The Florida Senate
BILL ANALYSIS AND FISCAL IMPACT STATEMENT
(This document is based on the provisions contained in the legislation as of the latest date listed below.)
Prepared By: The Professional Staff of the Committee on Fiscal Policy
BILL: CS/CS/CS/SB 536
INTRODUCER: Fiscal Policy Committee; Appropriations Committee on Health and Human Services;
Children, Families, and Elder Affairs Committee; and Senator Garcia
SUBJECT: Community-based Child Welfare Agencies
DATE: February 28, 2024
ANALYST STAFF DIRECTOR REFERENCE ACTION
1. Woodruff Tuszynski CF Fav/CS
2. Sneed McKnight AHS Fav/CS
3. Tuszynski Yeatman FP Fav/CS
Please see Section IX. for Additional Information:
COMMITTEE SUBSTITUTE - Substantial Changes
I. Summary:
CS/CS/CS/SB 536 amends laws related to the Department of Children and Families (DCF)
contracts with community-based care lead agencies (CBCs) to increase transparency and
accountability of the services provided by the CBCs.
The bill reforms contractual rights and obligations between DCF and the CBCs, establishes the
regulatory framework for a CBC’s subcontracts and transactions with related parties, revises the
CBC subcontract procurement process, and creates contractual remedies to address failures to
follow procurement law, noncompliance with contractual requirements, and inadequate
performance in the provision of child protection and child welfare services.
The bill also establishes a new funding methodology for the allocation of core service funds.
The bill has no fiscal impact for Fiscal Year 2024-25, but may redistribute funding among CBCs
beginning in Fiscal Year 2025-26 and annually thereafter. The bill has no fiscal impact on local
government. See Section V., Fiscal Impact Statement.
The bill takes effect July 1, 2024.
REVISED: BILL: CS/CS/CS/SB 536 Page 2
II. Present Situation:
Florida’s Child Welfare System
Chapter 39, F.S., creates the dependency system charged with protecting child welfare. Florida’s
child welfare system identifies children and families in need of services through reports to the
central abuse hotline and child protective investigations. The Department of Children and
Families (DCF) and community-based care lead agencies (CBCs) work with those families to
address the problems endangering children, if possible. If the problems cannot be addressed, the
child welfare system finds safe out-of-home placements for children.
The child welfare system includes the following key elements:
A report to the central abuse hotline.
A child protective investigation to determine the safety of the child.
The court finding the child dependent, if the child is determined to need such protection.
Case planning to address the problems resulting in the child’s dependency.
Reunification with the child’s parents or another option to establish permanency, such as
adoption.
The DCF is responsible for program oversight and the overall performance of the child welfare
system.
1
Department of Children and Families
The DCF’s mission is to work in partnership with local communities to protect the vulnerable,
promote strong and economically self-sufficient families, and advance personal and family
recovery and resiliency.
2
The DCF must develop a strategic plan to fulfill this mission and
establish measurable goals, objectives, performance standards, and quality assurance
requirements.
3
The DCF is required to deliver services by contract through private providers to the extent
allowed by law and funding.
4
These private providers include community-based care lead
agencies (CBCs) delivering child welfare services.
Community-Based Care Lead Agencies
Community-based care combines the outsourcing of foster care and related services to local
nonprofits with increased local community ownership of service delivery and design.
5
CBCs are
responsible for providing foster care and related services, including, but not limited to,
1
Office of Program Policy Analysis & Government Accountability, Child Welfare System Performance Mixed in First Year
of Statewide Community-Based Care, Report No. 06-50, June 2006, available at:
https://oppaga.fl.gov/Documents/Reports/06-50.pdf.
2
Section 20.19(1), F.S.
3
Id.
4
Id.
5
Florida Department of Children and Families, Community-Based Care, available at
https://www.myflfamilies.com/services/child-family/child-and-family-well-being/community-based-care (last visited Jan. 10,
2024). BILL: CS/CS/CS/SB 536 Page 3
counseling, domestic violence services, substance abuse services, family preservation,
emergency shelter, and adoption.
6
Because CBCs are to partner with community providers to
meet the needs of children and families in their service area, CBCs contract with subcontractors
for case management and direct care services to children and families.
7
The CBCs are to plan,
administer, and coordinate the delivery of client services, ensure compliance with federal and
state laws, rules, and regulations, and monitor subcontractors.
8
At present, there are 18 CBCs
that each cover specific geographic areas within the state’s 20 judicial circuits.
9
A CBC is statutorily limited from directly providing more than 35 percent of all child welfare
services in its catchment area unless it can demonstrate a justification for need to exceed the 35
percent threshold.
10
The local community alliance
11
in the CBC’s service area must review the
CBC’s justification for need to exceed the threshold and recommend whether the DCF should
approve or deny the justification.
12
Currently, nine CBCs utilize the waiver to exceed the 35
percent threshold.
13
CBCs are required to perform several duties, including:
Serve children referred to the CBC as a result of abuse, neglect, or abandonment reports to
the central abuse hotline.
Provide the DCF with accurate and timely information necessary for oversight.
Follow financial guidelines developed by the DCF and provide for regular independent
audits.
Prepare and file all necessary court documents and attend dependency court proceedings.
Ensure all individuals providing care to dependent children receive training and specified
information and meet employment requirements.
Maintain eligibility to receive all available federal child welfare funds.
Adhere to child welfare best practices.
Maintain written agreements with Healthy Families Florida entities in its service area to
promote cooperative planning for the provision of prevention and intervention services.
Comply with federal and state statutory requirements and agency rules in the provision of
contractual services.
Use authority to subcontract for the provision of services provided CBCs contribute to
services and meet specified criteria.
6
Section 409.145(1), F.S.
7
Id.
8
Section 409.988, F.S.
9
Florida Department of Children and Families, Lead Agency Information, available at
https://www.myflfamilies.com/services/child-family/child-and-family-well-being/community-based-care/lead-agency-
information (last visited Jan. 13, 2024).
10
Section 409.988(1)(j), F.S.
11
Section 20.19(5), F.S., requires the DCF, in consultation with local communities, to establish community alliances of the
stakeholders, community leaders, client representatives and funders of human services in each county to provide a focal point
for community participation and governance of community-based services.
12
Supra note 10.
