Florida Senate - 2024 COMMITTEE AMENDMENT
Bill No. CS for CS for SB 536
Ì736738OÎ736738
LEGISLATIVE ACTION
Senate . House
Comm: RCS .
02/28/2024 .
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The Committee on Fiscal Policy (Garcia) recommended the
following:
1 Senate Amendment (with title amendment)
2
3 Delete everything after the enacting clause
4 and insert:
5 Section 1. Subsections (3) and (4) of section 409.016,
6 Florida Statutes, are renumbered as subsections (4) and (5),
7 respectively, and new subsection (3) is added to that section,
8 to read:
9 409.016 Definitions.—As used in this chapter:
10 (3) “Management functions” means:
11 (a) Planning, directing, organizing, coordinating, and
12 carrying out oversight duties of the lead agency;
13 (b) Contracting for officer or director level staffing in
14 performance of the planning, directing, organizing,
15 coordinating, and carrying out oversight duties of the lead
16 agency.
17 (4)(3) “Secretary” means the secretary of the Department of
18 Children and Families.
19 (5)(4) “Social and economic services,” within the meaning
20 of this chapter, means the providing of financial assistance as
21 well as preventive and rehabilitative social services for
22 children, adults, and families.
23 Section 2. Subsections (3) and (4) and paragraphs (a) and
24 (b) of subsection (7) of section 409.987, Florida Statutes, are
25 amended to read, and paragraph (g) is added to subsection (7) of
26 that section, to read:
27 409.987 Lead agency procurement; boards; conflicts of
28 interest.—
29 (3) Notwithstanding s. 287.057, the department shall use 5
30 year contracts with lead agencies. The department may only
31 extend for a period of one to five years, in accordance with s.
32 287.057, if the lead agency has met performance expectations
33 within the monitoring evaluation.
34 (4) In order to serve as a lead agency, an entity must:
35 (a) Be organized as a Florida corporation or a governmental
36 entity.
37 (b) Be governed by a board of directors or a board
38 committee composed of board members. Board members shall provide
39 oversight and ensure accountability and transparency for the
40 system of care. The board of directors shall provide fiduciary
41 oversight to prevent conflicts of interest, promote
42 accountability and transparency, and protect state and federal
43 funding from misuse. The board of directors shall act in
44 accordance with s. 617.0830. The membership of the board of
45 directors or board committee must be described in the bylaws or
46 articles of incorporation of each lead agency, which must
47 provide that at least 75 percent of the membership of the board
48 of directors or board committee must be composed consist of
49 persons residing in this state, and at least 51 percent of the
50 state residents on the board of directors must reside within the
51 service area of the lead agency. The lead agency shall ensure
52 that board members participate in annual training related to
53 their responsibilities. The department shall set forth minimum
54 training criteria in the contracts with the lead agencies.
55 However, for procurements of lead agency contracts initiated on
56 or after July 1, 2014:
57 1. At least 75 percent of the membership of the board of
58 directors must be composed consist of persons residing in this
59 state, and at least 51 percent of the membership of the board of
60 directors must be composed consist of persons residing within
61 the service area of the lead agency. If a board committee
62 governs the lead agency, 100 percent of its membership must be
63 composed consist of persons residing within the service area of
64 the lead agency.
65 2. The powers of the board of directors or board committee
66 include, but are not limited to, approving the lead agency’s
67 budget and setting the lead agency’s operational policy and
68 procedures. A board of directors must additionally have the
69 power to hire the lead agency’s executive director, unless a
70 board committee governs the lead agency, in which case the board
71 committee must have the power to confirm the selection of the
72 lead agency’s executive director.
73 (c) Demonstrate financial responsibility through an
74 organized plan for regular fiscal audits; and the posting of a
75 performance bond; and the posting of a fidelity bond to cover
76 any costs associated with reprocurement and the assessed
77 penalties related to a failure to disclose a conflict of
78 interest under subsection (7).
79 (7)(a) As used in this subsection, the term:
80 1. “Activity” includes, but is not limited to, a contract
81 for goods and services, a contract for the purchase of any real
82 or tangible property, or an agreement to engage with a lead
83 agency for the benefit of a third party in exchange for an
84 interest in real or tangible property, a monetary benefit, or an
85 in-kind contribution.
