Assembly Budget Subcommittee No. 2 on Human Services

Good afternoon and welcome everyone. This is the Assembly Budget Subcommitee two on human services issues. Today we will be discussing issues and programs related to the California Health and Human Services Agency, Department of Social Services, and the Department of Community Services and Development. Before we invite our first panel to begin, I'll just make a few introductory comments.

We'll review California Health and Human Service agency vision and values, and we want to ensure that our budgetary decisions align with those values of equity, person centeredness, and data reliance. Our programs are so reliant on automation and automation, working well to serve those most in need. Today, we'll review some of the systems that facilitate access to public benefits in California.

People rely on these systems for survival, and we must be sensitive to what advocates and consumers tell us about the quality of those services that they need. We'll also hear about the Department of Community Services and development programs and observations from the field. I want to highlight one more that my lens for this year is those things that will protect that which sustains our most vulnerable populations and keeps them out of a State of crisis.

That is the test every program and proposal that we go through must be able to achieve. With that, I'll open it up and invite for those of the first panel to make their way up here. And while they are on their way, I want to make sure that everyone also knows that, as always, we will have our time for public comment at the end of all of our issues for today.

And when we do have public comment, we will make sure that each person providing public comment will have two minutes each to make their remarks. So let's just jump on into it, and we will start off with the overview of the California Health and Human Services Agency programs. And I believe. Mister Mcarthy? All right, you may begin, sir.

Thank you. Mister chair, I'm Brendan McCarthy, Deputy Secretary for Program and Fiscal Affairs at CalHHS. Your agenda does an excellent job laying out the structure of the agency and the expenditure. So I won't reiterate everything you've already seen in the agenda. I'll go straight to the questions if that works for you, Mister Chair. At CalHHS, our mission is to work with our constituent departments as well as external stakeholders, the Legislature, counties, providers, to provide services for the most vulnerable Californians.

Throughout this work, our goal is to be person centered, equity focused, and data driven. And as your agenda notes, we have adopted some guiding principles at CalHHS. These are that we focus on equity, that we actively listen, we use data to drive our actions. We see the whole person, we put the person back in person centered. We cultivate a culture of innovation and we deliver on outcomes.

And so as we and our constituent departments implement programs, design new programs, we always try and keep these principles in mind to improve the way that we deliver services to the most vulnerable Californians. Your agenda asked a very good question about how these guiding principles reconcile with some of the budget balancing solutions that are included in the Governor's Budget. And given the state's fiscal situation, we as an Administration were forced to make some difficult choices in developing the Governor's Budget.

What we attempted to do at CalHHS and with our partners, with the Department of Finance and the Governor's office is to use our guiding principles and protect investments that improve equity, protect core programs and eligibility to the extent we could, and to protect investments that are close on delivering results to improve the lives of Californians, particularly the most vulnerable Californians there are.

But as you note, a lot of budget balance solutions that are going to have real impact on Californians, and we are aware of that and what we, particularly in the CalWORKS program, has noted. But I should say we don't take those cuts lightly. What we did try and do is do as much as we could to minimize the impact on most vulnerable Californians.

So, for example, we did adopt or propose solutions in the Governor's Budget that would delay investments in other areas like workforce and other things, or some of our capital programs to expand, like behavioral health facilities, for example. We also did everything we could to maximize the revenues of the managed care organization tax. Those are all strategies we used to try and minimize the impact of the budget balancing solutions on the most vulnerable Californians, particularly those served by CalWORKS and our other safety net programs.

While we acknowledge there are cuts in those programs that are going to have big impacts on folks lives, we were able to limit the cuts to only 4% of the total budget balancing solutions included in the Governor's Budget. Your agenda asks the steps we're taking to analyze the repercussions of these cuts of solutions on the populations we serve. So this is something we're doing right now. We're talking with our departments, we're talking with external stakeholders.

We're obviously happy to engage with the Legislature on really understanding the impacts. And also we are, as an Administration, open to finding alternative ways to balance the budget and meet our collective constitutional obligation while minimizing the harm of solutions that we will need to adopt. If there's no questions on that, I can move on to the language access policy if that works. Mister chair.

Okay, so you asked for an update on our agency language access policy and the $20 million that was appropriated by the Legislature to implement this policy. So the first step was policy development at the agency level. In May of 2023, CalHHS adopted our agency language Access policy, which sets minimum standards for translation and interpretation across our programs and the services they provide.

And then each Department within our agency would then create their own Department level language access plan that takes into account state and federal laws, the CalHHS language policy, as well as any particular language access policies that may come with federal requirements. For example, in CalWORKS or Medi Cal or other federally funded programs. Our agency policy was developed by a language access workgroup, which was comprised of representatives from CalHHS and our departments.

In developing that plan, the workgroup conducted community and stakeholder engagement, assessed the available language access policies and procedures in place at the moment, and then consider issues about quality control and opportunities for bilingual staffing within our departments so that the agency level plan has been developed and adopted. Now we're in the point where our departments are developing their language access plans, so they are doing that now, taking into account all the particulars of their individual programs. They have been doing that with assistance from Cal HHS.

We've provided agency wide training, a lot of technical assistance sessions, and also facilitated 10 language access workgroup meetings. Their Department level programs will be developed and posted this summer, and then they will turn towards the translation of additional vital documents and further staff training to implement these plans at the Department level. Of the funding that was appropriated by the Legislature, it is split between state staff and some outside contracts.

So at the state level, we have hired language access coordinators at Department of Social Services, Department of Public Health, and Department of Health Care Services, in addition to the team working under our chief equity officer at agency, and those staff are available to assist some of our smaller departments, so they're not on their own. It's just that some of the smaller departments may not need a position dedicated to this, but we provide assistance from other departments or agency to meet their needs.

These are specialized staff that provide translation and interpretation directly, as well as manage contracts for additional translation and interpretation. They also support generally the department's efforts to make sure that vital documents, et cetera, are translated. We are budgeting about $2 million in costs in the current year, just under $4 million in personnel costs in the budget year, and then projecting $2.3 million in budget year plus one in terms of vendor contracts.

We've used these for translation services, for example, for vital documents, sign language interpretation, spoken language interpretation, where we don't have those skills in house, as well as American Sign language video productions. We have done some contracts, but many are still out to bid. So we've spent relatively little in the current year, just about $50,000. But in the budget year, we project to spend about $6 million on these efforts and then $5.5 million in budget year plus one. That's it. On the language access. I'd be happy to go on to the innovation accelerator if you have questions. Happy to answer those, whichever you're preferred.

That's still on the same issue. oh, that's the next issue. So we'll just stop there. Department of Finance .

Thank you, Chair. Joseph Donaldson, Department of Finance no additional comments. But available for any questions you may have.

Ryan Miller, Legislative Analysts Office nothing to add, but available for questions.

On the, Mister McCarthy, on the language access policy and plan you've outlined. Number one, what was the date and the timeline in terms of completion?

So the agency level plan has been completed. It was completed last spring, and then the State Individual Department plans will be done this summer.

Okay. And from the funds that were allocated for that, is there a balance?

We project to spend the entire 20 million over the current year, budget year and budget year plus one. So we think that money will be adequate for our needs for those three fiscal years.

So basically you're spreading that out over the next three years.

Well, the current year and then the budget year and the following. So this year and the next two years.

Got it. And what's that amount?

So in the budget year, we are projecting to spend just under $4 million for state staff and $6 million for vendor contracts, for example. Translation. And then in budget year plus one, we are projecting to spend $2.3 million for state staff and $5.5 million for vendor contracts.

Okay. Also, obviously, we're trying to ensure that as we deal with this, which certainly is going to be a tough budget year, not only this year, but for the next two foreseeable years, probably. Obviously, it's been the Assembly's position that we have got to do absolutely everything that we need to do to promote stability within the population, and not just when you look at the overall January proposal, obviously, the next time we all get together, we'll be talking about a whole new proposal.

But certainly, as we looked at the numbers, we certainly, if you look at the totality of the budget, there were still some areas that I think we wouldn't be considered a priority over. Another, for instance, we know that we have some gels we're not using and we're just paying to staff them. But yet we didn't decide to propose any cuts to closing these jails, but we decided to cut things in CalWORKS. Right.

So I think there's still some value realignments we still need to talk through, which is why this process is for the give and take and the great discussions that need to be had. But certainly we hope that as we enter into the may revise that we have a better realignment of what priorities are from the total budget so that we can make sure that we don't hurt people that don't need to be hurt.

And I think a part of that process also means that unfortunately, we have to tell some of our friends no in order to truly achieve equity and what I consider equity and justice in terms of how we make our decision making. Right. And so I look forward to certainly working with the secretary and his office and also working with the Department of Finance. So hopefully we can make sure that we can come to a budget that we can all be proud of.

Anyone who looks at the great recession objectively, I'm sure that anyone, particularly even those who used to sit in this and who used to hold this chair chairmanship during that time, we made some unwise decisions that I don't think really reflected what we purchased, what we at least portray what the values of California is. And certainly I don't think it achieved what the North Star of health and human services is. And so I look forward to those continued conversations as we go through this process.

And hopefully we can come to a good landing place that I think that even our constituents can even say that, hey, we know you did the best that you could. So thank you all very much on this item. And we will also make sure that we'll hold this item open. But certainly, if there's any more information that we ask for, obviously, we're going to be talking about shorter timeframes, particularly as the may revise comes.

But can you make sure that you provide those balances and that timeline to us, please? Hopefully, our goal is to get this by the end of next week, May 10. Thank you for already having some of those numbers already ready to go. We would just like to make sure we have that for records and in writing as we move forward. Thank you so much. And we'll move on to the next item, issue number two. And I think. Y'All still the same. Y'all still here? Okay. All right, you may begin sir.

Thank you, Mister chair. So your item two is the Health and Human Services Innovation Accelerator initiative delay proposed in the Governor's Budget. So your agenda asks for a brief overview of what the initiative is and what it intended to accomplish. The idea with this is to take a modest amount of state funding to help ensure that innovations in the healthcare field are translated into our health care safety net system.

So the concern is that sometimes new innovations, and I don't necessarily just mean like a new MRI machine, but maybe new models of care, new ways of coordinating care, new ways of sharing information, may be disseminated in the commercial market, but may not make it to our public hospitals, for example, or our clinics that serve our Medi Cal population and other low income folks.

And so the idea here was to use this to sort of translate best new practices and technologies and approaches to healthcare to make sure that it's benefiting all Californians in the healthcare safety net. That's the idea. We certainly, this was informed by our experience in COVID, where we saw vast disparities in the impact of COVID across low income communities compared to high income communities.

And we just are hoping that we can better, better ensure that folks who are served by our healthcare safety net get the best possible care. So the idea is that we would focus on some of the key challenges faced by our Low income communities, for example, infant mortality, infectious diseases, higher levels of diabetes, and seen in other more affluent communities. The current year budget provides for $75 million spread over the current year and the budget year for this initiative.

However, the Governor's Budget proposes to delay 74 million of that. To budget your plus one and budget year plus two, your agenda asks what substantive decisions have been made on this initiative. So when the money was appropriated in the current year budget, we created an RFP process to bring in some outside assistance to help us set up the structure of this.

So, thinking about governance and a long term plan for how to use the money, what the most important places to target the money are, who the best partners are to work with. However, acknowledging the worsening states fiscal situation and knowing that there were going to have to be budget balancing solutions as part of the Governor's Budget, we actually canceled that RFP in December of 2023. And the Governor's Budget proposes to delay, as I said, proposes to delay this budget.

So essentially, because seeing what was coming in terms of the fiscal situation, we paused work on this. To the extent this money is included in the budget that's adopted by the Legislature later this year, then we would restart work in the budget year. But we're just waiting to see what the discussions are between the Administration and the Legislature and what the ultimate decisions are made on this proposal in the budget act.

Your agenda proposes how, how this fit in with other delays and cuts and other safety net programs. And so what I would say is we looked at this Administration initiative, that we would rather delay this than make other cuts. And so we delayed this in order to avoid other worst cuts in the budget year. And that gives us time to think about the longer term plan for this initiative. Your agenda asks what entities would be partnered, receive funding. The focus is on the healthcare safety net.

For example, public hospitals, clinics, possibly rural hospitals. But then there's a lot of questions that we would need to dive in and work on about who we would partner with. The idea would not be, for example, to be giving money to for profit in entities as grants, but there may be something where we're working with our safety net providers, and then there is a for profit entity, for example, that has a new technology or system that they could share that would benefit healthcare.

In that case, there may be a partnership there, but the intent really is for this funding to support the safety net system, the public hospitals and clinics and entities like those, rather than large for profit entities. We anticipate using a third party administrator to award grants to these safety net entities.

And then our hope is, as we scale this up, that we may be able to draw in philanthropic and other entities who might also be interested in this mission in ways that may bring in other funds to leverage our state funds to increase the benefit to the safety net system.

