Florida Senate - 2024 CS for SB 536 By the Committee on Children, Families, and Elder Affairs; and Senator Garcia 586-02176-24 2024536c1 1 A bill to be entitled 2 An act relating to community-based child welfare 3 agencies; amending s. 409.987, F.S.; revising 4 requirements for contracts the Department of Children 5 and Families has with community-based care lead 6 agencies; revising requirements for an entity to serve 7 as a lead agency; requiring lead agencies to ensure 8 that board members participate in certain annual 9 training; revising the definition of the term 10 conflict of interest; defining the term related 11 party; requiring the lead agencys board of directors 12 to disclose any known, actual, or potential conflicts 13 of interest; prohibiting a lead agency from entering 14 into a contract or being a party to a transaction that 15 creates a conflict of interest; requiring a lead 16 agency to competitively procure certain contracts; 17 imposing civil penalties on lead agencies for 18 undisclosed conflicts of interest; providing 19 applicability; amending s. 409.988, F.S.; revising 20 community-based care lead agency duties; amending s. 21 409.991, F.S.; revising the definition of the term 22 core services funds; deleting definitions; requiring 23 that the allocation of core services funds be based on 24 a three-tiered payment model; providing specifications 25 for the payment model; requiring that reports be 26 submitted annually to the Governor and the Legislature 27 by a specific date; requiring that all funding for 28 core services be based on the statutory methodology; 29 amending s. 409.992, F.S.; revising requirements for 30 lead agency practices in the procurement of 31 commodities and contractual services; requiring the 32 department to impose certain penalties for a lead 33 agencys noncompliance with applicable procurement 34 law; requiring lead agencies to comply with 35 established purchasing practices for the procurement 36 of real property and professional services; requiring 37 the department to retain all rights to and ownership 38 of real property procured upon termination of 39 contracts; requiring that certain funds be returned to 40 the department; providing applicability of certain 41 limitations on the salaries of community-based care 42 lead agency administrative employees; amending s. 43 409.994, F.S.; revising the conditions under which the 44 department may petition a court for the appointment of 45 a receiver for a community-based care lead agency; 46 amending s. 409.996, F.S.; revising requirements for 47 contracts between the department and lead agencies; 48 revising the actions the department may take upon 49 certain circumstances; making a technical change; 50 providing duties to the department; providing an 51 effective date. 52 53 Be It Enacted by the Legislature of the State of Florida: 54 55 Section 1.Subsections (3) and (4) and paragraphs (a) and 56 (b) of subsection (7) of section 409.987, Florida Statutes, are 57 amended to read: 58 409.987Lead agency procurement; boards; conflicts of 59 interest. 60 (3)Notwithstanding s. 287.057, the department shall use 5 61 year contracts with lead agencies. The 5-year contract must be 62 reprocured at the end of each 5-year contract term. The contract 63 may be extended at the discretion of the department for up to 1 64 year, based on department needs. 65 (4)In order to serve as a lead agency, an entity must: 66 (a)Be organized as a Florida corporation or a governmental 67 entity. 68 (b)Be governed by a board of directors or a board 69 committee composed of board members. Board members shall provide 70 oversight and ensure accountability and transparency for the 71 system of care. The board of directors shall provide fiduciary 72 oversight to prevent conflicts of interest, promote 73 accountability and transparency, and protect state and federal 74 funding from misuse. The lead agency shall ensure that board 75 members participate in annual training, as approved by the 76 department, related to their responsibilities. The membership of 77 the board of directors or board committee must be described in 78 the bylaws or articles of incorporation of each lead agency, 79 which must provide that at least 75 percent of the membership of 80 the board of directors or board committee must be composed 81 consist of persons residing in this state, and at least 51 82 percent of the state residents on the board of directors must 83 reside within the service area of the lead agency. However, for 84 procurements of lead agency contracts initiated on or after July 85 1, 2014: 86 1.At least 75 percent of the membership of the board of 87 directors must be composed consist of persons residing in this 88 state, and at least 51 percent of the membership of the board of 89 directors must be composed consist of persons residing within 90 the service area of the lead agency. If a board committee 91 governs the lead agency, 100 percent of its membership must be 92 composed consist of persons residing within the service area of 93 the lead agency. 94 2.The powers of the board of directors or board committee 95 include, but are not limited to, approving the lead agencys 96 budget and setting the lead agencys operational policy and 97 procedures. A board of directors must additionally have the 98 power to hire the lead agencys executive director, unless a 99 board committee governs the lead agency, in which case the board 100 committee must have the power to confirm the selection of the 101 lead agencys executive director. 