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CC Resolution 8462 (Latchkey)
RESOLUTION NO. 8462 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SAN RAFAEL APPROVING THE 1991/92 "LATCHKEY" FUNDS CONTRACT WITH THE STATE DEPARTMENT OF EDUCATION WHEREAS, the Legislature of the State of California has enacted the Roberti (SB 303) Extended Day Care Services Bill, which provides funding for child care programs; and WHEREAS, the State Department of Education has been delegated the responsibility for the administration of the program and distribution of program funds; and WHEREAS, the City of San Rafael Child Care Program has been awarded a Child Care services contract of $71,874.00 for 1991/92, a copy of which is attached and made a part thereof. NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of San Rafael authorizes the City Manager to execute local agreement number CD 9154 in the amount of $71,874.00 of funds for the purpose of providing child care and development services in fiscal year 1991-92 and authorizes the Child Care Manager to sign the Attendance and Fiscal Reports required to be submitted monthly to the State Department of Education. I, JEANNE M. LEONCINI. Clerk of the City of San Rafael, hereby certify that the foregoing resolution was duly and regularly introduced and adopted at a regular meeting of the City Council of said City held on the 1st day of J u 1 v , 1991, by the following vote, to wit: AYES: COUNCILMEMBERS: Boro, Breiner, Shippey, Thayer & Mayor Mulryan NOES: COUNCILMEMBEERS: None ABSENT: COUNCILMEMBERS: None eor.cini,` City Clerk ff P PN 0 CALIFORNIA STAT 'IEPARTMENT OF EDUCATION 721 Capitol Mall; P.O. Box 944272 Sacramento, CA 94244-2720 LOCAL AGREEMENT FOR CHILD DEVELOPMENT SERVICES CONTRACTOR'S NAME: City of San Rafael Bill Honig Wo fa�� Superintendent of Public Instruction DATE: July 1, 1991 CONTRACT NUMBER CD -M54 PROGRAM TYPE: School Age Communitv Child Care Services PROJECT NUMBER: .}_�-N916-00-M90-1 � / By signing this contract and returning it to the State, you are agreeing to provide services in accordance with the Funding Terms and Conditions (FT&C), Due Process Requirements, School Age Community Child Care Program Requirements and Program Quality Requirements Which are attached and by this reference incorporated into this contract and the 1988-89 Application which by this reference is incorporated into this contract. The FT&C and Requirements specify the contractual responsibilities of the State and the contractor. Funding of this contract is contingent upon appropriation and availability of funds. This contract is effective from Julv 1. 1991 through June 30. 1992. For satisfactory performance of the required services, the contractor shall be reimbursed in accordance with page 16 of the FT&C, at a rate not to exceed $ 18.3021 per child per day of full-time enrollment and a Maximum Reimbursable Amount (MRA) of $ 71,874 Any provision of this contract found to be in violation of Federal or State statute or regulation shall be invalid but such a finding shall not affect the remaining provisions of this contract. SERVICE REOUIREMENTS Minimum Child Days of Enrollment (CDE) Requirement 3,927.1 Minimum Days of Operation (MDO) Requirement 249 STATE OF CALIFORNIA CONTRACTOR ByIA'J 12FD SIGNATURE) `/�7 OiRz:�A� PR".TED NAME OF PERSON SIGNING 0 ATTEST . .er Donna Salai, Manager PAMELA J. NICOLAI, City Manaqer i,Cler TT.E ADDRESS 1400 Fi fth Ave. , P. 0. Box 151560 Contracts Office San Rafael, CA 94915-1560 AVCJ': i ENCUMBERED BY THISI PROGRAMICATEGORY (CODE AND TITLE) FUND TITLE 'pepertment of General Services DOCJMENT Child Development Programs General use only Q `✓ See above (OPTIONAL USE) - PRIOR AMOUNT ENCUMBERED FOR IN916 THIS CONTRACT M--_3'CHAPTER STATUTE FISCAL YEAR 6100-196-001 (b) B/A 1991 1991/92 TOTAL AMOUNT ENCUMBERED TO I 1 DA'E OBJECT OF EXPENDITURE (CODE AND TITLE) 70102 I hereby certify upon my own personal knowledge that budgeted funds T.B A NO I B.R NO are available for the penod and purpose of the expenditure stated above. SIGNATURE OF ACCOUNTING OFFICER I DATE STANDARD PROVISIONS Standard Provisions for State Contracts A. The Contractor agrees to indemnify, defend and save harmless the State, its officers, agents and employees from any and all claims and losses accruing or resulting to any and all contractors, subcontractors, materialmen, laborers and any other person, firm or corporation furnishing or supplying work, services, materials or supplies in connection with the performance of this contract, and from any and ull claims and losses accruing or resulting to any person, firm or -corporation who may be injured or damaged by the Contractor in the performance of this contract. B. The Contractor, and the agents and employees of the Contractor, in the performance of this contract, shall act in an independent capacity and not as officers or employees or agents of the State of California. C. The State may terminate this contract an°d be relieved of the payment of any consideration to Contractor should Contractor fail to perform the covenants herein contained at the time and in the manner herein provl.ded. In the .:,:int of such termination, the State may proceed, wit ane , --irk i:,. any manner deemed proper by the State. The most to tC"ie State shall be dedii -ted from any sum due the Contractor under this contract, and the balance, if any shall be paid the Contractor upon demand. D. Without the written consent of the State, this contract is not assignable by Contractor either in whole or in part. E. Time is the essence of this contract. F. No alteration or variation of the terms of this contract shall be 'valid unless made in writing and signed by the parties hereto, and no oral understanding or agreement not incorporated herein, shall. be 13inding on any of the parties hereto. G. The consideration to be paid Contractor, as provided herein, shall by in compensation for 311 of Contractor's expenses incurred in the performance hereof, including travel and per diem, unless otherwise expressly so provided. H. Contractors entering into a contract funded wholly or in part with funds from the United States Government agree to amendments in funding to reflect any reduction in funds if the Congress does not appropriate sufficient funds. In addition, the contract is subject to any restrictions, limitations or enactments of Congress which affect the provisions,terms or funding of this contract in any manner. The State shall have the option to terminate the contract without cost to the State in the event the Congress does not appropriate funds or a United States agency withholds or fails to allocate funds. NONDISCRIMINATION CLAUSE 1. During the performance of this contract, the recipient, contractor and its subcontractors shall not deny the contract's benefits to any person on the basis of religion, color, ethnic group identification, sex, age, pliysical or mental disability, nor shall they discriminate unlawfully against any employee or applicant for employment because of race, religion, color, national origin, ancestry, physical handicap, mental disability, medical condition, marital status, age (over 40) or sex. Contractor shall insure that the evaluation and treatment of employees and applicants for employment are free of such discrimination. 2. Contractor shall comply with the provisions of the Fair Employment and Housing Act (Government Code, Section 12900 et seq.), the regulations promulgated thereunder (California administrative Code, Title 2, Section 7285.0 et seq.), the provisions of Article 9.5, Chapter ?, Part 1, Division 3, Title 2 of the Government Code (Government Code, Sections 11135-11139.5) and the regulations of standards adopted by the awarding State agency to implement such article. 3. Contractor or recipient shall permit access by representatives of the Department or Fair employment and Housing and the awarding state agency upon reasonable notice at any time during the normal business hours, but in no -case less than 24 hours notice, to such of its books, records, accounts, other sources of information and i-ts facilities as said Department or Agency shall require to ascertain compliance with this clause. 4. Recipient, contra -c -tor and its subcontractors shall give written notice c` -their obligations under this clause to labor organ, zat ions ,cls i ch they have a collective bargaining or tither ac;reement. 5 _ -he Cont_ __cto. shall J.nclude the nondiscrimination and compliance orovis .n of in all subcontracts to perform work under -_, h a contract. . CALIFORNIA ST. EDEPARTMENT OF EDUCATION' Bill Honig 721 Capitol Mall; P.O. Box 944272 Superintendent ' J Sacramento, CA 94244-2720 of Public Instruction Attention: EXECUTIVE DIRECTORS, 1991/92 CHILD DEVELOPMENT CHILD DEVELOPMENT PROGRAMS CONTRACT RE: Agreement No. CD- / / �y DO NOT R EMO VE ANY PAGES STAPLED TO THE C O N T nACT PAC E S H E ET 1. X Submitted for your approval are TWO (2) copies of the 1991/92 contract. Please SIGN both copies and insert the current MAILING ADDRESS in the Contractor's signature box, and RETURN BOTH COPIES of the contract to the Contracts Office. When final approval is obtained, an approved copy will be mailed to you. ENCLOSED FOR YOUR RETENTION is a package including the Funding Terms & Conditions and applicable Program Requirements. If you need additional copies, please contact Sandy Shongood or Donna Salaj in the Contracts Office. 2. 4 Please attach TWO (2) copies (with at least one set of original signatures) of a resolution by the local governing body which approves the contract and names the official who is authorized to sign it on their behalf. (A sample for your use is attached). County Superintendents of Schools who find exception with the resolution requirement should contact Donna Salaj (916-322-3050). 3. Enclosed is one fully executed copy of the contract. 4. Other: Sincerely, Donna Salaj, Manager Contracts Office (916-322-3050) Enclosures RESOLUTION This resolution must be adopted in order to certify the approval of the Governing Board to enter into this transaction with the California State Department of Education for the purpose of providing child care and development services in Fiscal Year 1991/92. RESOLUTION BE IT RESOLVED that the Governing Board of authorizes entering into local agreement number CD- and that the person/s who is/are listed below, is/are authorized to sign the transaction for the Governing Board. NAME PASSED AND ADOPTED THIS Governing Board of of I, TITLE day of County, California. SIGNATURE 1991, by the , Clerk of the Governing Board of , of , County, California, certify that the foregoing is a full, true and correct copy of a resolution adopted by the said Board at a meeting thereof held at a regular public place of meeting and the resolution is on file in the office of said Board. (Clerk's signature) (Date) �, 4� J:. ,�j... FUNDING TERMS ANP CONDITIONS AND PROGRAM REQUIREMENTS CHILD DEVELOPMENT PKOGRAMS r' �✓ �._./ Section SCHOOL AGE COMMUNITY CHILD CARE TABLE OF CONTENTS Fiscal Year 1991-92 Funding Terms and Conditions Page DEFINITIONS................................................................1 GENERAL PROVISIONS.........................................................3 National Labor Relations Board/Federal Court Order.......................3 Notification of Address Change...........................................3 OpenBoard Meetings......................................................3 Compliance with Title 22 California Code of Regulations..................4 Issuance and Use of Checks...............................................4 Prohibition Against Loans and Advances...................................4 Materials Developed with Contract Funds..................................4 Prohibition Against Religious Instruction or Worship.....................4 Payments to Family Child Care Providers..................................4 Contracts with Multiple Service Areas....................................5 Contractor's Termination for Convenience.................................5 Compliance Review of Contractors.........................................6 Eligibility for Funding..................................................6 Continued Funding........................................................6 Applicability of Corporations Code.......................................6 Conflicts of Interest....................................................7 FACILITIES AND EQUIPMENT...................................................7 Depreciation and Use Allowance...........................................7 CapitalOutlay...........................................................8 Equipment Bidding and Approval Requirements ..............................8 Title, Use, Disposition and Retention of Equipment .......................8 Renovation and Repair....................................................9 SUBCONTRACTS...............................................................9 Subcontracts Excluded from Requirements of this Section..................9 Bidsfor Subcontracts....................................................10 Prior Child Development Division Approval...............................10 Required Subcontract Provisions.........................................11 Recommended Subcontract Provisions......................................12 Audit Requirements for Subcontracts.....................................13 COSTS, EARNINGS AND REIMBURSEMENT.........................................13 Reasonable and Necessary Costs..........................................13 IndirectCosts..........................................................13 Administrative Costs....................................................13 Start -Up Costs for New or Expanded Programs .............................13 Costs for Travel and Per Diem...........................................14 Specific Items of Reimbursable Costs....................................14 Nonreimbursable Costs...................................................15 Charging of Expenditures................................................16 Recoupment of Advanced Contract Funds...................................16 Use of Subsidized Parent Fees...........................................16 Determination of Reimbursable Amount.....................................16 Minimum Days of Operation...............................................17 Reduction, Withholding and Cancelling Apportionments ..................... 17 Order of Expenditure....................................................18 ACCOUNTING AND REPORTING REQUIREMENTS.....................................18 General Provisions......................................................18 Child Development Fund and Interest Bearing Accounts....................18 Enrollment and Attendance Accounting....................................18 Attendance and Excused Absences.........................................19 General Recordkeeping Requirements......................................19 Attendance and Expenditure Reports......................................19 Legislative Report Data.................................................20 Audits and Auditors.....................................................20 Review of Audit by Office of External Audits ............................21 Delinquent Audits and One -Time -Only Extensions ..........................21 Auditor General Audit...................................................21 Budget and Calendar.....................................................22 CONTRACT CLASSIFICATIONS..................................................22 ClearStatus............................................................22 ProvisionalStatus......................................................22 Conditional Status......................................................22 TERMINATION, SUSPENSION AND MAJOR REDUCTIONS IN CONTRACT PAYMENTS ... ....... 