Florida Senate - 2024 CS for CS for SB 536 By the Appropriations Committee on Health and Human Services; the Committee on Children, Families, and Elder Affairs; and Senator Garcia 603-03303-24 2024536c2 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; requiring that contracts for which a 20 conflict of interest was not disclosed be reprocured; 21 authorizing the department to prohibit execution of 22 certain contracts; amending s. 409.988, F.S.; revising 23 community-based care lead agencies duties to include 24 compliance with regular, independent auditing; 25 requiring that contracts valued at more than a 26 specified amount comply with the competitive 27 procurement process; prohibiting lead agencies from 28 subcontracting for management and oversight functions 29 required by its contract; limiting the approval period 30 for which the lead agency may provide more than 35 31 percent of child welfare services to 2 years; 32 requiring the lead agency to submit quarterly reports 33 to the department and community alliance showing 34 specified efforts; requiring the lead agency to 35 reprocure such services at the end of a specified 36 period; providing that, in a certain circumstance, 37 review and approval or denial of a lead agencys 38 request for an exemption from the services threshold 39 is within the sole purview of the department; revising 40 the information that lead agencies must publish on 41 their website; amending s. 409.992, F.S.; revising 42 requirements for lead agency practices in the 43 procurement of commodities and contractual services; 44 requiring the department to impose certain penalties 45 for a lead agencys noncompliance with applicable 46 procurement law; requiring lead agencies to comply 47 with established purchasing practices for the 48 procurement of real property and professional 49 services; requiring the department to retain all 50 rights to and ownership of real property procured upon 51 termination of contracts; requiring that certain funds 52 be returned to the department; providing applicability 53 of certain limitations on the salaries of community 54 based care lead agency administrative employees; 55 amending s. 409.994, F.S.; revising the conditions 56 under which the department may petition a court for 57 the appointment of a receiver for a community-based 58 care lead agency; amending s. 409.996, F.S.; revising 59 requirements for contracts between the department and 60 lead agencies; revising the actions the department may 61 take in certain circumstances; making a technical 62 change; providing duties of the department; providing 63 an effective date. 64 65 Be It Enacted by the Legislature of the State of Florida: 66 67 Section 1.Subsections (3) and (4) and paragraphs (a) and 68 (b) of subsection (7) of section 409.987, Florida Statutes, are 69 amended, and paragraph (g) is added to subsection (7) of that 70 section, to read: 71 409.987Lead agency procurement; boards; conflicts of 72 interest. 73 (3)Notwithstanding s. 287.057, the department shall use 5 74 year contracts with lead agencies. The 5-year contract must be 75 reprocured at the end of each 5-year contract term. The contract 76 may be extended at the discretion of the department for up to 1 77 year, based on department needs. 78 (4)In order to serve as a lead agency, an entity must: 79 (a)Be organized as a Florida corporation or a governmental 80 entity. 81 (b)Be governed by a board of directors or a board 82 committee composed of board members. Board members shall provide 83 oversight and ensure accountability and transparency for the 84 system of care. The board of directors shall provide fiduciary 85 oversight to prevent conflicts of interest, promote 86 accountability and transparency, and protect state and federal 87 funding from misuse. The lead agency shall ensure that board 88 members participate in annual training, as approved by the 89 department, related to their responsibilities. The membership of 90 the board of directors or board committee must be described in 91 the bylaws or articles of incorporation of each lead agency, 92 which must provide that at least 75 percent of the membership of 93 the board of directors or board committee must be composed 94 consist of persons residing in this state, and at least 51 95 percent of the state residents on the board of directors must 96 reside within the service area of the lead agency. However, for 97 procurements of lead agency contracts initiated on or after July 98 1, 2014: 99 1.At least 75 percent of the membership of the board of 100 directors must be composed consist of persons residing in this 101 state, and at least 51 percent of the membership of the board of 102 directors must be composed consist of persons residing within 103 the service area of the lead agency. If a board committee 104 governs the lead agency, 100 percent of its membership must be 105 composed consist of persons residing within the service area of 106 the lead agency. 107 2.The powers of the board of directors or board committee 108 include, but are not limited to, approving the lead agencys 109 budget and setting the lead agencys operational policy and 110 procedures. A board of directors must additionally have the 111 power to hire the lead agencys executive director, unless a 112 board committee governs the lead agency, in which case the board 113 committee must have the power to confirm the selection of the 114 lead agencys executive director. 