102 (c)Demonstrate financial responsibility through an 103 organized plan for regular fiscal audits and the posting of a 104 performance bond. 105 (7)(a)As used in this subsection, the term: 106 1.Activity includes, but is not limited to, a contract 107 for goods and services, a contract for the purchase of any real 108 or tangible property, or an agreement to engage with a lead 109 agency for the benefit of a third party in exchange for an 110 interest in real or tangible property, a monetary benefit, or an 111 in-kind contribution. 112 2.Conflict of interest means when a board member, a 113 director, or an officer, or a relative of a board member, a 114 director, or an officer, of a lead agency does any of the 115 following: 116 a.Enters into a contract or other transaction for goods or 117 services with the lead agency. 118 b.Holds a direct or indirect interest in a corporation, 119 limited liability corporation, partnership, limited liability 120 partnership, or other business entity that conducts business 121 with the lead agency or proposes to enter into a contract or 122 other transaction with the lead agency. For purposes of this 123 paragraph, the term indirect interest has the same meaning as 124 in s. 112.312. 125 c.Knowingly obtains a direct or indirect personal, 126 financial, professional, or other benefit as a result of the 127 relationship of such board member, director, or officer, or 128 relative of the board member, director, or officer, with the 129 lead agency. For purposes of this paragraph, the term benefit 130 does not include per diem and travel expenses paid or reimbursed 131 to board members or officers of the lead agency in connection 132 with their service on the board. 133 3.Related party means any entity of which a director or 134 an executive of the entity is also directly or indirectly 135 related to, or has a direct or indirect financial or other 136 material interest in, the lead agency. The term also includes 137 any subsidiary, parent entity, associate firm, or joint venture, 138 or any entity that is controlled, influenced, or managed by 139 another entity or an individual related to such entity, 140 including an individual who is, or was within the immediately 141 preceding 3 years, an executive officer or a board member of the 142 entity. 143 4.3.Relative means a relative within the third degree of 144 consanguinity by blood or marriage. 145 (b)1.For any activity that is presented to the board of a 146 lead agency for its initial consideration and approval after 147 July 1, 2021, or any activity that involves a contract that is 148 being considered for renewal on or after July 1, 2021, but 149 before January 1, 2022, a board member, a director, or an 150 officer of a lead agency shall disclose to the board any 151 activity that may reasonably be construed to be a conflict of 152 interest before such activity is initially considered and 153 approved or a contract is renewed by the board. A rebuttable 154 presumption of a conflict of interest exists if the activity was 155 acted on by the board without prior notice as required under 156 paragraph (c). The board shall disclose any known, actual, or 157 potential conflicts to the department. 158 2.A lead agency may not enter into a contract or be a 159 party to any transaction that creates a conflict of interest, 160 including with related parties for the provision of management 161 or administrative services or oversight. The lead agency shall 162 competitively procure all contracts with related parties in 163 excess of $35,000 For contracts with a lead agency which are in 164 existence on July 1, 2021, and are not subject to renewal before 165 January 1, 2022, a board member or an officer of the lead agency 166 shall disclose to the board any activity that may reasonably be 167 construed to be a conflict of interest under this section by 168 December 31, 2021. 169 (g)1.Civil penalties in the amount of $5,000 per 170 occurrence shall be imposed for each known and potential 171 conflict of interest, as described in paragraph (b), which is 172 not disclosed to the department. 173 2.If a contract is procured for which a conflict of 174 interest was not disclosed to the department before execution of 175 the contract, the following penalties apply: 176 a.A civil penalty in the amount of $50,000 for a first 177 offense. 178 b.A civil penalty in the amount of $100,000 for a second 179 or subsequent offense. 180 3.The civil penalties for failure to disclose a conflict 181 of interest under subparagraphs 1. and 2. apply to any contract 182 entered into, regardless of the method of procurement, 183 including, but not limited to, formal procurement, single-source 184 contracts, and contracts that do not meet the minimum threshold 185 for formal procurement. 186 4.A contract procured for which a conflict of interest was 187 not disclosed to the department before execution of the contract 188 must be reprocured. 189 5.The department may, at its sole discretion, prohibit 190 execution of a contract for which a conflict of interest exists, 191 or will exist after execution. 192 Section 2.Paragraphs (c), (i), (j), (k), and (l) of 193 subsection (1) of section 409.988, Florida Statutes, are amended 194 to read: 195 409.988Community-based care lead agency duties; general 196 provisions. 197 (1)DUTIES.A lead agency: 198 (c)Shall follow the financial guidelines developed by the 199 department and shall comply with regular, independent auditing 200 of its financial activities, including any requests for records 201 associated with such financial audits within the timeframe 202 established by the department or its contracted vendors provide 203 for a regular independent auditing of its financial activities. 