86 2. “Conflict of interest” means when a board member,
87 director, or an officer, or a relative of a board member,
88 director, or an officer, of a lead agency does any of the
89 following:
90 a. Enters into a contract or other transaction for goods or
91 services with the lead agency.
92 b. Holds a direct or indirect interest in a corporation,
93 limited liability corporation, partnership, limited liability
94 partnership, or other business entity that conducts business
95 with the lead agency or proposes to enter into a contract or
96 other transaction with the lead agency. For purposes of this
97 paragraph, the term “indirect interest” has the same meaning as
98 in s. 112.312.
99 c. Knowingly obtains a direct or indirect personal,
100 financial, professional, or other benefit as a result of the
101 relationship of such board member, director, or officer, or
102 relative of the board member, director, or officer, with the
103 lead agency. For purposes of this paragraph, the term “benefit”
104 does not include per diem and travel expenses paid or reimbursed
105 to board members or officers of the lead agency in connection
106 with their service on the board.
107 3. “Related party” means any entity of which a director or
108 an officer of the entity is also directly or indirectly related
109 to, or has a direct or indirect financial or other material
110 interest in, the lead agency. The term also includes any
111 subsidiary firm, parent entity, associate firm, or joint
112 venture.
113 4.3. “Relative” means a relative within the third degree of
114 consanguinity by blood or marriage.
115 (b)1. For any activity that is presented to the board of a
116 lead agency for its initial consideration and approval after
117 July 1, 2021, or any activity that involves a contract that is
118 being considered for renewal on or after July 1, 2021, but
119 before January 1, 2022, a board member, a director, or an
120 officer of a lead agency shall disclose to the board any
121 activity that may reasonably be construed to be a conflict of
122 interest before such activity is initially considered and
123 approved or a contract is renewed by the board. A rebuttable
124 presumption of a conflict of interest exists if the activity was
125 acted on by the board without prior notice as required under
126 paragraph (c). The board shall disclose any known actual or
127 potential conflicts to the department.
128 2. A lead agency may not enter into a contract or be a
129 party to any transaction with related parties if a conflict of
130 interest is not properly disclosed. A lead agency may not enter
131 into a contract with a related party for officer or director
132 level staffing to perform management functions. The contract
133 with the department and lead agency must specify the
134 administrative functions and services that the lead agency may
135 subcontract For contracts with a lead agency which are in
136 existence on July 1, 2021, and are not subject to renewal before
137 January 1, 2022, a board member or an officer of the lead agency
138 shall disclose to the board any activity that may reasonably be
139 construed to be a conflict of interest under this section by
140 December 31, 2021.
141 3. Subject to the requirements of subparagraph 2. of this
142 subsection, a lead agency may enter into a contract or be a
143 party to any transaction with related parties as long as the
144 fee, rate, or price paid by the lead agency for the commodities
145 or services being procured does not exceed the fair market value
146 for such commodities or services. The lead agency shall disclose
147 any known actual or potential conflicts to the department.
148 (g) All department contracts with lead agencies shall
149 contain the following contractual penalty provisions:
150 1. Penalties in the amount of $5,000 per occurrence shall
151 be imposed for each known and potential conflict of interest, as
152 described in paragraph (b), which is not disclosed to the
153 department.
154 2. If a contract is executed for which a conflict of
155 interest was not disclosed to the department before execution of
156 the contract, the following penalties apply:
157 i. A penalty in the amount of $25,000 for a first offense.
158 ii. A penalty in the amount of $50,000 for a second or
159 subsequent offense.
160 iii. Removal of the board member that did not disclose a
161 known conflict of interest.
162 3. The penalties for failure to disclose a conflict of
163 interest under subparagraph (1) and (2) apply to any contract
164 entered into, regardless of the method of procurement,
165 including, but not limited to, formal procurement, single-source
166 contracts, and contracts that do not meet the minimum threshold
167 for formal procurement.
168 4. A contract procured for which a conflict of interest was
169 not disclosed to the department before execution of the contract
170 shall be reprocured. The department shall recoup from the lead
171 agency expenses related to a contract that was executed without
172 disclosure of a conflict of interest.
