SECTIONS 8400-8409 - California Statutes

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.