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340:40-13-5. Child care provider contracts

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Revised 6-1-09

(a) Criteria. In order for the Oklahoma Department of Human Services (OKDHS) to purchase out-of-home child care services, a provider must have a current Form 08CC001E, Child Care Provider Contract, signed by both the owner of the facility and the OKDHS Director or designee on file with the Family Support Services Division (FSSD) Child Care Subsidy Section. OKDHS assures all persons that OKDHS or any provider of contractual services, does not take into account a person's race, color, religion, sex, national origin, or disability in the selection or eligibility of persons to receive services and in the manner of providing them. Age may be a factor only to the extent that certain services are designed for a particular age group.

(1) Written complaints of noncompliance with the assurance in (a) of this Section may be made to the Director of OKDHS or to the Secretary of Health and Human Services, Washington, D.C. 20201.
(2) Local Oklahoma Child Care Services (OCCS) licensing staff provides initial information about contracts for child care facilities. The provider contacts the child care liaison to request a contract.
(3) Child care contracts are valid for a maximum of one year. Contracts are automatically renewed for successive one year terms, under the same terms and conditions, unless either the child care provider or OKDHS gives written notice of its intent not to renew to the other party at least 30 calendar days prior to the expiration of the current term.

(b) Procedure for obtaining child care contracts. Out-of-home providers may only obtain an OKDHS contract if they are licensed or on permit. A child care center provider requesting an initial contract must be licensed or permitted and have a one plus, two, or three star status before signing Form 08CC001E. A one star child care home provider requesting an initial contract must be licensed; not on permit, before signing Form 08CC001E. • 1 A child care home provider at one plus, two, or three star status requesting an initial contract must be licensed or permitted before signing Form 08CC001E. The procedures in (1) through (8) of this subsection are used to obtain child care contracts.

(1) OCCS licensing staff give the child care provider a promotional flyer containing information about contracting with OKDHS. The provider is instructed to contact the child care liaison for training and review of the contracting requirements.
(2) When contacted by the owner or director of a child care facility, the child care liaison explains that the owner must review the "Contracting with DHS for Child Care Subsidy Payments Handbook," view the required training, and pass the proficiency test before an initial contract is submitted to the FSSD Child Care Subsidy Section. • 2
- (A) If the owner of a child care center does not live in Oklahoma, the director of the facility must also fulfill this requirement.
- (B) Child care directors are not required but are highly encouraged to view the required training.
(3) If the provider wishes to contract with OKDHS following this training, the child care liaison gives Form 08CC001E to the child care provider after typing all identifying information on the contract. The child care liaison explains that the earliest date a contract is valid is the date of approval by the OKDHS Director or designee.
(4) The owner and director sign the contract before a Notary Public and return the contract to the child care liaison. • 3 The owner must also provide proof of his or her identity, a copy of his or her Social Security card, and proof of ownership of the child care business. • 4
(5) The child care liaison sends Form 08CC001E to the FSSD Child Care Subsidy Section for approval or denial along with:
- (A) the Contract Routing Checklist;
- (B) a copy of the owner's Social Security card;
- (C) proof of ownership;
- (D) a copy of the provider's Oklahoma State Bureau of Investigation (OSBI) background investigation report; • 5
- (E) a copy of the OSBI background investigation report for the:
  - (i) director and/or business manager of a child care center;
  - (ii) spouse of a child care home owner; or
  - (iii) assistant caregiver in a large family child care home; and
- (F) proof of the employer identification number (EIN) for a child care center provider.
(6) If the child care provider signs Form 08CC001E but fails to complete other contracting requirements within 30 calendar days, the child care liaison attaches Form 08CC001E to the Contract Routing Checklist and sends it to the FSSD Child Care Subsidy Section for denial.
(7) If approved, the FSSD Child Care Subsidy Section staff assigns a contract number and sends a copy of the signed contract back to the provider. • 6
(8) If denied, the FSSD Child Care Subsidy Section returns the original contract to the provider with a letter advising the provider OKDHS has decided it is in the best interest of OKDHS not to contract with the provider.