13
Florida Department of Children and Families, 2024 Agency Analysis, pg. 4. (on file with the Children, Families, and Elder
Affairs Committee). The nine CBCs that currently exceed the 35 percent threshold include: Kids First of Florida, Inc.;
Childnet, Inc. (Palm Beach); Childnet, Inc. (Broward); Community Partnership for Children, Inc.; Brevard Family
Partnerships; Family Integrity Program (St. Johns County); Kids Central, Inc.; Safe Children Coalition; and Children’s
Network of Southwest Florida. BILL: CS/CS/CS/SB 536 Page 4
Identify an employee to serve as a liaison with the community alliance and community-based
and faith-based organizations interested in collaborating or offering services or other
assistance on a volunteer basis to the children and families served by the CBC.
Ensure that appropriate CBC staff and subcontractors are informed of the specific services or
assistance available from local community-based and faith-based organizations.
Identify it as a DCF contractor on its website and promotional literature.
Ensure that it is addressing the unique needs of the fathers of children who are served by the
CBC by employing a father-engagement specialist.
Post information regarding case management services on its website by a specified date,
including the average caseload of case managers for filled positions, the turnover rate for
case managers and their supervisors for the previous 12 months, the percentage of required
home visits completed, and performance on outcome measures required under s. 409.997,
F.S., for the previous 12 months.
14
There are minimum requirements with which CBCs must comply to be eligible to contract with
the DCF, including:
Being organized as a Florida corporation or a governmental entity.
15
Having a board of directors or board committee with authority to approve the CBC budget
and hire a CBC executive director.
16
Demonstrating financial responsibility by having a plan for regular fiscal audits and securing
a performance bond.
17
The DCF contracts with the following CBCs as illustrated in the following map:
18
14
Section 409.988(1), F.S.
15
Section 409.987(4)(a), F.S.
16
Section 409.987(4)(b), F.S.
17
Section 409.987(4)(c), F.S.
18
Florida Department of Children and Families, Lead Agency Information, available at
https://www.myflfamilies.com/services/child-family/child-and-family-well-being/community-based-care/lead-agency-
information (last visited Jan. 13, 2024). BILL: CS/CS/CS/SB 536 Page 5
The DCF must develop and maintain written policies and procedures for monitoring compliance
with the services the CBCs provide under contract. The DCF is required to evaluate each CBC’s
programmatic, operation, and fiscal operations at least once annually.
19
The DCF typically enters into 5-year contracts with CBCs, with the option for an extension or a
renewal of up to five years or for the original term of the contract, whichever period is longer.
20
While entering into 5-year contracts has provided stability within the CBC system, it has also
had the effect of reducing competition. For example, since the creation of CBCs, the DCF has
conducted 19 procurements, 11 of which had only one entity submit a bid for the contract.
21
The
DCF is currently in the process of procuring CBC services in 12 circuits for Fiscal Year 2024-
25.
22
19
Section 409.996(19)(a), F.S.
20
Section 409.987(3), F.S.
21
Florida Department of Children and Families, 2024 Agency Analysis, pg. 4. (on file with the Children, Families, and Elder
Affairs Committee). The nine CBCs that currently exceed the 35 percent threshold include: Kids First of Florida, Inc.;
Childnet, Inc. (Palm Beach); Childnet, Inc. (Broward); Community Partnership for Children, Inc.; Brevard Family
Partnerships; Family Integrity Program (St. Johns County); Kids Central, Inc.; Safe Children Coalition; and Children’s
Network of Southwest Florida.
22
Florida Department of Children and Families, Invitation to Negotiate, Community-Based Care Lead Agencies, DCF ITN
2324 063 BILL: CS/CS/CS/SB 536 Page 6
Funding
Section 409.990, F.S., requires that funding for a contract between DCF and CBC be through
general revenue or other applicable state or federal funding sources. The DCF allocates core
funding
23
to CBCs based on a statutory “equity model”, which considers the proportion of child
population, child abuse hotline workload, and children in care.
24
In addition to annually evaluating CBC fiscal operations, current law requires the DCF to do
several things to ensure that the CBCs are providing services within its allocated budget:
Section 409.996, F.S., requires the DCF to annually conduct a comprehensive, multi-year
review of the revenues, expenditures, and financial positions of all CBCs that cover the most
recent two consecutive fiscal years. The review must include a comprehensive system-of-
care analysis and the CBCs must develop and maintain a plan to achieve financial viability to
accompany the DCF’s review. The DCF must submit the review to the Governor, the Senate
President, and the Speaker of the House of Representatives by November 1 each year.
The Fiscal Year 2023-24 General Appropriations Act required each CBC to submit a detailed
spending plan, approved by its board of directors, to the DCF for all projected expenditures
for the current fiscal year. The spending plan must demonstrate that core expenditures will
not exceed the appropriated amount of core funding and reserve a certain amount of funding
for unanticipated expenses. The DCF cannot release additional funds outside the two-month
advance until it has reviewed and approved a CBC’s spending plan. At any point during the
year, if a CBC’s actual expenditures project an end-of-year deficit, the CBC must submit a
revised spending plan to the DCF that reflects actions to be taken to remain within
appropriated core funding for the remainder of the fiscal year.
The Fiscal Year 2023-24 GAA provides the following core service funding to CBCs
25
:
CBC Lead Agency Circuit
FY 2023-24 Core
Services Funding
Northwest Florida Health Network (Big Bend)
2, 14 $55,032,652
1 $35,459,931
Partnership for Strong Families 3, 8 $31,401,300
Family Support Services of North Florida 4 (Duval, Nassau) $49,018,528
Kids First of Florida 4 (Clay) $12,525,871
St. Johns County Board of Commissioners 7 (St. Johns) $7,683,739
23
Section 409.997(1)(a), defines “core services funds” as all funds allocated to CBCs operating under contract with the DCF,
with the following exceptions: funds appropriated for independent living; funds appropriated for maintenance adoption
subsidies; Funds allocated by the DCF for protective investigations training; nonrecurring funds; designated mental health
wrap-around services funds; funds for special projects for a designated CBC; and funds appropriated for the Guardianship
Assistance Program under s. 39.6225, F.S.
24
Section 409.991, F.S. provides that core services funds are calculated based on the proportion of the (a) child population
weighted as five percent of the total; (b) child abuse hotline workload weighted as 35 percent of the total; and (c) children in
care weighted as 60 percent of the total. Section 409.991(3), F.S., provides that beginning in the 2015-16 FY, 100 percent of
the recurring core services funding must be based on the prior year recurring base core services funds, and any new funding
be allocated as: (a) 70 percent of new funding among all CBCs and (b) 35 percent of new funding to CBCs below their
equitable share.