Department of Finance.

Thank you. No additional comment. I'd be happy to answer any questions. You might have on this topic. Thank you.

LAO

Thank you. While the Administration has identified some issues and problems that may merit some attention and could potentially be the focus of this initiative, I think in our view, the proposal remains largely conceptual. And, you know, in light of your comments, Mister chair, at the beginning of the hearing about a lot of the difficult choices the Legislature is facing this year, I think that this appears to be a candidate for a reduction rather than a delay, in our view.

However, to the extent that this initiative remains a part of the state's fiscal plan going forward, we would recommend the Legislature adopt oversight language that would help to ensure that the resources are spent consistent with legislative priorities. We would be available to the Committee to assist in drafting any language.

Mister Mccarthy, can you tell me, so is the innovation accelerator initiative particularly only in the health field, or is any of it is any of it meant to be used in human services?

It was designed to impact the health field, Mister chair. I mean, obviously the folks that are served by our programs are served by multiple programs. We have lots of low income folks who are served by CalWORKS and others served by Medi Cal, but it was set up as a healthcare focused initiative.

Okay, fantastic. I mean, certainly as we move through and when the may revise comes out, certainly Lao, if you can help us with drafting some of that language in terms of intent, because it also seems to me that they're depending on how things go. You know, I think the question is, is it the Governor's intent to have this accelerator program in perpetuity? Right? Meaning, does he believe that it should also be available for future administrations when he leaves? Or is this just for the remainder of his term? Do you have any idea on what the vision is for this?

Thanks. The plan was for this to be a one time augmentation to do this, to make these investments, to bring these technologies in. But then, you know, through Medi Cal or other payer services than the healthcare providers would Bill for those kind of services. So we see it as a one time investment.

Okay, thank you very much. We will hold this issue open and thank you. And we'll move on to the next subject, which is the Governor's Budget proposal regarding the safety net Reserve Fund. And we'll wait for us to be joined by some new folks. And Mister McCarthy, you may begin.

Oh, thank you Mister chair. I'm actually going to defer to my colleague from the Department of Finance.

oh, okay.

Hi, Aanam Khan, Department of Finance. So in terms of the safety net Reserve, the Governor's Budget projects increased medi Cal and CalWORKS caseload compared to the 2023 budget. Actual given these increases and the projected budget shortfall, the budget proposes to withdraw from the safety net Reserve to maintain existing benefits and services for both the Medi Cal and CalWORKS programs.

This will allow the state to maintain CalWORKS and Medi Cal service levels while avoiding further reductions to essential programs and services in these areas and during this economic downturn. The Administration believes this proposal is consistent with the legislative intent and existing law to maintain these programs and of benefits and services for Medi Cal and CalWORKS programs.

Okay, thank you very much and we'll move on to Grace.

Thank you, Chair Andrew Cheyne, he him from Grace End Child Poverty, California. Thank you for the opportunity to speak about this. In particular, what is a double cut in terms of the situation? Safety net Reserve withdrawal and the several cuts to the CalWORKS program.

As noted, in terms of the safety net Reserve itself, it is a proposal for a complete withdrawal, and we would point to how inequitable this is in comparison to the proposal for other reserves, which are much larger and yet are sustained to about half. And the budget center has provided information. We're glad to follow up with you about that.

And as the agenda lays out, the previous comments notwithstanding, the LAO has written as well about, as well as in the agenda about how this very well may not meet the statutory goal. And I would also point to new data by the Cal budget center that revisits the original 2019 Legislative Analyst Office expectations for the safety net Reserve, and contrast that with current caseload and current grant levels, really how fragile the safety net Reserve is and the pressures that could be put on it.

And as you noted, chair, we could be looking at multi year deficits. So the question is, why is the only Reserve dedicated to safety net programs, by far the smallest, the only one targeted for complete withdrawal in the proposed budget?

So just in terms of the double cut, then some of the programs that are targeted I'm sure, I know you've already heard this, but in terms of family stabilization, we're talking about in CalWORKS programs that you've had community Members come here and talk about how it has saved their lives. It has given them places to stay, get off the street, be able to have a kitchen to cook the food and the groceries with their food stamps and help them go to college and turn their lives around.

Eviction protection, housing, domestic violence, substance abuse. The true stability that you spoke to. We saw just last fall that, in fact, a baby died at a bus stop at LAX when the mother was trying to reach out for help. Now, we'll never know if she was CalWORKS eligible, but it's highly likely that she would have been not only eligible, but also eligible for family stabilization.

And so these are the human consequences that we're talking about here for subsidized employment from neighborhood legal Services Los Angeles, here's a quote from Lucia Vasquez. I've been an employee for neighborhood legal services for five years and seven months, and I first started as a subsidized employment worker. I've gained a career as an intake screener helping others, and I'm proud of the place I work.

And we know that's true both for private organizations as well as counties helping achieve the culture change in our program, as well as the deep cuts to the single allocation that put jobs at risk. So just briefly, I think it's important to note that the double cut does stand in opposition to and undermines the agency's guiding principles and strategic priorities. A few examples of this the focus on equity the CalWORKS caseload itself is an indictment of the broader social forces of systemic racism and patriarchy.

Why do we have 90% of families led by women with Latinas and black mothers so horribly overrepresented? It's very clear why that is. The recent LAO report on child welfare lays out the serious disproportionalities that already exist and highlight the research we know is extensive on how strengthening concrete supports like CalWORKS is a proven preventative measure and bolster would bolster the priorities of prevention for the agency. Using data to drive action from even a purely fiscal perspective.

The data are clear that every $1 cut from CalWORKS costs eight because we push families past the brink into child welfare system impact, into public safety, and, quite frankly, the last opportunity as children are not able to achieve their potential in school and their careers.

And last and most certainly not least, this undermines the governor's plan to pursue the new TANF pilots through the Fiscal Responsibility Act, the FRA, which allows us to finally set aside the failed punitive rules and test real family outcomes in family stability and well being. Truly, the Federal Government is saying we should go in this direction, and yet these are some of the programs that are targeted in addition to the safety net reserve.

So we're hoping that the Legislature and Administration will come together, continue the program's direction in Medi Cal and CalWORKS, and preserve the safety net reserve. As you noted, what could be multiple years of deficits.

Good afternoon. Eileen Cubanski with the County Welfare Directors Association. I'll just briefly add a little bit to what Andrew has already so eloquently stated. You know, we other advocates have repeatedly expressed our strenuous opposition to the approximately $400 million in proposed ongoing cuts to CalWORKS services.

And while we're gratified to see that the grant levels remain untouched at the moment, we are all deceiving ourselves if we do not acknowledge the devastating short and long term impacts of the elimination of family stabilization services, subsidized employment opportunities, direct county worker support to families, and other tangible supports that will occur if the budget is proposed, is enacted. And Andrew has laid out some really dramatic and probably typical examples of the impacts of these cuts.

The LAO has noted in the agenda has posed a relevant and provocative question about whether the administration's use of the safety net Reserve is consistent with the intent, if not the letter, of the law. But it's certain, though, that the Legislature intended the existence of the safety net Reserve to act as a buffer or a backstop against the very CalWORKS cuts that are proposed in this budget. It's what the safety net reserve was created by the Legislature to prevent.

To see the entirety of the reserve exhausted in the first year of what is expected to be a multi year revenue dip, not exactly a recession, but revenues coming in lower than projected is extremely troubling and leaves us nowhere else to go in future fiscal years. And the use of the entirety of the safety net reserve, with none of it sparing the CalWORKS programs from services cuts, is a disappointment statement of values Andrew described it well. It's a double cut to CalWORKS.

We recognize the Legislature has really difficult choices to make for how to balance this budget, but we urge that the budget not be balanced on the backs of children and families already experiencing deep poverty, and that we preserve this option for the future. Thank you.

LAO

Good afternoon. Sonia Schrager Russo with the Legislative Analyst Office. A number of our comments have been highlighted thus far, but just to echo what some of my colleagues on the panel have mentioned in terms of our thoughts on the safety net reserve withdrawal, as has been mentioned, it's uncertain at this time if the economic conditions that we're facing meet what the legislation intended for this reserve, and then additionally in terms of the full withdrawal of the balance, the 900 million, as has been mentioned, this is a bit inconsistent with the overall approach the Administration appears to be taking to using reserves in this budget, since again, as has been mentioned, the Administration has proposed withdrawing only half of the other reserve, which is constitutionally allowable, as well as the full discretionary balance of that other reserve, whereas the Administration has proposed the full withdrawal of the safety net Reserve.

LAO do you concur with the Department of Finance that this proposal is consistent with legislative intent?

I think it's difficult to pinpoint that exactly at this point in time. I think as we get a better sense of what the economic conditions look like headed into this may revision, we may have a better sense of if caseload is changing in the way in which it's written in the legislation. But at this point, we haven't seen some sort of dramatic increase in caseload in either CalWORKS or Medi Cal that the legislation seems to point to as the trigger for using the safety net reserve.

Department of Finance I've met with people who and people who sat in this position during the time that Reserve was created, and I have not found anyone yet that says that the way that the Administration is using this reserve is consistent with legislative intent. Can you point to something that tells us that we are wrong?

Right. So I think the legislation points to being able to use for the purpose of maintaining existing program benefits and services for both the Medi Cal and CalWORKS programs. The Governor's Budget does propose like a $499 million increase in General Fund for the Medi Cal program compared to the 2023 Budget act. And then there is a 2.3% increase for CalWORKS caseload and then a 3.9% increase for CalWORKS caseload in the budget year compared to the 2023 Budget act.

So those increases compiled with the issue of the budget deficit that we're facing, the Administration believes that it does constitute utilizing the safety net Reserve.

I believe it should be utilized. But when you add up those increases, which seems to be the intent, it doesn't add up to getting rid of the whole thing. So you're saying that it's part of the reason, but it's not the total reason why you're trying to eliminate all of it. When we know that in future years, in the next 22 years, we still have a structural deficit we need to solve. So what gives us protection for future years in order to make sure that we don't have to make further cuts to this next year?

Right. So withdrawing the Reserve for in the current and budget year would address along with the budget solutions that are proposed in the administration's budget. It would solve for the deficit in current year and budget year.

So I think it's appropriate for me just to make clear that when we talk about a full withdrawal of the reserves, it is my expectation that there would be no cuts to any of the human services programs because the full reserve has been proposed to be used.

Now, what I'm seeing is that even though we made the wise decision of having a reserve for the safety net programs, we are actually, for lack of a better word, stealing from human services to prevent other cuts from happening in other places. We're still going to make cuts in other human services because we deem those other things more important than human services. Right?

And so I think my, my only foot pushback, and it'll be the same pushback if it's in the May Revise, to be honest, is that if we are going to propose a full elimination of the Reserve, there should be no cuts because that's what it was intend to happen. And so I just want to make sure that that is clear and that hopefully we won't have to continue to be put in this situation because certainly there something to, now I'm a political science major.

Let me just make that clear. I am not good at math, but even with my handicap in terms of math, something just doesn't feel right. And it is my hope that we can clarify this in the May revise, because just from an equity standpoint and a justice standpoint, we are literally taking money that is meant for our poorest and most vulnerable population and we're using it for something else. That's part of the problems that we did during the great Recession.

And it's my hope and my intent to be quite Frank, that we don't make those same mistakes again. So I appreciate it. I think that overall I want to thank LAO also for giving us another, some, also some alternative cuts to think about if we had to make in human services in which we are reviewing now. But there's no doubt that we have to come to a conclusion here and it's getting, it's almost a fourth quarter time when it comes to these budget times.

But I think as long as we continue to have these dialogues and continue to try to figure out what are some alternatives to these things, certainly I think we should be able to get to a point where we have a budget that we can all be proud of. I want to thank everyone for this item and we will hold this open and move on to the next subject.

Issue number four Center for Data Insights and Innovation and efforts to simplify program access, access to human services and health programs.

Thank you, Assemblymember Doctor Corey Jackson and Members of the Subcommittee, for the opportunity to speak today about the Center for Data Insights and Innovation. Is that okay with you? I can move forward to the questions listed in the agenda. So, for a quick overview of CDII since its creation in 2021, CDII has been responsible for several key CalHHS initiatives. CDII administers the State Committee for the Protection of Human Subjects.

That's sort of our institutional review board for external researchers to research data associated with the agency. It spearheads the California Health and Human Services Data Exchange Framework, or DXF initiative. CDII oversees the agency data hub and open data portal to integrate and standardize data across all calhs departments. It also collects and publishes reports on the quality of care and patient services, and strengthens the security of data processes within the agency in 2023.

