BILL ANALYSIS �
SENATE COMMITTEE ON EDUCATION
Alan Lowenthal, Chair
2011-2012 Regular Session
BILL NO: AB 245
AUTHOR: Portantino
AMENDED: May 11, 2011
FISCAL COMM: Yes HEARING DATE: June 22, 2011
URGENCY: No CONSULTANT:Daniel Alvarez
SUBJECT : Child care contractors: electronic payment.
SUMMARY
This bill requires, on or after January 1, 2013, the
California Department of Education (CDE), at the request of
a child care contractor, to request the State Controller
make a payment via direct deposit by electronic fund
transfer into the contractor's account at the financial
institution of the contractor's choice.
BACKGROUND
Current law:
Authorizes the Superintendent of Public Instruction (SPI)
to enter into and execute local contractual agreements with
any public or private entity or agency for the delivery of
child care and development services or the furnishing of
property, facilities, personnel, supplies, equipment, and
administrative services related to the delivery of child
care development services. Specifies that prior to
entering into or executing a local agreement, the CDE shall
obtain annual approval from the Department of General
Services and the Department of Finance as to the form and
general content of the agreement. Provides that the
agreements may only be made for the delivery of child care
and development services, or the furnishing of property,
facilities, personnel, supplies, equipment, or related
administrative services related. (Education Code � 8262).
Establishes eligibility for child care services and child
development programs administered by the CDE and requires
the SPI to adopt rules and regulations on eligibility,
enrollment and priority of services needed for
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implementation.
(EC � 8263).
ANALYSIS
This bill requires, on or after January 1, 2013, the
California Department of Education (CDE), at the request of
a child care contractor, to request the State Controller
make a payment via direct deposit by electronic fund
transfer into the contractor's account at the financial
institution of the contractor's choice.
STAFF COMMENTS
1) Need for the bill . According to the author, child
care providers receive payments by mail, resulting in
additional waiting time. In cases when checks are not
received by the appropriate party, there is a
significant time in investigating what happened to the
mailed check. It could be lost, mailed to the wrong
address, or stolen. In cases where a check does not
arrive, the contractor must contact the CDE to verify
whether a check was actually issued, then wait several
days after the inquiry before CDE will stop payment on
the check and reissue a new one. By using electronic
fund transfer (EFT), these providers are protected
from these delays.
2) Can this happen without additional resources? Over the
last several years, the CDE has been working on
replacing its software program used to manage child
care and development contracts. Last year, the CDE
issued a request for proposal for a new software
program to be paid with federal funds that will allow
the CDE to manage contracts and payments more
efficiently, including the ability to calculate and
generate payments to contractors; track agreement
payment and encumbrance information; generate local
contract documents, including making revisions to
contracts; perform budgetary and accounting functions;
and implement an EFT process. Due to higher than
expected costs, the project has been suspended. The
CDE states that it would be difficult to implement EFT
without the new computer system.
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3) California's child care and development system .
According to the CDE, California's child care and
development system is the largest in the nation, with
funding at approximately $2 billion in state and
federal funding. The CDE maintained approximately
1,450 service contracts with almost 800 public and
private agencies supporting and providing services to
503,670 children in the 2008-09 fiscal year.
Contractors include school districts, county offices
of education, cities, local park and recreation
districts, county welfare departments, other public
entities, community-based organizations, and private
agencies.
SUPPORT
California Alternative Payment Program Association
California Child Care and Resource and Referral Network
Child Care Information Service in Pasadena
OPPOSITION
None on file.