115 (c)Demonstrate financial responsibility through an 116 organized plan for regular fiscal audits and the posting of a 117 performance bond. 118 (7)(a)As used in this subsection, the term: 119 1.Activity includes, but is not limited to, a contract 120 for goods and services, a contract for the purchase of any real 121 or tangible property, or an agreement to engage with a lead 122 agency for the benefit of a third party in exchange for an 123 interest in real or tangible property, a monetary benefit, or an 124 in-kind contribution. 125 2.Conflict of interest means when a board member, a 126 director, or an officer, or a relative of a board member, a 127 director, or an officer, of a lead agency does any of the 128 following: 129 a.Enters into a contract or other transaction for goods or 130 services with the lead agency. 131 b.Holds a direct or indirect interest in a corporation, 132 limited liability corporation, partnership, limited liability 133 partnership, or other business entity that conducts business 134 with the lead agency or proposes to enter into a contract or 135 other transaction with the lead agency. For purposes of this 136 paragraph, the term indirect interest has the same meaning as 137 in s. 112.312. 138 c.Knowingly obtains a direct or indirect personal, 139 financial, professional, or other benefit as a result of the 140 relationship of such board member, director, or officer, or 141 relative of the board member, director, or officer, with the 142 lead agency. For purposes of this paragraph, the term benefit 143 does not include per diem and travel expenses paid or reimbursed 144 to board members or officers of the lead agency in connection 145 with their service on the board. 146 3.Related party means any entity of which a director or 147 an executive of the entity is also directly or indirectly 148 related to, or has a direct or indirect financial or other 149 material interest in, the lead agency. The term also includes 150 any subsidiary, parent entity, associate firm, or joint venture, 151 or any entity that is controlled, influenced, or managed by 152 another entity or an individual related to such entity, 153 including an individual who is, or was within the immediately 154 preceding 3 years, an executive officer or a board member of the 155 entity. 156 4.3.Relative means a relative within the third degree of 157 consanguinity by blood or marriage. 158 (b)1.For any activity that is presented to the board of a 159 lead agency for its initial consideration and approval after 160 July 1, 2021, or any activity that involves a contract that is 161 being considered for renewal on or after July 1, 2021, but 162 before January 1, 2022, a board member, a director, or an 163 officer of a lead agency shall disclose to the board any 164 activity that may reasonably be construed to be a conflict of 165 interest before such activity is initially considered and 166 approved or a contract is renewed by the board. A rebuttable 167 presumption of a conflict of interest exists if the activity was 168 acted on by the board without prior notice as required under 169 paragraph (c). The board shall disclose any known, actual, or 170 potential conflicts to the department. 171 2.A lead agency may not enter into a contract or be a 172 party to any transaction that creates a conflict of interest, 173 including with related parties for the provision of management 174 or administrative services or oversight. The lead agency shall 175 competitively procure all contracts with related parties in 176 excess of $35,000 For contracts with a lead agency which are in 177 existence on July 1, 2021, and are not subject to renewal before 178 January 1, 2022, a board member or an officer of the lead agency 179 shall disclose to the board any activity that may reasonably be 180 construed to be a conflict of interest under this section by 181 December 31, 2021. 182 (g)1.Civil penalties in the amount of $5,000 per 183 occurrence shall be imposed for each known and potential 184 conflict of interest, as described in paragraph (b), which is 185 not disclosed to the department. Civil penalties must be paid by 186 the board and not from any state or federal funds. 187 2.If a contract is executed for which a conflict of 188 interest was not disclosed to the department before execution of 189 the contract, the following penalties apply: 190 a.A civil penalty in the amount of $50,000 for the first 191 offense. 192 b.A civil penalty in the amount of $100,000 for a second 193 or subsequent offense. 194 3.The civil penalties for failure to disclose a conflict 195 of interest under subparagraphs 1. and 2. apply to any contract 196 entered into, regardless of the method of procurement, 197 including, but not limited to, formal procurement, single-source 198 contracts, and contracts that do not meet the minimum threshold 199 for formal procurement. 200 4.A contract procured for which a conflict of interest was 201 not disclosed to the department before execution of the contract 202 must be reprocured. 203 5.The department may, at its sole discretion, prohibit 204 execution of a contract for which a conflict of interest exists, 205 or will exist after execution. 206 Section 2.Paragraphs (c), (i), (j), and (k) of subsection 207 (1) of section 409.988, Florida Statutes, are amended to read: 208 409.988Community-based care lead agency duties; general 209 provisions. 