Developing the data exchange framework remains a top priority by continuing to lead interdepartmental collaboration, CDII strives to incubate and innovate data driven strategies, ecosystems, and products and services designed to improve data sharing and analytics across the agency, while encouraging increased stakeholder engagement from our partners. So the next question the crossover on impact between major health and human services programs and, for instance, how many of these enrolled in Medi Cal are eligible for and enrolled in or not calfresh and CalWORKS?

This is a question that CDSs and DHCs are currently working on together. As part of the continued efforts to measure and increase cross enrollment, CDSS is using existing application and recertification data shared by Californians from one program to estimate how many Californians may be eligible for a different program. CDSS will then be able to produce an actionable list of potentially eligible Californians that can be used for cross enrollment and an in reach measure to track the level of cross enrollment between programs.

So this is an exciting moment in data and research enabled by the SAAS migration, the statewide idea, and investments in building data research teams that have the capacity to do this work in house. As part of its work on measuring CalWORKS take up, CDSS is using application and recertification data from Calsaws to understand how many Californians enrolled in CalFresh are potentially eligible for and are cross enrolled in CalWORKS.

CDSS has a planned briefing with the Legislature this coming Friday with a public release of results this month. Lastly, on this topic, CDSs and DHCs are currently investigating what is possible with available data. Ideally, CDSs would use application and recertification data from calsaws to understand how many Californians are enrolled in Medi Cal and are potentially eligible for cross enrolled in CalWORKS or CalFresh. They have signed a business use case proposal, or BUCP shared data and are continually analyzing that data.

As far as what CDII is working on to establish a single point of multiple programs for eligible individuals and families, enabling them to have access to additional programs when they apply for one. So CDII isn't currently focused on the front end of eligibility systems, where a single point of entry would be used and working with the data. We are focused on continuing to lead interdepartmental collaboration while striving to incubate and innovate data driven ecosystems of products and services in the future.

However, CDII agrees that linking client data across departments would simplify the application process by leveraging information that already exists within the state. But again, this is something that currently CDI isn't working on. As far as the critical program outcomes, the interagency data sharing agreement helps us understand at the state level. There's a few efforts that are currently underway that utilize the interagency data exchange agreement, including the early childhood integrated data system, or ESIDS.

So CDII is working with the Department of Social Services and the Department of Education to collect, integrate, maintain, store, and report information from early childhood programs that serve children and families from birth to age five. We are in the process of receiving data from departments, agencies, and organizations so that we can begin to identify workforce shortages, teacher supports for inclusive practices, and access to facilities.

Another use case CDI is looking to establish is between the California Interagency Council on Homelessness, or Cal ICH, and California Health and Human Services departments, starting with the California Department of Social Services and the Department of Healthcare Services. So one component of this agreement of Healthcare, one component is to enable the linking of CalWORKS data with data from Cal ICH's statewide homeless data integration system, or hdis, as well as with data from DHCs, which contains flags for homelessness and housing insecurity.

So, importantly, this data would be linked to or at the client level, enabling both an unduplicated count and a rate of individuals who are experiencing homelessness or housing instability in the CalWORKS population. So the last question here we have for increasing attention to the rate of homelessness and instability in the CalWORKS population.

So the Center for data insights, along with Department of Social Services, Cal ICH, and Healthcare services, are in the final stages of signing an agreement to merge and analyze the statewide homeless data integration system, or HDIS data, and the data from various safety net programs, including Medi Cal and CalWORKS. This is to understand or better understand the rates of homelessness and housing instability among Californians that agency currently serves. This is an unprecedented and an exciting moment.

It will be the first time the state will have insight into the intersection of data on utilization of the local homeless response systems as seen through local homeless management information systems. There are many research questions that this data set could unlock, including how many Californians are enrolled in Cal Works, and there's also the opportunity to develop a methodology to measure housing and stability among the Medi Cal and CalWORKS caseload.

So this is going to take several years to develop, especially because the HMIS data requires complex data management and data analysis. However, once we invest the time in wrangling this data, merging these data sets, and developing and applying complex methodologies, we're hopeful these measures can be produced on an ongoing basis and can regularly inform our understanding of homelessness and housing instability among CalWORKS recipients and further informed policy decisions. There will be ongoing needs of continuous quality improvement of the data.

However, it will be an innovative look at the largest intersection of homelessness and social services data statewide. Open to questions

Joseph Donaldson Department of Finance no additional comments. Be happy to answer any questions you might have.

Ryan Miller, LAO, nothing to add, just.

A few things here. Director, obviously, some of the questions that we raised in terms of, I mean, the greatest thing, the greatest impact that I think you can have, particularly in the human services space, is that of helping us to really ensure that we break down these silos that exist, that are stopping people who are eligible for these services. But because we're working in silos, we just, they're not getting what they need, particularly in a timely fashion.

What needs to happen to put this on your workload so that we can make sure that we finally solve this issue? It's a critical issue. Right. Seniors who qualify for SSI, SSP, the percentage of which are not enrolled into Calfresh when they are eligible, is very concerning. And there's many examples of this. Right.

In one case, you have to go to one office, set up an appointment, and then instead of creating a one stop shop, they have to now create a separate appointment, take time off of work, find childcare, rearrange things. Right. So what needs to happen to ensure that you help us with solving this issue?

Yeah, I think that's something that we can take back. Definitely.

Does it take legislative language to ensure that you do it?

I don't think there's legislative language out there right now that denies us the opportunity to pursue that, but I do not think it takes legislative language. No.

Can we get a commitment that you will work on it?

Absolutely.

Because certainly now, you know, we have a lot of legislative language we can work on. We're really good at that, you know, so, you know, if it would be helpful. I mean, I think this is a critical thing, which is why we've been investing in so much on all these different databases and systems, because we've been told time and time again this will help us to close those gaps. This will help us to have a one stop shop. Right.

I know we're going to be talking about one of those databases or systems in the next item, but want to have continued conversations with you offline, Lao, if we feel the need to please certainly be ready to help assist us with any trailer Bill Language to ensure that that happens. It is also my understanding that there is a requirement in law for an annual briefing with legislative staff to facilitate oversight of CDII. Are you aware of this law requirement to do so?

Yes, we are. And we are open to engage in that conversation.

Well, I'm not sure if it matters if we're open to it. It sounds like that legally we have to.

Yes. So we have submitted that report.

Myself, I don't think I can say no. All right, so let's find a way to the appropriate time of the year each year to make sure that we do this annually, whether it's in a form like this or however is the appropriate way to do so. Our Committee staff will reach out to you to make sure that we fulfill our legal obligation and making sure that we have that appropriate oversight, if that's amenable to you. Absolutely. And it's not too bad to meet with me, by the way. I'm quite the entertainer, so I think we'll be good. You like Mountain Dew what's your.

I'm a coke guy. I'm a coke guy. Coca Cola

You're a Coke guy, yeah. oh, you're a coke guy. Okay, well, we'll work on that. All right, we'll move on to the next item then. Thank you so much, sir.

Thank you.

Issue number five. Speaking of systems, let's talk about the statewide automated welfare system. And it looks like Mr. Zyretsky. Did I say that right?

You absolutely did.

All right, this looks like you're kicking us off.

I am.

All right. Go for it.

Mr. Chair, good afternoon. My name is Steven Zyretsky and I'm with the California Health and Human Services Office of Technology and Solutions Integration. Appreciate the opportunity to speak to you today. We will be going through the items on the agenda and want to be respectful of time, so we'll jump right in. I do want to take a moment and commend the CalSAWS project. They completed a successful migration to the single SAWS eligibility system for all 58 counties this past October.

Truly monumental achievement. Milestone is a culmination of five years of dedicated effort by the CalSAWS consortium project, their vendor staff with the support of the counties, state, federal partners and other stakeholders. In the agenda, it asks how OTSI directs, governs, and oversees the planning and the implementation of CalSAWS, and we do this several ways. We are responsible for the state level project management and oversight of CalSAWS, and this includes administrative oversight as well as the management of the technical independent verification and validation services.

Our director serves as the state ex officio, which is a non voting board member representing OTSI, CDSS and DHCS at the CalSAWS's Joint Powers Authority. Under the leadership of our Deputy Director, Brandon Hansert, our team is responsible for overseeing and monitoring, and we participate in various CalSAWS project tasks and activities to ensure the compliance with state and federal standards and regulations, as well as information technology best practices.

We collaborate with our state sponsors, CDSS and DHCS, on the strategic outlook for CalSAWS, and we act as a point of contact for all project issues at the state level. We're the point of contact for our federal partners, center for Medicare and Medicaid, as well as food nutrition service.

We're also the point of contact for your staff as well as the LAO, and we work with our state and federal sponsors on various reviews and approvals of the multiple advanced planning documents, contracts, and procurements to ensure both contract compliance, project approval compliance, and accuracy validation and accuracy of the information. As I mentioned, we manage the third party independent verification and validation vendor, plays a critical role in the technical oversight.

We monitor risks and issues and the deviations from requirements, and we collaborate with the CalSAWS project and the state sponsors to ensure the necessary corrective actions are taken so that the CalSAWS project can remain on schedule and within scope to meet state and federal mandates. We also prepare various budget documents that you'll likely see throughout the year, including cost allocation plans, premise descriptions, and BCPs that really reflect the unique budgeting requirements for CalSAWS.

We're responsible for developing the claiming instructions that the counties use to claim costs, and we ensure that they reflect state and federal regulations as well as project approvals. We analyze those county claims, track the expenditures, and also reconcile them, and then we can prepare technical or budgetary briefings for the various entities when necessary. And at the state level we manage the administrative functions, including purchasing and procurement and budgeting and things like that. And at this point, I think we're ready to move to the overview of the budget and I'm going to turn it over to John Boulay.

Good afternoon, Dr. Jackson. Thank you for your time today. My name is John Boulay. I am the current CalSAWS executive director. As Mr. Zyretsky says, CalSAWS is a joint powers authority made up of all 58 of our California counties, and the JPA was put in place for the sole purpose of the design, development, implementation, and maintenance and operations of the CalSAWS system and the newly developed and implemented public facing portal, BenefitsCal. In previous years, my testimony to both the Assembly and the Senate has been mainly focused on the progress towards migrating all 58 counties and the state to CalSAWS case management system and the development and implementation of and public access portal, BenefitsCal.

I'm happy to echo Mr. Zyretsky, his comments that we have successfully migrated all the counties to CalSAWS and BenefitsCal, reducing the number of systems in the state providing that consistency. We are heartened that we were able to do this prior to the end of the federal mandate, what was the end of calendar year 2023, while also keeping up with legislative policy changes and supporting our counties through a global pandemic.

California now has the single largest integrated eligibility, health and human service system in the country, quite possibly in the world, with a new public facing access portal, BenefitsCal, that is serving California families who are in need of assistance, who need to be able to apply for that assistance: Medi-Cal, Calfresh, CalWORKS, and other human services programs. Further, BenefitsCal is being looked at from other jurisdictions around the country as a transfer system of choice for health and human services public portals across the country.

I'm also very humbled and proud of the work done by our project team, inclusive of our vendors. We cannot do this alone. Our counties have stepped up during challenging times. The administration has been arm in arm with us and our consumer advocates have been there every step of the way. The majority of the work to achieve these historic milestones was done during the pandemic and during the unwinding of the Medi-Cal continuous coverage provisions.

For CalSAWS and our counties, the pandemic became a catalyst for doing things differently. Mr. Zyretsky provided a partial response to the Committee's first question on the agenda. I will provide an overview of the CalSAWS budget. For CalSAWS budget for fiscal year 24-25, the total budget is $346 million. Of that, $300 million of that, 87% is for general maintenance and operations of the system. Keeping the lights on, keeping things going. Operation for CalSAWS includes hardware, hardware maintenance software, cloud services were hosted on the AWS platform.

Technical infrastructure, services such as wide area networks, local area networks, help desks staffing, those help desks, system performance monitoring. We're a 24/7 shop 365 days a year, monitoring the performance of that system because our counties and the public depend on that system. So 87% are those fixed costs, from legal services to quality assurance services and just the facilities that our people sit in. The remaining $46 million, or about 13% of the total budget, accommodates system change.

Now, if we take that $46.0 million, $17.5 million, 5% is limited to client correspondence enhancements. So you talked in an earlier agenda item about language equity. As these translations come from the Department coming down, they have to be able to get into the system. So when an action takes place in a case, they trigger them in the appropriate languages. BenefitsCal portal mobile enhancements as they come in and good ideas come in.

And then our Calhears interface partners with the Public Health Benefit Exchange in accordance with, and all of this is in accordance with the scope that has been approved by the state and our federal partners. Approximately $28.6 million of that total budget, 8% will be utilized for other changes, including reoccurring policy changes. If there's a cost of living adjustment, rate table changes, those things have to get put into the system. They have to get tested.

We have to make sure that they're right so the benefits are timely. In the agenda, there's the Committee's question on point of contact to problem solve in response to issues that consumer advocates have raised. I'll let the administration answer for themselves. But for CalSAWS, I am the point that is accountable for that as the executive director.

