SECTIONS 8385 - California Statutes

EDUCATION CODE

SECTION 8385

8385. (a) (1) The department, in consultation with the State
Department of Social Services, county fraud investigators, and other
fraud investigation experts, shall perform an error rate study to
estimate the percentage of errors, including, but not limited to,
overpayments and fraud, in determinations of eligibility, the need
for child care pursuant to paragraph (2) of subdivision (a) of
Section 8263, family fees, and reimbursement payments to child care
providers, including, but not limited to, authorized hours of care
and the use of adjustment factors, in programs operated pursuant to
Article 3 (commencing with Section 8220) and Article 15.5 (commencing
with Section 8350). The study shall include, but not be limited to,
an analysis of a statistically valid, random, sample of family files
and reimbursement payments that have been processed over a specified
time. Each payment from the sample shall be audited to determine
whether it was correctly paid or paid in error. Those payments
identified as being paid in error shall be classified based on the
type of the error that occurred, including, but not limited to,
administrative errors, overpayment caused by providers, overpayments
caused by parents, provider fraud, and beneficiary fraud.
(2) In conducting the compliance reviews required by regulations
of the Superintendent pursuant to Section 8261 for programs operated
pursuant to Article 8 (commencing with Section 8240), the department
shall survey a statistically valid sample of files for the program
and identify and report the errors, by category, resulting from that
survey.
(3) The department shall report in writing to the Governor, the
Chair of the Joint Legislative Budget Committee, the chairs of the
fiscal committees for both houses of the Legislature, and the
Department of Finance, information regarding the error rate study by
April 1, 2005. The report shall include, but not be limited to, all
of the following:
(A) The results of the error rate study.
(B) Fraud and overpayment reduction targets that have been
established based on the data from the error rate study.
(C) The timeframe for achieving the targets.
(D) Recommendations developed pursuant to subdivision (b).
(b) The department shall develop recommendations for the
prevention and elimination of child care fraud and programmatic
errors and the identification and collection of child care
overpayments. The recommendations shall include, but not be limited
to:
(1) Precise definitions of what constitutes child care fraud and
overpayments.
(2) A consistent statewide system to identify fraud and
overpayments.
(3) A consistent statewide system of standards for fraud
prevention, intervention, and overpayment collection that is applied
to all child care program provider categories.
(4) Statewide fraud and overpayment measures that will be reported
annually by the department.
(5) Standards for independent financial compliance audits,
including provisions to ensure that small programs are not unduly
burdened.
(6) Consistent statewide mechanisms for due process for parents.
(7) Consistent statewide mechanisms for dispute resolution for
child care programs and providers.
(8) Assessment of the cost-effectiveness of prevention and
intervention activities.
(9) Equitable treatment of all consumers of subsidized child care.
(10) Consideration of the need to minimize new barriers to family
access to child care.
(11) A survey of best practices from both California agencies and
providers and from other states.
(c) In developing its recommendations, the department shall place
priority on prevention of fraud and overpayments, and shall consider
existing best practices for doing so. The department shall make any
identified best practices available on its Web site by March 1, 2005.
(d) The department shall consult with representatives of the State
Department of Social Services, the Legislative Analyst's Office, the
Department of Finance, staff from the appropriate policy and fiscal
committees of each house of the Legislature, and other interested
parties including, but not limited to, child care consumers and
providers, representatives from county welfare departments, district
attorneys, county special investigative units, and legal advocacy
organizations representing consumers in developing these
recommendations.
(e) The department shall report its recommendations directly to
the respective policy and fiscal committees of the Legislature by
April 1, 2005.
(f) On or after July 1, 2005, all child care contracts entered
into by the State Department of Education for means-tested child care
programs, including, but not limited to, the programs described in
Article 3 (commencing with Section 8220), Article 8 (commencing with
Section 8240), and Article 15.5 (commencing with Section 8350), shall
require implementation of best practices identified pursuant to
subdivision (c).