22 Independent Appeal Procedures...........................................22 Formal Appeals Procedures .................................. ...........23 Contractor's Responsibility After Notice of Termination.................23 CONTRACT STATUS CHANGE PROCEDURES.........................................24 Administrative Review of Changes in Contract Status.....................24 Conditional Status Imposed During the Contract Period...................25 Conditional Status Addendum.............................................25 Duration of Conditional Contract Status.................................25 RESOLUTION OF CONTRACT ADMINISTRATION DISPUTES ............................26 Program Requirements DEFINITIONS...............................................................27 ELIGIBILITY AND NEED CRITERIA AND DOCUMENTATION ...........................28 General Requirements....................................................28 Eligibility Criteria....................................................29 Need Criteria...........................................................29 Certification of Eligibility............................................30 Contents of Basic Data File.............................................30 Application for Services................................................31 Determination of Family Size............................................31 Documentation of Total Countable Income.................................31 Documentation of Public Assistance.......................................32 Documentation of Employment.............................................32 Documentation of Training...............................................32 Documentation of Parental Incapacity....................................32 Documentation of the Child's Special Needs...............................33 Documentation of Homelessness...........................................33 Documentation of Seeking Permanent Housing..............................33 Documentation of Child Protective Services..............................33 Updating the Application................................................34 Recertification.........................................................34 LIMITED TERM SERVICE LEAVE REQUIREMENTS...................................34 ADMISSION POLICIES AND PROCEDURES.........................................35 General Admission Procedures............................................35 Admission Priorities, Waiting List and Displacement .....................35 FEE SCHEDULE..............................................................36 FeeAssessment..........................................................36 Exclusions from Fee Assessment..........................................36 No Additional Payments or Costs.........................................36 Credit for Fees Paid to Other Service Providers .........................36 Receipt for Payment of Fee..............................................37 Advance Payment of Fees.................................................37 CONFIDENTIALITY OF RECORDS................................................37 STAFFING QUALIFICATIONS...................................................37 ProgramDirector........................................................37 Site Supervisor.........................................................38 Teacher................................................................38 TeacherAide............................................................38 STAFFING RATIOS...........................................................38 DUE PROCESS REQUIREMENTS..................................................39 Notice of Action, Application for Services..............................39 Notice of Action, Recipient of Services.................................39 Approval or Denial of Child Care and Development Services...............39 Changes Affecting Service...............................................39 Clients Request for a Hearing and Procedures ............................40 Appeal Procedure for CDD Review.........................................40 Contractor Compliance with CDD Decision.................................41 Program Quality Requirements PROGRAM PHILOSOPHY, GOALS AND OBJECTIVES..................................42 PROFILE...................................................................42 EDUCATION PROGRAM.........................................................42 STAFF DEVELOPMENT PROGRAM.................................................42 PARENT INVOLVEMENT AND EDUCATION..........................................42 HEALTH AND SOCIAL SERVICES................................................43 COMMUNITY INVOLVEMENT.....................................................43 NUTRITION.................................................................43 PROGRAM EVALUATION PROCESS................................................43 FUNDING TERMS AND CONDITIONS SCHOOL AGE COMNUNITY CHILD CARE SERVICES Fiscal Year 1991-92 These are the Funding Terms and Conditions (FT&C) for fiscal year 1991-92. Each contractor is required, as a condition of its contract with the California Department of Education (CDE), Child Development Division (CDD), to adhere to these FT&C, and any other Requirements incorporated into the contract, in addition to all other applicable laws and regulations. Any variance from this contract, the FT&C, Requirements, laws or regulations could be considered a noncompliance issue and subject the contractor to possible termination of the contract. Any change of these FT&C or Requirements to be binding on the State and the contractor must be in writing, in advance, from the CDE in the form of a formal contract amendment. Any interpretation of the FT&C or Requirements must be in writing from the CDE and signed by the director of the CDD. Contractors may adopt any reasonable policies relating to the program that are not in conflict with law, regulations or the terms of this contract. Those potentially affected shall be duly notified and due process, if applicable, shall be assured. I. DEFINITIONS As used in the FT&C: "Actual and allowable net costs" means the costs which may be reimbursed under a particular child development contract after disallowed costs and restricted income have been subtracted from total expenditures. "Additional funds" means award of new contracts or expanded contracts which increase the contractor's level of administrative responsibility. Cost of living adjustments, rate increases and one -time -only supplemental funds are not considered to be "additional funds." "Adjusted child days/hours of enrollment" means child days or hours of enrollment after special needs adjustment factors specified in Education Code Section 8265.5 have been applied. "Administrative costs" means costs incurred for administrative activities where neither the family, the child nor the service providers for Alternative Payment programs and family childcare homes directly benefit from the activity. "Adult" means a person who is at least eighteen (18) years of age. "Approved indirect cost plan" means that the annual agency audit does not include any management findings regarding the development or the application of the plan. "Authorized representative" means a person who has been delegated the responsibility to sign a child in and out of a child care program in the absence of the parent. "Benefit to the State" means that the activity will improve knowledge or expertise in areas directly related to subsidized child care and development services. 1 "Ceases operation" means the contractor does not provide subsidized services in accordance with the contractor's program operating calendar submitted to and approved by the CDD for the applicable contract period. "Commingled child care services" means the provision of services to both subsidized and nonsubsidized children in the same classroom at the same time. "Contract period" means the time span the contract is in effect as specified in the child development contract. "Depreciation" means a cost in the current fiscal year that is based on acquisition costs, less any estimated residual value, computed on a straight line method (based on the normal, estimated useful life expectancy of the asset). "Disallowed costs" means costs which have been incurred but are not reimbursable because they are not reasonable and/or necessary for the performance of the contract as defined below or are otherwise nonreimbursable as specified in Section V.G below. "Employment agreements" means the formal hiring documents for individuals who will accrue benefits normally afforded to contractor's staff. "Full signature" means the legal signature of the individual (e.g., signature normally used on checks and other documents). If the individual is not literate in written English, the individual may sign with an "X" which must be initialled by the contractor's authorized representative. "Indirect cost allocation plan" means a written justification and rationale for assigning the relative share of indirect costs across more than one program or contract. "Indirect cost" means an expense that cannot be readily assigned to one specific program or one specific line item within a program. "Maximum reimbursable amount" means the total dollar amount of a contract. Reimbursement from the State shall not exceed the maximum reimbursable amount. "Net reimbursable program costs" means the portion of the actual and allowable net costs which are incurred in the provision of child care and development services for subsidized children. "New contract" is a contract award to an existing contractor which is for a program type as specified in Education Code Section 8208(h) that is different than the child development contract(s) currently administered by the applicant. "Private contractor" means an entity other than a public agency which is tax exempt or non - tax exempt and under contract with the CDE for the provision of child care and development services. "Public contractor" means a school district, community college district, county superintendent of schools, campus of the California State University or the University of California system, county, city or other public entity under contract with the CDE for the provision of child care and development services. 2 "Reasonable and necessary costs" means expenditures that, in nature and amount, do not exceed what an ordinarily prudent person would incur in the conduct of a competitive business. "Restricted income" means income which may only be expended for specific limited purposes. "Service delivery area" means the community, geographic area or political subdivision in which the child care and development services are to be provided as specified in the Request for Applications. "Total expenditures" means all costs for the provision of subsidized services under the contract and any nonsubsidized services which are provided in commingled classrooms. "Unnecessarily increase the value" means an improvement of a site beyond what is required to meet Title 22 California Code of Regulations, Community Care Licensing Standards. "Use allowance" means an alternate method for claiming the use of the contractor's assets as a cost when depreciation methods are not used. II. GENERAL PROVISIONS A. National Labor Relations Board/Federal Court Order By signing this contract, the contractor swears under penalty of perjury that no more than one final unappealable finding of contempt of court has been issued by a federal court against the contractor within the last two (2) years because of failure to comply with a federal court order for compliance with an order of the National Labor Relations Board (Public Contract Code Section 10296). This provision does not apply to public entities. B. Notification of Address Change Contractors shall notify the CDD in writing of any change in mailing address for communication regarding the contract within ten (10) calendar days of the address change. Contractors shall notify the CDD in writing of any proposed change in operating facility address(es) at least thirty (30) calendar days in advance of the change unless such change is required by an emergency such as fire, flood or earthquake. C. Open Board Meetings Any private tax exempt or private non -tax exempt agency receiving public funds under these regulations must, to the extent of the publicly funded program, comply with the Ralph M. Brown Open Meetings Act ("Brown Act"), Government Code Sections 54950- 54961. Board meetings shall be open to the public except for meetings with its designated representatives prior to and during consultations and discussions with representatives of employee organizations regarding the salaries, salary schedules or compensation paid in the form of fringe benefits of employees or to consider the appointment, employment, evaluation of performance or dismissal of an employee or to hear complaints or charges brought against an employee unless such employee requests an open meeting. Minutes of these open meetings shall be available to the public. 3 D. Compliance with Title 22 California Code of Regulations Contractors with facilities which are exempt by statute or otherwise exempt from licensure shall comply with health and safety regulations for day care centers and family child care homes as specified in Title 22 California Code of Regulations, Community Care Licensing Standards in order to qualify for child care and development program contract funds. E. Issuance and Use of Checks Except for external payroll services, private contractors shall not use any presigned, pre -authorized, or pre -stamped checks without the prior written approval of the CDD. Private contractors shall require two (2) authorized signatures on all checks unless: (1) the contractor has a policy approved by its governing board requiring dual signatures only on checks above a specified dollar amount and (2) the annual audit verifies that appropriate internal controls are maintained. F. Prohibition Against Loans and Advances Contractors shall not loan contract funds to individuals, corporations, organizations, public agencies or private agencies. Contractors shall not advance unearned salary to employees. Contractors shall not make advance payments to subcontractors and shall compensate subcontractors after services are rendered or goods are received except for (1) subcontractors providing direct child care and development services and (2) subcontractors with subcontracts exempt from the provisions of Section IV below as specified in Section N.A. G. Materials Developed with Contract Funds If the contractor receives income from materials developed with contract funds, the use of the income shall be restricted to the child development program. If the materials were developed in part with contract funds, the income from the sale of the materials that shall be used in the child development program shall be computed in direct proportion to the share of contract funds used in development of the materials. Materials developed with contract funds shall contain an acknowledgement of the use of State funds in the development of materials and a disclaimer that the contents do not necessarily reflect the position or policy of the CDE. H. Prohibition Against Religious Instruction or Worship The contractor shall not provide nor be reimbursed for child care and development services which include religious instruction or worship. I. Payments to Family Child Care Providers Contractors who operate through family child care homes shall pay each non-employee family child care provider the same rate(s) the provider charges nonsubsidized families. M For non-employee family child care providers that do not serve nonsubsidized children, the contractor shall pay a rate that is within 1.5 standard deviations of the mean market rate for family child care homes as established by the most recent survey of the local resource and referral agency. J. Contracts with Multiple Service Areas A contractor with more than one service delivery area as specified in and funded through a single contract shall maintain service at the same level, plus or minus ten percent (10%) of the contracted child hours or child days of enrollment, as applicable, in the individual service area(s) specified in its current contract. The contractor may request approval from the CDD to vary service levels by more than ten percent (10%) if.the contractor can demonstrate that the need for services in the designated area(s) has changed. The CDD shall approve or deny the request within thirty (30) calendar days of receipt of the request. If the request is denied, the contractor may appeal this decision in accordance with Section X below. K. Contractor's Termination for Convenience 1. General Termination for Convenience A contractor may terminate the contract for any reason during the contract term. The contractor shall notify the CDD of its intent to terminate the contract at least ninety (90) calendar days prior to the date the contractor intends to terminate the contract. Within fifteen (15) days from the date the contractor notifies the CDD of its intent to terminate the contract, the contractor shall submit: (1) a current inventory of equipment purchased in whole or in part with contract funds and (2) the names, addresses and telephone numbers of all families served by the contract and all staff members funded by the contract. Upon receipt of a notice of intent to terminate, the CDD will transfer the program to another agency as soon as practicable. The State shall only be obligated to compensate the contractor for net reimbursable program copts in accordance with this contract through the date of ` termination. There shall be no other compensation to the contractor. The State shall offset any monies the contractor owes the State against any monies the State owes under this contract. 