Now, we have taken steps over the last year to appoint a full time resource, Lynn Bridwell, an executive, to be able to step into that role and take on that challenging duty because we have very many access channels that we have to coordinate and make sure that we don't fall into our own silos, that we communicate across those silos.

The departments and the project. As outlined in our supplemental report to the Legislature that came in, I won't go through all of the different forums that we have that are public in nature, but we do have very many public forums that our consumer advocates are privy to and very many opportunities to be able to meet with those. We do have to optimize those. We have made great strides, as outlined in the supplemental report.

We still have some work to be able to do to optimize those, but we're proud of the work that we've done together on that. And with that, I'll turn it over to my colleague, Mr. Ryan Gillette.

Thank you so much. My name is Ryan Gillette. I'm the chief data officer and the deputy director over the research, automation, and data division at the Department of Social Services. I want to start my testimony by echoing the sentiment of John and Steve and celebrating the success of what we've been able to achieve with CalSAWS between the consortium and the administration.

It's a tremendous lift to migrate all 58 counties onto a single system, and the project was able to accomplish this on time, on budget, and without any major issues along the way. As I'm sure you all are familiar, this is not the norm for most major it projects, and so the fact that this transition has gone as smoothly as it has should really, I was.

About to say stop lying. That's impossible. You lying to us?

No, but I mean, it says a lot to the leadership of John and the great team that we've had along the way. So I do want to build on some of the points raised earlier by John and Steve. First, I want to share more about how the administration engages with advocates to address the questions pertaining to CalSAWS when they come up.

So there are many different CDSS and DHCS program areas that have an intersection with CalSAWS, either as a program that is directly managed through CalSAWS or one that interfaces with CalSAWS in some capacity. Each of these programs has a unique set of advocates and stakeholders with questions that pertains specifically to those policy areas, and as a result, we rely on our individual program areas to serve as that initial point of contact and triage for questions that may come up.

If an item is specifically related to automation within CalSAWS, they will be filtered either to my team or to OTSI, who will ensure that those issues are then raised in the proper forums with CalSAWS. So Brandon Hansard, who's not here today, but as Steve mentioned, is the deputy director over the project on the OTSI perspective, is the primary point of contact for those sorts of questions.

His name is Brian?

Brandon Hansard. Yeah, we'll send you a note.

Okay, fantastic.

In addition to that, advocates also do have a direct relationship with CalSAWS and frequently reach out to CalSAWS leadership to elevate concerns when they may come up. This is a valuable line of communication that has helped the administration and the project identify problems and work quickly to correct them when they have arise. Regarding functionality data, moving on to one of the later questions, metrics about BenefitsCal utilization are shared in various project and stakeholder meetings and are posted on the CalSAWS's website.

With the initial launch and migration completed, we can definitely look at adding additional metrics to this, such as some of the ones that were listed in the agenda. It is a shared goal that the transition to CalSAWS and launch of BenefitsCal statewide is successful both for clients and counties, and data will play an important role in helping us achieve that goal. A key issue will be determining who is the right entity to produce different types of information.

Metrics regarding the technical operation of CalSAWS and BenefitsCal system would probably make more sense to be produced and hosted by CalSAWS, while programmatic information related to caseload might make more sense to have produced and hosted by the administration. As we think about some of these additional metrics, the administration and CalSAWS will work with counties and advocates and other interested stakeholders to determine what metrics could be feasible and how to define them in a way that makes them both relevant and actionable.

Some of the metrics could be produced relatively easily, but others, such as, for example, an end to end timeline to submit an application, might be feasible to produce. But given the variety of different programs people could be applying for and the fact that people may choose the middle of their application to pause and go do something else, it might be hard to derive a lot of meaning from that.

So we would need to spend some additional time thinking about how to define that in such a way that we can actually get some useful productive value out of it. And then finally, there may just be other measures that we simply do not have the data to produce. Finally, there is a question regarding denial rates. So the state has produced data on the average denial rates by CalWORKS and Calfresh for calendar year 2023.

More recent data is still undergoing review, so we don't have that available just yet. For CalWORKS, the denial rate fluctuated between 56% and 60%, with an average of 58%. For historical context, the denial rate has ranged from a low of about 45% in fiscal year 2017-2018 and has witnessed a slow but steady increase over the past several years, with no significant one-time jumps. With CalFresh, the denial rate fluctuated between 39% and 45% with an average of 42% in calendar year 2023.

Similarly, over the past several years, we also have seen slow increase in that denial rate. I do think it's important to note that denial rates in isolation may not paint a complete picture of what is happening. I think it's also important to consider whether applications are actually being correctly determined. So maybe what we want to be thinking about is the rate at which people who actually are eligible are appropriately deemed eligible and people who are actually ineligible are appropriately deemed ineligible. So more to think about around that. I'm going to stop there, but happy to take any questions.

Jennifer Tracy with the California Association of Food Banks. Thank you, Mr. Chair and Committee Members for the opportunity to speak today. First, I do want to acknowledge the advancements that have been made since last year's hearings. Overall, the partnerships have become increasingly collaborative and communication feedback loops are more consistently implemented. The project designated a point of contact, as mentioned, for advocates group, which has supported many of those improvements.

We're also grateful to CDSS and DHCS staff for their work in supporting stakeholder engagement and for their efforts to elevate consumer needs within policy guidance. So, reflecting some of the recommendations in the agenda, our comments today summarize three issues that we hope can be prioritized for further support and alignment with the requirement in the Welfare Institutions code to minimize the burden of the eligibility process for clients and eligibility workers, and to engage stakeholders.

In the process of developing technology, advocates have experience that it's often structured to deliver on a set of predefined requirements with the intention that whatever is delivered will meet the intended purpose. And once the functionality is delivered, the proverbial box is checked and the vendor gets their payment, and that functionality goes out to the public. However, simply checking a box on requirements is insufficient to meet the goals of effective government service delivery. Take, for example, the translation of the BenefitsCal website into Spanish. The requirement to translate the website was met.

However, the application asks if someone is facing eviction to see if they may qualify for emergency services to prevent homelessness, and the word is translated as eviction, which actually means the loss of title to a property. The correct word in Spanish is desalojo.

Obviously, this affects the experiences of low income Californians who are attempting to navigate the website, which the requirements were met, often with lower literacy levels and other barriers. We're advocating for a bridge in the gap between meeting a requirement and the functionality based on that requirement meeting the intended purpose for why it was created in the first place. There are many ways to support this goal, which leads us to our second recommendation, to have meaningful metrics on the functionality of BenefitsCal.

Yes, the CalSAWS project website does publish some data. However, most of what is available does not include context to understand the value of what is shared. For example, we know from the website that there were 3.8 million accounts created, but it's not clear if those numbers demonstrate success or a cause for concern.

The website was launched over two and a half years ago and we're still unable to make informed recommendations for the allocation of resources, which we know are increasingly limited because critical information about how the website functions like where are people getting stuck? How long does it take to finish an application? Is still not provided to key decision makers, including state departments and this very Committee.

Lastly, when we have identified concerns related to the implementation of Welfare and Institutions code 100 and 823.1 through three, we've kind of had to guess at where to elevate these concerns or we've been unable to identify anyone within the funded state departments to help us address the questions about the project's compliance with this particular policy.

The advocate community recognizes that the development of BenefitsCal and the migration of counties has really focused on making sure some key deadlines are met, and we're really grateful for the successful migration.

However, as the project moves to the management and operations phase of the work, it makes sense even more now to shift to implementing transparent efforts to coordinate policy development with technology opportunities, to measure outcomes for beneficiaries using these technology systems, and to continue maturing our collaborative efforts with clear feedback loops and responsibilities, knowing that beneficiary success is the purpose of why we're all here.

Low income Californians need and deserve to have technology that doesn't just check a box so a vendor can make millions and millions of dollars, but also allows them to access the services as intended and envisioned. They deserve to have a functioning ecosystem of decision makers that value navigating the integrated and overlapping roles between beneficiaries, advocates, counties and state departments, and between policy, technology, and user experiences.

Thank you to the Chair and the Committee Members for valuing the sort of where the rubber meets the road conversation in support of improving beneficiary outcomes. And thank you to the Department staff and project staff who've been part of our shared learning process to meet the goals that were set forth by the Legislature in the Welfare and Institutions code.

Good afternoon. Eileen Cubanski with the County Welfare Directors Association. I'll keep my remarks relatively brief, not a lot to add to all of the great testimony that's been provided so far. We'll also pile on, though, to the victory lap that everyone's been taking. I never personally had any doubt that the migration would occur successfully on time and on budget. Have lots of confidence in our consortia staff, our county staff and our state and advocate partners to get this done.

But it is pretty remarkable, to be honest, and that it all happened in the midst of a global pandemic and with relatively few hiccups. It really is a testament to everyone's hard work. And so I did just want to, just want to pile on the praise and take another little victory lap because it's a really important accomplishment.

Our county's focus is to get benefits and services to eligible customers, and to do this, we need our systems to work for the workers who are providing direct customer service, and we have to be able to prioritize the changes that will be the most impactful. Even in good budget times, we're never in a position to have every change anyone might want be implemented, including our own county workers.

But as we enter more challenging budget years, being able to focus on the changes that will have the most impact on improving overall services will give us the best results from the available funds. Over the past few decades, the program's counties administer have become increasingly complex and our automation more sophisticated. Counties have introduced new access channels, including online customer portals and telephone service centers, and experimented with many other innovations, such as lobby management, advanced imaging technology and interactive voice response systems.

Now that migration is complete, we look forward to continuing to pursue innovations that can improve customer service and leverage technology to allow workers to focus more on customer interactions. I do want to reiterate, though, that these are complicated programs with complex rules and automation can only accomplish so much with respect to simplifying the consumer and worker experience with those programs and applications and complexities.

So we should absolutely be leveraging our systems and look forward to focusing our attention on how we improve our metrics, how we improve our functionality, and want to keep in mind too, that these are complicated programs by design and look forward to continue to policy engagement among all of us with goals of simplifying access and simplifying the ability for our customers and clients to tap into these programs and needed benefits. Thank you for your time.

Department of Finance?

Aanam Khan, Department of Finance, nothing further to add, but happy to answer any questions.

LAO?

Brian Metzger, LAO. The supplemental report language approved last year provides for a final, updated report from the Administration and other partners on CalSAWS stakeholder engagement by the end of the current fiscal year. Given the recommendations from advocate stakeholders listed in the agenda, we recommend the Legislature request a final report that not only updates the January report, but responds to the advocate stakeholder recommendations.

Our recommendation is consistent with legislative intent in the SRL that requests the administration and CalSAWS improve their processes for soliciting and integrating feedback and input from stakeholders into the prioritization of enhancements to the public facing elements of CalSAWS like BenefitsCal. However, given the fiscal pressure facing the state, we acknowledge that the final report must consider other factors as well, such as the level of existing project funding and resources available, as well as existing commitments for automation of policy changes.

To the extent any of the recommendations require additional funding and or positions to adopt, we recommend the Legislature request this context as part of the final report. Any updates to project reporting requirements could be considered based on the final report, including, for example, whether or not advocate stakeholders recommendations have been adopted. And those updates could be incorporated into other language like provisional budget bill language. Happy to answer questions.

Just a few questions here. Number one, are there still any bugs that need to be worked out in the system?

Mr. Chair, I would say yes. There's still defects that come up every single day. Some of most of those are minor items that we find that might be specific to a data issue or something else with the system that's continually part of the maintenance process of the system to see what a worker experiences, what the data is. Can we recreate that and actually rectify that so that services can be provided to customers? So sitting here? Absolutely there are still bugs.

As we do changes to the system, sometimes we introduce bugs and we have to quickly fix those. So yes, there are. And that's part of the continual process and maintenance and operations to be able to rectify those.

I certainly understand. My Facebook page was just messed up for a while. I didn't know who to call, you know? Okay. Anyway, it seems like some of these concerns from the stakeholders seem pretty relevant in terms of ensuring that if we're investing so much money that we can actually get some good data out of it, and that could actually lead to even greater innovation or a greater understanding of what the population may be facing, the needs that they may have. Certainly is there.

How often do you kind of bring stakeholders together to kind of see the potential of 2.0, 3.0 SAWS, right? Or even some of the things that could be happening on the ground today. Any thoughts about that?

Yeah, I'd say interactions happen weekly. There is forums that are led by CDSFs that happen quarterly and then by the project that happen quarterly to prioritize change. I agree with what Mr. Gillette laid out, that we are open to exploring those additional metrics. Agree with the intent of the additional metrics. As stated, we have to make sure that who is the owner of those metrics and where do they come from? Is it a Department performance measure? Is it a program measure?

