BILL ANALYSIS
AB 315
Page 1
ASSEMBLY THIRD READING
AB 315 (De Leon)
As Amended June 1, 2009
Majority vote
EDUCATION 8-2 APPROPRIATIONS 12-5
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|Ayes:|Brownley, Ammiano, |Ayes:|De Leon, Ammiano, Charles |
| |Arambula, | |Calderon, Davis, Fuentes, |
| |Buchanan, Carter, Eng, | |Hall, John A. Perez, |
| |Solorio, | |Price, Skinner, Solorio, |
| |Torlakson | |Torlakson, Krekorian |
| | | | |
|-----+--------------------------+-----+---------------------------|
|Nays:|Nestande, Miller |Nays:|Nielsen, Duvall, Harkey, |
| | | |Miller, |
| | | |Audra Strickland |
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SUMMARY : Requires the California Department of Education (CDE)
to establish guidelines for Alternative Payment Programs (APPs)
regarding payments to providers and other related administrative
procedures. Specifically, this bill :
1)Expresses the following intent of the Legislature:
a) Eliminate late and inaccurate payments to child care
providers;
b) Eliminate ambiguities that have led to changing
guidelines;
c) Eliminate insufficient communication about policies, and
the lack of a system that addresses child care provider
payment problems that has led to more experienced, quality
providers choosing not to accept subsidized children,
thereby reducing parental choice and availability of care
for families relying on the subsidized child care system;
and,
d) Create a uniform and timely system of payments to child
care providers by providing clear and consistent directives
for APPs.
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2)Requires the CDE, in developing regulations on provider
payments, to consider developing guidelines for APP on all of
the following:
a) Timeliness of payments to child care providers;
b) Due process and complaint process;
c) Filling out attendance records;
d) Manner of issuing payments to child care providers, and
whether an alternative payment program may issue a single
check for multiple children;
e) Timeliness of notice to providers when a child is no
longer eligible to receive subsidies; and,
f) Administrative recourse and penalties for late payments
to child care providers. Specifies that if a penalty is
assessed against an APP, the program shall use only
administrative and support service funds to pay the
penalty.
FISCAL EFFECT : According to the Assembly Appropriations
Committee, minor absorbable General Fund administrative costs to
CDE.
COMMENTS : The CDE administers a child care and child
development system, maintaining over 1,500 service contracts
with approximately 786 public and private agencies supporting
and providing services to about 500,000 children. Contractors
include school districts, county offices of education, cities,
colleges, other public entities, community-based organizations,
and private agencies.
APPs, funded with state and federal funds, offer a variety of
child care arrangements for parents, including licensed family
child care homes and center-based care, and arrange for payments
to licensed-exempt providers, who are relatives or friends of
parents or guardians. The APP helps families access child care
services and makes payment for those services directly to the
child care provider selected by the family. The APP is intended
to increase parental choice and accommodate the individual needs
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of the family. APPs are reimbursed based on the number of
children served and funds are appropriated based on the fiscal
reporting process and budget estimations. There are 84 APPs
throughout the state and they range from private, nonprofit
organizations to county offices of education. APPs began as
pilot programs in 1977 and became permanent in 1980.
The federal Temporary Assistance for Needy Families, passed in
1996, increased the demand for child care services through APPs.
According to the CDE, families who are eligible for child care
services because they are recipients of cash aid or have income
less than 75% of the state median income receive a specified
number of hours of child care need per week (certified hours of
care) based on their documented need. The certified hours of
care are based on participation in county mandated
welfare-to-work activities, employment, employment searches,
and/or vocational training, and include time for transportation
to and from approved activities.
According to the author, lack of clarity in state regulations
and guidelines has led to inconsistencies in how APPs administer
payments, which has led to undue burdens on child care
providers. These problems have led to more experienced, quality
child care providers choosing not to accept subsidized children,
which reduces choice in providers and ultimately limits access
for working families that rely on child care to maintain their
livelihoods. It is unclear how many providers are no longer
accepting children who receive state assistance.