204 The results of the financial audit must Such financial 205 information shall be provided to the community alliance 206 established under s. 20.19(5). 207 (i)Shall comply with federal and state statutory 208 requirements and agency rules in the provision of contractual 209 services. Any subcontract in excess of $250,000 must comply with 210 the competitive procurement process. 211 (j)May subcontract for the provision of services, 212 excluding administrative and management functions, required by 213 the contract with the lead agency and the department; however, 214 the subcontracts must specify how the provider will contribute 215 to the lead agency meeting the performance standards established 216 pursuant to the child welfare results-oriented accountability 217 system required by s. 409.997. The lead agency shall directly 218 provide no more than 35 percent of all child welfare services 219 provided unless it can demonstrate a need, within the lead 220 agencys geographic service area where there is a lack of viable 221 providers available to perform the necessary services. The 222 approval period to exceed the threshold must be limited to 2 223 years. The lead agency shall reprocure for these services before 224 the end of the 2-year period, to exceed this threshold. The 225 local community alliance in the geographic service area in which 226 the lead agency is seeking to exceed the threshold shall review 227 the lead agencys justification for need and recommend to the 228 department whether the department should approve or deny the 229 lead agencys request for an exemption from the services 230 threshold. If there is not a community alliance operating in the 231 geographic service area in which the lead agency is seeking to 232 exceed the threshold, such review and approval or denial of the 233 lead agencys request for an exemption from the services 234 threshold must recommendation shall be made by the department. 235 by representatives of local stakeholders, including at least one 236 representative from each of the following: 237 1.The department. 238 2.The county government. 239 3.The school district. 240 4.The county United Way. 241 5.The county sheriffs office. 242 6.The circuit court corresponding to the county. 243 7.The county childrens board, if one exists. 244 (k)Shall publish on its website by the 15th day of each 245 month at a minimum the data specified in subparagraphs 1.-9. 1. 246 5., calculated using a standard methodology determined by the 247 department, for the preceding calendar month regarding its case 248 management services. The following information must shall be 249 reported by each individual subcontracted case management 250 provider, by the lead agency, if the lead agency provides case 251 management services, and in total for all case management 252 services subcontracted or directly provided by the lead agency: 253 1.The average caseload of case managers, including only 254 filled positions; 255 2.The total number and percentage of case managers who 256 have 25 or more cases on their caseloads; 257 3.The turnover rate for case managers and case management 258 supervisors for the previous 12 months; 259 4.The percentage of required home visits completed; and 260 5.Performance on outcome measures required pursuant to s. 261 409.997 for the previous 12 months;. 262 6.The number of unlicensed placements for the previous 263 month; 264 7.The percentage and trends for foster parent and group 265 home recruitment and licensure for the previous month; 266 8.The percentage of families being served through family 267 support, in-home, and out-of-home services for the previous 268 month; and 269 9.The percentage of cases that converted from nonjudicial 270 to judicial for the previous month. 271 Section 3.Section 409.991, Florida Statutes, is amended to 272 read: 273 409.991Allocation of funds for community-based care lead 274 agencies. 275 (1)As used in this section, the term: 276 (a)core services funds means all funds allocated to 277 community-based care lead agencies operating under contract with 278 the department pursuant to s. 409.987. The term does not include 279 any of, with the following exceptions: 280 (a)1.Funds appropriated for independent living services; 281 (b)2.Funds appropriated for maintenance adoption 282 subsidies; 283 (c)3.Funds allocated by the department for child 284 protective investigation service investigations training; 285 (d)4.Nonrecurring funds; 286 (e)5.Designated mental health wrap-around service services 287 funds; 288 (f)6.Funds for special projects for a designated 289 community-based care lead agency; and 290 (g)7.Funds appropriated for the Guardianship Assistance 291 Program under s. 39.6225. 292 (b)Equity allocation model means an allocation model 293 that uses the following factors: 294 1.Proportion of the child population; 295 2.Proportion of child abuse hotline workload; and 296 3.Proportion of children in care. 297 (c)Proportion of child population means the proportion 298 of children up to 18 years of age during the previous calendar 299 year in the geographic area served by the community-based care 300 lead agency. 301 (d)Proportion of child abuse hotline workload means the 302 weighted average of the following subcomponents: 303 1.The average number of initial and additional child abuse 304 reports received during the month for the most recent 12 months 305 based on child protective investigations trend reports as 306 determined by the department. This subcomponent shall be 307 weighted as 20 percent of the factor. 