2. Changes in Laws or Regulations The CDD shall notify contractors in writing of changes in laws or regulations prior to the effective date or as soon as possible after enactment. If any laws or regulations are changed substantially during the contract period, the contractor shall have the option to discontinue performance and be relieved of all obligations for further performance. 5 The contractor has thirty (30) calendar days from receipt of notification of pending changes to notify the CDD in writing of the contractor's intent to terminate if the required changes are unacceptable to the contractor. The contract shall be deemed terminated sixty (60) calendar days after receipt of the notification of the intent to terminate. L. Compliance Reviews of Contractors At least once every three (3) years and as resources permit, the CDE shall conduct reviews at the contractor's office(s) and operating facility(ies) to determine the contractor's compliance with applicable laws, regulations or contractual provisions. The reviews shall be conducted by consultants, analysts and/or management staff of the CDD, CDE's Office of External Audits and Local Assistance Bureau (LAB) or other State of California representatives. M. Eligibility for Funding A contractor is not eligible for additional funds, as defined in Section I above, if the contractor has received final notification, as specified in Section VIII.A below, that its contract has been terminated. A contractor is not eligible for additional funds if the contractor has demonstrated fiscal and/or programmatic noncompliance and has received final notification, as specified in Section IX.A below, that (1) its contract will be placed on conditional status or (2) it will not be offered continued funding. N. Continued Funding Contractors have no vested right to a subsequent contract. Contractors that are not on conditional contract status but which have evidenced fiscal or programmatic noncompliance with the provisions of this contract, law or regulations shall receive an administrative review in accordance with Section IX.A below to determine whether they will receive an offer for continued funding. Contractors currently on conditional status that do not meet the requirements specified in the Conditional Status Addendum, as specified in Section IX.0 below, may not be offered a subsequent contract and shall be so notified by the CDD at least ninety (90) calendar days prior to the end of the current contract period. Contractors that intend to accept the offer to continue services in the subsequent contract period shall respond to a continued funding application request from the CDD in accordance with the instructions and timelines specified in the request. Failure to respond within the timelines specified in the continued funding application request shall constitute notification to the CDD of the contractor's intent to discontinue services at the end of the current contract period unless the contractor has received a written extension of the original timeline from the CDD. 0. Applicability of Corporations Code Private contractors shall be subject to all applicable sections of the Corporations Code including standards of conduct and management of the organization. 6 P. Conflicts of Interest For any transaction to which the contractor is a party and the other part is: (a) an officer or employee of the contractor or of an organization. having financial interest in the contractor; or (b) a partner or controlling stockholder or an organization having a financial interest in the contractor; or (c) a family member of a person having a financial interest in the contractor, the transaction(s) shall be fair and reasonable and conducted at arm's length. Based on corporate law (Corporations Code sections 310, 5233-5234, 7233 and 9243 as applicable) the general rules that would be followed to ensure that transactions are conducted "at arm's length" include: (1) prior to consummating the transaction, the governing body should authorize or approve the transaction in good faith and the board should require the interested party, or parties, to make full disclosure to the board both in writing and during the board meeting where the transaction is being discussed and (2) all parties having a financial interest in the transaction should refrain from voting on the transaction and it should be so noted in the board minutes. If the transaction involves the renting of property, either land or buildings, owned by affiliated organizations, officers or other key personnel of the contractor or their families, the board of directors shall request the interested party to obtain a "fair market rental estimate" from an independent appraiser. The appraiser shall be a member of the Society of Real Estate Appraisers or the American Institute of Real Estate Appraisal. If the contractor has no board or is a sole proprietor, the requirement for a "fair market rental estimate" shall also apply. The contractor has the burden of supporting the reasonableness of rental costs. If the property is owned by the contractor, rental costs are not reimbursable and costs may be claimed only as depreciation or use allowance. Rental costs for equipment owned by affiliated organizations, officers or other key personnel of the contractor or their families are allowable only as use or depreciation allowance. III.FACILITIES AND EQUIPMENT A. Depreciation and Use Allowance Taxes, insurance and maintenance may be claimed as part of actual and allowable costs for buildings, building improvements related to the child development program and equipment necessary. for the operation of the program. Within the limits specified below, depreciation or use allowance may also be claimed. Depreciation shall not be claimed on land, donated assets or assets purchased with public funds, on any fully depreciated asset or on idle or excess facilities. A use allowance shall not be claimed on land or assets purchased with contract funds or on assets for which depreciation has been claimed. Depreciation is a cost in the current fiscal year based on acquisition costs, less any estimated residual value, computed on a straight line method from the original date of acquisition (based on the normal, estimated useful life expectancy of the asset). When depreciation is applied to assets acquired in prior years, the annual charges shall not exceed the amounts that would have resulted had depreciation been claimed from the date of acquisition. 7 A use allowance is the alternate method for compensation when depreciation costs are not claimed. The use allowance for buildings and improvements is computed at an annual rate not to exceed two percent (2%) of acquisition costs. The use allowance for equipment is computed at an annual rate not to exceed six and two-thirds percent (6-2/3%) of acquisition costs. B. Capital Outlay Capital outlay expenditures are those that result in the acquisition of or additions to capital assets. Capital outlay expenditures are subdivided into two categories: (1) sites and improvement of sites; buildings; improvement of buildings; building fixtures; and services systems; and (2) equipment which includes personal property of a relatively permanent nature and/or of significant value. (See the California School Accounting Manual for categorization of various items.) Capital outlay expenditures for category (1) are only reimbursable as depreciation or use allowance or as provided for under Section III.E, Renovation and Repair. C. Equipment Bidding and Approval Requirements All equipment purchases in excess of five thousand dollars ($5,000) per item (including tax) shall be approved in writing in advance by the CDD. For private agencies, all equipment purchases exceeding five thousand dollars ($5,000) will not be approved unless at least three (3) bids or estimates have been obtained. The contractor shall purchase the goods or services from the lowest responsible bidder. If three (3) bids or estimates cannot be obtained, the contractor shall provide adequate documentation of the reason(s) why three (3) bids or estimates could not be obtained (e.g., emergency situations). Public agencies shall comply with applicable sections of the Public Contract Code. Bids, if applicable shall be attached to the Request for Approval of Capital Outlay Expenditures when submitted to the CDD for approval. One copy of the Request shall be retained by the CDD and one copy returned to the contractor approved or disapproved within thirty (30) calendar days of receipt. If the request for approval of an equipment purchase is disapproved, the contractor may appeal the decision in accordance with instructions specified in Section X below. Equipment replacement and lease -purchase agreements are subject to the above requirements. An inventory of all equipment shall be maintained. D. Title, Use, Disposition and Retention of Equipment 1. Title. When equipment is purchased with State funds, title shall vest in the contractor only for such period of time as the contractor has a contract with the CDE. 2. Retention of Equipment. The CDD may provide written authorization for the contractor to retain the equipment for the contractor's own use if a fair compensation is paid to the State for the State's share of the cost of the equipment. Fair compensation shall be determined by the State using the State's share of original acquisition cost, less depreciation, computed on a straight line method over the estimated useful life expectancy of the equipment. E 3. Use. When equipment is purchased in whole or in part with State funds, the contractor shall use the equipment exclusively in the program(s) from which funds were used to purchase the equipment. If the contractor wishes to share the use of the equipment between/among two (2) or more programs, the cost of such equipment shall be prorated between/among the programs. 4. Disposition. If the contractor no longer has a contract with the CDE, the contractor shall dispose of the equipment in accordance with written directions from the CDD. E. Renovation and Repair Improvement of sites and adjacent grounds to meet or continue to meet Title 22, California Code of Regulations, Community Care Licensing Standards is *reimbursable if the improvements do not unnecessarily increase the value (as defined in Section I above) of a facility and the contractor has obtained prior CDD approval for proposed work for ten thousand dollars ($10,000) or more. For private agencies, such proposed work in excess of five thousand dollars ($5,000), unless performed by contractor's staff, shall have at least three (3) bids or estimates and shall be awarded to the lowest responsible bidder. Bids, if applicable, shall be submitted by the contractor when requesting CDD approval. If three (3) bids or estimates cannot be obtained, the contractor shall maintain adequate documentation of the reason(s) why three (3) bids or estimates could not be obtained as well as the reasonableness of cost in the absence of competition. Public agencies shall comply with applicable sections of the Public Contract Code. Proposed work for ten thousand dollars ($10,000) or more shall be submitted for prior written approval to the CDD. If three (3) bids were not obtained, the contractor shall submit written justification to the CDD at the time approval is requested. The CDD shall approve or disapprove the request within thirty (30) calendar days. If the request is disapproved, the contractor may appeal the decision in accordance with instructions specified in Section R below. If the work is to be performed through a subcontract, the requirements of Sections IV.B through IV.F also apply. When private agencies submit proposed subcontracts for renovation and repair for approval, evidence shall be included that the proposed subcontractor has obtained a payment bond in an amount not less than one-half (1/2) the amount of the proposed subcontract. IV. SUBCONTRACTS A. Subcontracts Excluded from Requirements of this Section The following types of relationships are not subject to the requirements contained in Section IV: (1) employment agreements; (2) facility rental or lease agreements; (3) payment arrangements with family child care homes; (4) medical or dental service agreements; (5) bookkeeping/auditing agreements, except for Section IV.B; (6) food services agreements; (7) janitorial and groundskeeping agreements; (8) a subcontract with a public agency; and (9) subcontracts with an individual for less than ten thousand dollars ($10,000.00), except for Section IV.B. However, no subcontract shall in any way relieve the contractor of any responsibility for performance under this contract. 9 All subcontracts, rental agreements and other contractual arrangements should include a termination for convenience clause permitting termination of such agreements without cost to the contractor. B. Bids for Subcontracts Private contractors shall obtain at least three (3) bids or estimates for subcontracts that exceed five thousand dollars ($5,000). The subcontract shall be awarded to the lowest responsible bidder. If three (3) bids or estimates cannot be obtained, the private contractor shall maintain documents in its records that establish the reasons why three (3) bids or estimates could not be obtained; and (2) the reasonableness of the proposed expenditure without three (3) bids or estimates. Subcontracts subject to the approval of the CDD shall be rebid at least once every three (3) years or more often if specified by the CDD in its annual approval of the subcontract. Public agencies shall award subcontracts in accordance with the Public Contract Code. The contractor shall not split subcontracts to avoid competitive bidding requirements. Subcontracts for direct child development services between a public agency contractor and a private subcontractor are exempt from bidding but not advance approval by the CDD if they are for ten thousand dollars ($10,000) or more. Subcontracts for auditing and/or bookkeeping services shall be rebid and changed every five (5) years unless retention of the same auditor is approved by the CDD. C. Prior Child Development Division Approval Contractors shall obtain prior written approval from the CDD for subcontracts for ten thousand dollars ($10,000) or more that are not excluded from the provisions of this Section by Section IV.A above. Prior to execution of a subcontract and commencement of work, the contractor shall submit two (2) copies of the proposed subcontract to the CDD for approval, including a proposed line -item budget which shows the costs of the services to be performed. The budget for a proposed subcontract for renovation and repair shall show the total cost of labor and the total cost of materials. Bids, if applicable, shall be submitted to the CDD when requesting approval. If three (3) bids were not obtained, the contractor shall provide written justification when the subcontract is submitted to the CDD for prior approval. Contractors shall demonstrate that approval of the subcontract is cost effective to the State. For proposed renovation and repair sub- contracts, private agencies shall include documents showing that the bidder selected by the contractor has obtained a payment bond in an amount not less than one-half (1/2) the amount of the proposed subcontract. Requests for approval of subcontracts for transportation services shall include a Certificate of Insurance for the subcontractor in an amount not less than $1 million per occurrence (or a greater amount if required by the Public Utilities Commission regulations), listing the contractor and the State as additional named insured. One copy of the subcontract will be retained by the CDD and the other copy returned to the contractor approved or disapproved within thirty (30) calendar days of receipt of all required documents. No reimbursement shall be made to the contractor or subcontractor for work performed prior to CDD approval. A disapproved contract will 10 include a statement of the reason(s) for not approving the subcontract. If the request for approval of a subcontract is denied, the contractor may appeal the decision in accordance with instructions specified in Section R below. The State does not assume any responsibility for performance of approved subcontracts nor does the State assume responsibility for any unpaid debt of the contractor resulting from subcontracting liens. Subcontracts which increase the contractor's cost of performance are nonreimbursable. Subcontracts which contain a provision for reimbursement for cost -plus -a -percentage - of -costs are nonreimbursable. D. Required Subcontract Provisions Every subcontract shall specify: 1. The dates within which the subcontractor is to perform the contract. The time for subcontractor performance shall not begin prior to, nor shall the time extend beyond, the time period of the contract between the contractor and the State. 