25
Chapter 2023-239, L.O.F, General Appropriations Act for Fiscal Year 2023-24, Specific Appropriation 328. BILL: CS/CS/CS/SB 536 Page 7
CBC Lead Agency Circuit
FY 2023-24 Core
Services Funding
Community Partnership for Children 7 (Flagler, Volusia,
Putnam)
$43,440,511
Safe Children Coalition 12 $34,861,493
Family Support Services of Suncoast 6 (Pasco, Pinellas) $87,553,887
Kids Central 5 $54,912,909
Embrace Families 9, 18 (Orange, Osceola,
Seminole)
$60,761,737
Heartland for Children 10 $46,721,076
Brevard Family Partnerships 18 (Brevard) $29,292,110
Communities Connected for Kids 19 $24,247,000
ChildNet
15 (Palm Beach) $38,086,728
17 (Broward) $60,952,428
Children’s Network of Southwest Florida 20 $53,746,134
Children’s Network of Hillsborough 13 $75,448,412
Citrus Family Care Network 11, 16 $76,440,546
TOTAL $877,586,992
Because the core services funding for each CBC was established based on the total expenditures
by the DCF when the CBCs were created, significant core funding inequities have been
institutionalized in the system of care. To mitigate financial risk, the Legislature created a CBC
Risk Pool that allows CBCs to apply to the DCF for additional funding.
26
A committee that
includes the DCF’s secretary and three non-applicant CBC representatives review the risk pool
applications.
27
The DCF may authorize risk pool funding to address:
Significant changes in the number or composition of clients eligible to receive services.
28
Significant changes in the services that are eligible for reimbursement.
29
Continuity of care in the event of failure, discontinuance of service, or financial misconduct
by a CBC.
30
Significant changes in the mix of available funds.
31
The Legislature added the “equity model” CBC funding model into statute in 2011 because the
allocation of state or federal funds to CBCs was based primarily on the number of children in
care with funding direction to the DCF through proviso in the General Appropriations Act
(GAA).
32
In 2019, the Legislature directed the DCF and the CBCs to develop an alternative
26
Section 409.990(8), F.S.
27
Id.
28
Section 409.990(8)(c)1., F.S.
29
Section 409.990(8)(c)2., F.S.
30
Section 409.990(8)(c)3., F.S.
31
Section 409.990(8)(c)4., F.S.
32
Chapter 2011-62, L.O.F. In Fiscal Year 2010-11, the allocation was based on four weighted factors: the number of children
in poverty (30 percent); the number of reports the DCF’s central abuse hotline that are either referred for investigation or
whose findings have been verified (30 percent); the number of children in out-of-home care (30 percent); and contribution to
a safe reduction in out-of-home care (10 percent). BILL: CS/CS/CS/SB 536 Page 8
funding model.
33
This produced the Florida Funding Model for Children (FMC) that calculated
the cost of providing services by setting case worker caseload ratios, an incentive for prevention
spending, and a target to reduce use of group care and a per child cost calculation.
34
The
Legislature, through proviso in the GAA, used the FMC methodology to allocate increases in
CBC core services funding of $25 million in Fiscal Year 2019-2020 and $150 million in Fiscal
Year 2022-2023.
35
Oversight and Monitoring
The DCF is responsible for monitoring and overseeing CBCs to ensure that they are delivering
services in accordance with applicable federal and state statutes and regulations and the
performance standards and metrics specified in its strategic plan.
36
The DCF must, at a
minimum, evaluate each of the CBCs under contract annually.
37
The evaluation must cover the
programmatic, operational, and fiscal operations of the CBC.
38
CBC contracts specify required performance measures that generally align with the state and
federal measures.
39
The DCF contract manager must periodically identify whether any gaps exist
between actual and required CBC performance. If contractor performance is insufficient, the
DCF may allow a reasonable time for correction. If the deficiencies are not resolved and there
are no extenuating circumstances, the DCF must terminate the contract and it may not contract
again with the same provider during the next 24 months.
40
Section 409.996(1)(d), F.S., requires CBC contracts to include tiered interventions the DCF may
use if CBCs fail to comply with contractual terms or in the event of performance deficiencies.
Such interventions include, but are not limited to:
Enhanced monitoring and reporting;
Corrective action plans;
Requirements for contracted providers to accept technical assistance and consultations from
the DCF;
Financial penalties that require a CBC to reallocate funds from administrative costs to direct
care for children; and
Early termination of contracts.
33
Chapter 2019-115, L.O.F., General Appropriations Act for Fiscal Year 2019-20, Specific Appropriation 326.
34
Florida Department of Children and Families, 2024 Agency Analysis, pg. 4. (on file with the Children, Families, and Elder
Affairs Committee). The nine CBCs that currently exceed the 35 percent threshold include: Kids First of Florida, Inc.;
Childnet, Inc. (Palm Beach); Childnet, Inc. (Broward); Community Partnership for Children, Inc.; Brevard Family
Partnerships; Family Integrity Program (St. Johns County); Kids Central, Inc.; Safe Children Coalition; and Children’s
Network of Southwest Florida.
35
In Fiscal Year 2022-23, the Florida Legislature addressed the funding inequities by appropriating $150 million in increases
to core funding to bring all CBCs up to 100 percent funding levels to ensure that each CBC has the tools to best serve the
children and families in their respective service area. [Supra note 34] Even with this $150 million increase in core funding,
at the request of certain CBCs, the Legislature appropriated an additional $18.5 million in Back of Bill funding to address
CBC funding deficits incurred in Fiscal Year 2022-23. [Supra note 25, Section 88.]
36
Section 409.996, F.S.
37
Section 409.996(21)(a), F.S.
38
Id.
39
November 2022 CBC Services Contract, Contract AJ500, pp. 40-44, available at:
https://facts.fldfs.com/Search/ContractDetail.aspx?AgencyId=600000&ContractId=AJ500&Tab=4.
40
Section 402.7305(3)(f), F.S. BILL: CS/CS/CS/SB 536 Page 9
The DCF may provide technical assistance and consultation to CBCs as necessary for the
achievement of performance standings, including, but not limited to, providing additional
resources to assist a CBC in implementing best practices or instituting operational efficiencies.
