BILL ANALYSIS Ó
AB 812
Page 1
Date of Hearing: May 24, 2013
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Mike Gatto, Chair
AB 812 (Mitchell) - As Amended: May 15, 2013
Policy Committee: Human Services
Vote: 5-0
Urgency: No State Mandated Local Program:
No Reimbursable: No
SUMMARY
This bill makes the following changes to statute governing child
care contractors:
1)Requires the State Department of Education (SDE) to provide an
internal appeal procedure to resolve a dispute between SDE and
a contracting agency regarding a dispute over fiscal or
programmatic issues, as specified. Further requires the
contracting agency to have the right to appeal the findings of
a fiscal or programmatic review, as specified.
2)Specifies a contracting agency that employs a person in a
position of fiscal responsibility who has been convicted of a
crime involving misuse of funds may have its contract
immediately suspended by SDE, as specified.
3)Redefines a conditional contract as a contract awarded to an
agency with evidence of fiscal or programmatic non-compliance,
or both. Requires an agency with a conditional contract to be
on conditional status with SDE for all child care and
development purposes.
4)Authorizes any contracting agency that evidences any of the
following acts to have its contract terminated immediately:
a) Cessation of operations without the permission of SDE or
abandoning the contracts.
b) Failure of a program to reimburse a significant number
of approved child care providers as determined by SDE, as
specified.
c) Failure to pay salaries owed to employees, pay federal
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payroll tax, or reimburse a significant number of child
care providers, as determined by SDE, as specified.
FISCAL EFFECT
Minor, absorbable GF administrative costs to SDE to implement
the requirements of this measure. SDE indicates this bill
provides clearer authority in what instances it can act
regarding the suspension or termination of child care provider
contracts.
COMMENTS
1)Background . General child care and development (CCD) programs
are state and federally funded programs that use centers and
family child care home networks operated or administered by
either public or private agencies and local educational
agencies. These agencies provide child development services
for children up to 12 years of age and older children with
exceptional needs. These programs provide an educational
component that is developmentally, culturally, and
linguistically appropriate for the children served. The
programs also provide meals and snacks to children, parent
education, referrals to health and social services for
families, and staff development opportunities to employees.
According to SDE, there were approximately 1,420 service
contracts with approximately 770 public and private agencies
supporting 480,000 children in the 2009-10 fiscal year.
2)Purpose . According to the State Superintendent of Public
Instruction (SPI), sponsor of this bill, "Current statutory
authority surrounding the [child care] contract termination
process is vague and confusing, making it difficult,
protracted, and costly process to remove a contract from an
egregiously irresponsible contractor. [This bill] would make
it possible for SDE to utilize statutory authority to
immediately terminate a contract for an egregiously deficient
contractor. In these rare instances in which SDE would take
this type of action, there would be a cost savings to the
state if SDE can terminate a contract earlier and prevent
further misuse of public funds."
3)Existing law establishes SDE's authority over the suspension
or termination of child care contracts. Specifically, SDE can
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suspend or terminate a contract if there is documented
evidence (upon review of SDE's general counsel) of a fiscal or
programmatic violation, including those related to failure to
report suspected abuse, misuse of funds, theft of supplies,
and bodily harm. This bill provides SDE with additional
reasons for suspension or termination, including failure to
pay wages to employees and failure to reimburse a significant
number of child care providers.
The California Code of Regulations (CCR) establishes an
internal dispute review process within SDE. Specifically,
regulations specify that if a contractor cannot resolve a
dispute with SDE staff, it may appeal a decision by
documenting specified evidence. This bill codifies this
process.
Analysis Prepared by : Kimberly Rodriguez / APPR. / (916)
319-2081