2. The dollar amount of the subcontract or specify an amount not to exceed a maximum dollar amount. 3. The service(s) to be provided under the subcontract. 4. The responsibilities of each party under the subcontract. 5. That the subcontractor, and the agents and employees of the subcontractor, in the performance of the subcontract, are acting in an independent capacity and not as officers or employees or agents of the State of California. 6. That modifications of the subcontract shall be in writing, and that for subcontracts in excess of the amount stated in the annual child development contract, prior written CDD approval is required unless the subcontract is otherwise exempt from prior CDD approval. 7. That the subcontract is the complete and exclusive statement of the mutual understanding of the parties and that the subcontract supersedes and cancels all previous written and oral agreements and communications relating to the subject matter of the subcontract. 8. Remedies, in case of a breach of contract, for subcontracts in excess of ten thousand dollars ($10,000.00). 9. That the State of California retains title to any equipment or supplies purchased with State funds and that the equipment shall be returned to the contractor upon termination of the subcontract. The subcontract shall also specify that the subcontractor shall obtain prior written approval from the contractor and the CDD for any unit of equipment that costs in excess of five thousand dollars ($5,000). 11 10. That the subcontractor shall be reimbursed for travel and per diem expenses only at rates that do not exceed the rates paid to the majority of CDE's represented employees computed in accordance with State Department of Personnel Administration regulations, Title 2 California Code of Regulations, Subchapter 1. 11. That the subcontractor agrees to indemnify and hold harmless the State of California, its officers, agents and employees from any and all claims and losses occurring or resulting to any and all contractors, subcontractors, materialmen, laborers and any other person, firm or corporation furnishing or supplying work, services, materials or supplies in connection with the performance of the subcontract, and from any and all claims and losses occurring or resulting to any person, firm or corporation that may be injured or damaged by the subcontractor in the performance of the subcontract. 12. That for those subcontracts requiring CDD prior approval, the subcontractor shall maintain records for program review, evaluation, audit and/or other purposes and make the records available to agents of the State for a period of five (5) years. 13. The provisions of the "Nondiscrimination Clause" included in the prime contract as specified in Title 2 California Code of Regulations, Chapter 5, Section 8107. E. Recommended Subcontract Provisions The following items are suggested for inclusion in subcontracts to protect the interests of the contractor: 1. Funding of the subcontract should be made subject to the appropriation and availability of funds from the State. 2. All subcontracts should contain a provision that the subcontractor is liable for any audit exception caused by, or as a result of, the subcontractor's lack of performance as required by the subcontract. 3. The subcontract should provide that the subcontractor, its agents and employees, in the performance of the subcontract, are acting in an independent capacity and not as agents or employees of the contractor. 4. Unless exempted from CDD approval above, subcontracts for ten thousand dollars ($10,000) or more cannot become effective and binding on either the prime contractor or the subcontractor until approved in writing by the CDD, and any work performed by the subcontractor prior to the date of such approval shall not be used as a claim against the State. 5. The consideration paid to the subcontractor, as provided in the subcontract, should be stated to be the full compensation for all the subcontractor's expenses incurred in the performance of the subcontract. 12 F. Audit Requirements for Subcontracts Subcontracts requiring CDD approval shall be audited in accordance with CDE Audit Guidelines. The cost of the audit shall be reimbursable and shall be borne by the contractor either directly or as an allowance in the subcontract. The audit of the subcontract shall be submitted to the CDE's Office of External Audits as follows: 1. School districts, county offices of education and community colleges shall submit the audit by November 15, 1991 for subcontracts performed during the 1990-91 contract period. 2. All other contractors shall submit the subcontract audit along with the contractor's audit as specified in Section VI.H below. V. COSTS, EARNINGS AND REIMBURSEMENT A. Reasonable and Necessary Costs Contractors will be reimbursed for actual costs that are reasonable and necessary to the performance of the contract as defined in Section I above. B. Indirect Costs If an indirect cost rate is used, a cost allocation plan must be on file with the contractor and available for review by the CDD and auditors. The maximum indirect cost rate is eight percent (8%). The rate is applied to budget categories 1000- 5000 only in determining the indirect charge to the contract. School districts and county offices of education shall use the CDE approved rate if it is less than eight percent (8%). The indirect cost rate shall not include consideration of any costs otherwise nonreimbursable. If a depreciation or use allowance is included in the indirect cost rate, such allowance shall not be claimed on the asset. C. Administrative Costs Contractors may claim administrative costs as defined in Section I above which are directly related to the provision of child care and development services. Reimbursement of administrative costs shall not exceed fifteen percent (15%) of net reimbursable program costs or actual administrative costs, whichever is less. The fifteen percent (15%) includes any allowance for indirect costs and audits. Contractors shall maintain written documentation of the rationale used in determining direct and administrative costs. D. Start -Up Costs for New or Expanded Programs Allowable start-up costs include employment and orientation of necessary staff; setting up of the program and facility; finalization of rental agreements and necessary deposits; purchase of a reasonable inventory of materials and supplies; and purchase of an initial premium of insurance. 13 Contractors shall maintain an auditable record of start-up costs which shall be included within the audit at the end of the year. Reimbursable start-up costs shall occur prior to attainment of full enrollment. If all or part of the fifteen percent (15%) allowable start-up costs is needed and spent, that portion will not have to be "earned" through provision of services. If, however, the contractor neither needs nor chooses to claim any of the fifteen percent (15%) start-up costs, the full service requirements shall be earned at the contract rate. E. Costs for Travel and Per Diem Contractors and subcontractors shall be reimbursed for travel and per diem expenses at rates not exceeding those amounts paid to the majority of the CDE's represented employees computed in accordance with State Department of Personnel Administration regulations, Title 2 California Code of Regulations, Subchapter 1. Contractors with collective bargaining agreements allowing higher rates of reimbursement shall not pay the difference out of contract funds. The CDD shall notify the contractor of a change in expense rates within thirty (30) calendar days after the CDD has received notification of a change in rates from the State Department of Personnel Administration. Contractors shall be reimbursed for out-of-state travel expenses only with prior written approval from the CDD. The CDD shall not approve out-of-state travel expenses: (1) for more than one employee per contract per year; (2) for contractors with delinquent accounts payable which are delinquent more than ninety (90) calendar days after the date of the original invoice; (3) for contractors on conditional status; (4) when there is no clear benefit to the State; or (5) when the benefit to the State can be obtained within California. The CDD shall approve or deny the request for out-of-state travel within thirty (30) calendar days of the receipt of the request. If the request is denied, the contractor may appeal the decision in accordance with instructions specified in Section R below. F. Specific Items of Reimbursable Costs Reimbursable costs include, but are not limited to, the following: 1. Start-up costs as specified in Section V.D above. 2. Administrative costs as specified in Section V.0 above. 3. Employee compensation, including fringe benefits, and personal service contracts. 4. Equipment and equipment replacement with prior CDD approval if required in Section III.0 above. 5. Improvement of sites and adjacent grounds to meet or continue to meet Title 22 California Code of Regulations, Community Care Licensing Standards in accordance with Section III.E above. 6. Taxes, insurance, and maintenance for buildings and/or equipment. 14 7. Depreciation based on the useful life of an asset in accordance with Section III.A above. S. A use allowance for buildings and improvements in accordance with Section III.A above. 9. Travel and per diem expenses, including approved out-of-state travel, in accordance with Section V.E above. 10. An indirect cost rate based on an approved indirect cost plan, in accordance with Section V.B above. G. Nonreimbursable Costs The following costs shall not be reimbursable under the child development contract: 1. Bad debts, including losses arising from uncollectible accounts and any related legal costs. Uncollected parent fees are not considered to be bad debts if documentation of collection attempts exists. 2. Contributions 3. Costs of amusement or entertainment 4. Costs of fines or penalties 5. Costs of idle facilities unless those costs are related to a partial year program and the costs of the idle facilities have been approved by the CDD 6. Costs incurred after the contract has been terminated 7. Fund raising costs except as specified in Section VII of the Program Quality Requirements S. Consumer interest except: (a) interest on borrowed funds when apportionments are withheld because of a delay or error attributable to the State and the amount of interest claimed is approved by the CDD or (b) when interest is part of a lease purchase agreement. 9. Investment management costs 10. Costs of organization of a nonprofit corporation such as incorporation fees or consultant fees 11. Public relations consultant fees 12. Costs of legal, consulting and accounting services incurred in prosecution of claims against the State ' 13. State and federal income taxes 14. Costs for the acquisition of sites and buildings except through depreciation 15 15. Bonuses unless part of a collective bargaining agreement 16. Compensation to the members of the board of directors encept for: (a) reimbursement for travel and/or per diem, computed in accordance with Saction V.E above, incurred while the members are conducting business for the organization and (b) as provided in the California Corporacion Code Section 5227, et seq. 17. Costs of subcontracts which increase the contractor's cost or subcontracts which contain a provision for reimbursement for cost -plus -a -percentage -of -costs. H. Charging of Expenditures Net reimbursable program costs must be incurred during Ghe contract period. Contractors shall not use current year contract funds to pay prior or future year obligations. However, the cost of the annual independent audit may ba claimed either in the contract period which was the subject of the audit- or during the contract period in which the audit is completed. I. Recoupment of Advanced Contract Funds The CDE shall recoup any payments made for costs which were not reasonable and necessary. The amount that is recouped shall be the excess payment over the reasonable or fair market value, or one hundred percent (100%) of the cost, if the cost was not necessary. The CDE may elect to recover any costs of recoupment, including collection services or attorney fees. J. Use of Subsidized Parent Fees Fees received from subsidized parents are to be expended and earned by tho contractor before contract funds shall be claimed for reimbursement. Such fees shall be expended on reimbursable costs and earned by providing child days/hours of enrollment beyond the minimum required by the contract at a rate equal to the lesser of the d:.-ly/hourly contract rate or the actual cost. K. Determination of Reimbursable Amount Contractors shall be reimbursed for an audited claim that is the 13ast of ti:e following: 1. The maximum reimbursable amount as stated in the annual child develovment contract 2. The net reimbursable program costs 3. The product of the adjusted child days/hours of enrollment for certified children, times the contract rate per child day/hour of enrollment, times the actual percentage of attendance plus five percent (5%), but in no case to 3mceed one hundred percent (100%) of enrollment 16 Unless the 1991 State Budget Act contains language continuing the deferral of the fiscal effect of the state participation limit, determination of the reimbursable amount shall be the least of V.K.1, V.K.2, V.K.3 or: 4. Fifty percent (50%) of actual and allowable net costs for certified and noncertified children (total net program costs) or 5. Fifty percent (50%) of the product of the adjusted child days/hours of enrollment for certified and noncertified children, times the contract rate per child day/hour of enrollment. However, if V.K.4 or V.K.S above is the least amount to be reimbursed, these two limitations may be waived if the least amount is due to a scarcity of families who do not meet the Need and Eligibility requirements and for the Family Fee Schedule (i.e., lack of noncertified families). Approval of a waiver is subject to the following conditions: The contractor shall formally request a waiver The contractor shall certify that a "good faith" effort was made to recruit noncertified families The contractor's cost does not exceed the regional market rate (care costing no more than 1.5 market standard deviations above the mean cost of care for that region L. Minimum Days of Operation If the contractor fails to operate the minimum number of days specified in its contract, the maximum reimbursable amount shall be reduced in proportion to the percentage of the contract minimum days of operation that the contractor was not in operation. M. Reduction, Withholding, and Cancelling Apportionments to Contractors The CDE shall reduce, withhold or cancel any scheduled apportionment when one or more of the following conditions exist: 1. The contractor has not submitted an acceptable audit for any prior year of operation on or before the date due. 2. The contractor has not submitted the reports required by Section VI below on or before the date due. 3. The contractor will not earn the full contract amount based on the current year projected and the prior year actual net reimbursable programs costs as determined by the LAB. 4. A creditor of the contractor has placed a lien on the contractor's scheduled apportionments. 