41
The DCF may impose financial penalties on a CBC that does not comply with a corrective action
plan.
42
The DCF must request corrective action on a provider when the delivery of services is
unacceptable or the provider is not in compliance with contractual terms and conditions. The
DCF can impose financial penalties for failure to comply with a corrective action plan, unless the
DCF determines that extenuating circumstances exist.
43
The imposed financial penalties are
based on the severity of the noncompliance, nonperformance, or unacceptable performance that
generated the need for the corrective action plan.
44
A provider is prohibited from paying a
financial penalty with funds intended to be used, or which are budgeted, to provide services to
clients and cannot reduce the amount of quality of services delivered to clients as a result of the
imposition of a financial penalty.
45
The DCF may also petition a court for the appointment of a receiver for a CBC if:
The CBC is operating without a license as a child-placing agency;
The CBC has given less than 120 days’ notice of its intent to cease operations, and
arrangements have not been made for another CBC or the DCF to continue the uninterrupted
provision of services;
The DCF determines that conditions exist in the CBC which present an imminent danger to
the health, safety, or welfare of the dependent children under the CBC’s care or supervision;
or
A CBC is struggling to meet its financial obligations to its employees, contractors, or foster
parents as supported by issuance of bad checks or the existence of delinquent obligations for
payment of salaries, utilities, or invoices for essential services or commodities.
46
Audits
Over the years, the Governor’s Office of Inspector General (OIG) and the DCF’s Office of
Inspector General (DCF OIG) have conducted several audits of the CBCs.
41
Section 409.996(6), F.S.
42
Section 402.73(1), F.S.; See also R. 65C-29.001, F.A.C. All contracts entered into by the DCF for services shall contain a
notice that penalties shall be imposed for failure to implement or to make acceptable progress on corrective action plans
develop as a result of noncompliance, non-performance, or unacceptable performance with the terms and conditions of a
contract.
43
Rule 65C-29.001(3)(a), F.A.C.
44
Rule 65C-29.001(3)(b), F.A.C. The penalty, if imposed, shall not exceed ten percent of the total contract payments during
the period in which the corrective action plan has not been implemented or in which acceptable progress toward
implementation has not been made. Noncompliance that is determined to have a direct effect on client health and safety shall
result in the imposition of a ten percent penalty of the total contract payments during the period in which the corrective action
plan was has not been implemented or in which acceptable progress toward implementation has not been made.
Noncompliance involving the provision of service not having a direct effect on client health and safety shall result in the
imposition of a five percent penalty. Noncompliance as a result of unacceptable performance of administrative tasks shall
result in the imposition of a two percent penalty.
45
Rule 65C-29.001(5), F.A.C.
46
Section 409.994(1), F.S. BILL: CS/CS/CS/SB 536 Page 10
On February 20, 2020, Florida’s Governor issued an executive order requiring the OIG to review
entities which had sole-source public-private agreements with state agencies; received more than
50 percent or more of their budget from state and federal funds; and had compensation totals
exceeding federal or state law and regulations.
47
The OIG issued a report finding nine CBCs
48
had compensation that potentially exceeded statutory limits.
49
The report also identified
additional areas of concern related to CBC employees and related parties.
50
At the request of the
OIG, the DCF OIG conducted a review of the nine CBCs and identified two CBCs
51
for which
executive leadership compensation appeared to exceeded state limits.
52
On December 3, 2021, the DCF OIG issued a report focused on the creation of management
companies and other related parties within the CBCs.
53
The report found that “the purposes and
functions of these related organizations are not clear and pose risks to the DCF fulfilling its
mission.”
54
Based on these findings, the DCF contracted with two auditing firms to conduct
financial and operation examinations on all CBCs. The DCF released the findings for six of the
CBCs on August 22, 2023.
55
Key findings include:
Noncompliance with competitive procurement requirements for non-related and related
entities.
Overbilling related to PPP Loan Forgiveness.
Board approval of departmental deficit budgets.
Excessive compensation.
Establishment of sub-contracts to related parties that provide administrative support and
management services.
Related parties holding real estate that may have been purchased through the use of
state/federal funds or acquired based on the existence of those funding streams.
Another key finding was a significant overlap of key individuals serving on both CBC board of
directors and the board of a CBC related party. Additionally, CBC boards were not providing
high level fiduciary oversight of CBC operations and budgets. Certain executive leadership
47
Executive Order 20-44 arose from the Florida Coalition Against Domestic Violence, Inc., using funds from the DCF to
subsidize excessive executive leadership team compensation payouts.
48
Big Bend Community Based Care [d/b/a North West Florida Health Network (NWFHN)]; ChildNet, Inc.; Citrus Health
Network, Inc.; Community Based Care of Brevard, Inc.; Eckerd Youth Alternatives (d/b/a Eckerd Connects); Embrace
Families Community Based Care, Inc.; Florida Support Services of North Florida (FSSNF); Lakeview Center, Inc.; and Safe
Children Coalition, Inc. See Executive Office of the Governor, Office of the Chief Inspector General, Executive Order 20-44,
Data Compilation and Statutory Compensation Limit Review, CIG 2021-01-25-0017, June 30, 2021, pg. vi, available at
https://www.flgov.com/wp-content/uploads/2021/06/Final-Report-with-Responses-6.30.21-2.pdf.
49
Executive Office of the Governor, Office of the Chief Inspector General, Executive Order 20-44, Data Compilation and
Statutory Compensation Limit Review, CIG 2021-01-25-0017, June 30, 2021, pg. vi., available at https://www.flgov.com/wp-
content/uploads/2021/06/Final-Report-with-Responses-6.30.21-2.pdf.
50
Id.
51
Eckerd Connects and Family Support Services of North Florida.
52
Supra note 49.
53
Florida Department of Children and Families, Office of Inspector General, Internal Audit, Project #A-1819DCF-043,
December 3, 2021, available at https://eds.myflfamilies.com/IGRPTS/AuditFileView.aspx.
54
Id.
55
Florida Department of Children and Families, Community-Based Care Lead Agencies Audit Findings, available at
https://www.myflfamilies.com/community-based-care-lead-agencies-audit-findings (last visited Jan. 12, 2024). BILL: CS/CS/CS/SB 536 Page 11
positions were also integrally involved in related parties creating the potential for conflict of
interest in CBC contracts for services with such related parties.
56
The DCF took corrective action against the six CBCs because of the examinations’ findings.
