BILL ANALYSIS Ó
AB 271
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Date of Hearing: April 15, 2015
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Jimmy Gomez, Chair
AB
271 (Obernolte) - As Amended April 7, 2015
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Urgency: No State Mandated Local Program: NoReimbursable: No
SUMMARY: This bill allows alternative payment programs and child
care providers to maintain records electronically.
Specifically, this bill:
1)Allows alternative payment programs and child care providers
to:
AB 271
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a) Maintain records electronically regardless of whether
the original documents were created electronically.
b) Use electronic signatures that may be a marking that is
computer generated, produced by electronic means, or an
email signature that is intended by the signatory to have
the same effect as a handwritten signature.
1)Allows contractors operating and providing services under this
section to maintain records electronically regardless of
whether the original documents were created electronically.
2)Requires all of the above provisions to be done in compliance
with state and federal standards as determined by the State
Department of Education.
FISCAL EFFECT:
1)The California Department of Education (CDE) is required to
audit child care contractors per federal law in order to
receive federal funds to support child care programs. While
CDE supports efforts to transition to the collection and use
of electronic records, it lacks the capacity and resources to
adequately receive and verify electronically generated and
maintained records. This bill will create significant General
Fund cost pressure to the CDE to develop audit procedures and
reporting systems to accommodate electronic record formats and
a process to verify the authenticity of those records. Likely
CDE costs to develop an appropriate system would be as
follows:
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a) One-time costs in the range of $175,000 to train CDE
audit staff.
b) Unknown on-going costs likely in the low millions of
dollars due to increased audit costs for all 76 alternative
payment programs and potentially all 800 child care
providers.
1)Potential loss of federal child care funds of approximately
$700 million. If CDE does not have a system in place to accept
the required documentation necessary for auditors to verify
the accuracy of reported information, federal funds could be
at risk.
COMMENTS:
1)Purpose. The author states, "California leads the nation when
it comes to innovation and technology. However, many of our
state government operations have been left in the past. As a
result, a number of state agencies are forced to operate in a
manner that is both outdated and inefficient. [This bill]
would update an outmoded procedure by giving child care
agencies the option of saving and storing their paperwork
electronically. Providing child care programs with this
option would both modernize agency operations and maximize the
use of public dollars."
2)Alternative Payment Programs. There are currently 76 APPs
contracted with the California Department of Education (CDE),
funded through state and federal funds, to provide an array of
support and payment services that enable low-income and
eligible families to access subsidized child care. APPs do not
provide direct child services or programs, but rather provide
families who are participating in welfare-to-work activities
under the CalWORKs program, or who are low-income but do not
qualify for CalWORKs, with subsidized child care vouchers.
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3)Electronic records. In 2009, the state adopted the Uniform
Electronic Transactions Act (UETA). The UETA is the first
comprehensive effort to prepare state law for the electronic
commerce era. The state adopted rules and regulations that
generally apply to all records or signatures generated or
transmitted electronically, the formation of contracts using
electronic records, the making and retention of electronic
records and signatures, and the procedures governing changes
and errors in electronically transmitted records. However,
UETA does not require records or signatures to be recorded or
maintained electronically, but rather it provides a process by
which transactions can occur electronically.
In 2013, AB 274 (Bonilla) was enacted which allowed APPs to
maintain records, including child attendance records,
electronically in accordance with state and federal auditing
standards. However, it limited the electronic maintenance of
records to only those that were generated electronically in
response to CDEs concerns about their ability to adequately
audit such providers. In December 2013, the CDE issued
management bulletin 13-10 implementing the requirements of AB
274, which included additional guidance which states that
"documents or records created in paper form cannot be scanned
and stored electronically. These records must be stored in
their original paper format."
This bill seeks to further the AB 274 effort by permitting all
records to be maintained electronically. However, it is
unclear whether this bill will achieve the desired outcome
while also ensuring that the electronic records meet state
auditing requirements. In order for an electronic record to
be used and accepted, CDE, which is the contracting agency,
must agree to the use of electronic documents and have the
technology available to accept such documents. Although the
bill allows for APPs and child care providers to use
electronic records, it does not mandate the CDE to accept or
use them for purposes of programmatic or fiscal compliance.
Without the proper systems in place, it is unlikely CDE would
do so.
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4)Prior Legislation. AB 2101 (Levine), 2014, was substantially
similar to this bill. It was held on this Committee's
Suspense File.
Analysis Prepared by:Jennifer Swenson / APPR. / (916)
319-2081