17 5. The contractor has accounts payable which are: (a) more than_ n•innty ((.'0) nays delinquent to the CDE and (b) not under appeal as specif lid in aitt?er: Section VIII.A or Section % below. If any apportionment is to be reduced, withheld or cancelled, taa CDE z --hall provid�a the contractor prior written notice of the intended action. N. Order of Expenditure Expenditure from the Child Development Fund established pursua-Mt to Sect' or. II.3 belots shall occur in the following order: 1. Fees collected from parents of certified children shall be first n ac^ -=H out. 2. State or federal contract funds apportioned by the CDE shall b© second in a-nd second out. 3. Interest received on advanced contract funds shall be lues in and iasc oto,. VI. ACCOUNTING AND REPORTING REQUIREMENTS A. General Provisions Contractors shall follow the accounting procedures specified in the cost rocent edition of the California School Accounting Manual. Coatrsc;:ors Shall z•�no:a:t expenditures on an accrual basis. B. Child Development Fund and Interest Bearing Accounts All contractors shall establish a fund to be known as the "Child Develorment Rina" as specified in Education Code Section 8328, except that private contractors shall establish the fund in a federally insured banking institution located in California. Contractors with multiple fund sources shall establish separate nrogrars cost accounts for each source of funds. If a contractor places advanced contract funds in an interest bearing aaco=t, the interest bearing account shall be a separate account within the Child Deva lopment Fund. Interest earned shall be retained by the contractor if it is expended on reimbursable costs and earned by providing subsidized days/hours of enrollment beyond the minimum required to earn the maximum reimbursable amount at a rate equal to the lesser of the daily/hourly contract rate or the actual program costs. C. Enrollment and Attendance Accounting Contractors shall use daily sign-in/sign-out sheets as a primary sasrce Jocumient fir audit and reimbursement purposes. One of the following persons shall enter the time of arrival and dcpnrtur:: on a lign- in/sign-out sheet and, except as specified below, shall sign thb zl"ee* -asing i ►el full signature: (1) the parent or other adult authorized by the to u'_L^ 18 off/pick up a child or (2) the staff person designated by the contractor as the person responsible for entering the times of arrival and departure if the child is not dropped off/picked up by a parent or other adult authorized by the parent. First and last initials of the contractor's authorized representative along with a notation of the time are required to document when a school-age child departs for and returns from school during the day. D. Attendance and Excused Absences Attendance, for the purposes of reimbursement, includes excused absences because of illness or quarantine of the child, illness or quarantine of their parent, family emergency, court ordered visitations or a reason which is clearly in the best interest of the child. If the absence is claimed by the contractor as an excused absence, the attendance accounting records shall contain verification that includes: (1) the name of the child; (2) the date(s) of absence; (3) the specific reason for the absence; and (4) the signature of the parent or the contractor's authorized representative if verification is made by telephone. If an excused absence is based on time spent with a parent or other relative as required by a court of law, the basic data file shall contain a copy of the Court Order. Contractors shall adopt reasonable policies delineating circumstances that would constitute an excused absence for "family emergency" and "in the best interest of the child." Contractors shall also adopt a policy governing unexcused absences which may include reasonable limitations, if any. Contractors shall inform parents of these policies. Except for children who are recipients of protective services or at risk of abuse or neglect, excused absences "in the best interest of the child" shall be limited to ten (10) days during the contract period. E. General Recordkeeping Requirements All records shall be retained for a minimum period of five (5) years. Claims for reimbursement shall not be paid unless there are documents to support the claims. The contractor has the burden of supporting claims for reimbursement. Authorized representatives of the State shall be allowed access to all program related or fiscal records during normal work hours. F. Attendance and Expenditure Reports Contractors on conditional and provisional status shall report monthly (due to LAB by the 20th of the following month). All other contractors shall submit five (5) cumulative fiscal reports to IAB by the following dates: October 20th, January 20th, 19 March 20th, April 20th and July 20th. Reports not received in LAB by the dates specified shall be deemed delinquent and, in accordance with Section V.M above, apportionment(s) shall be withheld until the required report is received. Contractors shall submit reports containing the following information for each contract to the LAB. 1. Days/hours of enrollment and attendance for all children served in the program in the current reporting period and year to date 2. Total days of operation in the current reporting period and year to date 3. All services, revenues and expenditures for both subsidized and nonsubsidized children if nonsubsidized and subsidized children are commingled as defined in Section I above 4. Amount and sources of all revenues other than advanced contract funds for the current reporting period and the year to date total 5. Total expenditures related to the program operation for the current reporting period and the year to date total The report shall include a certification that the information contained in the report is correct and complete and the original signature of the person authorized by the contractor to certify the report. Contractors have sixty (60) days from the due date for submission of the audit to submit a revised final report. For local educational agencies, the final report shall be the final accounting of any amount payable to or receivable from the contractor pursuant to this contract. G. Legislative Report Data Contractors shall submit statistical, cost and program data as requested by the CDE in order for the CDE to prepare various legislatively mandated reports. By September 30 of each year, the CDD shall issue a notice to all affected contractors of any data collection efforts planned for the current contract period. Contractors shall submit the data to the CDE by the date specified in the CDE's request for this information. Reports not received by the required due date shall be considered delinquent. Penalties for delinquent reporting are specified in Section V.M. above. H. Audits and Auditors Contractors shall submit to the CDE's Office of External Audits an acceptable annual financial and compliance audit. All audits shall be performed by: (1) a Certified Public Accountant who possesses a valid license to practice within the State of California; (2) a Public Accountant licensed on or before December 31, 1970 and currently certified and licensed by the State of California; or (3) a member of the CDE's staff of auditors. Public agencies may have their audits prepared by in-hov.se 20 auditors if the public contractor has internal audit staff that performs auditing functions and meets the tests of independence found in Standards for Audits of Governmental Organization, Programs, Activities, and Functions issued by the Comptroller General of the United States. Non -school district contractors shall submit the audit for 1990-91 contract period by November 15, 1991 or earlier if specified by the CDE. The audits for school districts and county offices of education shall be submitted to the State Controller and the Office of External Audits by December 15, 1991 in accordance with Education Code Section 41020 and extensions shall only be granted in accordance with Education Code Section 41020.2. If, for any reason, the contract is terminated during the contract period, the audit shall cover the period from the beginning of the contract through the date of termination. Subcontracts which are required to have approval from the CDD prior to their execution as specified in Section IV.0 above shall be audited in accordance with the requirements stated in Section IV.F above. I. Review of Audit by the CDE's Office of External Audits The CDE's Office of External Audits shall conduct a review of the audit to determine whether the audit is acceptable and to determine the contractor's net reimbursable program costs. The Office of External Audits' determination of earnings shall be the final accounting of any amount payable to or receivable from the contractor pursuant to the contract. The contractor may appeal the Office of External Audits' findings according to the procedures specified in Section VIII.A below if the amount of the demand for remittance meets or exceeds the threshold specified in Education Code Section 8402(c) . J. Delinquent Audits and One -Time -Only Extensions If an audit is not received on or before the required due date and an extension has not been granted, the audit shall be considered delinquent and all apportionments shall be withheld as specified in Section V.M above. Except for contractors on conditional status, the Office of External Audits may grant a contractor a one -time -only, thirty (30) calendar day extension of the audit due date provided the inability of the contractor to submit the audit by the due date was beyond the fault and control of the contractor. Contractors shall be liable for all CDE costs incurred in obtaining an independent audit if the contractor fails to produce or submit an acceptable audit. K. Auditor General Audit Contractors shall be subject to the examination and audit of the Auditor General for a period of three (3) years after final payment under this contract. 21 L. Budget and Calendar Contractors shall submit a revised calendar to the CDD and the IAB whenever there are changes to the most recent version submitted to the CDE. Contractors shall submit revised budgets to the CDD as requested by the CDD. VII.CONTRACT CIASSIFICATIONS A. Clear Status Contractors that are in full compliance with applicable law, regulations and contract provisions are awarded clear contracts. B. Provisional Status New contractors shall be on "provisional" status (stamped on the facesheet of the contract) for a period of not less than twelve (12) months. Contractors on provisional status shall submit monthly fiscal and attendance reports to the LAB. C. Conditional Status Contractors receiving "conditional" contracts (stamped on the facesheet of the contract) shall be on conditional status until the CDE issues a contract rider formally clearing the contract as specified in Section IR.D below. While on conditional status the contractor shall submit monthly fiscal and attendance reports to the L&B. The first monthly report shall include a current inventory of equipment purchased in whole or in part with contract funds. VIII.TERMINATION, SUSPENSION AND MAJOR REDUCTIONS IN CONTRACT PAYMENTS A. Independent Appeal Procedures Pursuant to the requirements of Education Code Sections 8400 through 8409, an independent appeal procedure shall be available to any contractor whose contract is terminated or suspended, or whose total reimbursable contract amount is reduced by four percent (4$) or $25,000, whichever is less. Such appeals shall be heard by independent hearing officers in accordance with procedures established by the Office of Administrative Hearings (OAH) as specified in Title 1 California Code of Regulations, Sections 201 through 207, described below in Section VIII.B. Termination or suspension of a contract during the contract period may occur when: (1) a contractor fails to correct items of fiscal or programmatic noncompliance within six (6) months of receiving a conditional contract which includes an addendum stating the specific items of noncompliance and the corrective actions necessary to come into compliance or (2) a contractor engages in serious misconduct posing an immediate threat to health and safety or to State funds for any of the reasons listed in Education Code Section 8406.7. 22 Any action by the CDD to terminate or suspend a contract or to reduce the total reimbursable contract amount, as stated in Education Code Section 8402(a) through (c), shall be preceded by a notice stating the specific reasons for the action and describing the contractor's appeal rights. If the action is appealed, a copy of this information shall also be submitted to the OAH. To assure that there is no interruption in services to children, the CDD will initiate a competitive application process for the appellant's contract during the appeal process. Unless the termination or suspension is for reason(s) specified in Education Code Section 8406.7 or imminent danger to the health and welfare of children, the contractor may continue to operate during the appeal process. B. Formal Appeals Procedures 1. Appeal Petition The contractor may contest the noticed action by filing an appeal petition by registered mail with the CDD requesting a hearing before the OAH, not later than fifteen (15) calendar days from the service of the notice of action. The petition shall include (a) a clear, concise statement of the action being appealed; (b) the reasons the action is unwarranted; and (c) any written documentation in support of the appeal. 2. Hearing If the contractor requests a hearing, it will,be held within thirty (30) calendar days of receipt of the petition by the CDD, but at least ten (10) calendar days' written notice will be given of the time and place of the hearing. An OAH hearing officer will hear evidence submitted by the State and the contractor during the hearing. The hearing will be recorded. The hearing officer may continue hearings, if deemed necessary. 3. The Decision The hearing officer shall issue a final decision, in writing, within thirty (30) calendar days after the submission of the case. The decision shall be sent by registered mail or personally served on the representatives of the parties by OAH. The decision shall the final administrative action afforded the contractor. 