8400-8409
EDUCATION CODE
SECTION 8400-8409
8400. It has come to the attention of the Legislature that: (a) Existing law does not provide for an administrative appeal procedure to review and resolve disputes between the State Department of Education and the over 750 local contracting agencies which contract with the department to provide child care services to low-income families in California. (b) All disputes are currently resolved in the already overburdened California courts resulting in a time-consuming and costly process for both the contract agency and the department. Extensive funds have been expended by the State Department of Education for those purposes. (c) The presence of public and private agencies, small as well as large, in the subsidized child care delivery system provides client families with a range of desirable services, and cost-effective service mechanisms. (d) The presence of an efficient administrative appeal procedure will ensure program stability and encourage retention in the delivery system of a range of service-providing agencies. 8401. It is the intent of the Legislature to authorize an appeal process for the resolution of disputes between the State Department of Education and local agencies which contract with the Department of Education pursuant to Section 8262 to provide child care and development services or to furnish property, facilities, personnel, supplies, equipment and administrative services. 8402. The State Department of Education shall provide an independent appeal procedure to each contracting agency providing child care and development services pursuant to Section 8262. Prior to filing an appeal petition, the contracting agency shall have submitted all previously required standard monthly or quarterly reporting forms to the State Department of Education. The appeal procedure shall be conducted by the Office of Administrative Hearings and shall be provided upon petition of the contracting agency in any of the following circumstances: (a) Termination or suspension of a contracting agency's contract. (b) Denial of more than 4 percent or twenty-five thousand dollars ($25,000), whichever is less, of a local contracting agency's contracted payment for services schedule. (c) Demand for remittance of an overpayment of more than 4 percent or twenty-five thousand dollars ($25,000), whichever is less, of a local contracting agency's annual contract. 8403. All hearings shall be conducted according to the provisions of the Administrative Procedure Act (Chapter 5 (commencing with Section 11500) of Part 1, of Division 3 of Title 2 of the Government Code), except as otherwise directed in this article. 8404. The Office of Administrative Hearings shall, by June 30, 1982, adopt regulations governing the hearings, which shall include all of the following: (a) Deadlines for filing petitions, commencing hearings and rendering decisions. (b) Notice to affected parties. (c) The manner for maintaining appropriate provision for electronic recording and transcription, if necessary. (d) Hearings shall be conducted at the offices of the Office of Administrative Hearings in Sacramento or Los Angeles. However, hearings in Los Angeles shall be available only to local contracting agencies with the State Department of Education whose annual contracts total less than two hundred thousand dollars ($200,000). (e) Any other issues deemed appropriate by the Office of Administrative Hearings. 8405. The determination of the hearing examiner shall be the final administrative determination to be afforded the local contracting agency. 8406. All actions by the State Department of Education, as defined in subdivisions (a) to (c), inclusive, of Section 8402 shall be preceded by a written notice of action to the local contracting agency which shall include the following: (a) A statement of the specific reasons for the action in the Statement of Issues. (b) A description of the local contracting agency's rights and responsibilities concerning the appeal procedure described herein. 8406.6. The Superintendent of Public Instruction shall establish a contract classification system for purposes of identifying, monitoring, and providing technical assistance to contractors as follows: (a) Clear contract. This designation shall be given to contracted agencies that are in full compliance with all applicable statutory provisions, funding terms and conditions, and applicable program quality guidelines. (b) Provisional contract. This designation applies to existing contracted agencies, or agencies that are awarded a new contract for services. The time frame of a provisional contract is at the discretion of the State Department of Education and is given to ensure demonstrated fiscal and programmatic compliance before granting clear contract status. The contract status shall be reviewed annually. (c) Conditional contract. This designation applies to high-risk contracted agencies that evidence fiscal and or programmatic noncompliance. These agencies shall not be eligible to apply for additional State Child Development program funds, and are subject to any restrictions deemed reasonable to secure compliance. The conditional contract shall include a bill of particulars detailing the items of noncompliance, the standards that must be met to avoid termination of contract and to qualify the agency for clear contract status, and technical assistance plan. Failure to demonstrate substantive progress toward fiscal or program compliance within six months of that designation shall constitute a breach of contract and be subject to termination for any applicable cause specified in Section 8406.7 or in accordance with Section 8402. (d) Agencies with conditional contracts shall receive technical assistance from the Child Development Division of the State Department of Education. 8406.7. (a) Any agency that evidences chronic fiscal or program violations of a felony nature may have its contract suspended or terminated immediately, provided there is documented evidence thereof, and upon review and recommendation of the general counsel of the State Department of Education. A fiscal or programmatic violation constituting a breach of contract includes one or more of the following: (1) Fraud, or conspiracy to defraud. (2) Misuse of state funds in violation of the State of California Accounting Manual. (3) Embezzlement. (4) Threats of bodily or other harm to state officials. (5) Bribery or attempted bribery of a state official. (6) Unsafe or unhealthy physical environment or facility. (7) Substantiated abuse or molestation of children. (8) Failure to report suspected child abuse or molestation. (9) Theft of supplies, equipment or food. (b) An agency contract terminated for cause retains appeal rights in accordance with Section 8402. (c) The State Department of Education shall advise child care and development contractors of the provision of this section within 30 working days of its enactment. 8406.9. (a) An agency that places a person in a position of fiscal responsibility or control who has been convicted of any crime specified in Chapter 2 (commencing with Section 458) of, Chapter 4 (commencing with Section 470) of, Chapter 5 (commencing with Section 484) of, Chapter 6 (commencing with Section 503) of, or Chapter 7 (commencing with Section 518) of, Title 13 of Part 1 of the Penal Code may have its contract suspended or terminated immediately if there is documented evidence of the conviction, and upon review and recommendation of the general counsel of the State Department of Education. (b) For purposes of this section, "position of fiscal responsibility or control" includes any authority to direct or control expenditure of, or any access to, state or federal child care and development funds received pursuant to this chapter whether that authority or access is conferred based on the person's status as an employee, director, manager, board member, or volunteer, or based on any other status. (c) An agency whose contract is terminated pursuant to this section may appeal that action in accordance with Section 8402. (d) Termination pursuant to this section shall not occur without notice as described in Section 8406 at least 90 days prior to termination. (e) If the agency provides evidence to the State Department of Education that the convicted person has been removed from the position of fiscal responsibility or control and provides assurance that the person will not be returned to a position of fiscal responsibility or control, the State Department of Education shall withdraw the termination action. 8407. Except for causes listed in Section 8406.7, termination of existing funding shall not occur without good cause and without notice as described in Section 8406 at least 90 days prior to termination. 8408. Actions as defined in subdivisions (a) to (c), inclusive, of Section 8402 shall remain in effect during the appeal process. However, local contracting agencies may continue to operate under the contract during an appeal of termination, unless the action is based on imminent danger to the health or welfare of children. If the local agency contract is being terminated for this reason, the reason shall be specified by the department in its notice of termination. 8409. All contracts entered into by the State Department of Education pursuant to Section 8262 shall contain a complete description of the appeal procedures provided in this article.