Is it an operations of a county? We want to make sure that we don't have dueling data and that we have the right measures by the right owners of that data to be able to give meaningful information on program as well as system performance. I think the items that we have put out there show the system performance, but I agree with Ms. Tracy. We could do more and we need to do more to be able to work together.

So we're open with working with the Administration, our county partners and the stakeholders to continue to look at that and to see what other metrics need to be brought and whether they're programmatic or whether they're technology metrics that need to be brought forth.

Is there any plans to be able to provide the Assembly and the Senate floor with a final report? Were you already planning on doing that?

We would work with the administration on that if that is an expectation to be able to do that.

I'm wondering, have you already seen it as an expectation?

In the previous Hearing we had on the Senate, they did raise it as an expectation.

Okay. And so when we look at that, obviously we're trying to figure out how the appropriate time to do that. When do you think we might be able to do, have a final report? Any thoughts.

I might propose? Since we did only recently submit the latest SRL, maybe we push it out a little bit so that we have some time to implement some of the feedback that has been recommended that came out of the response that we got. So we can actually hopefully show a little bit more progress on what's been accomplished. But obviously, happy to defer to your preferences.

What's a reasonable timeline?

Six months. 12 months.

12 months. Ooh, you're getting a little aggressive there. Well, let's think about it. We want to make sure that we talk about making sure this will be good to actually, you know, conclude one part and then so that we can make sure that we continue to make sure everyone's on the same page when it comes to this, I'm looking at all the, all the supports and automation that SAWS provides in terms of CalWORKS, CalFresh, Medi-Cal, foster care, a whole host of things.

When can we get them to really, when can we get to that point where we create a no wrong door process here? I walk into the office and I find out that I qualify for CalWORKS and CalFresh and Medi-Cal and I can be enrolled.

I don't think that that is an automation question. I actually think that is a policy question because policy should drive the automation and the changes to go from that. And I think holistically we have to be able to look at the policy and does it allow no wrong door and making sure that the technology supports that as we go forward and the county operations are funded to be able to ensure that there's no wrong door, to be able to provide the expectation and those gateways that might be afforded from technology and a policy.

And I think that the SAWS and the state has really prioritized pushing automation as much as possible to not be the barrier in the door. I think, though, the challenge gets back to some degree to what I was alluding to in my testimony, which is that these are siloed programs that come to us largely from the feds, but in some cases at the state level, too, and we've done a better job as a state, I think, of trying to break down those silos, but they are complicated rules that differ from program to program, where we have limited ability to align the requirements for eligibility.

And that leads to challenges in terms of being able to simplify and streamline the ability for an individual to walk in the door and get a quick assessment done for their eligibility for half a dozen programs. Absolutely something at the top of our county director's priorities, just to simplify these rules and requirements as much as we can.

And I know the state shares that goal and we continually try to push it as much as we can at the federal level, where we need to as well, to have those rules be simplified so that we can align our eligibility requirements and streamline that experience.

How can the Legislature be helpful?

Well, I think I want to echo everything that was just said there. And again, I think part of the challenge is automation can only get us half the way, and we do need some changes to statute and policy that would make it easier to align the eligibility of these programs.

State or federal?

Some of that is state, some of that is federal. We need to come back with more of an analysis of what that could look like but, again, this would be something I think we would be interested in exploring because it is a challenge for our clients.

So I'm going to ask LAO to help us with creating some trailer bill language to make sure that if there's anything on the state side that is prohibiting this from happening, that we have direction to making sure that we get those recommendations. We need legislative recommendations on how to make sure that there are no state barriers for automation. I think if we get there, then we can work on the federal, God help us all. Okay.

I mean, we just got, I know that, I know this is complex, right. But I don't think there's anything but complex issues left. So it's time to start digging. Right? You've made this phenomenal project happen. Certainly something to be proud of. Now let's get everything we can get out of this baby, right? And if there's things that we're doing as a Legislature that's prohibiting that from fully happening, certainly we need to take care of that.

We just need to know what they are and then if there's anything else, we can certainly work together to making sure that that happens. But man, if we can make this thing. Oh, before you guys retire, what do you think?

Well, people are laughing because I have only two more weeks before I retire.

What? That's why you're saying yes to everything? You won't even be here.

My successor is in the audience and I know she is highly qualified to be able to do that.

And has she saying yes? Okay. Okay, I see.

Thank you, Julia.

Okay. All right. I feel comfortable now. Let's see, is there anything else before I mess everything up, anything else you need to respond to, anything else you have to, your wisdom?

Jennifer Tracy, California Association of Food Banks. I think it'd be great if we could have a response by the end of the year if possible, or like January to make it a 12 month cycle. But otherwise, yeah, by the time I retire to solve these problems would be fantastic.

You know, I mean, obviously, and the fact that it's joint powers, we know there's many people involved, a lot of agencies involved, and so we know this is a big, big ship to steer. We just want to continue to keep our foot on the gas to make sure that we get to a point that we can just make it easier for people to be able to thrive. Right? And I'm sure we all share that, share that sentiment.

Of course, we talked about the denial rates and those things. And, you know, obviously it would also be helpful to even just figure out. We know there's various ways that could trigger a denial. I'm just wondering, do we have data to find out what's the most prevalent reason for denial? Do you have that information? What's the most prevalent reason for denial?

So there's not a lot of granularity in the breakouts. It varies from program to program, but in both of them, the most common reason is procedural. So something related to they didn't fill out part of the paperwork right or maybe they didn't respond to an interview or something like that. But we can get you some more data on that if you'd like, follow up on that.

Sure.

Our understanding is that the most prevalent reasons for denial are that clients are unable. Not that they don't try to meet the requirements, but they're unable to. They don't get the letter for their interview in time. So they get the letter after their interview time. They can't get through to the contact center to call someone to reschedule or have their interview because the contact center is so inundated with calls that they have to wait for hours and hours if they can even get in the queue in a lot of cases.

People submit documents, but the worker can't find them. They try to submit documents, but sometimes it's not clear if it's working correctly, which the project has done a really good job of trying to remedy. But the reasons that people are being denied is not because they're not complying, it's because they try to comply. And there are barriers in the system that make it hard for their attempts at compliance to even be registered.

So the denial reasons are largely administrative because the system struggles to actually communicate with people and have a clear pathway for them to do what they're supposed to do.

Yeah. Why don't we do this? Why don't we, first, I would like to request some of those that information writing in terms of denial rates and kind of reasons why, I think that'll be great to memorialize it and we can wrap our brains around it. Right? But then also, obviously, as we give you time to do this final report, it'll be great to begin to also talk about in that final report, you know, issues we still see happening that we really need to work through. Right?

How we plan on getting them. When do we plan on completing those things? Like, those things will be helpful to be able to remedy based upon some of the stories we're hearing on the ground, because obviously, the worst thing you can do is say to someone, well, hey, if you have an issue or a question, call this number. And then you call it and, you know, you're watching Novellas while you're waiting for someone to pick it up. Right?

And so how do we make sure that if we're going to ask people to use something, that there's a timeliness to them being able to, you know, they shouldn't have to take a day off work because they have to wait for a phone call to come back, you know, someone to pick up. And if there's issues like that, you know, those are the type of BCPs that I would love to start to see. Right?

That, hey, if we need to ramp up our call center, if we need to ramp up whatever to be able to make sure that there's live people on the phone that particularly seniors will be able to have access to. Right? People who may need that real person interaction to be able to articulate what they're trying to accomplish. And not just press one, press three. Right? Those are the type of things.

So kind of also think about what else do you need to improve the customer experience from the client perspective? Those are the type of things we would like to see as well. Okay. All right. More to come. Thank you all very much for this item. And we will move on to item issue number six. It's only 3:16, and we're on number six? Wow.

Here goes another system. And is it Mister Duckens?

Yes, sir.

You may begin when you're ready.

My name is James Duckens, Chief Deputy Director, Office of Technology and Solutions Integration, and me and my colleague here are going to tag team through their questions.

Not a problem.

Okay, so we'll start off with question number one, providing an overview of the request made from the Governor's Budget for CWS cares. So the purpose of CWS California Automated Response and engagement system project we're going to call that Cares going forward is to implement a modernized system to support Child Welfare Services. Cares will be a statewide case management and data solution that incorporates capabilities essential to the delivery of tailored, high quality Child Welfare Services.

CARES will be a statewide case management system and data solution that incorporates those capabilities and it will also ensure compliance with comprehensive child welfare information systems CWIPs and maintain federal financial participation and related requirements. This functionality is not currently available in the existing Child Welfare Services case management system, CWS CMS. This modernization will result in improved data collection and monitoring of child and family outcomes, service delivery, and implementation of new child welfare initiatives.

It will also directly benefit child welfare workers by removing duplication of efforts and will streamline business processes which will ensure that children and families won't have to repeat information, will feel heard and engaged, and will decrease the impact of trauma. The state fiscal year 24-25 BCP request supports our ability to continue with essential work for the CARES solution. With the implementation of cares, the state will be able to decommission the legacy system CWS CMS.

The CARES project has requested 225 million total funds, including funding authorized and provisional language for state fiscal year 24-25. This request includes five new positions to support state, county and vendor activities for the continued design, development and implementation of the CARES system. So the total request is for 225 million $363 million $603,000. Of that which General Fund is $114,248,044. FFP will be $111,115,559. Now pass it over to my colleague.

Thank you James Good afternoon. My name is Jessica Rougeux and I'm the Chief of the Child Welfare System Branch at CDSS. So I'll be addressing number two and moving forward. So to address the timeline for fully achieving the implementation of CWS cares and how it relates to the proposed effective date for the permanent rate structure, we want to talk through several items. First, version one of the CARES project is planned for full statewide implementation in October of 2026.

The implementation of CARES V1 will not delay the implementation of the rate structure in July 2026. As indicated in the trailer Bill Language, the permanent rate structure will become operative on July 1, 2026 or when CalSAWS can perform the necessary automation to implement the new tiered rate tables upon the rate structure being built into CalSAWS, the Administration fully supports an interim process for the rates to be processed, pending full pardon me, sorry.

Switching pages implementation of V1of cares this would include leveraging the current cans data that the state has and applying the latent class analysis that's referenced in the proposal to determine the tier and utilizing the current workaround that we have today in entering data into CalSAW, similar to the use of the level of care protocol.

We do not anticipate additional cost, but it is early to know what unanticipated costs may be in terms that we are still having to work together between the state and counties to determine what that interim process will look like and what other automation elements may come a little bit further down the line. So it's a little early to yeah, fully know if we can absorb those costs into some of our current contracts or expenditures, or if there may be some additional costs to support that.

To realize the permanent rate structure in V1, CDSS has initiated two automation requests pending the enactment of the rate reform proposals. We're working again. This is early costing, early engagement to look at what the impact would be to both automation projects and what the scope would be. But of course it's contingent on budget approval.

First, the automation request for calsos is to support the foster care eligibility determination module, or FSD, and that will be part of the building out of the new rates table to support the rate structure and part of a bidirectional exchange of data that will happen between the calsa system and the cares system once cares is fully up and operational.

The second automation request is for the cares system to automate the exchange of the necessary data to support the three components of the rate structure, and that is the tier using the can score and the latent class analysis to determine the tier of the the emergent the immediate needs funding and then the strength building funding. Thank you. Still memorizing all the pieces of the rate structure.

And once this is complete, cares will be able to automate the cans data collection, apply the logic of the latent class analysis automatically, and then that will be exchanged in the bidirectional exchange with calsaws, and then from there at the CalSAW system, we'll be able to go through the remaining steps in making the eligibility determination for the program programs and the payments for the programs. Moving on to question three.

So how is the child and adolescent needs and strengths or the cans a specimen addressed or not in cares thus far, and what work is needed to be completed on this prior to the July 1, 26 proposed start date? So the cans assessment currently is automated in an interim system, cares live, where we are able to currently collect the cans information from counties. It's a multi purpose tool, it supports decision making, and it is a validated tool.

Currently, we collect that data, and that data can be leveraged in doing manual and running that against the latent class analysis and then doing this more manual or kind of temporary workaround process that we're referencing. We can leverage the existing data that exists in cares live today. In cares. In the future state, we will be automating the cans collection in an even more expansive way than what we have today.

So as of March 2021, we had completed the cans assessment, was mandated statewide, and in the future state, we will have a full assessment suite tool that will include the cans assessment in CARES V1, and it will also deliver enhanced functionality in CARES V1, leveraging that assessment suite to allow the sharing of data between county, child welfare, behavioral health and other partners. So currently, today, only child welfare has access to cares live. To do direct entry of that data.

In the future State of CARES, it would allow for the direct entry by social workers or other child welfare personnel, direct bidirectional exchange of information from behavioral health with that information where the cans is completed by a behavioral health clinician or through a third party entity, if there's a contracted provider that's being brought in to do the cans, and that reduces the delays in getting the cans data to child welfare so the latent class analysis can be run and the tiered rate can be established quickly.

