BILL ANALYSIS �
SENATE HUMAN
SERVICES COMMITTEE
Senator Carol Liu, Chair
BILL NO: AB 862
A
AUTHOR: Silva and Jeffries
B
VERSION: May 27, 2011
HEARING DATE: June 28, 2011
8
FISCAL: Appropriations
6
2
CONSULTANT:
Brown
SUBJECT
Developmental services: regional centers
SUMMARY
This bill would add to an existing list of disclosures to
be posted on each of California's 21 non-profit regional
centers' websites, with the intention of allowing greater
transparency in regional center operations.
ABSTRACT
Current law
1) Establishes the California Department of
Developmental Services (DDS) to administer the
Lanterman Developmental Disabilities Act, which
entitles individuals with developmental disabilities
to community services and supports and requires the
department to enter into contracts with private
nonprofit regional centers to provide these supports.
2) Establishes 21 non-profit regional centers to
coordinate these services and supports including, but
Continued---
STAFF ANALYSIS OF ASSEMBLY BILL 862 (Silva and Jeffries)
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not limited to, development of individual program
plans, the purchase of needed services to implement
the plan, and monitoring of the delivery of those
services.
3) Provides a number of review mechanisms for DDS to
provide oversight of the regional centers, including
inserting reporting requirements into the five-year
contracts between the state and each regional center.
4) Requires each regional center to post on its
website thirteen specific categories of information
intended to provide transparency in operations
including, but not limited to, results of independent
audits, contract awards, names and types of services
provided by vendors, and conflict-of-interest
policies.
This bill
Expands the list of documents to be posted on each regional
center's website, including:
1) Requiring that regional centers identify actual
rates paid to each vendor and that those rates must be
updated semiannually.
2) Requiring each regional center to identify on its
website any public funds provided to a nonprofit
housing organization outside the request for proposals
process.
3) Adding a requirement that principals of vendors be
identified, along with other vendor information.
4) Requiring regional centers to post on their
websites all conflict-of-interest disclosures.
5) Requiring the posting of any legal settlements that
can be disclosed.
FISCAL IMPACT
Per an Assembly Floor analysis, General Fund costs could be
in excess of $100,000 to gather and report information
required, including actual rates paid to vendors.
STAFF ANALYSIS OF ASSEMBLY BILL 862 (Silva and Jeffries)
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BACKGROUND AND DISCUSSION
California's 21 regional centers serve approximately
243,000 individuals with developmental disabilities and
their families through approximately 65,000 vendors,
including parents. The regional centers were created as
independent non-profit, nonpublic organizations to
encourage the development and use of local resources
designed to meet specific local needs.
Purpose
The author states that AB 862 seeks to increase
accountability and transparency within the state's regional
centers by requiring certain data relative to their
activities and services be posted on their websites.
The bill follows a flurry of public discussion about these
issues prompted by news articles involving questionable
contracting in one regional center, a critical Bureau of
State Audits report (2009) that found a lack of formal and
transparent rate-setting procedures and vendor-selection
processes, and legislative hearings on the subject of
regional center transparency.
Bureau of State Audits report
Department of Developmental Services: A more uniform and
transparent rate-setting process would improve the
cost-effectiveness of regional centers, (Report 2009118)
released in August 2010, noted that the lack of
transparency to outside reviewers results in the potential
for favoritism and makes it impossible to determine whether
regional centers are properly considering cost when
selecting among comparable vendors.
It noted that regional centers do not document how rates
are set, why particular vendors are selected, or how
contracts are procured, nor are they required to do so. As
a result, the audit noted, the regional centers could not
consistently demonstrate the rationale behind their
ratesetting and vendorselection decisions. And in some
cases, according to the report, vendor selection had the
appearance of favoritism or fiscal irresponsibility.
Related Legislation
SB 74 (Senate Budget and Fiscal Review) Chapter 9, Statutes
STAFF ANALYSIS OF ASSEMBLY BILL 862 (Silva and Jeffries)
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of 2011, an omnibus trailer bill passed in March 2011,
established new reporting requirements for regional
centers, including requirements that regional centers
adopt, maintain, and post on their Internet Web sites a
transparency and public information policy containing the
following components:
(1) Regional center annual independent audits.
(2) Biannual fiscal audits conducted by the department.
(3) Regional center annual reports.
(4) Contract awards, including the organization or entity
awarded the contract, and the amount and purpose of the
award.
(5) Purchase of service policies.
(6) The names, types of service, and contact information
of all vendors, except consumers or family members of
consumers.
(7) Board meeting agendas and approved minutes of open
meetings of the board and all committees of the board.
(8) Bylaws of the regional center governing board.
(9) The annual performance contract and year-end
performance contract entered with the department pursuant
to this division.
(10) The biannual home and community-based services waiver
program review conducted by DDS and the State Department of
Health Care Services.
(11) The board-approved transparency and public
information policy.
(12) The board-approved conflict-of-interest policy.
(13) The annual reports of salary schedules by personnel
classification, and operations budget expenditures for
administrative services.
STAFF ANALYSIS OF ASSEMBLY BILL 862 (Silva and Jeffries)
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The same trailer bill also required DDS to create a
transparency portal on its website and to include links to
the regional center transparency and public information
policy Internet Web sites, and other sites with monitoring
and enforcement information.
AB 2220 (Silva), 2010, would have added regional centers to
the list of public entities bound by the requirements of
the California Public Records Act. The bill was held on
suspense in the Assembly Appropriations Committee.
Arguments in support
ResCoalition, the bill's sponsor, writes that the bill will
ensure that taxpayers see where their money is spent.
"Valid data" in California's disability services system
would provide critical information for policy makers and
members of the public. The sponsor also argues that
regional centers invoke their non-profit status to avoid
providing information covered under the California Public
Records Act. The sponsor says that this bill would remedy
the information gap by specifically requiring certain
information about the use of public funds be posted
publicly.
Arguments in opposition
The Association of Regional Center Agencies (ARCA) is
concerned about lack of clarity in two areas of the bill:
On page 2, line 28 �Section 4629.5(b)(8)], the bill
requires regional centers to list "principals" of a
vendor. ARCA is unclear as to who is meant: an owner,
operator, the individual(s) listed on the business
license, or the manager of the facility or program?
Existing law requires the name of the vendor; if this
is not sufficient, a definition of "principals" is in
order.
On page 2, lines 25-26 �Section 4629.5(b)(6)], the
bill requires regional centers to make available
information on any public funds provided to a
nonprofit housing corporation outside the request for
proposals process. ARCA would like clarification of
the definition of "public funds" given the range of
funding streams an organization might use, such as
HUD, Housing and Community Development, grants, and
more.
ARCA believes that confusion over these definitions could
STAFF ANALYSIS OF ASSEMBLY BILL 862 (Silva and Jeffries)
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result in wasted time and expense.
Assembly votes
Human Services: 6-0
Appropriations: 17-0
Floor: 76-0
POSITIONS
Support: ResCoalition (sponsor)
Arc of California
Educate Advocate
Innovative Business Partnerships, Inc
United Cerebral Palsy
Oppose: Association of Regional Center Agencies
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