Executive Compensation
CBC expenditures must comply with financial guidelines developed by the DCF and with federal
and state law. Current law prohibits a CBC administrative employee in excess of 150 percent of
the annual salary paid to the DCF’s secretary from state-appropriate funds, including state-
appropriated federal funds.
57
The law does not prohibit any party from providing cash that is not
appropriated state funds to a CBC administrative employee.
58
The Legislature codified the
statutory salary cap into law in 2015 after the Florida Auditor General found instances where
salary payments, including bonuses and leave balances, did not appear to be properly supported
or calculated in accordance with established CBC policy or state law.
59
CBCs must also comply with the federal salary rate limit because CBCs receive federal pass-
through awards from the DCF. Federal funds from the United States Health and Human Services
(HHS) may not be used to pay the salary, or any percentage of salary, to an individual in excess
of the Executive Level II rate, currently $212,100.
60
Therefore, the maximum amount a CBC
executive may be compensated with combined state and federal funds is $315,000, of which only
$212,100 can be federal funds.
61
The DCF is required to publish the compensation information for a CBC’s chief executive, chief
administrator, or other chief officer.
62
The following table includes the total compensation for
CBC executive officers as of the last annual reporting to the DCF.
63
56
Florida Department of Children and Families, Community-Based Care Lead Agencies Audit Findings, available at
https://www.myflfamilies.com/community-based-care-lead-agencies-audit-findings (last visited Jan. 12, 2024).
57
Section 409.992(3), F.S.
58
Id.
59
Florida Auditor General, Department of Children and Families and Selected Community-Based Care Lead Agencies,
Oversight of Foster Care and Related Services, Operational Audit, Report 2015-156, March 2015, available at:
https://flauditor.gov/pages/pdf_files/2015-156.pdf.
60
Email from Sam Kerce, Legislative Affairs Director, Florida Department of Children and Families, re: Questions, on file
with the Senate Children, Families, and Elder Affairs Committee. See also Health Resources & Services Administration,
Grants Policy Bulletin, Legislative Mandates in Grants Management for FY 2023, Feb. 1, 2023, available at:
https://www.hrsa.gov/sites/default/files/hrsa/grants/manage/legislative-mandates-grants-management-2023.pdf.
61
Florida Department of Children and Families, 2024 Agency Analysis, pg. 4. (on file with the Children, Families, and Elder
Affairs Committee). The nine CBCs that currently exceed the 35 percent threshold include: Kids First of Florida, Inc.;
Childnet, Inc. (Palm Beach); Childnet, Inc. (Broward); Community Partnership for Children, Inc.; Brevard Family
Partnerships; Family Integrity Program (St. Johns County); Kids Central, Inc.; Safe Children Coalition; and Children’s
Network of Southwest Florida.
62
Section 409.996(4)(a)1., F.S.
63
Florida Department of Children and Families, Lead Agency Information, available at
https://www.myflfamilies.com/services/child-family/child-and-family-well-being/community-based-care/lead-agency-
information (last visited Jan. 13, 2024).
BILL: CS/CS/CS/SB 536 Page 12
CBC Lead Agency Circuit CEO CFO COO
Northwest Florida Health Network (Big
Bend)
1, 2,14 $563,842 $272,261 $217,194
Partnership for Strong Families 3, 8 $169,043 $116,277 $105,445
Family Support Services of North Florida 4 (Duval, Nassau)
$230,125 $146,978 Vacant
Family Support Services of Suncoast 6 (Pasco, Pinellas)
Kids First of Florida 4 (Clay) $113,656 $113,040 $101,656
St. Johns County Board of
Commissioners
7 (St. Johns) N/A N/A N/A
Community Partnership for Children
7 (Flagler,
Volusia, Putnam)
$205,000 $114,500 $122,360
Safe Children Coalition 12 $220,000 $110,000 $145,000
Kids Central 5 $218,624 $177,786 $162,350
Embrace Families
9, 18
(Orange, Osceola,
Seminole)
$332,023 $206,520 $254,635
Heartland for Children 10 $175,000 $130,000 $152,499
Brevard Family Partnerships 18 (Brevard) $157,757 $103,716 $129,024
Communities Connected for Kids 19 $169,161 $141,474 $145,757
ChildNet
15 (Palm Beach)
$266,492 $201,956 $212,630
17 (Broward)
Children’s Network of Southwest Florida 20 $209,830 $162,931 $163,513
Children’s Network of Hillsborough 13 $197,600 $166,400 $166,400
Citrus Family Care Network 11, 16 $263,800 $176,342 $203,059
Conflicts of Interest
The outsourced nature of the DCF services, including child welfare, requires the DCF to engage
in contract management functions focused on accountability. One area of possible lack of
accountability is conflicts of interest between a CBC member, officer, or relative and CBC
subcontractor.
Section 409.987(7), F.S., requires a process for disclosing and eliminating any transaction or
activity that could reasonably be construed to be a conflict of interest for a member, officer, or
relative of a CBC. This requirement applies to situations in which a CBC board member or
officer, or relative within the third degree of consanguinity by blood or marriage of a member or
officer:
Enters into a contract or other transaction for goods or services with the CBC.
Holds a direct or indirect interest
64
in a corporation, limited liability corporation, partnership,
limited liability partnership, or other business entity that conducts business with the CBC or
proposes to enter into a contract or other transaction with the CBC.
64
”Indirect interest” means an interest in which legal title is held by another as trustee or other representative capacity, but
the equitable or beneficial interest is held by the person required to file under Ch. 112, Part III, F.S. BILL: CS/CS/CS/SB 536 Page 13
Knowingly obtains a direct or indirect personal, financial, professional, or other benefit as a
result of the relationship with a board member or officer, or relative of the board member or
officer of the CBC.
Any activity that involves a contract for goods and services, a purchase of any real or tangible
property, an agreement to engage with the CBC for a benefit, or an in-kind contribution, or if a
CBC board member or officer notifies the CBC board of a potential conflict of interest under an
existing CBC contract, the proposed activity or potential conflict of interest must be presented to
the CBC board for approval which includes:
Listing the proposed activity on the CBC board’s agenda for the next general or special
meeting;
Providing copies of all contracts and relevant documents related to the proposed transaction;
and
Allowing the CBC board an opportunity to approve or disapprove the conflict of interest by
a vote of two-thirds of all other members present.