210 (1)DUTIES.A lead agency: 211 (c)Shall follow the financial guidelines developed by the 212 department and shall comply with regular, independent auditing 213 of its financial activities, including any requests for records 214 associated with such financial audits within the timeframe 215 established by the department or its contracted vendors provide 216 for a regular independent auditing of its financial activities. 217 The results of the financial audit must Such financial 218 information shall be provided to the community alliance 219 established under s. 20.19(5). 220 (i)Shall comply with federal and state statutory 221 requirements and agency rules in the provision of contractual 222 services. Any subcontract in excess of $250,000 must comply with 223 the competitive procurement process. 224 (j)May subcontract for the provision of services, 225 excluding management and oversight functions, required by the 226 contract with the lead agency and the department; however, the 227 subcontracts must specify how the provider will contribute to 228 the lead agency meeting the performance standards established 229 pursuant to the child welfare results-oriented accountability 230 system required by s. 409.997. The contract with the department 231 must detail the administrative functions and services the lead 232 agency is allowed to subcontract. The lead agency shall directly 233 provide no more than 35 percent of all child welfare services 234 provided unless it can demonstrate a need, within the lead 235 agencys geographic service area where there is a lack of viable 236 providers available to perform the necessary services. The 237 approval period to exceed the threshold is limited to 2 years. 238 During this 2-year period, the lead agency must submit quarterly 239 reports to the department and the community alliance showing its 240 efforts to recruit providers to the geographic service area. The 241 lead agency must reprocure these services before the end of the 242 2-year period, to exceed this threshold. The local community 243 alliance in the geographic service area in which the lead agency 244 is seeking to exceed the threshold shall review the lead 245 agencys justification for need and recommend to the department 246 whether the department should approve or deny the lead agencys 247 request for an exemption from the services threshold. If there 248 is not a community alliance operating in the geographic service 249 area in which the lead agency is seeking to exceed the 250 threshold, such review and approval or denial of the lead 251 agencys request for an exemption from the services threshold 252 must recommendation shall be made by the department. by 253 representatives of local stakeholders, including at least one 254 representative from each of the following: 255 1.The department. 256 2.The county government. 257 3.The school district. 258 4.The county United Way. 259 5.The county sheriffs office. 260 6.The circuit court corresponding to the county. 261 7.The county childrens board, if one exists. 262 (k)Shall publish on its website by the 15th day of each 263 month at a minimum the data specified in subparagraphs 1.-9. 1. 264 5., calculated using a standard methodology determined by the 265 department, for the preceding calendar month regarding its case 266 management services. The following information must shall be 267 reported by each individual subcontracted case management 268 provider, by the lead agency, if the lead agency provides case 269 management services, and in total for all case management 270 services subcontracted or directly provided by the lead agency: 271 1.The average caseload of case managers, including only 272 filled positions; 273 2.The total number and percentage of case managers who 274 have 25 or more cases on their caseloads; 275 3.The turnover rate for case managers and case management 276 supervisors for the previous 12 months; 277 4.The percentage of required home visits completed; and 278 5.Performance on outcome measures required pursuant to s. 279 409.997 for the previous 12 months;. 280 6.The number of unlicensed placements for the previous 281 month; 282 7.The percentage and trends for foster parent and group 283 home recruitment and licensure for the previous month; 284 8.The percentage of families being served through family 285 support, in-home, and out-of-home services for the previous 286 month; and 287 9.The percentage of cases that converted from nonjudicial 288 to judicial for the previous month. 289 Section 3.Subsections (1) and (3) of section 409.992, 290 Florida Statutes, are amended to read: 291 409.992Lead agency expenditures. 292 (1)The procurement of commodities or contractual services 293 by lead agencies is shall be governed by the financial 294 guidelines developed by the department and must comply with 295 applicable state and federal law and follow good business 296 practices. Pursuant to s. 11.45, the Auditor General may provide 297 technical advice in the development of the financial guidelines. 298 (a)Lead agencies shall competitively procure all 299 contracts, consistent with the simplified acquisition threshold 300 as specified in 2 C.F.R. part 200. Financial penalties or 301 sanctions, as established by the department and incorporated 302 into the contract, shall be imposed by the department for 303 noncompliance with applicable local, state, or federal law for 304 the procurement of commodities or contractual services. 