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