SF 3462

as introduced - 93rd Legislature (2023 - 2024) Posted on 02/12/2024 04:53pm

A bill for an act
relating to child care assistance programs; modifying record-keeping requirements;
modifying child care assistance program fraud investigations; amending Minnesota
Statutes 2022, sections 245E.01, subdivision 8; 245E.02, subdivisions 1, 2, 3, 4;
245E.05, subdivision 1; Minnesota Statutes 2023 Supplement, section 119B.125,
subdivision 6; repealing Minnesota Statutes 2022, section 119B.09, subdivision
9a.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

Section 1.

Minnesota Statutes 2023 Supplement, section 119B.125, subdivision 6, is
amended to read:

Subd. 6.

Record-keeping requirement.

(a) As a condition of payment, all providers
receiving child care assistance payments must:

(1) keep accurate and legible daily attendance records at the site where services are
delivered for children receiving child care assistance; and

(2) make those records available deleted text begin immediately deleted text end to the county or the commissioner deleted text begin upon deleted text end new text begin
within ten business days of receiving a new text end request new text begin from the county or the commissioner new text end . Any
records not provided to a county or the commissioner deleted text begin at the date and time deleted text end new text begin within ten business
days new text end of the request are deemed inadmissible if offered as evidence by the provider in any
proceeding to contest an overpayment or disqualification of the provider.

(b) As a condition of payment, attendance records must be completed daily and include
the date, the first and last name of each child in attendance, and the times when each child
is dropped off and picked up. To the extent possible, the times that the child was dropped
off to and picked up from the child care provider must be entered by the person dropping
off or picking up the child. The daily attendance records must be retained deleted text begin at the site where
services are delivered deleted text end for six years after the date of service. new text begin For at least two years after the
date of service, the records must be retained at the site where services are delivered.
new text end

(c) When the county or the commissioner knows or has reason to believe that a current
or former provider has not complied with the record-keeping requirement in this subdivision:

(1) the commissioner may:

(i) deny or revoke a provider's authorization to receive child care assistance payments
under section 119B.13, subdivision 6, paragraph (d);

(ii) pursue an administrative disqualification under sections 256.046, subdivision 3, and
256.98; or

(iii) take an action against the provider under chapter 245E; or

(2) a county or the commissioner may establish an attendance record overpayment under
paragraph (d).

(d) To calculate an attendance record overpayment under this subdivision, the
commissioner or county agency shall subtract the maximum daily rate from the total amount
paid to a provider for each day that a child's attendance record is missing, unavailable,
incomplete, inaccurate, or otherwise inadequate.

(e) The commissioner shall develop criteria for a county to determine an attendance
record overpayment under this subdivision.

Sec. 2.

Minnesota Statutes 2022, section 245E.01, subdivision 8, is amended to read:

Subd. 8.

Financial misconduct or misconduct.

"Financial misconduct" or "misconduct"
means an entity's or individual's new text begin fraudulent or abusive new text end acts or omissions deleted text begin that result in fraud
and abuse or error deleted text end against the Department of Human Services. new text begin To be fraudulent or abusive,
the acts or omissions must be intentional or show a pattern of willful disregard for the
department's record-keeping requirements. new text end Financial misconduct includes acting as a recruiter
offering conditional employment on behalf of a provider that has received funds from the
child care assistance program.

Sec. 3.

Minnesota Statutes 2022, section 245E.02, subdivision 1, is amended to read:

Subdivision 1.

Investigating provider or recipient financial misconduct.

The
department shall investigate alleged or suspected financial misconduct by providers deleted text begin and
errors deleted text end related to payments issued by the child care assistance program under this chapter.
Recipients, employees, and staff may be investigated when the evidence shows that their
conduct is related to the financial misconduct of a provider, license holder, or controlling
individual. When the alleged or suspected financial misconduct relates to acting as a recruiter
offering conditional employment on behalf of a provider that has received funds from the
child care assistance program, the department may investigate the provider, center owner,
director, manager, license holder, or other controlling individual or agent, who is alleged
to have acted as a recruiter offering conditional employment.

Sec. 4.

Minnesota Statutes 2022, section 245E.02, subdivision 2, is amended to read:

Subd. 2.

Scope of investigations.

(a) The department may contact any person, agency,
organization, or other entity that is necessary to an investigation new text begin of alleged or suspected
financial misconduct new text end .

(b) The department may examine or interview any individual, document, or piece of
evidence that may lead to information that is relevant to deleted text begin child care assistance program
benefits, payments, and child care provider authorizations deleted text end new text begin an investigation of alleged or
suspected financial misconduct new text end . This includes, but is not limited to:

(1) child care assistance program payments new text begin , benefits, and authorizations new text end ;

(2) services provided by the program or related to child care assistance program recipients;

(3) services provided to a provider;

(4) provider financial records of any type;

(5) daily attendance records of the children receiving services from the provider;

(6) billings; and

(7) verification of the credentials of a license holder, controlling individual, employee,
staff person, contractor, subcontractor, and entities under contract with the provider to
provide services or maintain service and the provider's financial records related to those
services.

Sec. 5.

Minnesota Statutes 2022, section 245E.02, subdivision 3, is amended to read:

Subd. 3.

Determination of investigation.