173 Section 3. Paragraphs (c), (j), and (k) of subsection (1)
174 of section 409.988, Florida Statutes, are amended to read:
175 409.988 Community-based care lead agency duties; general
176 provisions.—
177 (1) DUTIES.—A lead agency:
178 (c) Shall follow the financial guidelines developed by the
179 department and shall comply with regular, independent auditing
180 of its financial activities, including any requests for records
181 associated with such financial audits within the timeframe
182 established by the department or its contracted vendors provide
183 for a regular independent auditing of its financial activities.
184 The results of the financial audit must Such financial
185 information shall be provided to the community alliance
186 established under s. 20.19(5).
187 (j)1. May subcontract for the provision of services,
188 excluding with a related party for officer or director level
189 staffing to perform management functions, required by the
190 contract with the lead agency and the department; however, the
191 subcontracts must specify how the provider will contribute to
192 the lead agency meeting the performance standards established
193 pursuant to the child welfare results-oriented accountability
194 system required by s. 409.997. Any contract with a non-related
195 entity for officer or director level staffing to perform
196 management functions must adhere to the executive compensation
197 provision in s. 409.922(3).
198 2. The lead agency shall directly provide no more than 35
199 percent of all child welfare services provided unless it can
200 demonstrate a need, within the lead agency’s geographic service
201 area, where there is a lack of qualified providers available to
202 perform necessary child welfare services. The approval period to
203 exceed the threshold shall be limited to 2 years.to exceed this
204 threshold. After the 2-year period, the lead agency may submit
205 annual 1-year extension requests with a detailed report of all
206 efforts to recruit a qualified provider to perform the necessary
207 services to that geographic service area. If the department
208 determines the lead agency is not making a good faith effort to
209 recruit a qualified provider they must deny the extension
210 request and require reprocurement. The local community alliance
211 in the geographic service area in which the lead agency is
212 seeking to exceed the threshold shall review the lead agency’s
213 justification for need and recommend to the department whether
214 the department should approve or deny the lead agency’s request
215 for an exemption from the services threshold. If there is not a
216 community alliance operating in the geographic service area in
217 which the lead agency is seeking to exceed the threshold, such
218 review and recommendation shall be made by representatives of
219 local stakeholders, including at least one representative from
220 each of the following:
221 1. The department.
222 2. The county government.
223 3. The school district.
224 4. The county United Way.
225 5. The county sheriff’s office.
226 6. The circuit court corresponding to the county.
227 7. The county children’s board, if one exists.
228 (k) Shall publish on its website by the 15th day of each
229 month at a minimum the data specified in subparagraphs 1.-10.5.,
230 calculated using a standard methodology determined by the
231 department, for the preceding calendar month regarding its case
232 management services. The following information shall be reported
233 by each individual subcontracted case management provider, by
234 the lead agency, if the lead agency provides case management
235 services, and in total for all case management services
236 subcontracted or directly provided by the lead agency:
237 1. The average caseload of case managers, including only
238 filled positions;
239 2. The total number and percentage of case managers who
240 have 25 or more cases on their caseloads;
241 3. The turnover rate for case managers and case management
242 supervisors for the previous 12 months;
243 4. The percentage of required home visits completed; and
244 5. Performance on outcome measures required pursuant to s.
245 409.997 for the previous 12 months.
246 6. The number of unlicensed placements for the previous
247 month;
248 7. The percentages and trends for foster parent and group
249 home recruitment and licensure for the previous month;
250 8. The percentage of families being served through family
251 support, in-home, and out-of-home services for the previous
252 month; and
253 9. The percentage of cases that converted from nonjudicial
254 to judicial for the previous month.
255 10. Children’s legal service staffing rates.
256 Section 4. Section 409.991, Florida Statutes, is repealed.
257 Section 5. Section 409.9913, Florida Statutes, is created
258 to read:
259 409.9913 Funding methodology to allocate funding to lead
260 agencies.—
261 (1) As used in this section, the term:
262 (a) “Core services funding” means all funds allocated to
263 lead agencies. The term does not include any of the following:
264 1. Funds appropriated for independent living services.
265 2. Funds appropriated for maintenance adoption subsidies.
266 3. Funds allocated by the department for child protective
267 investigation service training.
268 4. Nonrecurring funds.
269 5. Designated mental health wrap-around service funds.
