BILL ANALYSIS Ó
AB 812
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CONCURRENCE IN SENATE AMENDMENTS
AB 812 (Mitchell)
As Amended June 26, 2013
Majority vote
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|ASSEMBLY: |77-0 |(May 29, 2013) |SENATE: |38-0 |(August 18, |
| | | | | |2013) |
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Original Committee Reference: HUM. S.
SUMMARY : Revises existing authority for the California
Department of Education (CDE) to suspend or terminate child care
contracts. Specifically, this bill :
1)Removes the authority of the CDE to suspend a child
development agency's contract.
2)Clarifies that a contracted child development agency shall
submit all required monthly and quarterly reporting forms to
the CDE prior to appealing the termination of their contract.
3)Clarifies the application of the "clear contract,"
"provisional contract," and "conditional contract"
designations for contracted child development agencies.
4)Clarifies the CDE's authority to immediately terminate a child
development agency's contract if it is found, upon the
recommendation of the CDE's general counsel, that the agency
violated specified conditions.
5)Adds to the reasons a child development agency may have its
contract immediately terminated for failure to reimburse a
significant number of its child care providers, pay its
employees, or pay its federal payroll tax within 15 calendar
days of the established date provided by the Alternative
Payment Program (APP) in its plan for timely payments, unless
the failure is due to the state's inability to distribute
funds in a timely manner to the APP.
6)Deletes specific references to penal code violations as reason
to prohibit the hiring and placement of a person into a
position of fiscal responsibility, and replaces it with
prohibitions that relate to state or federal convictions of
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the misuse or misappropriation of state or federal funds, or
crimes involving moral turpitude.
7)Eliminates the requirement that the CDE provide a 90-day
notice to an agency found in violation of placing a person who
has been convicted of specified crimes into a position of
fiscal responsibility.
8)Requires CDE to provide technical assistance to any child
development agency making a written request within 60 days of
the receipt of the request.
9)Prohibits a child development agency from continuing to
provide services while under an appeal if the agency's
contract is terminated under an immediate termination action,
as specified.
The Senate amendments :
1)Provide child development agencies the opportunity to request
and receive technical assistance from the CDE within 60 days
of the CDE's receipt of the request.
2)Clarify that if an agency does not fully reimburse unpaid
child care providers or their employees may have their
contract terminated upon determination by the CDE, as
specified.
3)Add other nonsubstantive technical and clarifying amendments.
FISCAL EFFECT : According to the Senate Appropriations
Committee, pursuant to Senate Rule 28.8, negligible state costs.
COMMENTS :
Suspension and termination : Current law and regulations provide
the CDE the authority to identify and address child development
agencies that face challenges or violate the law in the
administration of their contracts. The manner in which the CDE
addresses these agencies depends on the nature of the issues the
agency faces. In a large number of cases, agencies are operated
with the good intentions of operating a beneficial program that
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provides for an enriched child development environment that both
provides for the care and intellectual development of the
children they serve. However, the oftentimes complex and
challenging requirements to meet state programmatic or more
demanding fiscal requirements place some programs in arduous
positions. This reflects the nature in which the state provides
child development funds, whereby programs have to earn up to but
not more than 100% of their contracted reimbursement amount.
In order to help provide assistance, guidance and accountability
for the provision of developmental care and fiscal
responsibility to agencies, current law authorizes the CDE to
use a tiered process to address programs that are in good
standing, struggling or at risk of not meeting state
requirements. Although provided for in statute, much of the
specific process the CDE uses is laid out in Title 5 of the
California Code of Regulations (CCR) or in its issuance of
Management Bulletins (MB). MBs are issued periodically to
remind or provide guidance to contracted child development
agencies as to changing requirements under law, to respond to
thematic issues that may arise from misunderstandings about how
to implement or comply with statutory or regulatory
requirements, or other directives necessary as determined by the
CDE.
Through this multi-faceted approach, the CDE examines
programmatic reviews and fiscal audits to determine the health
of a child development agency. If an agency is operating in
compliance with the law and otherwise satisfactorily, it is
labeled as an agency in good standing; referred to as a "clear
contract." If an agency is struggling due to a misunderstanding
of requirements or misinterpretations of law, technical
assistance and professional development are made available to
the agency in order to better ensure that the program is
complying with statutory and regulatory requirements. However,
if after annual review and the provision of technical
assistance, the program continues to struggle, the CDE can place
the agency into "conditional contract" status, which then
identifies the agency as at-risk. This can be for several
reasons, including inability to comply with the law or
purposeful or otherwise unauthorized administrative behavior.
Conditional status typically lasts for one year, but can last
for more. It involves amending the agency's contract and
placing specific goals upon the agency to improve its
performance in order to bring it into compliance with statutory
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and regulatory requirements. If, after a specified period of
time, the agency does not meet the conditions placed upon it
under its "conditional contract" status, then the CDE can begin
to pursue action to terminate the contract.
In most cases involving unacceptable performance, such as
criminal actions or outright negligence, the CDE may act on the
program by suspending or terminating the contract for specified
reasons. These reasons can span from theft and embezzlement to
continued misappropriation of funds. In most cases, the CDE
will attempt to work with the agency unless the actions are so
egregious that their programmatic, fiscal, and legal staff
determines that the contract would best be served with another
agency or organization.
Clarification and enhanced authority for the CDE : This bill
seeks to clarify some ambiguous portions of the code as it
relates to how the CDE may address problematic agencies through
suspension, but also enhances its authority to immediately
terminate a child development agency's contract without allowing
the agency to operate while under appeal. Regarding suspension,
the CDE argues that current law is ambiguous as to how and when
suspension should occur.
Regarding increased authority, this measure would eliminate the
limited scope under which the CDE may immediately terminate a
child development agency's contract, and, conversely, expand how
and when immediate termination may be invoked. Currently, the
CDE has limited authority to immediately terminate a contract,
unless an agency is placing the health and welfare of the
children under its care in immediate danger. Typically, this
relates to severe violations of Title 22 of the CCR relating to
basic health and safety. However, this authority does not apply
to those agencies whose actions extend to egregious fiscal or
programmatic violations.
With the number of state budget cuts child development agencies
have sustained over the past seven years, the need to triage and
ensure that the state has accessible and quality child
development programs is essential. This is especially important
now that parents receiving CalWORKs aid have a truncated time
period to fulfill their welfare-to-work requirements.
Analysis Prepared by : Chris Reefe / HUM. S. / (916) 319-2089
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