After completing its investigation, the
department shall issue one of the following determinations:

(1) no deleted text begin violation of child care assistance requirements deleted text end new text begin financial misconduct new text end occurred;

(2) there is insufficient evidence to show that deleted text begin a violation of child care assistance
requirements deleted text end new text begin financial misconduct new text end occurred;

(3) a preponderance of evidence shows deleted text begin a violation of child care assistance program law,
rule, or policy deleted text end new text begin financial misconduct occurred new text end ; or

(4) there exists a credible allegation of new text begin criminal new text end fraud.

Sec. 6.

Minnesota Statutes 2022, section 245E.02, subdivision 4, is amended to read:

Subd. 4.

Actions or administrative sanctions.

(a) After completing the determination
under subdivision 3, the department may take one or more of the actions or sanctions
specified in this subdivision.

(b) The department may take the following actions:

(1) refer the investigation to law enforcement or a county attorney for possible criminal
prosecution;

(2) refer relevant information to the department's licensing division, the child care
assistance program, the Department of Education, the federal Child and Adult Care Food
Program, or appropriate child or adult protection agency;

(3) enter into a settlement agreement with a provider, license holder, controlling
individual, or recipient; or

(4) refer the matter for review by a prosecutorial agency with appropriate jurisdiction
for possible civil action under the Minnesota False Claims Act, chapter 15C.

(c) In addition to section 256.98, the department may impose sanctions by:

(1) pursuing administrative disqualification through hearings or waivers;

(2) establishing and seeking monetary recovery or recoupment;

(3) issuing an order of corrective action that states the practices that are violations of
child care assistance program policies, laws, or regulations, and that they must be corrected;
or

(4) suspending, denying, or terminating payments to a provider.

(d) Upon a finding by the commissioner that any child care provider, center owner,
director, manager, license holder, or other controlling individual of a child care center has
employed, used, or acted as a recruiter offering conditional employment for a child care
center that has received child care assistance program funding, the commissioner shall:

(1) immediately suspend all program payments to all child care centers in which the
person employing, using, or acting as a recruiter offering conditional employment is an
owner, director, manager, license holder, or other controlling individual. The commissioner
shall suspend program payments under this clause even if services have already been
provided; and

(2) immediately and permanently revoke the licenses of all child care centers of which
the person employing, using, or acting as a recruiter offering conditional employment is an
owner, director, manager, license holder, or other controlling individual.

new text begin (e) If, while seeking and obtaining monetary recovery or recoupment under this
subdivision, the department requests or collects more than the original loss amount and
becomes aware of the error, the department must immediately return the amount at issue to
the provider.
new text end

Sec. 7.

Minnesota Statutes 2022, section 245E.05, subdivision 1, is amended to read:

Subdivision 1.

Records required to be retained.

new text begin (a) new text end The following records must be
maintained, controlled, and made immediately accessible to license holders, providers, and
controlling individuals. The records must be organized and labeled to correspond to categories
that make them easy to identify so that they can be made available immediately upon request
to an investigator acting on behalf of the commissioner at the provider's place of business:

(1) payroll ledgers, canceled checks, bank deposit slips, and any other accounting records;

deleted text begin (2) daily attendance records required by and that comply with section 119B.125,
subdivision 6;
deleted text end

deleted text begin (3) deleted text end new text begin (2) new text end billing transmittal forms requesting payments from the child care assistance
program and billing adjustments related to child care assistance program payments;

deleted text begin (4) deleted text end new text begin (3) new text end records identifying all persons, corporations, partnerships, and entities with an
ownership or controlling interest in the provider's child care business;

deleted text begin (5) deleted text end new text begin (4) new text end employee records identifying those persons currently employed by the provider's
child care business or who have been employed by the business at any time within the
previous five years. The records must include each employee's name, hourly and annual
salary, qualifications, position description, job title, and dates of employment. In addition,
employee records that must be made available include the employee's time sheets, current
home address of the employee or last known address of any former employee, and
documentation of background studies required under chapter 119B or 245C;

deleted text begin (6) deleted text end new text begin (5) new text end records related to transportation of children in care, including but not limited to:

(i) the dates and times that transportation is provided to children for transportation to
and from the provider's business location for any purpose. For transportation related to field
trips or locations away from the provider's business location, the names and addresses of
those field trips and locations must also be provided;

(ii) the name, business address, phone number, and website address, if any, of the
transportation service utilized; and

(iii) all billing or transportation records related to the transportation.

new text begin (b) Daily attendance records required by and in compliance with section 119B.125,
subdivision 6, must be maintained, controlled, and made immediately accessible to license
holders, providers, and controlling individuals. The records must be organized and labeled
to correspond to categories that make them easy to identify so that they can be made available
to an investigator acting on behalf of the commissioner within ten business days of receiving
a request from the investigator.
new text end

Sec. 8. new text begin REPEALER.
new text end

new text begin Minnesota Statutes 2022, section 119B.09, subdivision 9a, new text end new text begin is repealed.
new text end

APPENDIX

Repealed Minnesota Statutes: 24-06020

119B.09 FINANCIAL ELIGIBILITY.

Subd. 9a.

Child care centers; assistance.

(a) A child care center may receive authorizations for 25 or fewer children who are dependents of the center's employees. If a child care center is authorized for more than 25 children who are dependents of center employees, the county cannot authorize additional dependents of an employee until the number of children falls below 25.

(b) Funds paid to providers during the period of time when a center is authorized for more than 25 children who are dependents of center employees must not be treated as overpayments under section 119B.11, subdivision 2a, due to noncompliance with this subdivision.

(c) Nothing in this subdivision precludes the commissioner from conducting fraud investigations relating to child care assistance, imposing sanctions, and obtaining monetary recovery as otherwise provided by law.