(d) Changes that must be reported. Form 08CC001E advises child care providers to report to the FSSD Child Care Subsidy Section the anticipated sale of the business, change of legal business entity, change of location, or plan to stop caring for children no less than 30 calendar days prior to the change occurring. When the provider fails to report the anticipated change timely and a new contract is needed, a gap may occur in the child care subsidy payment to the provider. A new contract is required in the situations included in (1) through (4).

(1) Change in facility status. A change in facility status occurs when a facility changes from a home to a center or a center to a home. A change from a family child care home to a large family child care home does not require a new contract as long as the same license number is used.
- (A) When the status of a child care home changes to a child care center, a new license application is required. Prior to signing a new contract, the provider must be issued a license or permit at one plus, two, or three star status.
- (B) When the status of a child care center changes to a child care home, a new license application is required. Prior to signing a new contract, the provider must be issued a license or permit at one plus, two, or three star status, or be licensed; not permitted, at one star status. • 1
(2) Change in ownership for a child care center. The new owner must meet or be anticipated by OCCS licensing staff to meet one plus, two, or three star status within 30 calendar days before a new contract is signed and submitted to the FSSD Child Care Subsidy Section. • 8
(3) Change of location. When a child care center or home provider changes the location of his or her child care business, the provider must sign a new license application agreeing to care for children only in the new location and notify FSSD Child Care Subsidy Section staff of the new location. The provider's license and contract remain open with the same:
- (A) begin date;
- (B) number assigned; and
- (C) star status. • 9
(4) Change of legal business entity. The child care provider must complete a new license application and contract when the provider changes his or her legal business entity. • 10 Examples of changing legal business entity include changing from a sole proprietor to a corporation, partnership, or limited liability company. The provider must provide proof of ownership. • 4
- (A) A child care center provider who was at one plus, two, or three star status under their previous legal business entity may sign and submit Form 08CC001E to the FSSD Child Care Subsidy Section while the new license application is pending. A child care center provider who was at one star status under the previous legal business entity may not sign a new contract until attaining one plus, two, or three star status even if a child already receiving child care subsidy benefits is currently in care under their previous legal business entity.
- (B) Child care home providers who were at one plus, two, or three star status under their previous legal business entity may sign and submit Form 08CC001E to the FSSD Child Care Subsidy Section while the new license application is pending. Child care home providers who were at one star status may only sign a new contract once they are licensed; they may not be in permit status. • 1

(e) Providing care at a different site than is authorized. When the child care provider signs the child care contract, he or she agrees to provide care only at the physical address designated in the contract. In certain circumstances, a child care center provider who owns more than one child care center only may move children eligible for subsidized child care benefits to an alternate center after he or she receives prior approval in writing from the FSSD Child Care Subsidy Section authorizing him or her to move the children and the point-of-service (POS) machine to the alternate site for a designated period of time. FSSD Child Care Subsidy Section staff gives approval when:

(1) the same owner or legal business entity owns the alternate site;
(2) the alternate site is licensed and contracted at the same star level;
(3) there is a legitimate business reason for providing care in another location; and
(4) the provider advises FSSD Child Care Subsidy Section staff how he or she is ensuring that parents are aware their children are being cared for at a difference location.

(f) Renewal of child care contracts. Child care provider contracts are effective for terms not to exceed one year, the commencement date of which is determined by the FSSD Child Care Subsidy Section staff. Contracts are automatically renewed for successive one year terms, under the same terms and conditions, unless either the provider or OKDHS gives written notice of its intent not to renew to the other party at least 30 calendar days prior to the expiration of the previous term. A contract is not renewed when a provider fails to attend required contract training or to provide any other information or documents requested during the contract renewal period.

