BILL ANALYSIS �
AB 1554
Page 1
Date of Hearing: March 20, 2012
ASSEMBLY COMMITTEE ON HUMAN SERVICES
Jim Beall Jr., Chair
AB 1554 (Jeffries and Silva) - As Amended: March 8, 2012
SUBJECT : Developmental services: regional centers
SUMMARY : Adds the following items to the information regional
centers are required to post on their Internet Web sites:
1)The actual rates paid to each regional center vendor, updated
annually, except consumers or family members of consumers;
and,
2)Any regional center purchase of services or operations funds
provided to a nonprofit housing organization outside the
request for proposals process.
EXISTING LAW
1)Establishes the Lanterman Developmental Disabilities Services
Act (Lanterman Act), under which the Department of
Developmental Services (DDS) contracts with 21 private
non-profit regional centers (RCs) to provide case management
services and arrange for, or purchase services that meet the
needs of individuals with developmental disabilities.
2)Requires that the contract between the DDS and each RC require
the RC to adopt, maintain, and post on its Internet Web site a
board-approved policy regarding transparency and access to
public information.
3)To promote transparency, requires each RC to include on its
Internet Web site, as expeditiously as possible, at least all
of the following:
a) RC annual independent audits;
b) Biannual fiscal audits conducted by DDS;
c) RC annual reports;
d) Contract awards, including the organization or entity
awarded the contract, and the amount and purpose of the
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award;
e) Purchase of service policies;
f) The names, types of service, and contact information of
all vendors, except consumers or family members of
consumers;
g) Board meeting agendas and approved minutes of open
meetings of the board and all committees of the board;
h) Bylaws of the RC governing board;
i) The annual performance contract and year-end performance
contract entered into with DDS;
j) The biannual Home and Community-based Services (HCBS)
Waiver program review conducted by DDS and the Department
of Health Care Services (DHCS);
aa) The board-approved transparency and public information
policy;
bb) The board-approved conflict-of-interest policy; and,
cc) The annual reports of salary schedules by personnel
classification, and operations budget expenditures for
administrative services.
FISCAL EFFECT : Unknown
COMMENTS : The Lanterman Act establishes a comprehensive
statutory scheme to provide services and supports to people with
developmental disabilities. Direct responsibility for
implementation of the Lanterman Act service system is allocated
between DDS and 21 RCs. RCs are private nonprofit entities
established pursuant to the Lanterman Act that contract with DDS
to carry out many of the state's responsibilities under the Act,
including intake and assessment, case management, and individual
program plan development and implementation.
The RC budget for 2011-12 is approximately $3.8 billion in state
and federal funds to serve 250,000 people with developmental
disabilities (consumers) by securing or purchasing services
based on each consumer's individual needs and choices as
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determined through the IPP process. Approximately 40,000
vendored service providers deliver a wide range of services to
consumers, such as respite care, transportation, day treatment
programs, residential placements, supported living services,
work support programs, and various social and therapeutic
activities.
Need for this bill : According to the authors:
Over the past two years a series of reports have
revealed that operations and expenditures at some
California Regional Centers have not been cost
effective, and at times have been corrupt misspending
of State funds. Parents, vendors, staff and the
disabled all stand to benefit from a more uniform and
transparent process. Although all twenty-one Regional
Centers across the State operate as nonprofits it is
reasonable to expect them to share information with
the public when they receive all of their funding from
the State of California. In the past, Regional
Centers have not been required to participate in
transparency practices. The centers have also used
their non-profit status to deny requestors information
that would typically be covered under the California
Public Records Act.
BSA Audit : In 2010, the California State Auditor, Bureau of
State Audits (BSA) issued a report of its review of RC
procurement and rate-setting processes. Department of
Developmental Services: A more uniform and transparent
rate-setting process would improve the cost-effectiveness of
regional centers, Report 2009-118, August 2010 (BSA Report).
The BSA visited a sample of 6 RCs. For those RCs, the Joint
Legislative Audit Committee directed the BSA to review
procedures for allowing public access to information on
operations and to determine if requests for public records made
by service providers in the past two fiscal years were satisfied
in a timely manner and within the requirements of the law. The
BSA determined "that the information that regional centers are
required to make public is limited to employment contracts and
that the regional centers are not required to maintain, and do
not maintain, logs of public information requests or track how
such requests are fulfilled. As such, we could not perform
tests of public or service provider requests for information."
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The BSA Report noted the lack of formal and transparent
rate-setting and vendor-selection processes by the RCs included
in the audit. BSA Report, p. 2. It was noted that the lack of
transparency to outside reviewers results in the potential for
favoritism and makes it impossible to determine whether RCs are
properly taking cost into consideration in selecting among
comparable vendors. BSA Report, p. 46.
Budget Trailer Bill : The Governor's Budget for 2011-12 proposed
increases in accountability and transparency in the RC system.
To promote transparency, 2011-12 Budget Trailer Bill pertaining
to DDS, SB 74 (Committee on Budget & Fiscal Review), Chapter 9,
Statutes of 2011, requires DDS to establish a transparency
portal on its Web site, which is to include, but need not be
limited to, all of the following:
Links to RC Internet Web sites with the information specified
in paragraph 3 under Existing Law, above;
Biannual fiscal audits conducted by DDS;
Vendor audits;
Biannual HCBS Waiver program reviews conducted by DHCS;
Early Start Program reviews conducted by DDS; and,
Annual performance contract and year-end performance contract
reports.
In addition, SB 74 requires each RC to adopt, maintain, and post
on its Internet Web site a board-approved policy regarding
transparency and access to public information. The policy must
provide for timely public access to information, including
information regarding requests for proposals and contract
awards, service provider rates, documentation related to
establishment of negotiated rates, audits, and IRS Form 990.
Under SB 74, each RC must also post on its Internet Web site the
information listed in paragraph 3) under Existing Law, above.
This bill adds to the list of items required to be posted on
each RC's Internet Web site pursuant to SB 74.
Prior legislation :
AB 862 (Silva & Jeffries 2011) was similar to this bill but
included additional items to be posted on regional centers' Web
sites and required semiannual updates of vendor rates. AB 862
was vetoed by the Governor. The veto message referred to the
inclusion of one of the items required to be posted (related to
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conflict-of-interest statements), which is not included in this
bill.
AB 2220 (Silva 2010) would have designated regional centers as
"local agencies" within the meaning of the California Public
Records Act, thereby subjecting them to the act's disclosure
requirements. AB 2220 was held in the Assembly Appropriations
Committee.
REGISTERED SUPPORT / OPPOSITION :
Support
ResCoalition (sponsor)
Developmental Disabilities Area Board 10
Opposition
None on file.
Analysis Prepared by : Eric Gelber / HUM. S. / (916) 319-2089