BILL ANALYSIS Ó
SENATE COMMITTEE ON APPROPRIATIONS
Senator Ricardo Lara, Chair
2015 - 2016 Regular Session
AB 271 (Obernolte) - Child care: alternative payment programs
and contractors: electronic records: digital signatures.
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|Version: May 28, 2015 |Policy Vote: ED. 9 - 0, HUMAN |
| | S. 5 - 0 |
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|Urgency: No |Mandate: No |
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|Hearing Date: August 17, 2015 |Consultant: Jillian Kissee |
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This bill meets the criteria for referral to the Suspense File.
Bill
Summary: This bill expands the existing authority of
alternative payment programs and child care providers to use
electronic methods for storage of documents or records and to
use digital signatures pursuant to state and federal standards,
as specified.
Fiscal
Impact:
The California Department of Education (CDE) indicates that
this bill will drive one-time costs of $73,000 to train audit
staff, update related auditing procedures, and participate in
the development of regulations. (Federal funds and General
Fund)
The CDE anticipates unknown additional costs for audit
fieldwork to verify systems meet required standards, with
costs expected to decrease over time. Potential costs could
AB 271 (Obernolte) Page 1 of
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be between the low tens of thousands to the low hundreds of
thousands. Costs will largely depend on the duration and
complexity of each audit. (Federal funds and General Fund)
Background: Existing law authorizes local government agencies or
non-profit organizations to contract with the California
Department of Education (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 make
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) Care provided through
General Child Care, Migrant and Handicapped child care, and
State Preschool is reimbursed through contracts with CDE.
Providers are reimbursed based on the number of children they
serve.
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; and (3)
services, revenues and expenditures relating to care provided
for subsidized and unsubsidized children. Parents are required
to physically sign-in and sign-out each child when they drop off
and pick up their child each day.
Existing law requires agencies that receive state funds to, at
the request of the Superintendent of Public Instruction, make
all records pertaining to its state-funded programs available to
the CDE, as specified, and requires that all records be retained
by each agency for at least five years, as specified. (EC §
33421)
Existing law authorizes alternative payment programs and
providers and other contractors providing child care development
services to maintain records in electronic format if the
original documents were created in electronic format. (EC §
8262.1)
State law and regulations specify protocols for the maintenance
of electronic records. Statute requires the Secretary of State
to approve and adopt appropriate nationally recognized
AB 271 (Obernolte) Page 2 of
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standards, while state regulations list minimum standards and
conditions that must be met to be defined as a "trusted system."
Examples of appropriate electronic record management include
assigning unique identifiers to individual records and providing
safeguards against unauthorized changes made to records.
Regulations also establish criteria for public entities using
digital signatures.
Proposed Law:
1) This bill allows alternative payment programs and child care
providers to maintain records electronically, in compliance with
state and federal standards, as determined by the CDE. It also
requires alternative payment programs and child care providers,
when converting from a paper record to an electronic format and
storing the electronic record, to comply with the specified
state standards. This bill also authorizes alternative payment
programs and child care providers to use digital signatures,
pursuant to state and federal standards, and requires a digital
signature to have the same force and effect as a manual
signature, as specified.
Related
Legislation: AB 2101 (Levine, 2014) similar to this bill, would
have allowed alternative payment programs and child care
providers to retain records electronically. AB 2101 failed
passage in the Assembly Appropriations Committee.
Staff
Comments: It is unclear how broadly electronic maintenance of
records will be implemented as systems will have to comply with
specified state and federal standards for electronic records.
However, over time one can assume that agencies and providers
will realize potentially significant savings from increased
operational efficiency due to an electronic recordkeeping
system.
The Child Development Division of the CDE, which conducts the
child care audits, is supported through a split of federal funds
(83 percent) and state General Fund (17 percent). Currently,
the CDE conducts four to six annual program audits of child care
providers, and verifies that the provider has kept the required
sign-in and sign-out attendance sheets and they contain the
AB 271 (Obernolte) Page 3 of
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required parent or guardian signatures.
The CDE anticipates shifting to an electronic recordkeeping
system will increase costs to conduct audits by $3,980 per week
and for a small agency, and a minimum of one additional week
would be required. For a larger agency, multiple additional
weeks could be required. However, costs are expected to decline
over time. Actual costs will ultimately depend on the duration
of the annual audits which is largely determined by the level of
funding an agency receives, the number of contracts the agency
has with the CDE, and the workload necessary to accomplish the
objectives of the audit. However, assuming (1) the CDE conducts
four audits of small agencies in a year, (2) the audit of this
type of agency normally takes one week, (3) additional costs of
$3,980 per week and one additional week are required, increased
audit costs could be about $32,000. Another scenario could
assume the CDE audits six, more complex agencies, and their
audits typically take about three weeks, and an additional two
weeks are required. Associated increased costs would be about
$119,000.
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