(g) Contract violations. When the child care provider signs Form 08CC001E, the provider is agreeing to abide by the terms of the contract. When human services center (HSC) staff become aware that a provider is violating the terms of the contract, he or she advises the provider to stop the practice immediately and sends an e-mail to FSSD Child Care Subsidy Section advising of the circumstances. • 11 HSC staff may also complete Form 19MP001E, Referral Form, to report the violation to the Office of Inspector General. Examples of contract violations include, but are not limited to:

(1) discriminating against persons seeking services either by charging a discriminatory rate or violating a person's rights as listed in the Civil Rights Act of 1964 as amended, the Rehabilitation Act of 1973 as amended, or the Americans with Disabilities Act of 1990;
(2) failing to maintain a drug-free workplace;
(3) possessing or swiping a client's electronic benefit transfer (EBT) card;
(4) knowing a client's personal identification number (PIN);
(5) failing to ensure accurate time and attendance information was recorded by the parent or caretaker on the POS machine. The attendance, not time, of a child approved for the part-time or blended unit type must be recorded during the school year by the parent or caretaker;
(6) charging a client receiving subsidized child care more than the OKDHS rate for days and hours within the client's plan of service;
(7) charging a client for days and hours outside of client's plan of service or requiring that the client swipe attendance for those days and hours when the additional hours are a requirement of the provider and not a choice of the client; • 12
(8) moving the children from the agreed upon location shown in the contract for reasons other than field trips and claiming for services at the other location without prior written approval from the FSSD Child Care Subsidy Section;
(9) moving the POS machine and allowing parents to record time and attendance at a different location than agreed upon in contract without receiving prior written approval from the FSSD Child Care Subsidy Section in accordance with subsection (e) of this Section;
(10) failing to advise and provide OKDHS a completed copy of any agreement the provider enters into within 30 calendar days of entering into a collaboration or agreement. This includes agreements with Head Start, Early Head Start, public schools, and/or any other programs receiving state or federal funding;
(11) claiming and/or receiving payment from OKDHS for the same hours of care the provider receives payment from another state or federal funding source;
(12) failing to inform OKDHS of a change in facility status, location, legal business entity, or ownership of the business at least 30 calendar days in advance of the change;
(13) filing manual claims when claims could be filed through the EBT system;
(14) failing to post all of the facility's rates and fees;
(15) subcontracting services to another provider without written prior approval from OKDHS;
(16) refusing unlimited access by a parent or caretaker to the facility during the hours of operation;
(17) refusing to make available to OKDHS within an hour of request by any OKDHS representative all business records that document proper fiscal and program management by the provider;
(18) breaching the contract signed by the provider with the OKDHS EBT contractor;
(19) not maintaining written records for any manual claims filed during the last three years;
(20) failing to inform OKDHS in writing within ten calendar days of any person who has an ownership or controlling interest in, or is an agent or managing employee of the child care business, who has been convicted of a criminal offense related to such person's involvement under Titles XVIII, XIX, or XX of the Social Security Act; and
(21) failing to report the income from the child care business within ten calendar days to his or her Family Support Services (FSS) worker if receiving benefits.

(h) Cancellation of child care provider contracts. FSSD Child Care Subsidy Section staff initiates the cancellation by issuing a notice to the provider by certified mail and regular mail at the same time. • 13

(1) Contracts may be canceled:
- (A) with cause. The effective date of cancellation is 13 calendar days after FSSD staff mail the notice. This allows three calendar days for mailing time. The notice must contain a reference to the grounds for cancellation including the specific contract provision(s) that was violated; or • 14
- (B) without cause. The effective date of cancellation is 33 calendar days after FSSD staff mail the notice. This allows three calendar days for mailing time. • 15
(2) The FSSD Child Care Subsidy Section communicates with the child care liaison when a contract is being canceled to ensure that HSC staff have sufficient time to plan with clients to find another facility, if necessary. When it is necessary to cancel authorizations with a child care provider, the provider is notified by use of a computer-generated notice. FSSD Child Care Subsidy Section staff closes all authorizations with the provider whose contract is canceled.

INSTRUCTIONS TO STAFF 340:40-13-5

Revised 6-1-09

1. (a) The child care liaison monitors the license status of all providers requesting a contract by accessing Oklahoma Child Care Services (OCCS) Licensing Services information on the Child Care Licensing System (CCLS). The CCLS is located on the Infonet under OKDHS Tools. The child care provider provides his or her license number to the liaison. The license status is found under the Case Summary Overview tab. See Family Support Services Division (FSSD) Child Care Web site for detailed instructions on accessing the CCLS.

