BILL ANALYSIS �
SENATE COMMITTEE ON EDUCATION
Carol Liu, Chair
2013-2014 Regular Session
BILL NO: AB 274
AUTHOR: Bonilla
AMENDED: May 24, 2013
FISCAL COMM: Yes HEARING DATE: July 3, 2013
URGENCY: No CONSULTANT:Lynn Lorber
SUBJECT : Alternative payment program: child care and
development
attendance records, maintenance of records, and
direct deposit
payments.
SUMMARY
This bill authorizes child care and development providers
that contract with Alternative Payment Programs to submit
attendance records on a monthly basis, authorizes
contractors to be reimbursed by direct deposit, and
authorizes providers to maintain records in electronic
format.
BACKGROUND
Current law authorizes local government agencies or
non-profit organizations to contract with the CDE to
operate Alternative Payment Programs and provide
alternative payments and support services to parents and
child development providers. Alternative Payment Programs
help parents arrange child care services and makes payments
directly to the provider, which may be in-home care, family
child care or center-based care, and either licensed or
license-exempt. (Education Code � 8220)
Current regulations require child care and development
providers that contract with Alternative Payment Programs
to submit periodic reports that must include:
1) Days and hours of enrollment and attendance.
2) Total days of operation.
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3) Services, revenues and expenditures relating to care
provided for subsidized and unsubsidized children.
Parents are required to physically sign-in and sign-out
their child when they drop off and pick up their child each
day. (California Code of Regulations, Title 5, � 18065)
Current regulations require, and Management Bulletin issued
by the California Department of Education (CDE) clarifies,
child care and development providers that contract with
Alternative Payment Programs to review attendance records
to ensure the days and hours of services used by the parent
were broadly consistent with the certification establishing
the parent's hours and days of service, and the parent
completed the attendance records as required by signing in
and out on a daily basis. (CCR, Title 5, � 18065 and �
18066; CDE Management Bulletin 12-17)
Child care and development providers that contract with
Alternative Payment Programs are required to maintain
records for up to five years. (CCR, Title 5, � 18067)
ANALYSIS
This bill authorizes child care and development providers
that contract with Alternative Payment Programs to submit
attendance records on a monthly basis, authorizes
contractors to be reimbursed by direct deposit, and
authorizes providers to maintain records in electronic
format. Specifically, this bill:
1) Requires child care providers that contract with
Alternative Payment Programs to submit to the program
a monthly attendance records or invoice for each child
who received services that documents hours of care
provided based on need certified by the program. This
bill requires the monthly record or invoice to include
the dates and times of attendance, and requires
verification of attendance at the end of each month by
single signature, under penalty of perjury, of both
the parent or guardian and the provider. This bill
requires the provider to accept the monthly record or
invoice as documentation of the hours of care
provided.
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2) Expands the definition of "attendance" for purposes of
reimbursement to providers through an Alternative
Payment Program to include any of the following:
a) The hours of service provided that
are broadly consistent with certified hours of
need.
b) For families with variable
schedules, the actual days and hours of
attendance up to the maximum certified hours.
c) In the case of license-exempt
providers that provide part-time services the
actual days and hours of attendance.
3) Exempts providers that contract with an Alternative
Payment Program from the requirement to track
absences.
4) Authorizes Alternative Payment Programs and providers
to maintain records electronically, subject to
compliance with state and federal auditing
requirements. This bill authorizes records maintained
electronically to include:
a) Child immunization records.
b) Parental job verification records.
c) Parent income verification.
d) Parent school or training verifications and
attendance records.
5) Requires the California Department of Education (CDE)
to request the State Controller to issue payments to
Alternative Payment Programs, upon request of the
contractor, via direct deposit through the Financial
Information System for California (Fi$Cal), after the
Superintendent of Public Instruction determines that
Fi$Cal has been implemented with the CDE.
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STAFF COMMENTS
1) Need for the bill . According to the author,
"Currently, daily attendance records for early care
and education provided must have a daily sign in/out
signature from a parent. The requirement of daily
sign in/out for parents for each child has created
many problems for contractors, parents and providers,
including providers that may not be paid if signatures
were not secured even though care was provided. This
can occur if a parent fails to sign in and out each
day and then terminates child care suddenly. The
current process of paper checks for contract
allocations has resulted in a delay of funds to
contractors potentially delaying voucher payments to
child care providers and at times has resulted in lost
checks which may take weeks to replace. The process
of electronic direct deposit would alleviate these
problems and is a common banking practice."
2) Author's amendments . The author wishes to amend this
bill as follows to ensure greater consistency with
existing regulations:
a) Require the monthly attendance record or
invoice to include, at a minimum, the dates and
actual times care was provided each day,
including the times the child entered and the
time the child left care each day.
b) Require, rather than authorize, monthly
attendance records or invoices to be maintained
in an unaltered original format.
c) Clarifies that the Alternative Payment
Program must accept the monthly attendance record
or invoice if the required information is
provided.
d) Modifies the authority to maintain records
in electronic format only when the original
documents were created in electronic format.
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e) Clarifies that records must be retained for
at least five years, pursuant to current law.
3) Current regulations and existing practice for
attendance accounting . The California Department of
Education (CDE) issued Management Bulletin (MB) 12-17
in September, 2012, to clarify requirements regarding
the responsibility of the completion of attendance
records in Alternative Payment Programs, as well as
the use of those records for provider payments. This
bill is consistent with MB 12-17 and includes several
provisions that exist in current regulations.
4) Direct deposit . Currently, Alternative Payment
Programs and contracting providers are paid through
hard copy checks. Although the CDE determines how and
when providers are to be paid, it is the State
Controller that issues payments from the State
Treasury. The 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
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business management of the state.
FI$Cal will begin integration of state agencies in phases
July 1, 2013. According to the California Department
of Education (CDE), when the department is integrated
into FI$Cal, CDE will be able to process direct
deposit payments for all providers and Alternative
Payment Programs. Unfortunately, CDE will not be
included until the fourth and final phase of the
project's roll out scheduled for July 1, 2016.
5) Fiscal impact . According to the Assembly
Appropriations Committee, this bill would impose:
a) Automation costs of $200,000 to $500,000
(General Fund) to update the CDE's payment system
for child care providers in order to allow for
direct deposit.
b) One-time costs of approximately $200,000
(GF) for CDE to develop regulations associated
with the new attendance requirements and the
electronic certification.
c) On-going costs of up to $65,000 (GF) for the
increased auditing requirements for CDE.
d) On-going minor costs, under $10,000 (GF) per
year, for transaction fees associated with direct
deposit.
6) Prior legislation . AB 245 (Portantino, 2011) would
have required CDE, at the request of a child care
contractor, to request the State Controller to make a
payment via direct deposit by electronic fund transfer
into the contractor's account at the financial
institution of the contractor's choice. AB 245 was
held on the Senate Appropriations Committee's suspense
file.
SUPPORT
4Cs of San Mateo
California Alternative Payment Program Association
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Child Action, Inc.
Child Care Alliance of Los Angeles
Child Care Links
Child Care Resource Center
Child Development Associates, Inc.
Child Development Resources of Ventura County
Choices for Children
Connections for Children
Contra Costa Child Care Council
Davis Street Family Resource Center
Family Resource & Referral Center
Go Kids, Inc.
Knowledge Universe
Los Angeles County Board of Supervisors
Mexican American Opportunity Foundation
North Coast Opportunities
Northern Directors' Group
San Francisco Child Care Planning and Advisory Council
Santa Cruz County Parents Association
Service Employees International Union
Valley Oak Children's Services
YMCA Childcare Resource Service
OPPOSITION
None on file.