STATE OF CALIFORNIA Budget Change Proposal - Cover Sheet DF-46(REV 08/16)

Fiscal Year 2017-18

Business Unit 0530 and 5180

Department California Health and Human Services Agency and California Department of Social Services

Priority No. 008

Budget Request Name 0530-008-BCP-2017-GB

Program 0290- Office of Systems Integration

Subprogram

Budget Request Description Case Management, Information and Payrolling System II - Implementation of Paid Sick Leave for IHSS Providers (SB 3)

Budget Request Summary The California Health and Human Services Agency's Office of Systems Integration requests a one-time increase of $4.8 million in spending authority to implement paid sick leave for IHSS and Waiver Personal Care Services providers beginning July 1, 2018, pursuant to Chapter 4, Statutes of 2016 (SB 3).

The California Department of Social Services requests a corresponding one-time increase of $4.8 million General Fund in local assistance authority to reflect an increase in contract services costs with the Office of Systems Integration.

Requires Legislation

n Yes Kl No

Code Section(s) to be Added/Amended/Repealed

Does this BCP contain information technology (IT) components? Yes • No

If yes, departmental Chief Information Officer must sign.

Department CIO Dave Patch

Date

For IT requests, specify the project number, the most recent project approval document (FSR, SPR, S1BA, S2AA, S3SD, S4PRA), and the approval date.

Project No. N/A Project Approval Document: N/A Approval Date: N/A

If proposal affects another department, does other department concur with proposal? • Yes ^ No Attach comments of affected department, signed and dated by the department director or designee.

Prepared By Date Reviewed By Date Cynthia Tocher Mike French

Department Director Date Agency Secretary Date John Boule Diana Dooley

Department of Finance Use Only

Additional Review: • Capital Outlay ITCU • FSCU • OSAE • CALSTARS Si Dept. of Technology

BCP Type: • Policy ^ Workload Budget per Government Code 13308.05

PPBA Original Signed By: Yang Lee

Date submitted to the Legislature

Analysis of Problem

BCP Fiscal Detail Sheet • C P TWt: Cas t Manag«m*nt Infonriation and Payrolling System II • implMMntation or PaM Stek .̂ L . a v t t o r l H S $ P r o v l d . r , ( S B 3 ) • « Nam.: OSSO-OOS-BCP-MITKi^

Budget ReqiMst Summary FY17 ^ C Y BY B Y . I my*2 UY*3 • Y 4 4

Operating Expenses and Equipment 5340 - Consulting and Professional Services -

External Total Operating Expenses and Equipment Total Budget Request

Fund Summary Fund Source - State Operations

California Healtfi and Human Services " " " Automation Fund

Total State Operations Expenditures

Totel All Funds

4,800

S4.S0O

4.800

SO

$4J00 SO to

so so

Program Summary Program Funding

029O - Office of Systems integration Total All Programs

4.800

to to

1

Analysis of Problem

Budget Request Summary The California Health and Human Services Agency's Office of Systems Integration (OSI) requests an increase of $4.8 million in spending authority to implement paid sick leave for IHSS and Waiver Personal Care Services providers beginning July 1, 2018, pursuant to SB 3.

The California Department of Social Services (CDSS) requests a corresponding increase of $4.8 million General Fund in local assistance authority to reflect an increase in contract services costs with the Office of Systems Integration.

Background/History

CDSS is responsible for the administration of the state In-Home Supportive Services (IHSS) program. The Case Management, Information and Payrolling System (CMIPS) II is an automated statewide system that performs case management and payroll functions for all IHSS providers and recipients. CDSS contracts with OSI for project management and vendor contract oversight services to maintain and operate CMIPS II.

Table 1 - Resource History (Dollars in thousands)

Program Budget F Y - 4 F Y - 3 P Y - 2 P Y - 1 PY* CY** Authorized Expenditures $20,591 $81,810 $89,568 $115,779 $82,543 $71,572

Actual Expenditures $22,047 $80,815 $85,695 $108,050 $63,103 Unavailable Authorized Positions 21 21 24 34 34 34 Filled Positions 21 21 24 32 32 31 Vacancies 0 0 0 2 2 3

*FY 2015-16 Actual Expenditures reported ttirougti 6/30/16 (most current reporting available) **FY 2016-17 Actual Expenditure data not yet available, Auttiorized Expenditure data based on ttie revised 2016-17 projection

State Level Considerations

CMIPS II is currently in the maintenance and operations phase. As part of ongoing maintenance and operations, the state will continue to implement system changes to ensure CMIPS II supports the IHSS program.

Justification

OSI requests a one-time increase of $4.8 million California Health and Human Services Automation Fund in FY 2017-18 to implement SB 3.

SB 3 entitles IHSS providers who work in California for 30 or more days within a year from the commencement of employment to paid sick days, subject to specified full amount of leave time amounts and the rate of accrual. Implementation of the paid sick leave functionality is scheduled to be deployed in a phased approach, beginning July 2018.

To meet this deadline, OSI requests a one-time increase of $4.8 million California Health and Human Services Automation Fund in FY 2017-18. OSi's system support services will support the implementation of paid sick leave for IHSS and Waiver Personal Care Services providers. Half of the $4.8 million is for application changes, business interface process changes, training of county staff, and provider help desk resources. The CMIPS II application changes will implement functionality to calculate, accrue, and track sick leave hours required to support variable yearly sick leave caps and accrual rates at both the state and county levels. Additional CMIPS II application and business interface process changes will include modifications to case management, payroll, reporting, and both timesheets and timesheet processing facility processes.

