BILL ANALYSIS �
AB 2101
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Date of Hearing: May 14, 2014
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Mike Gatto, Chair
AB 2101 (Levine) - As Amended: May 6, 2014
Policy Committee: Human
ServicesVote:7 - 0
Urgency: No State Mandated Local Program:
No Reimbursable:
SUMMARY
This bill allows alternative payment programs and child care
providers to maintain and retain records electronically or in
another alternative format. Specifically, this bill:
1)Allows alternative payment programs and child care providers
to:
a) Maintain records electronically regardless of whether
the original documents were created electronically.
b) Retain records using either electronic or other types of
alternative storage.
c) Use electronic signatures that may be a marking that is
computer generated, produced by electronic means, or an
email signature that is intended by the signatory to have
the same effect as a handwritten signature.
1)Allows contractors operating and providing services under this
section to maintain records electronically regardless of
whether the original documents were created electronically.
2)Expands the list of types of records that can be maintained
electronically to include attendance sheets, provider
invoices, and other items.
3)Requires all of the above provisions to be done in compliance
with state and federal standards as determined by the State
Department of Education.
AB 2101
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FISCAL EFFECT
The California Department of Education (CDE) is required to
audit child care contractors per federal law in order to receive
federal funds to support child care programs. This bill will
create significant General Fund cost pressure to the CDE to
develop audit procedures and reporting systems to accommodate
electronic record formats. Likely CDE costs as follows:
1)One-time costs of $175,000 to train CDE audit staff.
2)On-going costs of up to $7.8 million due to increased audit
costs of between $70,000 and $100,000 per audit for all 78
alternative payment programs. Up to $80 million if the audits
include all 800 child care providers.
3)Potential loss of federal child care funds of up to $1.7
billion. The bill does not require providers to retain
original paper source documents which are currently required
by CDE for performance of its audits. If the lack of required
documentation necessary for auditors to verify the accuracy of
reported information is absent, federal funds could be at
risk.
COMMENTS
1)Purpose . The author introduced this bill "in support of
community based public and private nonprofit Alternative
Payment Program (APP) agencies that have existed since 1976 to
connect eligible working poor families to child care. These
programs are the link to connecting our poorest of poor
families with child care and other services with the goal of
making families self-sufficient." This bill will allow these
agencies the option to save their paperwork electronically.
According to the author, hundreds of thousands of dollars are
spent on warehousing paper copies of family case files dating
back five to seven years.
2)Alternative Payment Programs . There are currently 78 APPs
contracted with the California Department of Education (CDE),
funded through state and federal funds, to provide an array of
support and payment services that enable low-income and
eligible families to access subsidized child care. APPs
AB 2101
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provide families who are participating in welfare-to-work
activities under the CalWORKs program, or who are low-income
but do not qualify for CalWORKs, with subsidized child care
vouchers.
3)Electronic records . In 2009 the state adopted the Uniform
Electronic Transactions Act (UETA). The UETA is the first
comprehensive effort to prepare state law for the electronic
commerce era. The state adopted rules and regulations that
generally apply to all records or signatures generated or
transmitted electronically, the formation of contracts using
electronic records, the making and retention of electronic
records and signatures, and the procedures governing changes
and errors in electronically transmitted records. However,
UETA does not require records or signatures to be recorded or
maintained electronically, rather it provides a process by
which transactions can occur electronically.
Writing in explanation of the UETA, the Conference of
Commissioners on Uniform State Laws states that "UETA applies
only to transactions in which each party has agreed by some
means to conduct them by electronically. Agreement is
essential. Nobody is forced to conduct to electronic
transactions."
In 2013, AB 274 (Bonilla) was enacted which allowed APPs to
maintain records, including child attendance records,
electronically in accordance with state and federal auditing
standards. However, it limited the electronic maintenance of
records to only those that were generated electronically in
response to CDEs concerns about their ability to adequately
audit such providers. In December 2013 the California
Department of Education issued management bulletin 13-10
implementing the requirements of AB 274, which included
additional guidance on what types of documents may be
generated and transmitted electronically. In this guidance it
states that "documents or records created in paper form cannot
be scanned and stored electronically. These records must be
stored in their original paper format."
Analysis Prepared by : Jennifer Swenson / APPR. / (916)
AB 2101
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319-2081