(b) The Case Summary Overview tab shows the current star status. The child care liaison allows the child care provider to sign a contract even when the star status effective date is a future date. The star status must be a one plus, two or three star. The child care liaison sends the contract to Family Support Services Division (FSSD) Child Care Subsidy Section as soon as all other required information is provided. The child care liaison uses the Contract Routing Checklist document located on the FSSD Child Care Subsidy Web site under Child Care Liaison Tools to ensure all required information is submitted with Form 08CC001E, Child Care Provider Contract.

(c) If the Case Summary Overview tab shows a child care center provider is at one star status, the child care liaison advises the provider he or she must attain one plus, two, or three star status before he or she may sign Form 08CC001E.

(d) If the Case Summary Overview tab shows that a child care home provider is at one star status, the child care liaison looks at licensing status to determine whether the case status is licensed. If the case status is permitted, the child care liaison advises the provider he or she must become licensed, not permitted, or attain a one plus, two, or three star status before he or she may sign Form 08CC001E.

(e) See Instruction to Staff 7 when a new contract is requested because of a change in ownership.

2. The provider must wait to view the required training until after he or she meets necessary criteria at subsection (b) and Instructions to Staff 1 of this Section.

3. The dates in Part One and Part Two of Form 08CC001E are left blank for entry by FSSD Child Care Subsidy Section staff. The earliest date entered is the date approval of the contract is granted.

4. (a) The owner must provide photo identification to the child care liaison. The child care liaison checks on the Contract Routing Checklist that he or she has seen photo identification that confirms the owner's identity. A copy of the photo identification is not sent to FSSD Child Care Subsidy Section.

(b) The provider designates on Form 08CC001E his or her type of legal business entity. The child care liaison uses Oklahoma Department of Human Services (OKDHS) Appendix L-7, Ownership Proof Chart, to determine what the provider must furnish to verify proof of ownership for that type of business entity.

5. (a) In order to obtain a license, the owner of a child care facility must undergo an Oklahoma State Bureau of Investigation (OSBI) background check. All providers applying for a new contract must obtain a copy of his or her OSBI background check from the licensing specialist or provide his or her own copy to the child care liaison. Any provider applying for a new contract after being licensed previously for over one year must provide a new OSBI background check. An existing OSBI background check can be accepted if it was issued within the past 12 months.

(b) The OSBI background check is not required for providers that are making an entity change.

(c) The FSSD Child Care Subsidy programs manager may waive the requirement for a federally recognized tribe that has a cooperative agreement with OCCS.

6. (a) FSSD Child Care Subsidy Section staff enter information about the provider on the Day Care Contract File when the contract is initially approved and as changes occur. FSSD Child Care Subsidy Section staff notify the child care liaison by e-mail of the contract number and the approval date for the contract. The child care liaison then notifies the new contracted provider and appropriate human services center (HSC) staff of the new contract number and approval date for the contract.

(b) HSC staff access information about contracted child care providers by using transaction PCI on IMS. Enter PCI space and the contract number. The PCI screen gives information about the child care provider such as the provider's name, location, and mailing addresses, contract begin date, and the name of the owner. If the contract number is unknown, the worker obtains the number by using the PCX transaction or Child Care Locator.

(1) To use PCX the worker enters PCX space and up to the first eight letters of the child care center name or child care home operator's first name. The PCX transaction displays the names of all child care providers with those beginning letters. HSC staff enter PCI next to the contract number on the list displayed to obtain information about the provider. To view instructions and filter options for these transactions, enter M space and the transaction code. Example: M space PCX.

(2) Child Care Locator is available on the InfoNet under OKDHS Tools. The worker clicks on Child Care Locator, chooses the county where the facility is located, and enters the name of the facility for a child care center or the first and last name of the owner for a child care home. A gray ball appears in front of the names of providers with child care contracts. The worker obtains the contract number by hovering their mouse over the gray ball.

(c) FSSD Child Care Subsidy Section staff send a copy of the "Contracting with OKDHS for Child Care Subsidy Payments" handbook to the provider after contract approval.