4. Request for Additional Written Materials on File at CDE Contractors may request, in writing, any public documents on which the CDE intends to rely from the CDE files at a cost of six (6) cents per page, payable in advance. The CDE will mail the material requested not later than ten (10) days from the receipt of the request. C. Contractor's Responsibility After Notice of Termination After receiving notice of the CDD's decision to terminate the contract, the contractor shall submit to the CDD all of the following: (1) a current inventory of equipment purchased in whole or in part with contract funds; (2) the names, addresses and telephone numbers of all families served by the contract, all staff members funded 23 by the contract; and (3) monthly enrollment and attendance reports until the contract is actually terminated. Contractors providing services through family child care homes shall also submit the names, addresses and telephone numbers of al providers of subsidized services under the contract. The State shall only be obligated to compensate the contractor for net reimbursable program costs in accordance with this contract through the date of termination. There shall be no other compensation to the contractor. The State shall offset any monies the contractor owes the State against any monies the State owes under this contract. IX. CONTRACT STATUS CHANGE PROCEDURES A. Administrative Review of Changes in Contract Status Contract performance shall be reviewed at least annually by CDD staff who shall determine by April 1 of each year whether to offer continued funding on a clear contract, continued funding on a conditional basis or to make no offer of continued funding. If the staff recommends conditional status or no offer of continued funding, the contractor shall be notified in writing of the reasons for the proposed change in contract status by April 7. The notice of proposed action shall be sufficiently specific to allow the contractor to respond to the factual basis for the proposed action. If the contractor disagrees with the proposed action the contractor's response shall be received by the CDD within ten (10) calendar days of receipt of the notice of proposed action. The contractor's response shall include any written materials in support of its position and, if the contractor intends to make an oral presentation, the response shall so specify. If the action is being appealed, the staff recommendation and the contractor's response shall be reviewed by an administrative review panel convened by the Director of the CDD within seven (7) calendar days of receipt of the contractor's response. The review panel will consist of representatives of CDD management, the LAB and CDE's Legal Office, Office of External Audits and Contracts Office and a representative of a child care and development service provider familiar with the type(s) of program(s) operated by the contractor. Upon review of the written submissions, the panel will do one of the following: (1) issue a final decision upholding or modifying the proposed change in status if no oral presentation has been requested; (2) schedule a time and place for an oral presentation by the contractor or (3) issue a final decision to not change the contract status. If an oral presentation has been requested, the contractor will be notified by telephone of the time and place of the presentation. The oral presentation will be scheduled no later than fourteen (14) calendar days from receipt of the contractor's response. 24 At the oral presentation, the contractor or the contractor's representative will have an opportunity to explain any material submitted in its response. While the contractor may present any information or arguments that are relevant to the proposed action, the review panel may set reasonable limits on the scope of the presentation. Within seven (7) calendar days after the oral presentation, the review panel shall issue and mail to the contractor a decision upholding, reversing or modifying the proposed change in contract status. The decision of the review panel shall be the final action of the CDE with regard to that contract. B. Conditional Status Imposed During the Contract Period If the contractor demonstrates fiscal or programmatic noncompliance during the contract period, based on such information as an annual audit report, a contract compliance review, a program quality review, or a change in licensing status, the CDD may place the contract on conditional status for the remainder of the contract period. The contractor shall receive notice and may request an administrative review of the proposed action as set forth in Section IX.A above, in the event such a change in contract status is recommended by staff of the CDD. If the contract is placed on conditional status during the last ninety (90) days of the contract period and the contractor is offered continued funding, the contract for the subsequent contract period will also be on conditional status. C. Conditional Status Addendum A conditional status contract shall contain a bill of particulars as specified in Education Code Section 8406.6 called a Conditional Status Addendum explaining the contract conditions. The Addendum shall include the ,following: (1) the specific item(s) of noncompliance which the contractor must correct; (2) the specific corrective action(s) which must be taken; (3) the time period within which the contractor must complete the corrections; and (4) notice that failure to make required corrections will result in termination of the contract or no offer of continued funding. If the contractor is placed on conditional status during the contract period a Conditional Status Addendum will be issued by the CDE and the Conditional Status Addendum shall be considered a part of the annual child development contract and binding on the contractor. D. Duration of Conditional Contract Status A contractor shall remain on conditional contract status until the contractor has corrected deficiencies and/or has met requirements identified in the Conditional Status Addendum. A contractor with a repayment plan shall remain on conditional contract status until full repayment is made. A contractor on conditional contract status that is not on a repayment plan shall remain in that status until: (1) the CDE issues written notice to the contractor that the conditional status has been cleared; (2) the contractor is issued a clear contract; or (3) the contract terminates according to its terms. 25 A contractor may request written verification from the CDD that some of the deficiencies have been corrected even if the contractor will not be removed from conditional contract status. X. RESOLUTION OF CONTRACT ADMINISTRATION DISPUTES The procedure specified in this Section shall be used to resolve disputes between contractors and the CDE that may arise regarding the interpretation and application of any term or condition of a contract, including, but not limited to, requests for waivers, approval of subcontracts or expenditures requiring approval, requests for reimbursement rate adjustments, or reductions in the total amount of contract reimbursement that are not appealable under Section VIII.A above. The contractor shall attempt to resolve contract disputes at the lowest staff level within the CDE. If the dispute is not resolved at the lowest staff level, the contractor may appeal the decision by submitting a written description of the issues and the basis for the dispute to the Regional Administrator of the CDD having jurisdiction over the contractor's service delivery area. The Regional Administrator shall make a determination and shall send a written notification of the decision to the contractor, together with the reasons for the decision, within thirty (30) calendar days of the receipt of the appeal by the Regional Administrator. The contractor may appeal the decision of the Regional Administrator to the Assistant Director of the CDD by submitting a written description of the issues in dispute, and a copy of the Regional Administrator's decision. The Assistant Director of the CDD shall send notification of the decision to the contractor and shall specify the reason(s) for the decision within thirty (30) calendar days of the receipt of the appeal by the Assistant Director. The decision of the Assistant Director of the CDD shall be the final administrative action afforded the contractor. 26 SCHOOL ACE COMMUNITY CHILD CARE PROGRAM REQUIREMENTS Fiscal Year 1991-92 I. DEFINITIONS As used in the Program Requirements: "Adjusted monthly income" means total countable income minus verified child support payments paid by the parent whose child is receiving child development services. Except for child support payments paid by the parent, monthly income shall not be adjusted because of voluntary or involuntary deductions. When income fluctuations occur, the adjusted monthly income shall be computed by averaging the total adjusted income received during the twelve (12) months immediately preceding the month in which the application for services is signed. "Authorized representative" means the person designated by the contractor to certify eligibility for subsidized services. "Certify eligibility" means the formal process the contractor goes through to collect information and documentation to determine that the family and/or child meets the criteria for receipt of subsidized child development services as specified in Sections II.A, II.B and II.0 below. The signature of the contractor's authorized representative on an application for services attests that the criteria have been met. "Child protective services" means children receiving protective services through the local county welfare department as well as children identified by a legal, medical, social service agency or emergency shelter as abused, neglected or exploited or at risk of abuse, neglect or exploitation. "Children with exceptional needs" means children who are mentally retarded, hard of hearing, deaf, speech impaired, visually handicapped, seriously emotionally disturbed, orthopedically impaired, other health impaired, deaf -blind, multihandicapped, severely handicapped or children with a specific learning disability, who require the special attention of adults in a child care setting. "Declaration" means a written statement signed by a parent under penalty of perjury attesting that the contents of the statement are true and correct to the best of his or her knowledge. "Displace families" means to disenroll families in order to reduce service levels due to insufficient funding or inability of a contractor to operate one or more sites because of reasons beyond the control of the contractor, including earthquakes, floods or fire. "Income eligible" means that a family's adjusted monthly income is at or below eighty- four percent (84%) of the state median income, adjusted for family size at the time of initial enrollment, and shall not exceed one hundred percent (100%) of median income, adjusted for family size. "Income fluctuation" means income which varies because of income such as bonuses, commissions, overtime, lottery winnings or migrant agricultural work or other seasonal employment. 27 "Legally qualified professional" means a person licensed under applicable laws and regulations of the State of California to perform legal, medical, health or social services for the general public. "Parent" means any person living with a child who has responsibility for the care and welfare of the child. "Parental incapacity" means that the ability of the child's parent(s) to provide normal care for the child is significantly limited. "Recipients of service" means families and/or children enrolled in a child care and development program subsidized by the CDE. "School age" means children enrolled in kindergarten through 9th grade. A child is considered to be enrolled in kindergarten on June 1 of each year if he or she will be four years nine months of age by September 1 of the same year. "Social service agency" means an agency which, in the course of day to day business, provides personal counseling, personal or group therapy using personnel properly certified or licensed under California law. Examples of such agencies include county welfare departments, county mental health departments, Family Service Association of America and Children's Home Society. "State median income" means the most recent median income for California families as determined by the State Department of Finance. "Total countable income" means income that does not include the following: (1) earnings of a child under age eighteen (18) years; (2) loans, grants, and scholarships obtained under conditions that preclude their use for current living costs; (3) grants or loans to students for educational purposes made or insured by a state or federal agency; (4) allowances received for uniforms or other work required clothing, food and shelter and (5) business expenses for self-employed family members. "Update the application" means the process of revising the application for services between recertifications. The application shall be revised by inserting the latest family information that documents continued need and eligibility. II. ELIGIBILITY AND NEED CRITERIA AND DOCUMENTATION A. General Requirements To receive State subsidized child care and development services, families shall meet eligibility and need criteria as specified in Sections II.B and II.0 below. In addition to meeting eligibility and need requirements, to be eligible for services the child's parent(s) must live and/or work in the State of California. Evidence of a street address, post office address, income verification or declaration to live or work in California satisfies this requirement. The governing board of a school district, community college district, or a county superintendent of schools may accommodate children residing outside the district boundaries in accordance with Education Code Section 8322(a). The determination of eligibility shall be without 28 regard to the immigration status of the child or the child's parent(s) unless the child or the child's parent(s) is under a final order of deportation from the United States Department of Justice. Only school age children are eligible to be enrolled in the School Age Community Child Care program. Children with exceptional needs shall also meet the criteria for that age group specified in Education Code Section 56026 and Title 5 California Code of Regulations, Sections 3030 and 3031. B. Eligibility Criteria Eligibility shall be established by 1, 2, 3 or 4 below: 1. Family is a public assistance recipient 2. Family is income eligible. When the number of family members and the amount of family income have been determined, eligibility may be established by reference to the family fee schedule. 3. Homeless 4. Child protective services as defined in Section I above C. Need Criteria Need shall be established by 1, 2, 3 or 4 below: 1. Child protective services as defined in Section I above 2. The parent and any other adult counted in the family size are any of the following: a. Employed (including court ordered community service) If the parent (or other adult counted in the family size) works in the home, the nature of the work must preclude the supervision of the family's children. Family child care providers are not eligible for subsidized services because their work does not preclude the supervision of their own children. However, the children of family child care providers may be served in the State Preschool program or if need as specified in this section is based on the child's need. b. Seeking employment. The family's period of eligibility for this purpose is limited to sixty (60) working days during the fiscal year. Service is limited to an average not to exceed five (5) days per week for an average of less than six and one-half (6 1/2) hours per day. Families certified for the Greater Avenues of Independence program (GAIN Certified Families) are not subject to the sixty (60) day limitation. C. Participating in vocational training leading directly to a recognized trade, paraprofession or profession. The vocational training plan shall be reviewed by the contractor at the beginning of each semester or quarter to 29 determine that progress is being made toward the vocational goal specified in the certification and eligibility documents. (See Section II.K below for additional documentation requirements.) d. Homeless and seeking permanent housing for family stability. 3. Incapacity, including a medical or psychiatric special need, to the extent that the parent's ability to provide normal care for the child is significantly limited, verified by a legally qualified professional. 4. The child has a medical or psychiatric special need, including children with exceptional needs as defined in Section I above, which cannot be met without provision of services, verified by a legally qualified professional. D. Certification of Eligibility The contractor shall designate the staff person authorized to certify eligibility and, prior to initial enrollment and at the time of recertification, an authorized representative of the contractor shall certify each family's/child's eligibility for child care and development services after reviewing the completed application and documentation contained in the basic data file. Prior to enrollment the contractor shall certify eligibility by completion of the following forms: 1. Application for child care and development services as described in Section II.F below. 