308 2.The average count of children in investigations in the 309 most recent 12 months based on child protective investigations 310 trend reports as determined by the department. This subcomponent 311 shall be weighted as 40 percent of the factor. 312 3.The average count of children in investigations with a 313 most serious finding of verified abuse in the most recent 12 314 months based on child protective investigations trend reports as 315 determined by the department. This subcomponent shall be 316 weighted as 40 percent of the factor. 317 (e)Proportion of children in care means the proportion 318 of the number of children in care receiving in-home services 319 over the most recent 12-month period, the number of children 320 whose families are receiving family support services over the 321 most recent 12-month period, and the number of children who have 322 entered into out-of-home care with a case management overlay 323 during the most recent 24-month period. This subcomponent shall 324 be weighted as follows: 325 1.Fifteen percent shall be based on children whose 326 families are receiving family support services. 327 2.Fifty-five percent shall be based on children in out-of 328 home care. 329 3.Thirty percent shall be based on children in in-home 330 care. 331 (2)Effective July 1, 2025, allocation of core services 332 funds must be based on an actuarially sound, tiered payment 333 model. The tiered models purpose is to achieve the overarching 334 goals of a stable payment model that adjusts to workload and 335 incentivizes prevention, family preservation, and permanency. 336 (a)Tier 1 provides operational base and fixed costs, which 337 do not vary based on the number of children and families served. 338 Tier 1 payments may vary by geographic catchment area and cost 339 of living differences. The department shall establish and 340 annually update Tier 1 payment rates to maintain cost 341 expectations that are aligned with the population served, 342 services provided, and environment. Tier 1 expenses may include: 343 1.Administrative expenditures; 344 2.Lease payments; 345 3.Asset depreciation; 346 4.Utilities; 347 5.Select components of case management, including 348 administrative elements; 349 6.Mandated activities such as training, quality, and 350 contract management; or 351 7.Activities performed for children and families which are 352 nonjudicial and not candidates for Title IV-E funding, including 353 true prevention and community-focused activities. 354 (b)Tier 2 is a per-child, per-month payment designed to 355 provide funding for lead agencies expenses that vary based on 356 the number of children served for a particular month. The 357 payment rate blends out-of-home rates and in-home rates specific 358 to each lead agency to create a rate that provides a financial 359 incentive to lead agencies to provide service in the least 360 restrictive safe placement. The department shall establish and 361 annually update Tier 2 payment rates to maintain cost 362 expectations that are aligned with the population served, 363 services provided, and environment. Tier 2 rates must be set 364 annually. 365 (c)Tier 3 provides financial incentives that the 366 department shall establish to reward lead agencies that achieve 367 performance measures aligned with the departments goals of 368 prevention, family preservation, and permanency. The equity 369 allocation of core services funds shall be calculated based on 370 the following weights: 371 (a)Proportion of the child population shall be weighted as 372 5 percent of the total. 373 (b)Proportion of child abuse hotline workload shall be 374 weighted as 35 percent of the total. 375 (c)Proportion of children in care shall be weighted as 60 376 percent of the total. 377 (3)By December 1 of each year, beginning in 2024, the 378 department shall submit a report to the Governor, the President 379 of the Senate, and the Speaker of the House of Representatives 380 which includes each lead agencys actual performance in 381 attaining the previous fiscal years targets, recommendations 382 for adjustments to lead agency funding, and adjustments to the 383 tiered payment model, if necessary Beginning in the 2015-2016 384 state fiscal year, 100 percent of the recurring core services 385 funding for each community-based care lead agency shall be based 386 on the prior year recurring base of core services funds. 387 (4)Effective July 1, 2025, unless otherwise specified in 388 the General Appropriations Act, the department shall allocate 389 all funding for core services based on the methodology 390 established in this section any new core services funds shall be 391 allocated based on the equity allocation model as follows: 392 (a)Seventy percent of new funding shall be allocated among 393 all community-based care lead agencies. 394 (b)Thirty percent of new funding shall be allocated among 395 community-based care lead agencies that are funded below their 396 equitable share. Funds allocated pursuant to this paragraph 397 shall be weighted based on each community-based care lead 398 agencys relative proportion of the total amount of funding 399 below the equitable share. 400 Section 4.Subsections (1) and (3) of section 409.992, 401 Florida Statutes, are amended to read: 402 409.992Lead agency expenditures. 403 (1)The procurement of commodities or contractual services 404 by lead agencies is shall be governed by the financial 405 guidelines developed by the department and must comply with 406 applicable state and federal law and follow good business 407 practices. Pursuant to s. 11.45, the Auditor General may provide 408 technical advice in the development of the financial guidelines. 