7. (a) If a client states he or she wishes to use an out-of-state provider, the worker advises the client that OKDHS does not contract with out-of-state providers. The worker asks the client to choose an in-state contracted provider.

(b) If an out-of-state provider requests a contract, the child care liaison advises the provider that OKDHS only contracts with child care providers operating in Oklahoma. If the provider insists on filling out a contract, the liaison sends it to the FSSD Child Care Subsidy Section. FSSD Child Care Subsidy Section staff send the provider a denial letter.

8. (a) When the child care provider signs Form 08CC001E, he or she agrees to notify the FSSD Child Care Subsidy Section no fewer than 30 calendar days prior to the effective date of any anticipated sale of the business. If the old and/or new owner provides timely notification of the anticipated ownership change and children receiving a child care subsidy are currently in care at the facility, OKDHS staff make every effort to avoid or reduce any gap in the child care subsidy payment by allowing the new owner to sign a child care contract and view the required training as soon as possible.

(b) When the old owner contacts OKDHS in advance to advise of the ownership change, staff advise him or her to tell the prospective owner to apply for a child care license with the local OCCS licensing specialist and a contract with the child care liaison as soon as possible.

(c) When the child care liaison is notified in advance of an ownership change by the new owner, the child care liaison advises the new owner that he or she must apply for a child care license first. If the new owner has already applied for a license, the liaison asks if the new owner applied for a one star plus or higher star level. If the new owner has not applied for a one star plus or higher star level, the liaison advises the new owner that a contract cannot be signed or the required training viewed until the owner has requested a one star plus or higher star status.

(d) After the new owner has applied for a one star plus or higher star level, the liaison checks with the OCCS licensing specialist about the status of the licensing application. If the OCCS licensing specialist states it appears likely a permit or license can be approved upon change of ownership and one star plus or higher star status is expected to be approved within 30 calendar days, the liaison allows the provider to sign Form 08CC001E and submits the Contract Routing Checklist and all necessary information to the FSSD Child Care Subsidy Section.

(e) FSSD Child Care Subsidy Section staff wait to approve or deny the child care contract until after the decision on the license application is made and star status determined. If a one star plus or higher status is not approved by OCCS licensing staff, the contract is denied.

9. FSSD Child Care Subsidy Section staff wait to change the provider's address on the Information Management Services (IMS) DayCare Contracts/Registrations transaction PCU until confirming that the address change has already been made by OCCS licensing staff.

10. When a new contract must be signed because of a change in legal business entity, the provider completes the contract with the child care liaison. The owner must provide proof of identity and ownership. All center providers must also provide proof of an employer identification number (EIN) in the name of the new business entity. For business entity changes, the provider does not have to provide a new OSBI background investigation report, but they do have to view the required training and pass the proficiency test again.

11. (a) FSSD Child Care Subsidy Section staff review the circumstances and whether the provider has agreed to stop the practice. Depending on the circumstances, FSSD staff may:

(1) decide no further action is needed;

(2) request that HSC staff complete Form 19MP001E, Referral Form, to start an investigation; or

(3) decide to cancel the child care provider's contract.

(b) When FSSD Child Care Subsidy Section staff recommend completion of Form 19MP001E, HSC staff put as much detail as possible about the violation on the form. This includes who reported the violation, what was alleged, the provider's comments when called about the violation, and a telephone number to reach this person. The HSC staff attaches any written documentation that supports the allegation to the Form 19MP001E. When a client reports a violation, this could be a written statement from the client about the violation.

12. There are providers who require that all children be in attendance by a certain time every morning, for instance 9:00 a.m., regardless of the client's work or school schedule. Reasons given by the provider may include limiting disruptions to program content, so all children can participate fully in the quality content of the child care program, or to reduce transportation costs for the provider. If, based on the client's work or school schedule, care is not needed until 11:00 a.m., the client swipes attendance by entering a previous in for 11:00 a.m. on the point-of-service (POS) machine when the child is picked up at the end of the day. The provider must not charge the client for the additional two hours of care. If the client chooses to drop the child off at the child care provider earlier than the approved plan of service hours or leaves the child later for personal reasons, the provider can charge the client for those additional hours.