2. Notice of Action, Application for Services as described in Section I%.A below. At the time of certification and recertification, families shall be informed of their responsibility to notify the contractor of any changes in family income, family size, or need for child care and development services. When a child's residence alternates between the homes of separated or divorced parents, eligibility, need and fees should be determined separately for each household in which the child is residing during the time child developement services are needed (i.e., separate certifications and service agreements). For example, a child may be subsidized during part of the week and full cost the rest of the week. E. Contents of Basic Data File Contractors shall establish and maintain a basic data file for each family receiving child care and development services. The basic data file shall contain an application for services, items II.E.1 through II.E.8 as applicable to determine eligibility and need in accordance with Sections II.B and II.0 above and items II.E.9 and II.E.10. 1. Documentation of total countable income 2. Documentation of employment 3. Documentation of training 4. Documentation of parental incapacity 5. Documentation of child's special needs 30 6. Documentation of homelessness 7. Documentation of seeking permanent housing for family stability 8. Written referral from a legal, medical or social services agency or emergency shelter for child protective services 9. Notice of Action, Application for Services and/or Recipient of Services 10. All child health and emergency information required by Title 22 California Code of Regulations, Community Care Licensing Standards F. Application for Services The application for services shall contain the following information: 1. The parent's(sl) full name(s), address(es) and telephone number(s) 2. The names and birth dates of all children under the age of eighteen (18) in the family, whether or not they are served by the program 3. The number of hours of care needed each day for each child; 4. The names of other family members in the household related by blood, marriage or adoption 5. The reason for needing child care and development services as specified in Section II.0 above 6. Employment or training information for parent(s) 'including name and address of employer(s) or training institution(s) and days and hours of employment or training, if applicable 7. Eligibility status as specified in Section II.B above S. Family size and income, if applicable 9. The parent's signature and date of the signature 10. The signature of the contractor's authorized representative certifying the eligibility. G. Determination of Family Size Family size shall be determined by the number of adults and children related by blood, marriage, or adoption who comprise the household in which the child is living. When an adult living in the household is neither the parent of the child nor the spouse of the parent, the adult and the adult's children if any, shall be excluded from the calculation of family size when such exclusion is to the advantage of the family. When a child is living with adult(s) other than a natural or adoptive parent, the child shall be considered a family of one. In these cases, a need criterion as specified in Section II.0 above must be met by the caretaker of the child. H. Documentation of Total Countable Income Unless that basis of need and eligibility as specified in Sections II . B and II.0 above is child protective services, the parent(s) shall provide copies of his or her most recent check stub(s) or the contractor shall record the following information on the application for services when viewing the most recent check stub(s): (1) date of the check(s); (2) amount(s) of the gross pay specified on the check stub and (3) the period(s) covered by the check. Documentation shall be maintained for all income included in total countable income. 31 If the parent is self-employed, he/she may provide other documentation of income such as a letter from the source of the income or copies of tax returns or statements of estimated income for tax purposes. If the parent does not have documentation of his/her income, he/she may make a declaration of the amount of income. I. Documentation of Public Assistance If the basis of eligibility as specified in Section II.B above is public assistance, the contractor shall document that a family is receiving public assistance by recording the family's Medi -Cal number on the application. J. Documentation of Employment If the basis of need as specified in Section II.0 above is employment of the parent(s), the basic data file shall contain documentation of the parent(s) employment. The documentation of employment shall consist of one of the following: 1. Statement of Wages which is attached to the check 2. A written statement from the employer 3. Documented telephone verification between the contractor's staff and the employer. K. Documentation of Training If the basis of need as specified in Section II.0 above is training, the documentation in the basic data file shall include: 1. Name of the school or organization where training is received 2. Dates that current training activities will begin and end 3. A statement of the parent's(sl) vocational goal(s) 4. The anticipated completion date(s) of all required training activities to meet the vocational goal 5. Class schedule which includes: a. The courses that the parent is currently enrolled in; b. Day(s) of the week and time(s) of day of the courses; C. Signature of parent along with the date the application was signed; d. Signature or stamp of the training institution's registrar and 6. Report cards, transcripts or other records to document that the parent is making progress toward the attainment of the vocational goal in accordance with item II.K.3. L. Documentation of Parental Incapacity If the basis of need as specified in Section II.0 above is parental incapacity, the basic data file shall contain documentation of the parent's(sl) incapacitation provided by a legally qualified professional. The documentation of incapacitation shall include: 1. A description of the nature of the incapacitation 2. The probable duration of the incapacitation 3. A statement that the parent's(sl) incapacitation prevents the parent(s) from caring for the child for some part of the day 32 4. The number of hours that child care is needed each day because of the incapacitation and 5. The name, address, telephone number and signature of the legally qualified professional who is rendering the opinion of incapacitation. M. Documentation of the Child's Special Needs If the basis of need as specified in Section II.0 above is the child's special need, the basic data file shall contain documentation of that special need from a legally qualified professional. The documentation of special need shall include: 1. A description of the nature of the child's special need and the special services required to meet the child's special need 2. The probable duration of the child's special need 3. A statement that the child's special need cannot be met without the provision of child care and development services 4. The number of hours that the child care is needed each day 5. The name, address, telephone number and signature of the legally qualified professional who is rendering the opinion of the special need and 6. For exceptional needs children, the basic data file shall also include information as specified in Education Code Section 56026 and Title 5 California Code of Regulations, Sections 3030 and 3031. N. Documentation of Homelessness If the basis of eligibility as specified in Section II.B above is homelessness, the basic data file shall include a written referral from an emergency shelter or other legal, medical or social service agency; or a written parental declaration that the family is homeless. 0. Documentation of Seeking Permanent Housing If the basis of need as specified in Section II.0 above is seeking permanent housing for family stability, the basic data file shall include documentation of homelessness as specified in Section II.N and a written parental declaration that the family is seeking permanent housing and needs child care and development services while seeking permanent housing. P. Documentation of Child Protective Services If eligibility and need as specified in Section II. B and II.0 above are based on child protective services, the basic data file shall contain a written referral, dated within the six (6) months immediately preceding the date of application for services, from a legal, medical, social service agency or emergency shelter. The written referral shall include either: 1. A statement from the local county welfare department, child protective services unit certifying that the child is receiving child protective services and that child care and development services are a necessary component of the child protective services plan or 33 2. A statement by a legally qualified professional that the child is at risk of abuse or neglect and the child care and development services are needed to reduce or eliminate that risk and 3. The probable duration of the child protective service plan or the at -risk situation and 4. The name, address, telephone number and signature of the legally qualified professional who is making the referral. Q. Updating the Application Contractors shall update the family's application to document continued need and eligibility and determine any change to fee assessment, if applicable, as follows: 1. For migrant and other seasonally employed families, the application shall be updated within thirty (30) days whenever there is a change in family size or need if need is based on training or incapacity of the parent 2. For all other families, the application shall be updated within thirty (30) days whenever there is a change in family size, income, public assistance status or need. The requirement for updating the files does not apply to families receiving services because the child is abused, neglected or exploited or at risk of abuse, neglect or exploitation. R. Recertification After initial certification and enrollment, the contractor shall verify need and eligibility and recertify each family/child as follows: 1. Families receiving services because the child is at risk of abuse, neglect or exploitation shall be recertified at least once every six (6) months; 2. Families receiving services because of actual abuse, neglect or exploitation shall be recertified at least every six (6) months and, at the time of recertification, the contractor shall document that the family is participating in a protective services plan in accordance with the requirements of their local county welfare department, child protective services unit to alleviate the circumstances causing the abuse, neglect or exploitation; 3. All other families shall be recertified at least once each contract period and at intervals not to exceed twelve (12) months. III.LIMITED TERM SERVICE LEAVE REQUIREMENTS If the family will temporarily not have a need for subsidized child care and development services as specified in Section II.0 above, the contractor may grant the family a limited term service leave. If the contractor grants a limited term service leave: (1) the family shall not be disenrolled from the program; (2) the service agreement with the parent shall indicate that no services will be provided during the limited term service leave; and (3) the contractor shall not report the child as enrolled nor claim reimbursement from the CDE while the child is on a limited term service leave. 34 A limited term service leave shall not exceed twelve (12) consecutive weeks in duration except when the parent is on a maternity or a medically related leave absence from their employment or training. Maternity or medical limited term service leaves shall not exceed sixteen (16) consecutive weeks in duration. If the contractor grants limited term service leaves, the contractor shall establish and implement a policy regarding the criteria for approval of requests for limited term service leaves. IV. ADMISSION POLICIES AND PROCEDURES A. General Admission Procedures Contractors shall develop written admission policies and procedures which shall be made available to the public. The admission procedures established shall conform to requirements in Title 22 California Code of Regulations, Section 101319. B. Admission Priorities, Waiting List and Displacement First Prioritv: Child protective services families as defined in Section I above shall be admitted first. Within this priority, children receiving protective services through local county welfare departments shall be served first. Second Prioritv: Children in kindergarten and grades 1 through 3, and their school age siblings under the age of thirteen (13). Within this priority, families with the lowest per capita income shall be admitted first. For purposes of determining the order of admission, public assistance grants are counted as income. Third Prioritv: Children in grades 4 through 9, and their school age siblings under the age of thirteen (13). Within this priority, families with the lowest per capita income shall be admitted first. For purposes of determining the order of admission, public assistance grants are counted as income. For the second and third priorities, each program shall serve individuals with exceptional needs. The percentage of children served with exceptional needs shall at least equal the percentage of children in kindergarten and grades 1 to 8 inclusive, residing in the school district and receiving special education services, unless the demand for this level of service does not exist. Where compelling need is demonstrated for services exclusively to either kindergarten and grades 1 through 3 inclusive or grades 4 through 9 inclusive, these programs may be offered subject to approval by the CDD in light of needs assessment, community concurrence, cost effectiveness and good faith effort to meet the needs of siblings. The contractor shall maintain a waiting list of families seeking entry into the program in accordance with the enrollment priorities. As vacancies occur in the program, families shall be enrolled in the order of priority established on the waiting list. If it is necessary to displace families, families shall be displaced in the reverse order of the above priorities. 35 V. FEE SCHEDULE A. Fee Assessment Contractors shall use a fee schedule prepared and issued by the CDD. The contractor shall utilize the following factors in determining the fee to be assessed for each family: (1) the adjusted monthly family income and (2) family size. Families having fewer than three (3) members shall be regarded as a family of three (3). The fee shall be assessed and collected based on the family's child who is enrolled for the longest period. The fee assessed and collected shall be either the fee indicated on the fee schedule, the actual costs of services or the contract maximum daily/hourly rate, whichever is least. No adjustment shall be made for excused or unexcused absences. The fee shall be the full portion of the family's cost for services. The contractor shall maintain a record of each family's fee assessment, the effective date(s) of each fee increase or decrease, the dates and amounts of fees collected and any amounts which are delinquent. The contractor shall explain to the parent(s) the contractor's policies regarding fee assessment and collection and the possible consequences for delinquent payment of fees. B. Exclusions from Fee Assessment No fees shall be collected from families whose children are enrolled because of a need for child protective services or with an income level that, in relation to family size, is less than the first entry in the fee schedule. C. No Additional Payments or Costs Neither a contractor nor a provider of services shall require or solicit, in cash or in kind, additional payments from the recipients of service. The prohibition includes activities or services that would increase the family's cost of participation including meals, recreation and field trips. If additional payments are made or additional costs are incurred by the family, the contractor shall refund to the parent(s) the amount of payments made or costs incurred. However, the contractor may require all parents to provide a sack lunch. The contractor shall provide a meal if the parent does not provide a sack lunch. A contractor that requires parents to provide sack lunches may develop a policy which includes reasonable penalties for parents who fail to provide a sack lunch. D. Credit for Fees Paid to Other Service Providers This section shall apply to child care and development services provided by someone other than the contractor. When a contractor cannot meet all of a family's needs for child care for which eligibility and need as specified in Sections II. B and II. C above have been established, the contractor shall grant a fee credit equal to the amount paid to the other provider(s) of these child care and development services. The contractor shall apply the fee credit to the family's subsequent fee billing period. The family shall not be allowed to carry over the fee credit beyond the family's subsequent fee billing period. 