So this is really about data, improvement of data and bringing datasets together from kind of the three entities that are able to perform the cans today. Currently, roughly 50% of initial and ongoing assessments are completed timely statewide.

But because of this three tiered approach in implementing the CANs assessments, sometimes there are delays in getting data from those partners, and that impacts the timeliness data that we have because of data entry being sometimes manual or taking time for the paper copies of cans to get from other parties to child welfare for data entry.

And so we know that this data is not complete and does not actually reflect all of the good practice that's occurring because of some of the limitations in data collection and cares live today. Let's see. And for reference, I believe one of the questions is, you know, what does timely mean?

And in terms of timely, the cans requirements are that within 60 days of a child coming into care, they are getting an initial cans assessment done and then every six months thereafter, and a subsequent cans is done. Unless there is a significant change in the child's need that would necessitate an earlier cams or if the child is receiving intensive care coordination, it would happen at every 30 or, sorry, every 90 days, so it happens at a quicker interval.

CDSS program staff continue to provide technical assistance to counties to improve data entry for cans and support continued cans implementation. Really addressing and working with counties and with our partners at CWD and looking at where there are challenges in implementation and where we can find improvements to improve timeliness for either data entry or data sharing with our partners.

So we are committed to continuing to do that and improving these outcomes as we move forward towards more integrated data system that will support practice as well with CARES V1, CDSs and DHCs are actively working to issue joint guidance right now regarding the Administration of the CANs by county placement agencies and county behavioral health.

This guidance will align the critical aspects of the CANS Administration, including which version is to be used and the frequency of completion, and it is also intended to enable partnerships between county behavioral health and county placement agencies to avoid duplicative assessments and completion of processes and supporting effective care coordination, which is one of the other limitations we currently have in cans completion. The future automation of CWS cares will support these improvements and reduce barriers to data collection and sharing.

And finally, for question four, do OTSI or CDSs have concerns about the readiness for CWS cares in relationship to the permanent rate structure, the governor's proposal for cares and for the rate reform taken into account the needed automation and cares, and the timing for implementation of the new rates.

As we await final budget decisions, we will closely monitor how any changes to the final policy might impact CWS cares, but CDSS is confident with the rates table development in Calsaws, the state and counties can implement a manual or interim process for implementing the new rate structure on an interim basis until CWS cares is complete.

Similar to the level of care tool, counties today are able to use that tool to identify a rate tier or a rate level, and then CalSAWS is able to receive that rate as the tiers are built into CalSAWS and are able to process it through existing submission processes that occur today, and we envision being able to leverage that same process as an interim until full automation in cares can be completed.

CDSS will work with counties to operationalize the interim process and make sure it meets business needs. And that is the end of my questions or my response, unless you have questions.

Eileen Cubanski with the County Welfare Directors Association we support the tiered approach, the philosophical approach behind the foster care rates proposal, a tiered rate and a rate that that is keyed off of the needs of the child. We've provided significant feedback on the rate proposal itself in a budget memo that we sent in late April. And so as it relates to this discussion today, this panel, I wanted to offer just some reflections and suggestions on how to approach some of the key questions needed for automation.

So, starting with the CalSAWS, pieces of it cares and CalSAWS, as Jessica said, are building an interface to support the exchange of the data to facilitate the eligibility determinations for foster care and the payments and the payments which are issued from CalSAWS.

Aspects of the rate structure are going to need to be built into both systems, but CalSAWS will need final policy on rate structures published not less than 14 months prior to implementation of the new rate structure in order to begin their programming work and have it be finished on time. And there are specific policy elements that CalSAWS needs to know to have resolved to enable that component of the programming to begin.

And those include one the information on the number of tiers, the groupings of youth in the tiers, and the applicability of any kind of CNI or other inflationary adjustment to those tiers. We need to know the process for transitioning youth from the current level of care or the age based rates to the new rates. We need to know if there's any new or changed notices or forms that are going to be required, including translations.

And we need to know about any new or changed reports like those are the things that are produced out of CalSAWS now that we need to have policy nailed down on. We believe that if we can get trailer Bill language addressing those points by August, this should allow the Department sufficient time to develop the policy and issue the guidance and get that done on time to achieve a July 1, 2026 implementation date.

But what we are struggling a little bit with is not having cares v one go live. At the same time, there are a number of the misalignment of the dates in cares implementation v one, and when CalSAWS could be ready to go with the new rate structure already caused us some concerns because much of what the departments proposed in the rate proposal is very much contingent on there being functionality and cares to support that.

And so without both systems being ready, it does pose for us some technical and operational concerns. Technically, it's not clear to us how the rate itself would be set without the CARES functionality. We can do the cans, and there are numerous issues that have been alluded to with ensuring the CANs is done to fidelity and done timely, and that the data gets entered into one system for purposes of determining the rate.

But I'm not sure how that latent class analysis would be performed without some sort of programming for it. That's not something that we could do manually. So thinking through, and we've submitted in our comments concerns about the latent class analysis and the use of that generally. But certainly we're going to have to think about what we would do in an interim to determine a tier based off the cans without running that LCA, if that.

If that's not something, because that's not something we can just do manually, it's not a calculation that we do. And there are other elements of the proposal that really require cares automation to support. So that is an issue. And operationally, some of our concerns are we'd be going live with cares v one at the same time as implementing a new rate structure. Operationally, as we know from big systems changes, rolling that out statewide is going to have its own challenges and priorities.

If we are layering both of those at the same time as we're doing a new rate proposal, there are operational challenges there. We just need to make sure that we're planning for those challenges, and I think we can accommodate them, but we need to plan for them. So there's those two issues. I think the complexity of the new rate structure, the extent to which policy guidance is clear, complete and timely, and whatever interactions are needed. We may need to adjust the automation schedule.

We may need to adjust the implementation schedule of the rates proposal, but we are still in all the conversations about that. The funding is an estimate for the automation. As Jessica noted, it may require revisions once we know more of the rate structure itself. Once that's finalized and the details are known about what kind of child specific reporting and other data and outcome reporting we're going to need to do.

So, lots of questions, but do want to stress the importance of having both systems being ready to go for the rates proposal as we currently understand it.

Joseph Donaldson, Department of Finance no additional comments at this time.

Brian Metzger LAO my comments will be specific to the IT project itself, and then my colleague Angela may have additional comments. We find that the project is making progress largely in line with its most recent cost, schedule and scope. However, the most recent oversight report suggests that the project may not be on track to achieve its objectives within the approved timeframe due to some issues and risks that could impact the project schedule.

The project is currently going through a schedule stabilization plan that it's planning to submit in the next couple of months to address some of these issues and risks. Furthermore, it's unclear whether the project will expend its entire appropriation in the current fiscal year. Out of the about 200 million budgeted, only 77 million has been spent as of the end of March.

Some of that difference is explained by how project vendors are paid, which can lead to some large month over month differences, as well as reimbursement timelines that can extend many months after the end of a fiscal year. We would note that the agenda does make a note that the project does expect to spend most of these funds, but we've been asking for monthly projected expenditures for the project for many months now and have not received that information from Department of Finance.

Therefore, we would just raise this as an issue about whether all the funds will be spent. Also, it raises questions about the effectiveness of the provisional budget Bill language that was passed last year that conditioned about $70 million, which about 35 million is General Fund, on the demonstration of verified satisfactory progress towards project completion. And our concerns are really primarily about that amount being high enough to trigger the language and actually show that progress is being made in a timely manner.

We recommend the Legislature request an update on that conditioned funding because it has not been requested by the Administration quite yet, and more generally on the probability of the project actually spending its full appropriation in the current year.

Good afternoon Angela Short with the Legislative Analyst Office. We did also just want to add some brief comments related to the new proposed permanent rate structure. Overall, I think, as was made clear by both the Department and CWDA, this is very much an evolving issue. The Administration and stakeholders are still working on proposed trailer Bill Language to implement the new foster care rate structure, which was proposed by the Administration alongside the Governor's Budget proposal.

And so at this point, it's difficult to know exactly the scope and timeline and overall budgetary needs for automation that will be required to implement the new rate structure. But given how significant the new rate structure is shaping up to be, we do anticipate that there will be automation needs. We just don't know at this point exactly what those will be.

But as you heard from the Department and counties, we do anticipate some of those needs could be related to actually programming the new rates themselves, as well as sort of the formula or the algorithm to actually determine what rate level youth would be categorized as eligible to receive. Some other potential new elements could be related to the newly proposed strengths building and maintenance component as well as the immediate needs component, which again, details are still very much evolving and being worked out for those components.

So all that to say, it's hard to say exactly at this point, but as was noted, the Governor's Budget does include $12 million General Fund as an augmentation to for automation for both CWS cares and calsols to implement whatever automation changes are needed to support the new rate structure. That amount is intended to cover the needed automation efforts, but at this point it is a placeholder.

So we'll just need to continue monitoring and see, once we have the full details of the rate structure proposal, how that will impact any automation needs. And we'll be continuing to work with the Department and counties and other alleged staff, and we'll certainly keep the Legislature updated as we learn more. Thank you.

Thank you very much. Administration, you seem to indicate that you were confident of the July 1 completion. Are you, is there some disagreement between you and Lao in terms of your ability to make sure that we're meeting that deadline?

We believe that we are able to meet the deadline, as in the proposed TBL, which is July 1, 26 or when CalSAWS is able to support the rates tables, whichever is later.

So again, I think some of it has to do with the full assessment of the full trailer Bill Language and the policy that is needed by CalSAWS14 months in advance to be able to have complete policy in place so that they have all the information they need to then do the automation and have enough time to test it and implement it.

So again, I think we're very much looking at, yes, we think it's an achievable date, but having that language very focused on or when automation is possible. And, you know, again, I will defer back to Eileen in terms of, you know, thinking around automation, you know, and how that will time up with cares.

Well, before you chime in, I want to make sure that, because I heard you loud and clear, that there has to be, it seems like there needs to be better coordination in terms of cares and sols. Is there both at some point need to talk to each other? Am I correct in that?

Correct. And we are currently in the middle of building the FSD, which is the foster care eligibility determination, or it's an interface. It's a bidirectional interface between the two systems that will go live in version one of care. So that's already underway being built.

So we don't have to worry about other silos happening here?

No, we are actively working together.

Please, not another silo.

We have our own governance structure and process between the two projects to support this as well. So we have a lot of active communication and teaming. I think we are just looking more towards final budget approval. Trailer bell language and policy to come forward for both projects to be able to successfully build this into our roadmaps and execute the automation and Department of.

Finance you seem to. We, LAO has indicated that they're still waiting for monthly information to be sent to them. And in terms of finance expenditures, things like that, is there a reason why you're unable to provide that to LAO as requested?

No, I 'm Department of Finance. Yeah, I think the team is still working to get this information together, but they will follow up when they have that.

Do you have that information available?

I don't think that they have that information available right now.

Okay. And at what point will we be able to achieve that request?

I think the team is working on it. We don't have an estimated date at this time, but happy to work with your staff to follow up.

LAO, how long have you made this request?

I believe the first time we made this request was in January. So it's been several. Several months.

Okay. Several months. And so I'm hoping this doesn't take a year to be able to get this information. So just know that we definitely have that expectation that you're providing Lao with the information necessary so that we can be properly briefed on that information as well. So with that, I'm going to ask the Lao to continue to closely monitor the spending for CWS Cares project. Of course, we know you, it's hard for you to do that when you don't have the information.

And so we're going to be insisting on that information as well for the Administration, if you can, please let us know if there's a likelihood of unspent funds or further delays that may occur. In terms of cares as well, I think the idea is, I know a lot of things are dependent. There's like a domino effect, and a lot of it triggers trailer Bill Language, then cares, saws, all that kind of stuff.

I think also it seems as though even when we thinking about the rate structures, that a lot of it is dependent on cans, and if the cans is not universally used, then there's a delay in determining the rates. Is that correct?

So the CANs is used by all three entities in support of children in care. I think one of the challenges that exists today that we reference is that there are slightly different versions being administered between the Department of Healthcare Services and the Department of Social Services. So, child welfare versus behavioral health.

And right now, the departments are working together to realign that so that we will have one version and one set of timelines for completion, so that we ensure we have timeliness, so that we're not measuring behavioral health by child welfare standards when they don't align. So guidance is in the middle of being prepared to be released right now to align that well in advance of cares that you want.

And we anticipate that that will likely help align our cans data now, not just in the future in support of the rates proposal, but in terms of data collection much earlier as well.

And the other. zero, sorry. The other issue is also around getting that data into CARES, CARES live, or CWS CARES eventually. The behavioral health system does not have access yet to the current version of cares that is functional. That falls then on child welfare to be the data enterers of that. And that's where also some of the delay is, and that. That's additional workload that we're having to absorb. So having there be the ability for the entity performing the cans to.