Title 5, Division 1, Chapter 19 and 19.5 of the California Code
of Regulations establishes broad guidelines regarding
enrollment, attendance accounting, rates, and provider
participation.
The provisions below are the areas for which the CDE is required
to consider developing regulations pursuant to this bill:
1)Timeliness of payments to child care providers: The sponsor,
the Child Care Providers United (CCPU), states that there is
discrepancy over when providers are paid (e.g., within "x"
working days after receipt of attendance record, specified pay
dates, etc.) and how often they are paid (e.g., once or twice
a month), which makes it difficult for providers to operate
their businesses and pay their bills. In extreme situations,
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providers have reported having to wait months after submitting
their attendance records before getting paid.
Existing regulations require the APP to develop and implement
a plan for timely payment to providers. However, when
providers are paid is contingent upon accuracies of attendance
records. If an attendance record requires followup, payments
to providers may be delayed.
2)Due process and complaint process: According to the sponsor,
when providers complain about late payments and other payment
problems, they have experienced retribution.
Current regulations require APPs to develop and implement
policies and procedures for provider participation, including
grievance procedures for parents and providers. It is unclear
whether providers are not following the grievance process,
whether APPs are violating the regulations by not developing a
plan, or whether they are ignoring their policies.
The CDE notes that there is due process for the clients - the
parents. Establishing a due process for providers will affect
the contractual relationship the state currently has with
APPs.
3)Filling out attendance records: The sponsor states that
requirements for attendance records are not consistent and
that attendance records have been returned because parents use
different color inks to sign in or out, or because white out
was used. Another example includes rejection of attendance
records because parents signed a shortened version of their
names (e.g., Kim vs. Kimberly).
Payments for services are contingent upon the submission of
the attendance records. Any discrepancy can be an indication
of provider or parent fraud. Pursuant to annual budget acts,
the CDE is required to conduct a random sampling of family
data files to assess the administrative error rates in the
areas of eligibility, parent fee, need, and provider payment.
For fiscal year 2007-08, the estimated error rate for
provider payment reimbursements was 37%. CDE staff found that
most contractor errors in this area were due to either the
incorrect selection of a ceiling or the lack of quality
control to ensure that parents are completing the attendance
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records on a daily basis.
Current regulations require APPs to provide written materials
to providers, including instructions on enrollment and
attendance recordkeeping. It is unclear whether providers are
not receiving the information, whether they are not following
instructions, or whether rules change.
4)Manner of issuing payments to child care providers, and
whether an alternative payment program may issue a single
check for multiple children: The sponsor states that there is
inconsistency in issuing payments to providers. Some
providers receive a single check for each child they serve at
different times of the month. Some APPs offer direct deposit
while others do not. This issue is not addressed by current
regulations.
5)Timeliness of notice to providers when a child is no longer
eligible to receive subsidies: The sponsor states that some
providers are not notified when there are changes to a
parent's eligibility (e.g., a parent's eligible hours are
reduced or terminated) and they are not paid for services they
have provided.
Parents are required to report changes within five days. Some
APPs do notify providers when they are notified of changes and
offer a grace period before terminating payments. This issue
is not addressed by current regulations.
6)Administrative recourse and penalties for late payments to
child care providers: The sponsor states that some providers
are not paid for months, but they feel that they have no
recourse.
Existing regulation requires the APP to develop a plan for
timely payment to providers, but does not specify penalties
for failing to comply with the plan.
The CDE is currently working on regulations related to provider
rates and policies, although they are not currently specific to
the areas addressed by this bill.
AB 304 (Price), held by the Assembly Appropriations Committee,
requires APPs to establish an electronic banking program for
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payments to providers.
The American Federation of State, County and Municipal Employees
states, "The department has recently begun a process to update
their provider payment regulations. Most of the regulations
that the department is currently working under are from the
1980s. It is not clear just what subject matters will be
addressed in this process, and the CCPU want to be sure that the
issues noticed in this legislation are to be the focus of the
regulatory package that is put forth, -- thus the reason for
this bill."
Analysis Prepared by : Sophia Kwong Kim / ED. / (916) 319-2087
FN: 0001313