13. (a) When OKDHS initiates contract cancellation, FSSD Child Care Subsidy Section staff route all correspondence regarding contract cancellation proceedings to:

(1) OCCS licensing coordinator;

(2) Legal Division;

(3) Finance Division;

(4) Office of Inspector General;

(5) FSSD Benefit Integrity and Recovery Section;

(6) Commodity Distribution Unit;

(7) the Child Care Resource and Referral Agency serving the area where the provider is located;

(8) Department of Education, Child Care Food Program;

(9) Cherokee Nation, if serving the area where the provider is located;

(10) Creek Nation, if serving the area where the provider is located;

(11) Choctaw Nation, if serving the area where the provider is located;

(12) Field Operations Division area office where the provider is located; and

(13) the local county director, child care liaison, OCCS licensing supervisor, and OCCS licensing staff where the provider is located.

(b) Copies of all correspondence regarding contract cancellation proceedings that are initiated by the provider are routed by the FSSD Child Care Subsidy Section to:

(1) Finance Division; and

(2) local county director, child care liaison, OCCS licensing supervisor, and OCCS licensing staff where the provider is located.

14. When a contract is canceled with cause, the reason is included in the provider's cancellation letter. The provider is advised OKDHS will no longer make child care payments 13 calendar days from the date FSSD Child Care Subsidy Section staff mail the notice to the provider.

15. (a) When OKDHS cancels a contract without cause and the child care facility was recently audited or investigated by the Office of the Inspector General (OIG), the provider is reminded in the cancellation letter of the audit or investigation and that the OIG auditor or investigator advised the provider that he or she met the criteria for contract cancellation. The provider is also advised in the letter that OKDHS no longer makes child care payments 33 calendar days from the date FSSD Child Care Subsidy Section staff mail the notice to the provider. Reasons that a contract might be cancelled following an OIG audit or investigation include evidence that the provider:

(1) was in possession of or swiped a client's electronic benefit transfer (EBT) card;

(2) has knowledge of a client's personal identification number (PIN);

(3) failed to ensure accurate time and attendance information was recorded on the point-of-service (POS) machine by the client;

(4) failed to provide accurate or complete information on a manual claim that was filed by the provider and paid by OKDHS;

(5) failed to maintain a drug-free workplace; or

(6) failed to allow full access to the facility's premises and personnel to investigate a drug-related complaint.

(b) Other reasons a provider contract may be cancelled without cause include, but are not limited to, when:

(1) OCCS staff revokes the provider's child care license. Payments by OKDHS for care given by providers holding a current child care provider contract may continue throughout the 33 calendar day period during which the intent to revoke a license may be appealed.

(A) If the provider does not appeal the intent to revoke the license, the contract is automatically canceled.

(B) If the provider does appeal license revocation, denial of a renewal license, or denial of a license while operating under a six month permit, the contract may be canceled or continued until the appeal is decided;

(2) persons whose contracts have previously been cancelled following an OIG audit or investigation are now owners, authorized representatives, or materially involved in the business of a new facility at the same address;

(3) the provider has an outstanding overpayment debt with OKDHS either as a client or as a provider;

(4) the provider receives benefits as an OKDHS client and his or her benefits are closed as he or she was found to have committed fraud and/or willful misrepresentation;

(5) it comes to the attention of FSSD Child Care Subsidy Section staff that a provider has been convicted of a felony that has been verified with the Oklahoma State Bureau of Investigations (OSBI) or the Oklahoma Supreme Court Network (OSCN);

(6) it comes to the attention of FSSD Child Care Subsidy Section staff that a provider has been debarred, suspended, proposed for debarment, or declared ineligible by any federal department or agency or convicted of a fraud-related crime;

(7) the provider is convicted of food benefit trafficking;

(8) the provider requests cancellation of the contract;

(9) the ownership of a facility changes;

(10) a one star center provider no longer has open child care authorizations; or

(11) the provider commits a contract violation that is brought to the attention of FSSD Child Care Subsidy Section staff and refuses to correct it.

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