409 (a)Lead agencies shall competitively procure all 410 contracts, consistent with the simplified acquisition threshold 411 as specified in 2 C.F.R. part 200. Financial penalties or 412 sanctions, as established by the department and incorporated 413 into the contract, shall be imposed by the department for 414 noncompliance with applicable local, state, or federal law for 415 the procurement of commodities or contractual services. 416 (b)Notwithstanding s. 402.73, for procurement of real 417 property or professional services, lead agencies shall comply 418 with established purchasing practices, including the provisions 419 of s. 287.055, as required, for professional services, including 420 engineering or construction design. Upon termination of the 421 contract, the department shall immediately retain all rights to 422 and ownership of real property procured. Any funds from the 423 sale, transfer, or other dispossession of such property during 424 the contract term shall be returned to the department. 425 (3)Notwithstanding any other provision of law, a 426 community-based care lead agency administrative employee may not 427 receive a salary, whether base pay or base pay combined with any 428 bonus or incentive payments from the lead agency or any related 429 party, in excess of 150 percent of the annual salary paid to the 430 secretary of the Department of Children and Families from state 431 appropriated funds, including state-appropriated federal funds. 432 This limitation applies regardless of the number of contracts a 433 community-based care lead agency may execute with the 434 department. This subsection does not prohibit any party from 435 providing cash that is not from appropriated state funds to a 436 community-based care lead agency administrative employee. 437 Section 5.Paragraphs (c) and (d) of subsection (1) of 438 section 409.994, Florida Statutes, are amended to read: 439 409.994Community-based care lead agencies; receivership. 440 (1)The Department of Children and Families may petition a 441 court of competent jurisdiction for the appointment of a 442 receiver for a community-based care lead agency established 443 pursuant to s. 409.987 if any of the following conditions exist: 444 (c)The department determines that conditions exist in the 445 lead agency which present a an imminent danger to the health, 446 safety, or welfare of the dependent children under that agencys 447 care or supervision. Whenever possible, the department shall 448 make a reasonable effort to facilitate the continued operation 449 of the program. 450 (d)The lead agency cannot meet, or is unlikely to meet, 451 its current financial obligations to its employees, contractors, 452 or foster parents. Issuance of bad checks or the existence of 453 delinquent obligations for payment of salaries, utilities, or 454 invoices for essential services or commodities constitutes shall 455 constitute prima facie evidence that the lead agency lacks the 456 financial ability to meet its financial obligations. 457 Section 6.Paragraph (d) of subsection (1) of section 458 409.996, Florida Statutes, is amended to read: 459 409.996Duties of the Department of Children and Families. 460 The department shall contract for the delivery, administration, 461 or management of care for children in the child protection and 462 child welfare system. In doing so, the department retains 463 responsibility for the quality of contracted services and 464 programs and shall ensure that, at a minimum, services are 465 delivered in accordance with applicable federal and state 466 statutes and regulations and the performance standards and 467 metrics specified in the strategic plan created under s. 468 20.19(1). 469 (1)The department shall enter into contracts with lead 470 agencies for the performance of the duties by the lead agencies 471 established in s. 409.988. At a minimum, the contracts must do 472 all of the following: 473 (d)Provide for contractual actions tiered interventions 474 and graduated penalties for failure to comply with contract 475 terms or in the event of performance deficiencies, as determined 476 appropriate by the department. 477 1.Such contractual actions must interventions and 478 penalties shall include, but are not limited to: 479 1.Enhanced monitoring and reporting. 480 a.2.Corrective action plans. 481 b.3.Requirements to accept technical assistance and 482 consultation from the department under subsection (6). 483 c.4.Financial penalties, which shall require a lead agency 484 to direct reallocate funds from administrative costs to the 485 department. The department shall use the funds collected to 486 support service delivery of quality improvement activities for 487 children in the lead agencys care to direct care for children. 488 These penalties may be imposed for failure to provide timely, 489 sufficient resolution of deficiencies resulting in a corrective 490 action plan or other performance improvement plan issued by the 491 department. Financial penalties may include liquidated damages. 492 d.5.Early termination of contracts, as provided in s. 493 402.7305(3)(f) s. 402.1705(3)(f). 494 2.The department shall include in each lead agency 495 contract executed a provision that requires payment to the 496 department of sanctions or disincentives for failure to comply 497 with contractual obligations. The department shall establish a 498 schedule of daily monetary sanctions or disincentives for lead 499 agencies, which must be incorporated by reference into the 500 contract. The department is solely responsible for determining 501 the monetary value of liquidated damages. 502 Section 7.This act shall take effect July 1, 2024.