65
If the CBC board votes against the proposed activity, the CBC board member or officer must
notify the CBC board in writing of his or her intention, or the relative’s intention, not to pursue
the proposed activity or the CBC board member or officer must resign. If the CBC board finds a
CBC member or officer has violated the requirements for approval, the CBC board member or
officer will be deemed removed from the CBC board before the next scheduled board meeting.
If the CBC board does not approve a conflict of interest, the parties to the activity where the
conflict of interest exist may opt to cancel the activity or resign from the CBC board or office
before the next scheduled board meeting.
66
A contract entered into between a CBC board member or officer, or relative of a CBC board
member or officer, and a CBC which has not been properly disclosed as a conflict of interest or
potential conflict of interest is voidable and terminates upon the filing of a written notice to the
CBC board of directors.
67
Findings from the most recent CBC financial and operational examinations included concerns of
significant overlap of key individuals serving on both a CBC board of directors and a related
party board and executive leadership positions being integrally involved in multiple related
parties creating the potential for conflict of interest in CBC contracts for services with related
parties.
68
Findings also noted a perception that CBC board of directors were not providing proper
fiduciary oversight of CBC operations and budgets.
69
65
Section 409.987(7)(c), F.S.
66
Section 409.987(7)(d)2., F.S.
67
Section 409.987(7)(f), F.S.
68
Florida Department of Children and Families, Office of Inspector General, Internal Audit, Project #A-1819DCF-043,
December 3, 2021, available at https://eds.myflfamilies.com/IGRPTS/AuditFileView.aspx.
69
Id. BILL: CS/CS/CS/SB 536 Page 14
Competitive Solicitation for Commodities or Contractual Services
Section 287.057, F.S., requires state agencies that wish to procure commodities or contractual
services in excess of $35,000 to use a competitive solicitation process. A competitive solicitation
is a process of requesting and receiving two or more sealed bids, proposals, or replies submitted
by responsive vendors in accordance with the terms of a competitive process, regardless of
procurement method.
70
Depending on the type of contract and scope of work or goods sought, an
agency may use one of three procurement methods: invitation to bid,
71
request for proposals,
72
or
invitation to negotiate.
73
III. Effect of Proposed Changes:
Section 1 of the bill amends s. 409.016, F.S., to create a new definition of “Management
functions” to mean:
Planning, directing, organizing, coordinating, and carrying out oversight duties of a lead
agency; and
Contracting for officer or director level staffing in performance of the planning, directing,
organizing, coordinating, and carrying out oversight duties of the lead agency.
This definition is used throughout the bill to give effect to the provisions of the bill that reduce
the ability for a lead agency to contract officer or director level positions and reduce the use of
and potential conflicts associated with related parties.
Section 2 of the bill amends s. 409.987, F.S., to limit the DCF’s ability to extend a lead agency
contract for a period of one to five years, if the lead agency has met the monitored performance
expectations.
The bill requires a CBC board of directors to ensure accountability and transparency of the
system of care, which includes fiduciary oversight to prevent conflicts of interest, promote
accountability and transparency, and protect state and federal funding from misuse.
The bill requires the CBC to ensure that board members participate in annual training related to
their responsibilities. The DCF must set forth minimum training requirements in the contract
with the CBC.
The bill expands those who may have a conflict of interest to include a CBC director or a relative
of a director and creates a definition for “related party” to conform to changes made in this
section.
The bill requires a CBC board of directors to disclose to the DCF any known, actual, or potential
conflicts of interest.
70
Section 287.012(6), F.S.
71
Section 287.057(1)(a), F.S.
72
Section 287.057(1)(b), F.S.
73
Section 287.057(1)(c), F.S. BILL: CS/CS/CS/SB 536 Page 15
The bill prohibits CBCs from entering into a contract or be a party to any transaction with a
related party if a conflict of interest is not properly disclosed. The bill prohibits any contract with
a related party for officer or director level staffing to perform management functions. The DCF
must specify the administrative functions a CBC may subcontract in the contract between the
DCF and CBC.
The bill allows a CBC to contract with a related party as long as the fee, rate, or price paid by the
CBC does not exceed fair market value, and any known actual or potential conflicts of interest
are disclosed to the DCF.
The bill removes obsolete language related disclosure of conflicts of interest that occur by a
specific date.
The bill requires DCF to create contractual penalties of $5,000 per occurrence when a CBC does
not disclose a known and potential conflict of interest to the DCF in the process described in s.
409.987(b), F.S.
The bill requires DCF to create contractual penalties for when a CBC procures a contract that
was a conflict of interest and not disclosed to the DCF of $25,000 for a first offense; $50,000 for
a second or subsequent offense; and removal of a board member that did not disclose a known
conflict of interest. The bill requires the penalties to apply to any contract entered into, regardless
of the method of procurement, including, but not limited to, formal procurement, single-source
contracts, and contracts that do not meet the minimum threshold for formal procurement. The bill
requires re-procurement of any contract procured in violation of the disclosure requirements.
The bill requires a CBC to post a fidelity bond to cover any assessed penalties and costs
associated with reprocurement related to a failure to disclose a conflict of interest under the new
conflict of interest provisions.
These provisions all focus on the corporate function and business operations of CBCs, clarifying
and detailing requirements around reporting, conflicts of interest, board of director functions, and
financial penalties.
Section 3 of the bill amends s. 409.988, F.S., to require CBCs to comply with regular,
independent auditing of their financial activities, including any requests for records associated
with such financial audits within the timeframe established by the DCF or its contracted vendors.
It also requires the results of financial audits to be provided to the community alliance in the
CBC’s service area rather than the CBC’s financial information being provided to the
community alliance.
The bill prohibits CBCs from subcontracting with a related party for officer or director level
staffing to perform management functions, and requires any contract with a non-related party for
these functions to adhere to the executive compensation provisions in s. 409.922(3), F.S.
The bill prohibits a CBC from providing more than 35 percent of direct child welfare services
unless there is a lack of qualified providers available to perform the necessary services. The bill BILL: CS/CS/CS/SB 536 Page 16
requires an approval period to exceed the 35 percent threshold be limited to 2 years. After this 2-
year period, the CBC may submit annual 1-year extensions with a detailed report of all efforts to
recruit a qualified provider to perform the services for that geographic service area. If the DCF
determines the lead agency is not making a good faith effort to recruit a qualified provider they
must deny the extension and require reprocurement.
