records
State statute is unspecific as it relates to how and in what
form child development providers and APPs must maintain records,
whether in original format, electronically, or in another
format. However, Section 8261 of the Education Code provides
the SSPI the authority to adopt regulations to specify adequate
standards of performance for contractors and APPS and establish
reporting requirements for purposes of compliance with the
CCDSA. Pursuant to that authority, Section 18067 of Title 5 of
the CCR, APPs and child care providers are required to maintain
records for up to five years.
AB 274 would simply state that APPs and child care provides may
maintain records electronically, except as required by state or
federal law. However, should other state law, or more
specifically, federal law, require records to be maintained in
hard copy or original format, it is unclear whether this
proposed provision would achieve its intended outcome.
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According to the Northern Director's Group, an association of
northern California APPs and R&R agencies, which is a co-sponsor
of this measure, this will help to reduce the administrative
burden of maintaining hard copy files of documents. Maintaining
and storing hundreds, if not thousands, of filing boxes of
original documents can be significant in light of the
substantial budget reductions made to the CCDSA. Allowing them
to be maintained electronically rather than in hard copy would
help to reduce costs and save funds that could otherwise be used
for meeting other current state requirements and supporting
child care providers and the families and children they serve.
Direct Deposit
Currently, APPs and child care providers are paid through hard
copy checks by the CDE. Although the CDE administer and
determines how and when child development providers shall be
paid, it is the State Controller that issues payments from the
state treasury. However, CDE's current financial management
system, the Provider Accounting and Reporting Information System
(PARIS) is unable to process payments through direct deposit.
According to CDE, PARIS is a system designed to calculate
payment amounts to child development programs and APPs. Once
the payment amounts are calculated through PARIS, the amounts
are transmitted via hard copy documents to the State Controller
for issuance of payment. PARIS is not designed to operate as a
payment system, which would require the collection, maintenance,
and transmittal of financial information necessary to facilitate
payment to APPs and child development providers through direct
deposit.
The state is currently in the process of implementing the
Financial Information System for California (FI$Cal) Project.
The purpose of the FI$Cal Project is to provide the state with a
singular budgeting, accounting, procurement, and cash management
system. A collaborative effort between the State Controller,
the State Treasurer, and the Directors of the Departments of
Finance and General Services, it is intended to provide an
integrated financial management system better optimize and make
more efficient the business management of the state.
FI$Cal will begin integration of state agencies in phases July
1, 2013. According to the CDE, when they are integrated into
FI$Cal they will be able to process direct deposit payments for
all providers and APPs. However, CDE will not be included until
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the fourth and final phase of the project's roll out on July 1,
2016.
This measure would require the CDE to request the State
Controller to pay specified providers and APPs via direct
deposit at their request, beginning July 1, 2015. AB 274's
direct deposit requirement should be aligned with the July 1,
2016 roll out of FI$Cal for CDE, since CDE's current system is
unable to process direct deposit payments.
RECOMMENDED AMENDMENTS
Staff recommends the following amendments:
Amendment #1
On page two, delete lines nine and ten inclusive and replace
with " signed by the parent or guardian of child receiving
services and the child care provider once per"
Amendment #2
On page two, line 13 delete "or other ascertainable means" and
be replaced with " and signed as the end of each month of care
and under penalty of perjury by both the parent and the child
care provider.
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Amendment #3
On page three, line three insert new subdivision (d) to read:
(d) The alternative payment provider shall accept the monthly
attendance record or invoice as documentation of the certified
need and hours of care provided.
Amendment #4
On page three, line 21 delete "2015" and replace with " 2016 "
REGISTERED SUPPORT / OPPOSITION :
Support
BANANAS, Child Care Resource & Referral, Northern Alameda County
Contra Costa Child Care Council
Family Resource and Referral Center, San Joaquin County
Solano Family & Children's Services
Valley Oak Children's Services
Opposition
None on file
Analysis Prepared by : Chris Reefe / HUM. S. / (916) 319-2089