To access the system and have it be one unified system, I think will be really helpful. But that also kind of gets to my point about to what Angela said. There's the CalSAWS automation and what they need to do that to actually process a payment, to make a payment. So once you know the tier, they can push that out.

But it's determining which youth falls into which tier for the rate that's reliant a lot on cares functionality, be it the cans data that's entered into it, and then after that, the calculation or the algorithm that is proposed to be used to trigger the new rate. And those are outside of CalSAWS. And CalSAWS has no. That's always designed to have been interfaced, and that's what. That's the interface that's being augmented now, built and augmented for that functionality.

So it could take up to six months for a CANs to take place? 60 days.

60 days, correct.

Oh, I forgot the zero.

That's right, yes. Right, yes.

Before the 60 days, a child has already been placed.

Correct? Yes.

So what determines their rate until then?

So currently, the currents rate structure right now would be based on either their age, the type of placement that they're in, or the level of care protocol, depending on the specific situation. So it would apply to the current rate structure that we have today.

And going forward, once the new rate structure implements the proposal, is that the tier two would be the level that everyone who's entering into foster care would receive pending the completion of the care.

That is the default.

Exactly. Now, we have, we've got reflections, concerns with that proposal. We have alternative suggestions, but that's the current proposal. There would be a default of some sort, be it that or something else that's agreed to as part of the conversations that happen. Yes, so that everyone would get a rate.

So I want to reiterate my request for us to get together to talk about the rate reform before the May Revise comes out. We got to get it on because I want to have this follow-up discussion before the May Revise because we know how fast May Revise happens.

And so I just want to reiterate the need for me to meet again with DSS on this so that we can make sure that proper follow up and some things that have come to light from the, from the ICU Director Johnson, on agreeing to that. I just want to make sure, and if the holdup is my side, by the way, just let me know and I'll take care of that as well. I want to thank everyone again.

LAO, please keep keeps us appraised, and I am requesting from the Department of Finance that you give me a date in which LAO will be receiving the data so that we can make sure that we're having the proper oversight necessary on this. I really appreciate everyone's work. I know there's a lot of moving pieces here. And good luck to you all in this process. Thank you all very much. We will move on to the next item, item number seven, electric benefit transfer theft, and update.

Hasn't even been 3 hours yet. We're rolling, man. I don't want to jinx it or anything, but I'm just saying. All right, number seven, Mister Gillette.

That's me. All right. Hello again, Ryan Gillette, Deputy Director with the Research, Automation and Data Division at the Department of Social Services. I'm just going to jump right into the questions that were raised. So, starting with a description of how EBT theft has been impacting clients. So just as a brief reminder, CalFresh and CalWORKS benefits are issued on electronic benefits transfer, or EBT cards for client use.

EBT cards are used by swiping the magnetic stripe for in person transactions, which makes them vulnerable to a particular type of fraud called skimming. Malicious actors use these skimming devices, which are installed at ATM's or other point of sale terminals, capture EBT card information and create clone cards, and then use those clone cards to conduct fraudulent transactions that leave legitimate cardholders drained of their benefits.

EBT theft has increased substantially over the past 24 months, and victims of EBT theft may find themselves unable to pay rent, buy food, or manage other essential expenses. While counties are expected to replace benefits within 10 days after the theft is reported, even short interruptions can have significant impacts on beneficiaries finances. California has been replacing electronically stolen calfresh benefits with General Fund Dollars since 2021.

This changed on December 2023 when USDA Food Nutrition Service FNS began reimbursing the State of California for EBT theft of calfresh or SNAP benefits without additional action at the federal level. Though this federal authority to continue reimbursing state agencies for electronically stolen benefits will SNAP benefits will expire on October 1 of this year.

California continues to replace stolen benefits stolen cash benefits with state General Fund Dollars and is prepared prepared to revert back to this process for calfresh if actions are not taken federally to continue snap reimbursement in terms of costs. In FY 22-23, the state reimbursed approximately $75 million in CalWORKS or cash benefits out of the General Fund and 32 million in Calfresh or food benefits also the General Fund, for a total of 100.

For 23-24 we projected cash reimbursements at an estimated 142 million in General Fund impact and food replacements were projected at 72 million, but due to the federal policy, only about 25 million of that would be General Fund. The total projected impact was 214 million, of which 168 million was from the state General Fund. We can provide tables with this if you want all that.

In terms of households, we don't have perfect data on the number of individuals that were impacted just because of the way that the data is reported up to this date. But we estimate that between November of 2022 and October of 2023, approximately 200,000 households were victims of theft and of those about 25,000 were victimized more than once. In total, this represents about 5% of the total households caseload. The good news is moving on to the next question.

We do have plans in place to enhance card security, so we specifically have been working to put chip tap technology onto these cards, which will provide a significant improvement in security that will close the main pathway by which cards are being compromised and benefits are being stolen. California is poised to be the first state in the nation to do this. No other states are doing this. We are farther along than anyone else, income hell or high water.

We are going to get this done as quickly as we can. Prior to implementation of chip tap technology, though, EBT retailers will have to update their point of sale terminals to accept the new EBT chip tap tokens and process transactions accordingly. In addition, these updates are required to in addition, they're required to continue to accept magnetic stripe EBT cards, including those used for WIC and summer EBT. The point of sale devices and the software they run are managed by a set of third party transaction processors.

And what this means is that any changes to the EBT system must be closely coordinated with retailers, transaction processors or EBT vendors, financial institutions, our vendor FIS, and then federal oversight bodies, including FNS, to ensure that consistent practices are being adopted nationally or yeah, before the rollout of new cards, we are conducting extensive testing to ensure that the new functionality works as expected and in particular that it does not destabilize the retailers.

The system for retailers who may not have updated their point of sale terminals prior to card deployment, we are also in discussions with our federal oversight partner, FNS, to determine potential impacts to nationwide interoperability to ensure that if someone goes to another state, they can still use their card. We are actively conducting user acceptance testing every day for the past couple weeks. We have been doing this to determine the answers to these questions.

CDSS continues to encourage FNS, retail and payment processing industry leaders to move as quickly as they can in updating their terminals. FNS informed us that this week they actually plan to mail out letters to all of the 30,000 plus retailers that accept EBT in California, informing them that they need to update their point of sale devices and CDSs plans to send out a similar mailing to retailers and financial institutions later this month.

We are working closely with advocacy groups such as the Grocers Association to spread the word and ensure that merchants are ready to accept chip tap when we go live this summer and we will be doing outreach to county boards of supervisors to ask them to engage their local community business leaders on this topic topic, too.

In the meantime, CDSS and OTSI are advancing equipment configuration and deployment activities in an effort to provide county welfare departments with the equipment needed to deliver to actually create the chip tap cards at county offices. Beyond the implementation of chip EMV and Tap cards, CDSS has implemented a number of other efforts to target theft mitigation. In the interim. I won't go into too much detail on these, but happy to talk more about them if you're interested.

One we have EBT edge in the which is a app and web portal where clients can do self service card security features so they can lock their card when it's not in use. They can block out of state transactions, they can block online transactions. They can change their pin all through an app or through an online web portal.

This is also not sure if it's currently available or about to be available through the IVR phone line so people can call in and do this over the phone, too. We have numerous public service announcements raising awareness about this and informing people of what they can do to secure their cards.

We've done multiple different types of direct client outreach, again to encourage people to change their pins to use these other card security features that we've developed, including things like direct deposit so clients can choose to have their EBT benefits deposited, or at least the cash benefits deposited directly into a bank account if they have one, which would solve that potential theft problem for them.

Our vendor, FIS, has created a dedicated fraud team that's been really helpful for us in thinking about these different strategies, and we've been working closely with law enforcement to pursue investigations of situations where we've found some of the people that are committing this theft. Moving on to the third question on how the Department is using resources appropriated in prior budgets to investigate EBT theft.

The Department does continue to collaborate with local, state, and federal law enforcement authorities to mitigate the theft of EBT benefits by blocking suspicious transactions, identifying potential perpetrators, and locating where skimming devices have been placed. Multiple investigations are currently ongoing. We've made numerous arrests. The investigative unit that was provided in the last year's budget consists of one special supervisory investigator, two special investigators, and one program analyst.

And thanks to their help, in coordination with all of our other law enforcement partners, we've made over 140 arrests since 2022 and have blocked over 200 terminal ids that are suspected of being involved with Snap trafficking. Just earlier this month, or I guess actually last month at this point, CDSS assisted in an operation with Homeland Security in Los Angeles, where two individuals were arrested at an ATM location with multiple clone cards.

And in San Diego County last month, seven individuals that appeared to be part of an organized crime ring were arrested and charged in connection with the theft of hundreds of thousands of dollars. If convicted, they could face 10 to 15 years in prison. And we've also been coordinating with national partners, which has led to the arrests of individuals in other states as well. For example, an individual was recently taken into custody in Michigan who possessed several stolen EBT cards and a skimmer device.

So we're taking this very seriously and we intend to prosecute anyone that we are able to find and convict to the maximum extent of the law. With regard to changes that DSS and counties have made to make it easier and faster to reimburse benefits, processing EBT theft claim forms and issuing replacement benefits is a tremendous workload for counties.

While we anticipate that the implementation of chip tap technology will significantly reduce this burden due to there being less theft, we have taken other measures to support counties in issuing timely replacement of benefits in the interim. So one of the most recent things that we've done is we automated the form that clients need to fill out. It's called the EBT 2259 form. This used to be a paper form that people would have to fill out taken to the county.

This is now something they can fill out online through benefits Cal. And so hopefully that should make the client experience a little bit better and also ease some of the burden on our county caseworkers. We also have removed some of the barriers to reporting theft in the first place. We issued an ACL that removed the requirement to submit a police report and file a misdispense claim with our vendor.

These were original requirements that had been in place, but we'd heard from cardholders that this was a barrier for some people who for various reasons may not have wanted to talk to the police about what was going on or just were confused about the process. So removing those steps has led to an increase in people submitting reimbursement claims. So we're pleased to see that that seems to be successful.

And, yeah, then there's other efforts like direct deposit and EBT edge, which have made it easier for clients to manage and secure their benefits. And yeah, finally, the last question regarding is there a process for recovering stolen summer EBT benefits. So summer EBT benefits that are stolen by electronic theft, including skimming, scamming, and similar fraudulent means, are not eligible for state or federal replacement benefits.

This is due to a federal rule that stipulates that summer EBT benefits can only be replaced for food purchased and subsequently destroyed due to a household misfortune or disaster. For scenarios in which summer EBT benefits have been compromised due to the physical card being stolen, the household must report that card is lost or stolen. At this point, the state would immediately replace the card so as to prevent fraudulent activity.

Some EBT cards can be managed through EBT edge, that mobile app in the web portal, and through that they have the opportunity to lock their cards, block out of state transactions and all those other security enhancements that are available to General EBT card users. With that, happy to take any questions.

Thank you, Chair Jackson again, Andrew Cheyne with Grace End Childhood Poverty, California well, Mister Gillette really covered some of the things I was going to say, so no need to underscore really well, I do really appreciate the state's seriousness, and I was going to mention some of the same work with the Secret Service. I mean, I think that speaks for itself for how odious this is. This is stealing from people already experiencing poverty. Just first.

Then regarding restorations, we continue to hear from households that there are challenges and delays in submitting and receiving restorations, and to underscore that when timely restoration is not happening, that means families are not eating, their cash is gone, their lights are turned off, their housing is at risk. There have been the improvements. Really appreciate that.

I would say that we still need to get clarity at the local level about the process to try and get to that three day best practice that counties have said that they can achieve. We know 10 days is the requirement, but there are many clients who are still seeking recourse with legal aid to get hearings right, so that it's happening but at a much longer rate. And as Mister Gillette spoke to, for families that are being victimized multiple times, right, it's this continuous process.

So I'm gonna focus on the transition to chip tap. But as the agenda notes, the recent CVV cards didn't prevent skimming as they were not designed to do, nor will chip tap completely eliminate EBT theft. Unfortunately, that is just gonna be the case. And so we have to continue to improve the restoration process while taking action to prevent as much theft. We absolutely agree that should be the focus and we need to address through chiptap and other means, the enormous inequity and card security.

That is primarily the failure of the Federal Government. And just to be clear about that, and we can discuss that later if that's of interest. And so to underscore we celebrate the Governor and administration's leadership, we are the first state, this dates back to January 2023. Proposed budget to make us the first state to get to chip tap. And it is frustrating that there's still work to be done. It sounds simple, right? We middle class, upper class people have chip tap cards. It's not new technology.

But this is a situation for EBT in which going first is challenging. Whether we like it or not. It requires significant coordination. As Mister Gillette spoke to, there's a lot of industry stakeholders, two federal agencies in the state. So just a little detail on that.

