Community Care Licensing

The Governor proposes to increase CCL fees to support increased investigations in two program areas. We discuss this proposal below and provide an alternative approach that achieves General Fund savings in the budget year.

Governor’s Community Care Facility Fee Increase Proposal

The Governor’s budget proposes to add 30 new positions to the CCL Division of DSS to address (1) an increased workload in investigating subsequent arrest reports for persons previously criminally cleared to operate or work at licensed community care facilities, and (2) issues recently identified by the Bureau of State Audits (BSA) related to checking that registered sex offenders were not residing at, or otherwise had access to, such facilities. The Governor proposes to fund these new positions with additional fee revenues generated by a 16 percent increase in application and annual fees for licensed facilities. We discuss these two aspects of the proposal in more detail below.

Workload Increase in Subsequent Criminal Arrest Investigations. All individuals who are licensed to operate, work in, or reside at a community care facility must receive a criminal background check. The Caregiver Background Check Bureau within CCL supports the processing and monitoring of background checks and arrest records for these individuals. The bureau is responsible for reviewing and responding to both initial background checks and any subsequent criminal activity involving an arrest. Upon an investigation and analysis by the bureau of subsequent criminal arrests, CCL may revoke the individual’s ability to be involved with the licensed facility. Typically, violent crimes result in such suspensions, while many nonviolent crimes do not.

Over the last three years, there has been a 17 percent increase in the overall number of criminal arrest records submitted to the bureau for review. In particular, the number of subsequent crime arrest records that warrant investigation by the bureau has increased by 60 percent. As a result of this increase in workload, CCL estimates that there is an existing backlog of about 1,400 individuals who require review, investigation, and/or analysis by the bureau. Pending such investigation, these individuals, if not incarcerated, are generally allowed to work in community care facilities.

The Governor’s budget proposes to add approximately $2.1 million and 21.5 positions to CCL to address these workload increases. About $1.8 million of this augmentation would be funded through the proposed 16 percent fee increase, while the remaining $318,000 would be supported with federal funds.

Service Expansion Related to Investigations of Registered Sex Offenders. In April 2008, the BSA released a report that identified 49 registered sex offenders who matched 46 addresses of licensed facilities. This resulted from a review of records pertaining to over 60,000 licensed child care and foster care homes and facilities. The CCL took subsequent actions to investigate the BSA findings and, in two instances, suspended licenses and took legal action against facilities or homes in which registered sex offenders had access and children in care were present. In 11 other cases, CCL found that the offenders had access to a facility or home with an active license, but that no children in care were present. Nevertheless, these licenses were also suspended. All of the remaining address matches required no further action from CCL as they were determined to present no safety risks.

Partly in response to the BSA findings and to decrease any potential risk of abuse or harm to children and adults served by licensed facilities, the CCL proposes to expand its investigation efforts related to registered sex offenders. These efforts include providing online data to parole and probation officers about the locations of licensed facilities, conducting an annual match of address data with licensee addresses, and extending the address match process to county–licensed homes and relative placement addresses.

The Governor’s budget proposes to add approximately $1.4 million and 8.5 positions to CCL to expand efforts related to these investigations. About $1.2 million of this augmentation would be funded through the proposed 16 percent fee increase, while the remaining $190,000 would be supported with federal funds. In addition, the budget includes an additional $458,000, supported by the fee increase, for counties that operate licensing programs under contract to the state to undertake comparable activities.

LAO Alternative: Increase Fees Now and Gradually Increase Investigation Efforts

The Governor’s budget proposes increasing fees by 16 percent, which generates about $3.5 million in additional revenue, to support the proposal described in the previous section. Our recommendation is to increase fees by a higher amount than proposed by the Governor, and gradually invest the additional fee revenue in the program areas described in the Governor’s proposal. Specifically, we recommend (1) a higher fee increase of 25 percent (raising $5.4 million), (2) funding the workload increase related to subsequent crime arrest investigations (at a cost of $1.8 million), and (3) funding the data–sharing portion of the expanded efforts related to registered sex offender investigations now (at a cost of $96,000) and delaying consideration of the remaining efforts for two years. This option results in a net General Fund benefit of $3.5 million in 2009–10, with similar savings in 2010–11.

Fee Revenue. Figure 15 compares examples of current annual and application fees to the Governor’s and LAO’s proposed fees. Under our approach of increasing fees by 25 percent, revenues would increase by about $1.9 million more than the Governor’s proposal, for a total of $5.4 million in 2009–10. These fees have not been raised since 2004–05 and currently recover about 35 percent of the state cost of licensing and enforcement activities. We estimate a 25 percent fee increase would raise the state’s cost recovery to about 45 percent.

Gradual Investment in Expanded Registered Sex Offender Investigations. The state currently invests in several processes and programs through the California Department of Corrections and Rehabilitation, the Department of Justice, and local probation agencies to monitor the whereabouts of registered sex offenders. Given these existing efforts, we believe the development of the data–sharing capability is justified at this time. Therefore, we recommend funding this portion of the Governor’s proposed efforts to expand CCL’s registered sex offender investigations. Specifically, we recommend providing total funds of $111,000 to develop, administer, and maintain a Web site for sharing location information on community care facilities with parole agents and probation officers, offender placement agencies, and local offender registration officials. We believe funding this specific tool will enhance the efforts of existing resources that are dedicated to the monitoring of registered sex offenders.

As for the remaining proposed efforts to expand CCL’s registered sex offender investigations, we believe that CCL has a sound existing process in place—through background checks and review of criminal arrest records—to check for potential registered sex offender involvement with licensed facilities. This existing process contributed to the low incidence of actions resulting from the address matches identified by BSA. Therefore, although these proposed efforts to expand investigations of registered sex offenders have merit, these efforts represent a higher service level which we believe can wait for consideration for two years. At that time, the Legislature can reconsider the merit of these additional positions and the state’s fiscal condition.