305 (b)Notwithstanding s. 402.73, for procurement of real 306 property or professional services, lead agencies shall comply 307 with established purchasing practices, including the provisions 308 of s. 287.055, as required, for professional services, including 309 engineering or construction design. Upon termination of the 310 contract, the department shall immediately retain all rights to 311 and ownership of real property procured. Any funds from the 312 sale, transfer, or other dispossession of such property during 313 the contract term shall be returned to the department. 314 (3)Notwithstanding any other provision of law, a 315 community-based care lead agency administrative employee may not 316 receive a salary, whether base pay or base pay combined with any 317 bonus or incentive payments from the lead agency or any related 318 party, in excess of 150 percent of the annual salary paid to the 319 secretary of the Department of Children and Families from state 320 appropriated funds, including state-appropriated federal funds. 321 This limitation applies regardless of the number of contracts a 322 community-based care lead agency may execute with the 323 department. This subsection does not prohibit any party from 324 providing cash that is not from appropriated state funds to a 325 community-based care lead agency administrative employee. 326 Section 4.Paragraphs (c) and (d) of subsection (1) of 327 section 409.994, Florida Statutes, are amended to read: 328 409.994Community-based care lead agencies; receivership. 329 (1)The Department of Children and Families may petition a 330 court of competent jurisdiction for the appointment of a 331 receiver for a community-based care lead agency established 332 pursuant to s. 409.987 if any of the following conditions exist: 333 (c)The department determines that conditions exist in the 334 lead agency which present a an imminent danger to the health, 335 safety, or welfare of the dependent children under that agencys 336 care or supervision. Whenever possible, the department shall 337 make a reasonable effort to facilitate the continued operation 338 of the program. 339 (d)The lead agency cannot meet, or is unlikely to meet, 340 its current financial obligations to its employees, contractors, 341 or foster parents. Issuance of bad checks or the existence of 342 delinquent obligations for payment of salaries, utilities, or 343 invoices for essential services or commodities constitutes shall 344 constitute prima facie evidence that the lead agency lacks the 345 financial ability to meet its financial obligations. 346 Section 5.Paragraph (d) of subsection (1) of section 347 409.996, Florida Statutes, is amended to read: 348 409.996Duties of the Department of Children and Families. 349 The department shall contract for the delivery, administration, 350 or management of care for children in the child protection and 351 child welfare system. In doing so, the department retains 352 responsibility for the quality of contracted services and 353 programs and shall ensure that, at a minimum, services are 354 delivered in accordance with applicable federal and state 355 statutes and regulations and the performance standards and 356 metrics specified in the strategic plan created under s. 357 20.19(1). 358 (1)The department shall enter into contracts with lead 359 agencies for the performance of the duties by the lead agencies 360 established in s. 409.988. At a minimum, the contracts must do 361 all of the following: 362 (d)Provide for contractual actions tiered interventions 363 and graduated penalties for failure to comply with contract 364 terms or in the event of performance deficiencies, as determined 365 appropriate by the department. 366 1.Such contractual actions must interventions and 367 penalties shall include, but are not limited to: 368 1.Enhanced monitoring and reporting. 369 a.2.Corrective action plans. 370 b.3.Requirements to accept technical assistance and 371 consultation from the department under subsection (6). 372 c.4.Financial penalties, which shall require a lead agency 373 to direct reallocate funds from administrative costs to the 374 department. The department shall use the funds collected to 375 support service delivery of quality improvement activities for 376 children in the lead agencys care to direct care for children. 377 These penalties may be imposed for failure to provide timely, 378 sufficient resolution of deficiencies resulting in a corrective 379 action plan or other performance improvement plan issued by the 380 department. Financial penalties may include liquidated damages. 381 d.5.Early termination of contracts, as provided in s. 382 402.7305(3)(f) s. 402.1705(3)(f). 383 2.The department shall include in each lead agency 384 contract executed a provision that requires payment to the 385 department of sanctions or disincentives for failure to comply 386 with contractual obligations. The department shall establish a 387 schedule of daily monetary sanctions or disincentives for lead 388 agencies, which must be incorporated by reference into the 389 contract. The department is solely responsible for determining 390 the monetary value of liquidated damages. 391 Section 6.This act shall take effect July 1, 2024.