270 6. Funds for special projects for a designated lead agency.
271 7. Funds appropriated for the Guardianship Assistance
272 Program established under s. 39.6225.
273 (b) “Operational and fixed costs” means:
274 1. Administrative expenditures, including, but not limited
275 to, information technology and human resources functions.
276 2. Lease payments.
277 3. Asset depreciation.
278 4. Utilities.
279 5. Administrative components of case management.
280 6. Mandated activities such as training, quality
281 improvement, or contract management.
282 (2) The department shall develop, in collaboration with
283 lead agencies and providers of child welfare services, a funding
284 methodology for allocating core services funding to lead
285 agencies which, at a minimum:
286 (a) Is actuarially sound.
287 (b) Is reimbursement based.
288 (c) Is designed to incentivize efficient and effective lead
289 agency operation, prevention, family preservation, and
290 permanency.
291 (d) Considers variable costs, including, but not limited
292 to:
293 1. Direct costs for in-home and out-of-home care for
294 children served by the lead agencies.
295 2. Direct costs for prevention services.
296 3. Operational and fixed costs.
297 (f) Is scaled regionally for cost-of-living factors.
298 (3) The lead agencies and providers shall submit any
299 detailed cost and expenditure data that the department requests
300 for the development of the funding methodology.
301 (4) The department shall submit a report to the Governor,
302 the President of the Senate, and the Speaker of the House of
303 Representatives by December 1, 2024, which, at a minimum:
304 (a) Describes a proposed funding methodology and formula
305 that will provide for the annual budget of each lead agency,
306 including, but not limited to, how the proposed methodology will
307 meet the criteria in subsection (2).
308 (b) Describes the data used to develop the methodology, and
309 the data that will be used to annually calculate the proposed
310 lead agency budget.
311 (c) Specifies proposed rates and total allocations for each
312 lead agency. The allocations must ensure that the total of all
313 amounts allocated to lead agencies under the funding methodology
314 does not exceed the total amount appropriated to lead agencies
315 in the General Appropriations Act in the 2024-2025 fiscal year.
316 (d) Provides risk mitigation recommendations that ensure
317 that lead agencies do not experience a reduction in funding that
318 would be detrimental to operations or result in a reduction in
319 services to children.
320 (5) By October 31 of each year, beginning in 2025, the
321 department shall submit a report to the Governor, the President
322 of the Senate, and the Speaker of the House of Representatives
323 which includes recommendations for adjustments to the funding
324 methodology for the next fiscal year, using the criteria in
325 subsection (2) and basing the recommendations on, at a minimum,
326 updated expenditure data, cost-of-living adjustments, market
327 dynamics, or other catchment area variations. The total of all
328 amounts proposed for allocation to lead agencies under the
329 funding methodology for the next fiscal year may not exceed the
330 total amount appropriated for core services funding in the
331 current fiscal year’s General Appropriations Act. The funding
332 methodology must include risk mitigation strategies that ensure
333 that lead agencies do not experience a reduction in funding that
334 would be detrimental to operations or result in a reduction in
335 services to children.
336 (6)(a) The requirements of this section do not replace, and
337 must be in addition to, any requirements of chapter 216,
338 including, but not limited to, submission of final legislative
339 budget requests by the department under s. 216.023.
340 (b) The data and reports required under subsections (4) and
341 (5) may also include proposed rates and total allocations for
342 each lead agency which reflect any additional core services
343 funding for lead agencies which is requested by the department
344 under s. 216.023.
345 (7)(a) Beginning with the 2025-2026 fiscal year, the
346 Legislature shall allocate funding to lead agencies through the
347 General Appropriations Act with due consideration of the funding
348 methodology developed under this section.
349 (b) The department may not change the allocation of funds
350 to a lead agency as provided in the General Appropriations Act
351 without legislative approval. The department may approve
352 additional risk pool funding for a lead agency as provided under
353 s. 409.990.
354 (8) The department shall provide to the Governor, the
355 President of the Senate, and the Speaker of the House of
356 Representatives monthly reports from July through October 2024
357 which provide updates on activities and progress in developing
358 the funding methodology.