The bill expands the data that a CBC must publish on its website to include:
The number of unlicensed placements for the previous month;
The percentages and trends for foster parent and group home recruitment and licensure for
the previous month;
The percentage of families being served through family support, in-home, and out-of-home
services for the previous month;
The percentage of cases that converted from nonjudicial to judicial for the previous month;
and
Children’s legal services staffing rates.
These provisions focus on the business operations of CBCs and tighten requirements around
procurement, the provision of services, and transparency.
Section 4 of the bill repeals s. 409.991, F.S., that details the allocation of funding for
Community-based care lead agencies, as the bill has language implementing a new funding
allocation model.
Section 5 of the bill creates s. 409.9913, F.S., to create a new funding allocation methodology
for CBCs. The bill directs DCF to work in collaboration with CBCs and child welfare providers
to develop this new funding methodology. At a minimum, the methodology must:
Be actuarily sound;
Be reimbursement based;
Be designed to incentivize efficient and effective CBC operations, prevention, family
preservation, and child permanency;
Consider variable costs for in-home and out-of-home care, prevention services, operational
costs, and fixed costs; and
Be scalable to account for regional cost-of-living differences.
The bill itemizes which variables are to be considered “operational and fixed costs” and
reaffirms that “core services funding” refers to all funds allocated to a CBC with certain
exceptions. Operational and fixed costs means administrative expenditures (including, but not
limited to, information technology and human resources), lease payments, asset depreciation,
utilities, and mandated activities such as training, quality improvement, and contract
management. Core services funds do not include funding a CBC receives for independent living
services, adoption subsidies, child protective investigation training, nonrecurring funds, mental
health wrap-around services, special projects, and the Guardianship Assistance Program.
The bill includes three reporting requirements to present the new methodology, to provide
monthly progress reports on the development of the methodology, and to provide annual, BILL: CS/CS/CS/SB 536 Page 17
recommended updates to the methodology that account for any changes to variable costs that
serve as the basis for each CBC allocation:
From July 2024 through October 2024, DCF is required to submit monthly updates to the
Governor and Legislature on the activities and progress in developing the new funding
methodology.
By December 1, 2024, the bill requires DCF to submit the final report on the new
methodology to the Governor and Legislature for consideration during the 2025 Session.
The report shall describe the proposed methodology, the data used to develop the
methodology, and include proposed rates and allocations for each CBC that may not exceed
the total amount of funding provided in the General Appropriations Act for Fiscal Year 2024-
25. The report shall also include risk mitigation recommendations should a CBC’s proposed
allocation negatively impact operations or result in a reduction of services to children.
Beginning October 31, 2025, the bill requires DCF to submit a report annually including
recommended adjustments to the proposed methodology that incorporate fluctuations to the
underlying criteria used to calculate the allocations.
The bill subjects the new funding methodology to the state government planning and budgeting
requirements of Chapter 216. The bill authorizes DCF to report on the proposed rates and total
allocations for each CBC that reflect any additional core service funding requested by DCF in
legislative budget requests.
Beginning with FY 2025-26, the bill requires the Legislature to allocate funding to the CBCs
through the General Appropriations Act with due consideration given to the funding
methodology developed by DCF, in collaboration with the CBCs and child welfare providers.
The bill prohibits DCF from changing the allocation of funds to a CBC as provided in the
General Appropriations Act without legislative approval. However, the bill authorizes DCF to
approve additional risk pool funding for a CBC.
Section 6 of the bill amends s. 409.992, F.S. to require CBCs to competitively procure all
contracts consistent with the simplified acquisition threshold in federal rule (2 C.F.R. part 200),
and requires competitive procurement of all contracts with related parties in excess of $35,000.
The bill also requires financial penalties or sanctions for noncompliance with applicable local,
state, or federal law for the procurement of commodities or contractual services. The bill requires
the DCF to establish and incorporate the financial penalties or sanctions into the CBC contracts.
The bill requires the contract between the DCF and CBCs to delineate the rights and obligations
of the CBC concerning the acquisition, transfer, or other disposition of real property, at a
minimum these rights and obligations must require:
The CBC to follow all federal law on the acquisition, transfer, or other disposition of real
property acquired by the CBC with federal dollars.
The DCF to obtain the rights to and ownership of all real property acquired by the CBC using
state funds.
The DCF to approve any sale, transfer, or disposition of real property acquired and held by
the CBC using state funds. BILL: CS/CS/CS/SB 536 Page 18
The DCF to retain all rights to and ownership of all real property acquired and held by the
CBC upon termination of the CBC contract.
The bill limits the compensation a CBC administrative employee may receive to a capped total
amount not to exceed 150 percent of the annual salary paid to the secretary of the DCF,
regardless of the number of contracts a CBC executes with the DCF.
This is currently $315,000
of combined state and federal funds.
Section 7 of the bill amends s. 409.994, F.S., to expand the situations in which the DCF can
petition the court to initiate receivership of a CBC. The bill expands when the DCF may petition
the court for receivership to include when a CBC is unlikely to meet its financial obligations, and
not simply cannot meet its financial obligations.
Section 8 of the bill amends s. 409.996, F.S. to create flexibility for the DCF to take action
against a CBC by removing a tiered intervention and graduated penalties process and instead
requires contractual actions and financial penalties for performance deficiencies. The bill
requires the DCF, my January 1, 2025, to include the following in CBC contracts:
Contractual actions for failure to comply with contract terms or in the event of performance
deficiencies, as determined by the DCF. Such contractual actions include, but are not limited
to:
o Enhanced monitoring and reporting.
o Corrective action plans.
o Requirements to accept technical assistance and consultation from the DCF.
o Financial penalties for failure to comply with contractual obligations that are directed to
the DCF. The DCF must use these funds to support and provide services to children and
families in the geographic services area of the lead agency from which the funds were
obtained.
Section 9 of the bill requires the DCF to submit two reports to the Governor, President of the
Senate, and Speaker of the House on the rules and policies adopted and other actions taken to
implement the requirements of the bill. The first report is due September 30, 2024 and the second
is due February 1, 2025.
Section 10 provides an effective date of July 1, 2024.
IV. Constitutional Issues:
A. Municipality/County Mandates Restrictions:
None.
B. Public Records/Open Meetings Issues:
None.
C. Trust Funds Restrictions:
None identified. BILL: CS/CS/CS/SB 536 Page 19
D. State Tax or Fee Increases:
None.
