BILL NUMBER: SB 1259 AMENDED
BILL TEXT
AMENDED IN SENATE MARCH 29, 2012
INTRODUCED BY Senator Emmerson
FEBRUARY 23, 2012
An act to amend Section 4629 4652.5
of the Welfare and Institutions Code, relating to developmental
disabilities.
LEGISLATIVE COUNSEL'S DIGEST
SB 1259, as amended, Emmerson. Developmental disabilities:
regional centers.: centers.
Existing law, the Lanterman Developmental Disabilities Services
Act, requires the State Department of Developmental Services to enter
into 5-year contracts with regional centers to render specified
services. The act requires an entity receiving payments of
$250,000 or more, but not more than $500,000, from a regional center
to obtain either an independent audit or independent review report of
its financial statements for the period. An entity receiving
payments of $500,000 or more is required to obtain an independent
audit. Existing law requires a copy of the audit or report to be
provided to the vendoring regional center within 30 days of
completion of the audit or review.
This bill would make technical, nonsubstantive changes to
these provisions instead require, for fiscal years
ending on or after July 1, 2011, that an entity that receives
payments of at least $2,000,000 obtain an independent audit of its
financial statements and provide a copy to the vendoring regional
center within 9 months of the end of the entity's fiscal year. The
bill would also require the department to randomly select entities
that are subject to, but fail to meet, the audit requirements and
perform a billing audit of the selected entities .
Vote: majority. Appropriation: no. Fiscal committee: no
yes . State-mandated local program: no.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 4652.5 of the
Welfare and Institutions Code is amended to read:
4652.5. (a) (1) An For fiscal years
ending on or after July 1, 2011, an entity receiving
that receives payments from one or more regional
centers shall contract with an independent accounting firm
for to obtain an independent audit
or review of its financial statements
subject to all of the following:
(A) When
when the amount received from the regional center or
regional centers during the entity's fiscal year is more
than or equal to at a minimum of two
hundred fifty thousand million dollars
($250,000) but less than five hundred thousand dollars ($500,000),
the entity shall obtain an independent audit or independent review
report of its financial statements for the period. Consistent with
Subchapter 21 (commencing with Section 58800) of Title 17 of the
California Code of Regulations, this subdivision shall also apply to
work activity program providers receiving less than two hundred fifty
thousand dollars ($250,000) ($2,000,000) .
(B) When the amount received from the regional center or regional
centers during the entity's fiscal year is equal to or more than five
hundred thousand dollars ($500,000), the entity shall obtain an
independent audit of its financial statements for the period.
(2) This requirement does not apply to payments made using usual
and customary rates, as defined by Title 17 of the California Code of
Regulations, for services provided by regional centers.
(3) This requirement does not apply to state and local
governmental agencies, the University of California, or the
California State University.
(b) An entity subject to subdivision (a) shall provide copies of
the independent audit or independent review report
required by subdivision (a), and accompanying management letters, to
the vendoring regional center within 30 days after
completion of the audit or review nine months of the
end of the entity's fiscal year for which the audit is required
.
(c) Regional centers receiving the audit or review
reports required by subdivision (b) shall review and
require resolution by the entity for issues identified in the report
that have an impact on regional center services. Regional centers
shall take appropriate action, up to termination of vendorization,
for lack of adequate resolution of issues.
(d) Regional centers shall notify the department of all qualified
opinion reports or reports noting significant issues that directly or
indirectly impact regional center services within 30 days after
receipt. Notification shall include a plan for resolution of issues.
(e) For purposes of this section, an independent review
audit of financial statements must
shall be performed by an independent accounting
firm and shall cover, at a minimum, all of the following:
(1) An inquiry as to the entity's accounting principles and
practices and methods used in applying them.
(2) An inquiry as to the entity's procedures for recording,
classifying, and summarizing transactions and accumulating
information.
(3) Analytical procedures designed to identify relationships or
items that appear to be unusual.
(4) An inquiry about budgetary actions taken at meetings of the
board of directors or other comparable meetings.
(5) An inquiry about whether the financial statements have been
properly prepared in conformity with generally accepted accounting
principles and whether any events subsequent to the date of the
financial statements would have a material effect on the statements
under review.
(6) Working papers prepared in connection with a review of
financial statements describing the items covered as well as any
unusual items, including their disposition.