359 Section 6. Subsections (1) and (3) of section 409.992,
360 Florida Statutes, are amended to read:
361 409.992 Lead agency expenditures.—
362 (1) The procurement of commodities or contractual services
363 by lead agencies is shall be governed by the financial
364 guidelines developed by the department and must comply with
365 applicable state and federal law and follow good business
366 practices. Pursuant to s. 11.45, the Auditor General may provide
367 technical advice in the development of the financial guidelines.
368 (a)1. Lead agencies shall competitively procure all
369 contracts, consistent with the federal simplified acquisition
370 threshold.
371 2. Lead agencies shall competitively procure all contracts
372 in excess of $35,000 with related parties.
373 3. Financial penalties or sanctions, as established by the
374 department and incorporated into the contract, shall be imposed
375 by the department for noncompliance with applicable local,
376 state, or federal law for the procurement of commodities or
377 contractual services.
378 (b) The contract between the department and the lead agency
379 must delineate the rights and obligations of the lead agency
380 concerning the acquisition, transfer, or other disposition of
381 real property. At a minimum, the contract must:
382 1. Require the lead agency to follow all federal law on the
383 acquisition, improvement, transfer, or disposition of real
384 property acquired by the lead agency using federal dollars.
385 2. Require the department to obtain the rights to and
386 ownership of all real property acquired by the lead agency using
387 state funds.
388 3. Require the department to approve any sale, transfer, or
389 disposition of real property acquired and held by the lead
390 agency using state funds.
391 4. Require the department to retain all rights to and
392 ownership of all real property acquired with state funds and
393 held by the lead agency upon termination of the lead agency
394 contract.
395 (3) Notwithstanding any other provision of law, a
396 community-based care lead agency administrative employee may not
397 receive a salary, whether base pay or base pay combined with any
398 bonus or incentive payments, in excess of 150 percent of the
399 annual salary paid to the secretary of the Department of
400 Children and Families from state-appropriated funds, including
401 state-appropriated federal funds. This limitation applies
402 regardless of the number of contracts a community-based care
403 lead agency may execute with the department. This subsection
404 does not prohibit any party from providing cash that is not from
405 appropriated state funds to a community-based care lead agency
406 administrative employee.
407 Section 7. Paragraph (d) of subsection (1) of section
408 409.994, Florida Statutes, is amended to read:
409 409.994 Community-based care lead agencies; receivership.—
410 (1) The Department of Children and Families may petition a
411 court of competent jurisdiction for the appointment of a
412 receiver for a community-based care lead agency established
413 pursuant to s. 409.987 if any of the following conditions exist:
414 (d) The lead agency cannot meet, or is unlikely to meet,
415 its current financial obligations to its employees, contractors,
416 or foster parents. Issuance of bad checks or the existence of
417 delinquent obligations for payment of salaries, utilities, or
418 invoices for essential services or commodities constitutes shall
419 constitute prima facie evidence that the lead agency lacks the
420 financial ability to meet its financial obligations.
421 Section 8. Paragraph (d) of subsection (1) of section
422 409.996, Florida Statutes, is amended to read:
423 409.996 Duties of the Department of Children and Families.
424 The department shall contract for the delivery, administration,
425 or management of care for children in the child protection and
426 child welfare system. In doing so, the department retains
427 responsibility for the quality of contracted services and
428 programs and shall ensure that, at a minimum, services are
429 delivered in accordance with applicable federal and state
430 statutes and regulations and the performance standards and
431 metrics specified in the strategic plan created under s.
432 20.19(1).
433 (1) The department shall enter into contracts with lead
434 agencies for the performance of the duties by the lead agencies
435 established in s. 409.988. At a minimum, the contracts must do
436 all of the following:
437 (d) Provide for contractual actions tiered interventions
438 and graduated penalties for failure to comply with contract
439 terms or in the event of performance deficiencies, as determined
440 appropriate by the department.
441 1. Such contractual actions must interventions and
442 penalties shall include, but are not limited to:
443 a.1. Enhanced monitoring and reporting.
444 b.2. Corrective action plans.
445 c.3. Requirements to accept technical assistance and
446 consultation from the department under subsection (6).
447 d.4. Financial penalties, which shall require a lead agency
448 to directreallocate funds from administrative costs to the
449 department. The department shall use collected funds to support
450 and provide services to children and families in the geographic
451 service area of the lead agency from which the funds were
452 obtaineddirect care for children.