2

Analysis of Problem

The remaining half of the requested $4.8 million is to provide four statewide mass mailings informing recipients and providers about changes to the IHSS program resulting from SB 3.

The following table provides the high level scope of work to implement the SB 3-related functionality in the CMIPS II and to provide the necessary outreach to IHSS and Waiver Personal Care Services providers and recipients.

Table 2 - High Level Scope of Paid Sick Leave Implementation ($4.8 million) One-Tlme Implementation ($2.4 million)

Case Management • Screens will be added to CMIPS II to appropriately display Sick Leave information • Business rules and processes will be updated to accrue and track Sick Leave hours, and to authorize and

manage Sick Leave payment requests • Sick Leave edits and validations require business rules and data elements that exist within the Case

Management application o If Sick Leave requests pass all edits and validations, Sick Leave hours will be included in the payment

requests passed to the Payroll component • A new Sick Leave timesheet type will be implemented

Payroll • Payroll will be configured to issue payments for Sick Leave and to track Sick Leave for tax processing purposes as needed

Reporting • Selected payroll reports will be modified to include and report paid Sick Leave hours

interfaces • Timesheet Processing Facility, Employment Development Department, State Controller's Cffice, and data download processes will be updated to include Sick Leave information, as needed

Training • CMIPS 11 Prime Vendor will support CDSS activities for training of county staff, up to six (6) training sessions

• CMIPS 11 Prime Vendor will assist with the development of training materials and webinars for the prime vendor supported training sessions

• CMIPS 1! Prime Vendor will provide up to 80 hours of support for county and state delivered trainings Provider Help Desk Training

• CMIPS II Prime Vendor will conduct training for Provider Help Desk staff, prior to implementation of Sick Leave

• CDSS would be responsible for providing updated or amended scripts

One-Time Outreach ($2.4 miliion) Mailings • Multiple (4) outreach mailings (Total of 2.5 Million mailings) will occur to IHSS provider (2) and recipients

(2) based upon informational letters created by CDSS • The assumption is that this mailing will be for up to three duplex pages per mailing piece

The requested resources are comparable to previous one-time CMIPS II system support services changes, such as those resulting from federal Fair Labor Standards Act requirements. The $4.8 million amount is based on a high-level estimate submitted by the current CMIPS II prime vendor.

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Analysis of Problem

Budget Summary

Table 3 below provides a summary of the CMIPS II budget inclusive of this proposal.

Table 3-CMIPS II Budget

Activity

2017-18 Budget Act

Baseline

2017-18 Proposed

Budget

2017-18 Budget Year

Request OSI Staff $ 4,073,775 $ 4,073,775 $ Other $ 2,470,546 $ 2,470,546 $ CMIPS II Prime Contract $ 40,227,781 $ 45,027,781 $ 4,800,000

State Support Contracts $ 2,620,281 $ 2,620,281 $ Interfaces $ 1,662,490 $ 1,662,490 $ Facilities $ 413,000 $ 413,000 $ OSI Cost $51,467,873 $ 56,267,873 $ 4,800,000

County Travel $ 120,240 $ 120,240 $ Data Center Services $ 18,583,694 $ 18,583,694 $ CDSS Cost $ 18,703,934 $ 18,703,934 $ Total Local Assistance $70,171,807 $ 74,971,807 $ 4,800,000 Local Assistance General Fund

$ 35,607,840 $ 38,078,300 $ 2,437,928

Local Assistance Other Funds $ 34,563,967 $ 36,893,507 $ 2,362,072

State Operations Cost $ 1,400,049 $ 1,400,049 $ State Operations - CDSS $ 1,400,049 $ 1,400,049 $

$ 4,800,000 Total CMIPS II Budget $ 71,571,856 $ 76,371,856

$

$ 4,800,000

E. Outcomes and Accountability Although IHSS recipients are the employers of record for IHSS providers, the state, with the use of CMIPS II, is responsible for processing more than 1.1 million timesheets each month submitted by approximately 400,000 providers.

Table 3 - Projected Outcomes Workload Measure CY*

2016-17 BY*

2017-18 IHSS caseload support by CMIPS 11 500,406 531,069

IHSS Program timesheets processed 13,046,538 13,711,911

* Caseload based on 2017-18 Governor's Budget DBS estimates

F. Analysis of All Feasible Alternatives Alternative #1 : Approve the requested FY 2017-18 increase in OSI spending authority and CDSS funding.

Pros:

• Ensures the funding remains in alignment with the IHSS program objectives.

• Ensures funding is available to complete the critical legislatively mandated CMIPS II changes to avoid disruption of IHSS services.

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Analysis of Problem

Increases General Fund costs.

Increases system support service costs to implement the legislatively mandated system changes.

Alternative #2: Do not approve resources as requested.

Pros:

• No General Fund impact.

• No increase to the CMIPS II prime vendor contract costs.

Cons:

• The critical legislatively mandated changes will not be made, and as a result the IHSS program will not be in compliance with state law.

• CMIPS II will be out of alignment with IHSS program objectives.

• Risk of IHSS program disruption.

G. Implementation Plan

Maintenance to CMIPS II system is scheduled and performed on a consistent and routine basis. These repeatable processes are occasionally modified based on business or administrative needs, or required as by statutory, regulatory, or policy changes. CSI is conducting a competitive procurement to award a new prime vendor contract for CMIPS II maintenance and operation services, which is anticipated to be awarded August 2017.

H. Supplemental Information None.

I. Recommendation

Approve Alternative #1 as proposed, which provides the funding resources necessary to remain in statutory compliance by completing legislatively mandated system changes, and provides for continued operations in support of the IHSS program.

Cons:

5