(f) For purposes of this section, an independent review report
shall cover, at a minimum, all of the following:
(1) Certification that the review was performed in accordance with
standards established by the American Institute of Certified Public
Accountants.
(2) Certification that the statements are the representations of
management.
(3) Certification that the review consisted of inquiries and
analytical procedures that are lesser in scope than those of an
audit.
(4) Certification that the accountant is not aware of any material
modifications that need to be made to the statements for them to be
in conformity with generally accepted accounting principles.
(f) The department shall, in the course of its normal audits,
randomly select entities that are subject to, but fail to meet the
requirements of, this section and perform a billing audit.
(g) The department shall , in the course of its normal
audits, not consider a request for adjustments to rates
submitted in accordance with Title 17 of the California Code of
Regulations by an entity receiving payments from one or more regional
centers solely to fund either anticipated or unanticipated changes
required to comply with this section.
SECTION 1. Section 4629 of the Welfare and
Institutions Code is amended to read:
4629. (a) The state shall enter into five-year contracts with
regional centers, subject to the annual appropriation of funds by the
Legislature.
(b) The contracts shall include a provision requiring each
regional center to render services in accordance with applicable
provision of state laws and regulations.
(c) (1) The contracts shall include annual performance objectives
that shall do both of the following:
(A) Be specific, measurable, and designed to do all of the
following:
(i) Assist consumers to achieve life quality outcomes.
(ii) Achieve meaningful progress above the current baselines.
(iii) Develop services and supports identified as necessary to
meet identified needs.
(B) Be developed through a public process as described in the
department's guidelines that includes, but is not limited to, all of
the following:
(i) Providing information, in an understandable form, to the
community about regional center services and supports, including
budget information and baseline data on services and supports and
regional center operations.
(ii) Conducting a public meeting where participants can provide
input on performance objectives and using focus groups or surveys to
collect information from the community.
(iii) Circulating a draft of the performance objectives to the
community for input prior to presentation at a regional center board
meeting where additional public input will be taken and considered
before adoption of the objectives.
(2) In addition to the performance objectives developed pursuant
to this section, the department may specify in the performance
contract additional areas of service and support that require
development or enhancement by the regional center. In determining
those areas, the department shall consider public comments from
individuals and organizations within the regional center catchment
area, the distribution of services and supports within the regional
center catchment area, and review how the availability of services
and supports in the regional area catchment area compares with other
regional center catchment areas.
(d) Each contract with a regional center shall specify steps to be
taken to ensure contract compliance, including, but not limited to,
all of the following:
(1) Incentives that encourage regional centers to meet or exceed
performance standards.
(2) Levels of probationary status for regional centers that do not
meet, or are at risk of not meeting, performance standards. The
department shall require that corrective action be taken by any
regional center that is placed on probation. Corrective action may
include, but is not limited to, mandated consultation with designated
representatives of the Association of Regional Center Agencies or a
management team designated by the department, or both. The department
shall establish the specific timeline for the implementation of
corrective action and monitor its implementation. When a regional
center is placed on probation, the department shall provide the
appropriate area board with a copy of the correction plan, timeline,
and any other action taken by the department relating to the
probationary status of the regional center.
(e) In order to evaluate the regional center's compliance with its
contract performance objectives and legal obligations related to
those objectives, the department shall do both of the following:
(1) Annually assess each regional center's achievement of its
previous year's objectives and make the assessment, including
baseline data and performance objectives of the individual regional
centers, available to the public. The department may make a special
commendation of the regional centers that have best engaged the
community in the development of contract performance objectives and
have made the most meaningful progress in meeting or exceeding
contract performance objectives.
(2) Monitor the activities of the regional center to ensure
compliance with its contracts, including, but not limited to,
reviewing all of the following:
(A) The regional center's public process for compliance with the
procedures sets forth in paragraph (2) of subdivision (c).
(B) Each regional center's performance objectives for compliance
with the criteria set forth in paragraph (1) of subdivision (c).
(C) Any public comments on regional center performance objectives
sent to the department or to the regional centers, and soliciting
public input on the public process and final performance standards.
(f) The renewal of each contract shall be contingent upon
compliance with the contract including, but not limited to, the
performance objectives, as determined through the department's
evaluation.