E. Other Constitutional Issues:
None identified.
V. Fiscal Impact Statement:
A. Tax/Fee Issues:
None.
B. Private Sector Impact:
There is an indeterminate fiscal impact on the community-based care lead agencies
(CBCs) due to the requirement to post a fidelity bond to cover potential financial
penalties included in the bill.
The bill has no fiscal impact for FY 2024-25 as the only requirements during this fiscal
year are for reports providing monthly updates on the progress of developing the
methodology and for the submission of the proposed funding methodology. For FY 2025-
26, the bill specifies that the sum of the proposed allocations for each CBC may not
exceed the total amount appropriated to CBCs for Fiscal Year 2024-25; however, to the
extent that the proposed methodology suggests an amount to each CBC that is different
that its FY 2024-25 allocation, there may be either a positive or negative fiscal impact to
individual lead agencies.
The bill does not require the Legislature to adopt the proposed methodology for FY 2025-
26, but requires due consideration of such when developing the General Appropriations
Act for FY 2025-26. Furthermore, while the bill specifies that each annual update may
not exceed the total provided to CBCs in the prior fiscal year, it does not preclude DCF
from making a request for additional CBC funding through the Legislative Budget
Request process.
C. Government Sector Impact:
The bill has no fiscal impact on state government expenditures.
VI. Technical Deficiencies:
None.
VII. Related Issues:
None. BILL: CS/CS/CS/SB 536 Page 20
VIII. Statutes Affected:
This bill substantially amends sections 409.016, 409.987, 409.988, 409.992, 409.994, and
409.996 of the Florida Statutes.
This bill creates s. 409.9913 of the Florida Statutes.
This bill repeals s. 409.991 of the Florida Statutes.
IX. Additional Information:
A. Committee Substitute – Statement of Substantial Changes:
(Summarizing differences between the Committee Substitute and the prior version of the bill.)
CS/CS/CS by Fiscal Policy on February 27, 2024:
The committee substitute:
Creates a definition for the term “management functions” and revises the definition
for the term “related party.”
Authorizes DCF to extend 5-year community-based care (CBC) lead agency contracts
for a period of 1-5 years if the CBC lead agency meets performance expectations.
Requires DCF to establish minimum training criteria in CBC lead agency contracts.
Prohibits CBC lead agencies from contracting or being a party to a transaction with a
related party that was not properly disclosed to DCF.
Revises penalties related to disclosure of conflicts of interest, to include removal of a
board member that fails to disclose a known conflict, and penalty amounts.
Requires the CBC to post a fidelity bond to cover any costs associated with penalties
for failure to disclose conflict of interest.
Authorizes CBC lead agencies to subcontract with related parties so long as the fee,
rate, or price being paid does not exceed the fair market value of the commodity or
service.
Requires the CBC lead agencies to report monthly on children’s legal service staffing
rates.
Repeals s. 409.991, F.S., relating to the allocation of funds for CBC lead agencies.
Requires contracts between DCF and CBC lead agencies to address the acquisition,
transfer, or other disposition or real property during the contract term and sets the
minimum requirements of those rights and obligations.
Preserves the “imminent danger” threshold in current law relating to DCF’s
authorization to petition a court for a receivership of a CBC lead agency.
Requires the lead agency, after the initial two year approval, to submit annual
extension requests with a detailed report of all efforts to recruit a qualified provider
and requires DCF to deny that extension and require reprocurement if the DCF
determines the CBC is not making good faith efforts to recruit a qualified provider.
CS/CS by Appropriations Committee on Health and Human Services on February
13, 2024:
The committee substitute: BILL: CS/CS/CS/SB 536 Page 21
Requires the Department of Children and Families (DCF) to use an actuarial-based,
three-tiered payment model for the allocation of core services funds to community-
based care lead agencies (CBCs).
Prohibits a CBC, under contract with the DCF, from subcontracting for management
and oversight functions. Requires that the contract between the CBC and the DCF
detail the administrative functions and services the CBC may subcontract for.
Requires a CBC that received a DCF temporary exemption to exceed the 35%
threshold for directly providing child welfare services, to submit quarterly reports
during the exemption period to the DCF and the community alliance, showing its
efforts to recruit providers to the geographic service area.
CS by Children, Families, and Elder Affairs on January 17, 2024:
The committee substitute adds the following provisions:
Requiring CBC board members to complete annual training, as approved by the DCF,
on their responsibilities.
Include a CBC director, or a relative of a CBC director, to persons who can have a
conflict of interest.
Retaining current statutory language on the process of a CBC disclosing a conflict of
interest to the DCF and allowing the DCF to impose civil penalties if a CBC does not
properly disclose known or potential conflicts of interest as required by that process.
Requiring CBC board members to disclose any known, actual, or potential conflicts
of interest.
Requiring CBCs to competitively procure all contracts with related parties over
$35,000.
Requiring the DCF to impose civil penalties against a CBC that procures a contract
without proper disclosure of a conflict of interest on any contract entered into by the
CBC, regardless of the method of procurement, including, but not limited to, formal
procurement, single-source contract, and contracts that do not meet the minimum
threshold for formal procurement.
Requiring subcontracts over $250,000 to comply with the competitive procurement
process.
Allowing a CBC to exceed the threshold of providing more than 35 percent of child
welfare services in its service area if there is a lack of viable providers and limits the
approval to exceed the 35 percent threshold to two years.
Delaying implementation of the CBC funding model changes until July 1, 2025.
Including a list of Tier 1 operational base costs in the actuarially sound funding
model.
Requiring a CBC to return any funds from the sale, transfer, or other dispossession of
real property to the DCF.
Updating a cross-reference for early termination of a CBC contract.
Retaining the requirements that the DCF must submit an annual report on the child
welfare results-oriented accountability program.
The committee substitute removes the following provisions:
Requiring CBCs to submit certain judicial documents to the DCF attorneys within
specific timeframes. BILL: CS/CS/CS/SB 536 Page 22
Requiring CBCs to submit spending plans to the DCF for approval prior to receiving
allocated funds.
Allowing a written certification by the DCF’s secretary to serve as prima facie to file
a petition for receivership of a CBC.
Requiring CBC contracts to include sanctions or disincentives for failure to comply
with specific items.
B. Amendments:
None.
This Senate Bill Analysis does not reflect the intent or official position of the bill’s introducer or the Florida Senate.