453 e.5. Early termination of contracts, as provided in s.
454 402.7305(3)(f) s. 402.1705(3)(f).
455 2. No later than January 1, 2025, the department shall
456 ensure that each lead agency contract executed includes a list
457 of financial penalties for failure to comply with contractual
458 requirements.
459 Section 9. The Department of Children and Families shall
460 submit a report to the Governor, the President of the Senate,
461 and the Speaker of the House of Representatives on rules and
462 policies adopted and other actions taken to implement the
463 requirements of this act. The first such report must be due
464 September 30, 2024, and the second such report must be due
465 February 1, 2025.
466 Section 10. This act shall take effect July 1, 2024.
467 ================= T I T L E A M E N D M E N T ================
468 And the title is amended as follows:
469 Delete everything before the enacting clause
470 and insert:
471 A bill to be entitled
472 An act relating to community-based child welfare
473 agencies; amending s. 409.016, F.S.; defining the term
474 “management functions”; amending s. 409.987, F.S.;
475 revising requirements for contracts the Department of
476 Children and Families has with community-based care
477 lead agencies; revising requirements for an entity to
478 serve as a lead agency; providing duties for board
479 members of lead agencies; requiring that lead agencies
480 ensure that board members participate in certain
481 annual training; requiring the posting of a fidelity
482 bond; revising the definition of the term “conflict of
483 interest”; defining the term “related party”;
484 requiring the lead agency’s board of directors to
485 disclose any known or potential conflicts of interest;
486 prohibiting a lead agency from entering into a
487 contract or being a party to any transaction with
488 related parties if a conflict of interest is not
489 properly disclosed; prohibiting a lead agency from
490 entering into a contract or being a party to any
491 transaction with related parties for officer or
492 director level staffing to perform management
493 functions; authorizing a lead agency to enter into
494 certain contracts or be a party to certain
495 transactions so long as any conflict of interest is
496 properly disclosed; requiring contractual penalties on
497 lead agencies for undisclosed conflicts of interest;
498 providing applicability; requiring certain contracts
499 to be reprocured; authorizing the department to recoup
500 lead agency expenses for the execution of certain
501 contracts; amending s. 409.988, F.S.; revising lead
502 agency duties; repealing s. 409.991, F.S., relating to
503 allocation of funds for community-based care lead
504 agencies; creating s. 409.9913, F.S.; providing
505 definitions; requiring the department, in
506 collaboration with the lead agencies and providers of
507 child welfare services, to develop a specific funding
508 methodology for the allocation of core services that
509 meets certain criteria; requiring the lead agencies
510 and providers of child welfare services to submit to
511 the department certain financial information;
512 requiring the department to submit to the Governor and
513 the Legislature certain reports by the established
514 deadlines; subjecting the allocation of core services
515 to the requirements of ch. 216, F.S.; authorizing the
516 department to include certain rates and total
517 allocations in certain reports; requiring the
518 Legislature to allocate funding to the lead agencies
519 with due consideration of the funding methodology,
520 beginning with the 2025-2026 fiscal year; prohibiting
521 the department from changing a lead agency’s
522 allocation of funds provided in the General
523 Appropriations Act without legislative approval;
524 authorizing the department to approve certain risk
525 pool funding for a lead agency; requiring the
526 department to submit to the Governor and the
527 Legislature certain reports by the established
528 deadlines; amending s. 409.992, F.S.; revising
529 requirements for lead agency practices in the
530 procurement of commodities and contractual services;
531 requiring the department to impose certain penalties
532 for a lead agency’s noncompliance with applicable
533 procurement law; requiring the contract between the
534 department and the lead agency to specify the rights
535 and obligations to real property held by the lead
536 agency during the term of the contract; providing
537 applicability of certain limitations on the salaries
538 of community-based care lead agency administrative
539 employees; amending s. 409.994, F.S.; revising the
540 conditions under which the department may petition a
541 court for the appointment of a receiver for a
542 community-based care lead agency; amending s. 409.996,
543 F.S.; revising requirements for contracts between the
544 department and lead agencies; revising the actions the
545 department may take under certain circumstances;
546 making a technical change; providing duties of the
547 department; providing reporting requirements;
548 providing an effective date.