California State Auditor Report Number: 2015-501

Follow-Up—California Department of Develpmental Services
It Can Do More to Ensure That Regional Centers Comply With the Legislature’s Cost-Containment Measures Under the Lanterman Act

Introduction

Background

The Lanterman Developmental Disabilities Services Act (Lanterman Act), originally enacted in 1969 and subsequently amended, established the State’s responsibility for providing services to individuals with developmental disabilities (consumers) and created a network of regional centers to meet this responsibility. There are currently 21 regional centers throughout the State, and as shown in the Figure; the regional centers generally operate over large areas and can serve one or more counties. The California Department of Developmental Services (Developmental Services) is charged with overseeing the regional centers. The Lanterman Act defines developmental disabilities as cerebral palsy, epilepsy, autism, or other intellectual disabilities that originated before the consumer turned 18 years of age and that can be expected to continue indefinitely.

Regional Centers Play an Important Role Under the Lanterman Act

The Lanterman Act places the responsibility for procuring needed services for consumers with the regional centers, including assessing whether consumers are eligible for those services. Once a consumer is found to be eligible, a planning team consisting minimally of a regional center representative, the consumer, and when appropriate, the consumer’s parents or representatives, determines the services and supports to be provided. Specifically, the Lanterman Act requires the planning team to develop an Individual Program Plan (IPP) that establishes the goals for the consumer and states how these goals will be met, including the use of specific service providers or vendors. Further, an IPP may include services designed to assist the consumer in satisfying certain needs and achieving personal goals concerning living arrangements, work opportunities, and community interaction. A variety of services are available to consumers and their families, from community‑based day programs that help consumers improve their social skills in community settings to early intervention services for at‑risk infants and their families. Supported living services help consumers establish and maintain a safe, stable, and independent life in their own homes; in‑home respite services provide temporary nonmedical care and supervision to consumers living with their families, and supportive employment services provide job coaches who help consumers learn or perform jobs at businesses in the community.

Figure
Map of Regional Center Service Areas

Source: California Department of Developmental Services.

* Regional centers visited by the California State Auditor.

Regional Centers Play an Important Role Under the Lanterman Act

Once an initial assessment confirms the consumer’s eligibility for services under the Lanterman Act, the planning team identifies the goals and services needed to support the consumer. In the Lanterman Act, the Legislature expressed its intent that the IPP be centered on the consumer and his or her family and that it take into account the needs and preferences of the consumer and the family, where appropriate. The IPP should also promote community integration; an independent, productive, and normal life; and a stable and healthy environment. The Legislature also expressed its intent that the provision of services to consumers and their families be effective in meeting the goals stated in the IPP, reflect the preferences and choices of the consumer, and reflect the cost‑effective use of public resources.

The IPP is developed through a structured process that determines the consumer’s needs. The consumer and, when appropriate, the authorized representatives actively participate in this process.² Further, state law requires that decisions concerning the consumer’s goals, objectives, and needed services and supports—as noted in the IPP—be made by agreement between the regional center representative and the consumer or authorized representative when appropriate.

Thus, consumers and their families have a strong voice in the IPP development process. For example, particular services provided under an IPP cannot continue unless the consumer or authorized representative is satisfied and the regional center representative and the consumer or authorized representative agree that reasonable progress is being made toward achieving the objectives stated in the IPP. Further, the consumer and the authorized representative may decline to approve portions of the IPP and may make use of the State’s fair hearing process, including ultimately pursuing relief in court.

When selecting a vendor to provide services to the consumer, state law requires that the planning team consider not only the proven abilities of the vendor but also the consumer’s choice. In instances when the planning team’s review determines that more than one vendor can adequately provide comparable services that meet the needs of the consumer as identified in the IPP, the planning team is required to select the least costly vendor from the pool of acceptable vendors after considering all the factors described in the text box.

Developmental Services Is Responsible for Ensuring Uniformity and Consistency of Services Provided to Consumers Throughout the State

Developmental Services is charged with ensuring that all regional centers operate consistently and that they comply with the Lanterman Act. State law authorizes Developmental Services to adopt regulations in consultation with regional centers that prescribe uniform budgeting, administrative, and reporting practices regarding the number and costs of services the regional centers purchase. In addition, state law requires Developmental Services to audit the regional centers to ensure that they comply with the Lanterman Act’s fiscal requirements.

In our previous audit titled Department of Developmental Services: A More Uniform and Transparent Procurement and Rate‑Setting Process Would Improve the Cost‑Effectiveness of Regional Centers, Report 2009‑118 (2010 audit), we noted that a California Supreme Court ruled in 1985 that Developmental Services has the ability to promote the cost‑effectiveness of providing services to consumers. In the 2010 audit, we also noted that the Legislature had enacted various cost‑containment measures under the Lanterman Act in response to the State’s fiscal crisis and we recommended that Developmental Services take steps to ensure that one of those cost‑containment measures—the requirement that planning teams select the least costly provider when appropriate—is followed in practice by the regional centers. Specifically, the 2010 audit recommended that Developmental Services require the regional centers to document the basis of all IPP‑related vendor selections and specify which comparable services (when available) were evaluated. The 2010 audit further recommended that Developmental Services verify compliance with this requirement through its existing reviews or its audit process.

Scope and Methodology

California Government Code, Section 8546.1(d), authorizes the California State Auditor (state auditor) to conduct additional follow‑up audit work on statutorily mandated or legislatively requested financial and performance audits. The 2010 audit was requested by the Joint Legislative Audit Committee. In February 2015 the state auditor initiated a follow‑up audit to evaluate the status of certain issues deemed important based on our professional judgment. The Table lists the objectives of our follow‑up audit and our methods for addressing them.

Table
Audit Objectives and the Methods Used to Address Them

AUDIT OBJECTIVE		METHOD
1	For a sample of service-related purchases by regional centers, evaluate whether regional centers performed an assessment of comparable services and selected the least costly available provider.	Using data obtained from the California Department of Developmental Services (Developmental Services) Uniform Fiscal System (UFS), we randomly selected 200 expenditures collectively charged by five regional centers. This purpose did not require a data reliability assessment. Instead, we needed to gain assurance the population was complete. Because this is a follow-up audit on previous recommendations, we did not perform completeness testing of these data. We then visited each regional center and reviewed each regional center’s policies and procedures regarding how planning teams should document, if at all, consideration of vendor cost as part of the vendor selection process.
2	For each contract we select, compare the contract rate to the statewide median rate to identify cost savings (if any).	We researched the applicable median rates and other applicable criteria relevant to the charge codes appearing in our sample of 200 transactions described in audit objective number 1. All 200 transactions we tested were either below the applicable median rate or had valid exceptions as prescribed in state law.
3	Estimate statewide cost savings by extrapolating the testing results from our sample of service provider contracts.	Since our testing of 200 transactions did not result in any errors, we did not extrapolate an error rate to the population of all regional center expenditures.

Source: California State Auditor’s determination of the audit objectives for this follow-up audit, and information and documentation identified in the table column titled Method.

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Footnotes

² For the purposes of our audit report, we refer to a consumer’s parents, le gal guardians, conservators, and representatives collectively as authorized representatives. Such authorized representatives may consent to medical treatment on behalf of the consumer. Go back to text

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