36 The contractor shall obtain copies of receipts or cancelled checks for the other child care and development services from the parent. The copies of the receipts or cancelled checks shall be maintained in the contractor's fee assessment records. E. Receipt for Payment of Fee The contractor or service provider shall provide an original copy of a pre -numbered receipt to each person who pays a fee. The receipt shall show the amount paid, the date of payment, the rate of payment and the period of service purchased. The contractor shall retain a copy of the receipt in its fee assessment records. F. Advance Payment of Fees Contractors shall adopt a policy for the collection of fees in advance of providing services. The written policy shall be provided to families at the time of initial enrollment into the program. For contractors providing direct services to children, fees shall be considered delinquent after seven (7) calendar days from the date the fees were due. For contractors providing services through Alternative Payment programs, fees shall be considered delinquent on the date they are notified by the provider that fees have not been paid. A Notice of Action, Recipient of Services shall be used to inform the family of the following: (1) the total amount of unpaid fees; (2) the fee rate; (3) the period of delinquency; and (4) that services shall be terminated two (2) weeks from the date of the Notice unless all delinquent fees are paid before the end of the two-week period. The contractor shall accept a reasonable plan from the parent(s) for payment of delinquent fees. The contractor shall continue to provide services to the child, provided the parent(s) pays current fees when due and complies with the provisions of the repayment plan. Upon termination of services for nonpayment of delinquent fees, the family shall be ineligible for child care and development services until all delinquent fees are paid. VI. CONFIDENTIALITY OF RECORDS The use or disclosure of all information pertaining to the child and his/her family shall be restricted to purposes directly connected with the administration of the program. The contractor shall permit the review of the basic data file by the child's parent(s) or parent's authorized representative, upon request and at reasonable times and places. VII.STAFFING QUALIFICATIONS A. Program Director The contractor shall employ a program director who has overall administrative responsibility for programs operated at one or more sites. The program director may also serve as a site supervisor at one of the sites if he/she assumes responsibility for the day-to-day operation of the program at that site. 37 The program director shall meet the requirements of either Section VII.A.1 or VII.A.2 below: 1. Has a baccalaureate degree in recreation, recreational therapy, special education or a related field; and a. Three (3) semester units of administration and supervision of recreation, child development or related programs; and b. Two (2) years of teaching or supervisory experience in recreation or related programs 2. Holds one of the following valid permits or credentials issued by the Commission on Teacher Credentialing: a. Children's Center Supervision Permit; b. Life Children's Center Supervision Permit; C. Preliminary Administrative Services Credential; d. Professional Administrative Services Credential; or e. Be deemed to hold a permit pursuant to Education Code Section 8360 and have three (3) semester units of administration and supervision of child development programs. B. Site Supervisor Each site shall have a site supervisor who meets the requirements specified in Title 22 California Code of Regulations, Division 12, Chapters 1 and 2, Sections 101215, 101315 and 101515. C. Teacher Each contractor shall employ sufficient numbers of qualified teachers to meet the requirements specified in Title 22 California Code of Regulations, Chapters 1 and 2, Sections 101216, 101316.2 and 101516.2. D. Teacher Aide Each contractor shall employ sufficient numbers of teacher aides to meet the requirements specified in Title 22 California Code of Regulations, Chapter 1 and 2, Sections 101216 and 101316.3. VIII.STAFFING RATIOS Contractors shall maintain at least the following minimum ratios in all centers: Children enrolled in kindergarten through 14 years old - 1:14 adult -child ratio, 1:28 teacher -child ratio. Compliance with these ratios shall be determined based on actual attendance. 38 IX. DUE PROCESS REQUIREMENTS A. Notice of Action, Application for Services The contractor's decision to approve or deny services shall be communicated to the applicant through a written statement referred to as a Notice of Action, Application for Services, in accordance with Section IX.0 below. The contractor shall maintain copies of the Notice of Action, Application for Services in the basic data file. The Notice of Action, Application for Services shall include: (1) the applicant's name and address; (2) the contractor's name and address; (3) the name and telephone number of the contractor's authorized representative who made the decision; (4) the date of the notice; (5) the method of distribution of the notice. If services are approved, the notice shall also contain: (1) basis of eligibility; (2) daily/hourly fee, if applicable; (3) duration of the eligibility; (4) names of children approved to receive services; and (5) hours of service approved for each day. If the services are denied, the notice shall contain: (1) the basis of denial and (2) instructions for the parent(s) on how to request a hearing if they do not agree with the contractor's decision in accordance with procedures specified below. B. Notice of Action, Recipient of Services If upon recertification or update of the application, the. contractor determines that the need or eligibility requirements are no longer being met, or the fee or amount of service needs to be modified, the contractor shall notify the family through a written Notice of Action, Recipient of Services in accordance with Section IX.D below. The contractor shall maintain copies of all Notices of Action, Recipient of Services in the family's basic data file. The Notice of Action, Recipient of Services shall include: (1) the type of action being taken; (2) the effective date of the action; (3) the name and address of the recipient; (4) the name and address of the contractor; (5) the name and telephone number of the contractor's authorized representative who is taking the action; (6) the date the notice is mailed or given to the recipient; (7) the method of distribution to the recipient; (8) a description of the action; (9) a statement of the reason(s) for the changes; (10) a statement of the reason(s) for termination, if applicable; and (11) instructions for the parent(s) on how to request a hearing if they do not agree with the contractor's decisions in accordance with procedures specified in Section IX.E below. C. Approval or Denial of Child Care and Development Services The contractor shall mail or deliver a completed Notice of Action, Application for Services to the parents within thirty (30) calendar days from the date the application is signed by the parent(s). D. Changes Affecting Service The contractor shall complete a Notice of Action, Recipient of Services when changes are made to the service agreement. Such changes may include, but are not limited to, an increase or decrease in parent fees, an increase or decrease in the amount of services, or termination of service. The contractor shall mail, or deliver the notice of action to the parents at least fourteen (14) calendar days before the effective date of the intended action. 39 E. Clients Request for a Hearing and Procedures If the parent disagrees with an action, the parent(s) may file a request for a hearing with the contractor within fourteen (14) calendar days of the date the Notice of Action was received. Upon the filing of a request for hearing, the intended action shall be suspended until the review process has been completed. The review process is complete when the appeal process has been exhausted or when the parent(s) abandons the appeal process. Within ten (10) calendar days following the receipt of the request for a hearing, the contractor shall notify the parent(s) of the time and place of the hearing. The time and place of the hearing shall, to the extent possible, be convenient for the parent(s). The hearing shall be conducted by an administrative staff person who shall be referred to as "the hearing officer." The hearing officer shall be at a staff level higher in authority than the staff person who made the contested decision. The parents) or parent's authorized representative is required to attend the hearing. If the parent or the parent's authorized representative fails to appear at the hearing, the parent will be deemed to have abandoned his or her appeal. Only persons directly affected by the hearing shall be allowed to attend. The contractor shall arrange for the presence of an interpreter at the hearing, if one is requested by the parent(s). The hearing officer shall explain to the parent(s) the legal, regulatory, or policy basis for the intended action. During the hearing, the parent(s) shall have an opportunity to explain the reason(s) they believe the contractor's decision was incorrect. The contractor's staff shall present any material facts omitted by the parent(s). The hearing officer shall mail or deliver to the parent(s) a written decision within ten (10) calendar days after the hearing. F. Appeal Procedure for CDD Review If the parent disagrees with the written decision from the contractor, the parent has fourteen (14) calendar days in which to appeal to the CDD. If the parent(s) do(es) not submit an appeal request to the CDD within fourteen (14) calendar days, the parents' appeal process shall be deemed abandoned and the contractor may implement the intended action. The parent(s) shall specify in the appeal request the reason(s) why he/she believes the contractor's decision was incorrect. A copy of the contractor's notice of intended action and written decision shall be submitted by the parent(s) with the appeal request. !l] Upon receipt of an appeal request, the CDD may request copies of the basic data file and other relevant materials from the contractor. The CDD may also conduct any investigations, interviews or mediation necessary to resolve the appeal. The decision of the CDD shall be mailed or delivered to the parent(s) and to the contractor within thirty (30) calendar days after receipt of the appeal request. G. Contractor Compliance with CDD Decision The contractor shall comply with the decision of the CDD immediately upon receipt thereof. The contractor shall be reimbursed for child care and development services delivered to the family which is appealing during the appeal process. If a contractor's determination that a family is ineligible is upheld by the CDD, services to the family shall cease upon receipt of the CDD's decision by the contractor. 41 SCHOOL-AGE CHILD CARE PROGBAH QUA= REQUIREMENTS Fiscal Year 1991-92 I. PROGRAM PHILOSOPHY, GOALS AND OBJECTIVES Each contractor shall have a written philosophical statement and goals and objectives which support that philosophy. The governing body of each contractor shall approve the program philosophy, goals and objectives. The goals and objectives shall address the requirements contained in Sections II through I% below and shall reflect the cultural and linguistic characteristics of the families served. II. PROFILE Each contractor shall identify each child's needs, skills and interests upon enrollment and annually thereafter. III.EDUCATION PROGRAM Each contractor shall include in its program an educational program component that is developmentally, culturally and linguistically appropriate for the children served. The educational program component shall provide activities which will facilitate a child's physical, cognitive, social and emotional development. Contractors may restrict their educational program component to recreational activities which shall be developmentally, culturally and linguistically appropriate. IV. STAFF DEVELOPMENT PROGRAM Each contractor shall develop and implement a staff development program which includes the following: A. Identification of training needs of staff or service providers; B. Written job descriptions C. An orientation plan for new employees D. An annual written performance evaluation procedure unless a different frequency of performance evaluations is specified in a contractor's collective bargaining agreement with their employees E. Staff development opportunities which include topics related to the functions specified in each employee's job descriptions and those training needs identified in Section IV.A above F. An internal communication system that provides each staff member with the information necessary to carry out his or her assigned duties. V. PARENT INVOLVEMENT AND EDUCATION Each contractor shall include in its program a parent involvement and education component that includes the following: A. An orientation for parents that includes topics such as program philosophy, program goals and objectives, eligibility criteria and priorities for enrollment, fee requirements, due process procedures and program activities B. At least two (2) individual parent/teacher conferences per year C. Parent meetings with program staff 42 D. An open door policy which encourages parents to participate in the daily activities whenever possible E. A parent Advisory Committee which advises the contractor on issues related to services to families and children VI. HEALTH AND SOCIAL SERVICES Each contractor shall include in its program a health and social service component that: A. Identifies the needs of the child and the family for health or social services B. Refers a child and/or family to appropriate agencies in the community based on the health or social service needs C. Conducts follow-up procedures with the parent to ensure that the needs have been met VII.COMMUNITY INVOLVEMENT Each contractor shall solicit support from the community including the solicitation for donated goods and services. Each contractor shall provide information to the community regarding the services available. Contractors may utilize media or other forms of communication in the community. VIII.NUTRITION Each contractor shall include in its program a nutrition component that ensures that the children have nutritious meals and snacks during the time in which they are in the program. The meals and snacks shall be culturally and developmentally appropriate for the children being served and shall meet the nutritional requirements specified by the federal Child Care Food or the National School Lunch program. (See Section V.0 of the School -Age Community Child Care Program Requirements for more information regarding provision of meals. IX. PROGRAM EVALUATION PROCESS Each contractor shall develop and implement an annual evaluation plan that determines if the program goals and objectives are being met. The evaluation shall include a self- assessment by the contractor in accordance with instructions specified by the CDD. The evaluation plan shall include assessment of the program by parents. The contractor shall submit a summary of the findings of the self-assessment to the CDD by March 1 of each year. The contractor shall modify its goals and objectives to address any areas identified during the evaluation as needing improvement. 43