And I'm not going to pretend to be an expert on the back end, so definitely tell me if I get something wrong here, but I think the basics are that the standard for the EBT chip tap transactions is still being developed, meaning that it's known that the retailers are not ready to actually take the chip or the tap for those cards, right.

And even when that standard is developed, there's a lot of work to update the software, the point of sale systems, and train their staff, but the standard's not even set. So in the meantime, as was alluded to, the focus is on the fallback, right? So that the machine, the software at the grocery store or the atmosphere directs the consumer then to swipe their card.

So that's important, meaning that once that happens, then we're going to have the access to send out the cards, but we're not getting the security because someone is still swiping. And that's where those overlay devices, the skimming devices, can still intercept the card number. And then when someone puts in their pin, the pin. So we're not getting the security.

And so what's concerning is that the early testing, at least and understood it's ongoing, showed that the fallback failed in a significant number of tests, meaning that you could not actually use the swipe feature as the fallback for the chip tap. So that happens to people all the time if you have multiple cards. But what if it's your only card, right? That's what's at issue here.

Not only that, we risk the behavioral damage of consumers already in the toxic stress of poverty, having the confusion of your card, not working, not able to buy your groceries or pull out your cash from the atmosphere, mad at the gas station, the grocery clerk, whoever it is, and no one's really sure what to tell you what to do. And for all the time we spend in this Committee on eligibility, on that gold north Star of automatic access for seniors, right?

That benefit lives and dies on the card. It has to, has to work in the real world. So the community message is simple. We just have to get this right. We have to balance access with security. And fundamentally that just means not to rush this again. We have every faith the state is going to get this right.

We just can't let an artificial deadline like September 30, which we're working hard on the federal side or any other date to say we have to go because of some pressure. We just have to get this right in the retail setting, making sure that the hardware, the point of sale, the software, the training, those supports are there. And it's a big lift. We appreciate this is not easy. We're here to help support it. Again, it's 30,000 authorized retailers across California.

And just for some context, when we rolled out actual EBT, when we moved away from the food stamps into EBT, it was piloted. This was a decision made nationally by the USDA and in California that included a stakeholder group that had consumers and advocates. This allowed for learning in a lower stakes environment with robust feedback. Obviously there wasn't the skimming, right? There wasn't that sort of pressure. But again, it was a way to actually roll this out in a more measured approach.

And from an equity perspective, we applaud that the Administration has signaled to first focus on dual-enrolled CalFresh CalWORKS households who are having both their food and their cash stolen. Right.

That absolutely makes sense from an equity perspective. But from a systems perspective, if that's done statewide, it means that the food and cash side has to work on day one, potentially statewide. So it just raises some of those stakes and again just puts the onus on having adequate testing and support. The good news is that very quick. The good news is that industry and USDA is at the table and we think the difference between premature and successful rollout is just a few months.

This is not indefinite delay and time well spent to preserve access while improving security. I can follow up, if interested, about ways to improve upon the CVV experience. Thank you.

Good afternoon, honorable Chair. My name is Gilbert Ramos and I serve as the deputy Executive officer for Human Services Department in San Bernardino. County. One of the departments is the transitional assistance Department, which is responsible for administering CalWORKS, CalFresh and other social services programs, and of which I served as a Director before my current assignment today, I want to share my experience in county with EBT theft.

So in mid 2021 we started to see an increase in EBT theft, skimming and scamming and we started to notice this increase. Prior to this notice increase we would do about maybe 10 replacements a month and by the summer of 2021 we had started to see an increase of about 30 and by the end of 21 we had had about 300 request replacements received. As we rolled into 2022 we continue to see an increase in the replacement request.

And just to illustrate, in April we had 342 requests for replacement by August 456 and by December we had 838 requests for replacements made from our customers. This increase in theft was accompanied with negative impacts to our customers who suffered these losses. Also the impact of the staff because of the dramatic workload increase that we had not experienced before in order to issue and replace these benefits as quickly as possible so our customers would have a minimal impact.

From a dollars in benefits perspectives, this equates to about $488,000 in benefits being replaced in 2021, but it jumped to $3.7 million in 2022. Now these are CalWORKS and CalFresh, benefits that are stolen from our customers and results in an inability to pay rent, pay utilities, buy groceries for themselves and for their children, as well as have to go through the administrative process to get their benefits replaced. Prior to this marked increase in EBT thefts, addressing the stolen benefits, we were accomplished by maybe one person.

However, in order to meet this new workload, we had to continue to add staff to get this job done. One staff turned into two staff quickly turned into additional staff, adding specialized staff who have been trained to do the process and of course overtime had to be offered as well just to keep up with the demand.

Now, recognizing this was not a local issue and is affecting all the counties and actually continue to go across the nation, we had conversations with other counties, had conversations with CWDA as well as cdss, and talked about what we can do to help resolve this.

And so with our partnerships, we did begin to see policy changes and updates as Mister Gillette described, to better respond to the replacement request actions such as removing the requirements for police reports, filing claims with the EBT vendors and locally adjusting some policies for a timely review and making approvals quicker. Even recently extending the timeframe to report the theft, as well as adding the online automated claim form the EBT 2259 on Benefits Cal.

All of these things have helped us improve our responsiveness to the customers claims, though these efforts have helped us respond quicker and provide the customers benefits back to them as quickly as possible. We continue to see a steady increase in the thefts. In 2023, we did see the number of replacements hit 18,000 in the year and that resulted in $12.6 million in total benefits.

CalWORKS and CalFresh being replaced but while we were replacing these benefits, our fraud investigators, along with local, state and federal law enforcement agencies, were investigating and disrupting criminal organizations who are responsible or perpetrating these crimes against our customers, of which who are our most vulnerable Members in the community. Our fraud investigators started looking into these crimes early on and teamed up with our sheriffs and other law enforcements to do deep dives to see what was happening and how they were happening.

Initially, they did find illegally installed skimming devices and micro cameras attached to the point of sales devices ATM's around the county, which they quickly removed. But as the crimes progressed, so did their investigations and so did their results, which they were able to disrupt the activities and arrest those who were responsible. Our San Bernardino county fraud investigators have had been great partners in sharing their investigatory tactics and techniques.

With nearly 2000 requests for replacements received per month so far this year, we unfortunately are not seeing a slowdown in the thefts. But we do. Yet we do continue to stay current in responding to the replacements by having adequate staff assigned to make sure that we are responding timely. We are currently assessing the cost benefits to increasing the number of staff that we have dedicated full time to do so.

We have successfully implemented the retro replacement request and we are currently within the timeframes of all known requests for replacements, benefits that have been turned in. Nonetheless, each and every customer that is impacted, though they may be eventually made whole through the replacement benefits, they will not be compensated for a late fee that's charged by a landlord or a late fee.

That's because they made their utility payment late, or even the embarrassment for having to leave their groceries on the counter because they have a zero balance. I'll finish shortly. Because they had a zero balance on their card, they will not be compensated for that. So we do look forward to the full adoption of the EBT edge application by our customers and the full rollout of the chip enabled technology.

But until then, we'll continue to do our part to balance our workload priorities, ensure those that are most vulnerable are protected, and for those who depend on us to meet their basic needs are served with integrity and compassion. Thank you so much.

Aanam Khan Department of Finance nothing further.

Sonia Schrager Russo with the Legislative Analyst Office our office plans to continue monitoring the benefit replacement efforts and the rollout of the new EBT cards for any key takeaways or issues to raise for the legislation.

The deadline that you have to make the transition, is there a particular, is this like a hard deadline that legally, legislatively, anything that we have to make sure that it gets done by a certain time?

So to be clear, there's not a specific deadline. The October date that I mentioned is the date at which the federal reimbursement of stolen food benefits will end. So that just means it starts to become a bigger cost to us. If we want to take longer than that, we could, but there's nothing that is requiring us to do it by that date. Our hope is to roll this out as quickly.

That's a good reason, though. I'm not trying to.

I would agree.

Okay. So I guess the, obviously there's some concerns about moving too fast and whether people might actually be harmed by that and whether that is a greater harm than whatever potential risk they're already assuming today. I assume you've already kind of did that cost benefit analysis and you're, you know, I mean, from the testing that's currently being done, is that a red flag to you all?

So, yeah. So let me share a little bit more about where we are on the testing. So some good news and some milestones actually that we hit recently. Within the past couple weeks, we were able to print an actual chip card and we were able to conduct a transaction with it in a test environment that worked.

So we know the technology functions, the state is doing our part to make sure that we have developed all of the technology, all the implement, all, all of the underlying framework, the code like it has happened once now. Right. We've proven that it can be done.

As well as the tape?

Yeah. Yeah. So we know how to do all these things at this point. The challenge, as we've mentioned and has been raised in this discussion, is how do we get the 30,000 retailers and financial institutions to make those updates to their devices. And so that's where we need to be doing regular communication with them to emphasize the importance of pushing these code updates into their terminals and testing to make sure that they actually did it.

Because again, what we don't want to have happen is we mail out these cards to everyone and there are two risks of things that can happen. One is we send out cards to people and they try to use them, but the retailer doesn't accept chip tap yet and they just fall back to magstripe. Right. And that's bad because their cards are still vulnerable in that case. Correct.

The scarier thing is if we discovered through this testing that there may be some instances of people who improperly had earlier not updated their terminals, so that the default behavior if you're presented with a chip card is to fall back to magstripe. And there were some instances of that not happening properly, and that was not expected. That was a defect. That is not the way that the system is supposed to work.

So we are also checking that, because that would be very problematic if a client is not able to use their card at all. So before we would actually go forward with mailing out all of these cards to everyone, we want to have done enough testing to feel confident that the vast majority of retailers have at least solved that second problem. And hopefully most of them are actually able to process chip transactions as well.

How can we continue to receive updates from you in terms of making sure is, as you know, something goes wrong, my colleagues offices phones will start ringing off the hook, and I'm sure the counties as well. I prefer the counties more than mine, but how do we make sure that we're not caught off guard? And as you're rolling things out and, you know, is there a way that you can send us a plan or a report in reasonable interview intervals so that we are fully.

Absolutely.

Because I remember when the issues with IDD happened and phone calls started flooding in, and it caught a lot of people off guard. And I just want to make sure that we're fully keeping our legislators and counties informed in case. So we're just prepared. Right?

Of course.

So if you can get back to us in the next few weeks to kind of talk about, you know, how we can foster that good communication, that'll be great.

Absolutely. Happy to do that.

Okay. All right, thank you very much. We'll move on to the next item, issue number eight.

Good afternoon, Mister chair, Committee Members. My name is Chad Crowe. I'm the Chief Information Officer at Department of Social Services. So I just want to say thank you for giving me the opportunity to discuss our security compliance request today and taking the time. As a quick overview and as background, the California Department of Technology has mandated all state agencies to assess, plan, and implement the initial stage of the state adopted zero trust security maturity model, which is a multifaceted, multi year effort.

Zero trust architecture is a security framework that utilizes least privilege access within the security within the network environment, meaning users and devices are only allowed or granted access or permission to the things they need to do. And the tasks they need to perform within the network. This helps reduce the overall security risk to the Department and its assets. A good analogy that is out there for a zero trust architecture concept is today our security architecture is kind of like a moat with a castle.

The firewall would be the moat, right? Firewall before, but the moat, you transverse the moat, you get into the castle, you can go wherever you want. There's no checks inside. You got full reign of the castle. In the new zero trust architecture, you replace that castle with a modern day hotel. So you traverse the moat, you get into the hotel, you have to have a key card to get anywhere. So you constantly check to make sure you have access to the places you're trying to get.

So that's a zero trust architecture and what we're trying to get to so this request is for $2 million for consulting services for the 24-25 budget year. To comply with that model standard by CDT.

With approval of this funding, CDSs will engage with professional services and industry experts to conduct a thorough assessment of the department's current technology workforce and enable the Department to initiate compliance activities and define the ongoing resources, technology and time needed to meet the emerging requirements with ensuring our progression towards that zero trust enterprise. Moving towards zero trust architecture model will ultimately enhance CDS's ability to protect its sensitive data.

In regards to the agenda question, explain why it's necessary to invest this year of the General Fund and are there alternatives to the General Fund? It is necessary to invest new General funds in this project in order to meet CDT's mandated initiatives. Additional CDT security requirements will follow to build upon this initial work. If the Department does not complete the initial requirements in 2024, it will put our ability to complete subsequent requirements that build on top of that in the out years.

Without a new General Fund investment, sensitive and confidential data will not be protected to the best of our abilities to defend against modern and forthcoming cybersecurity attacks which can result in data breaches and sensitive client data of the millions of Californians that we serve in CDSS programs. So internally we do not have the expertise, the workforce of the funding. Unfortunately, to back this initiative internally to the question what may occur if this request is denied. We just heard the issue about EBT theft, right?

And the impact of the client's benefits and the sophisticated targeting and fraud of those attacks. So we don't want to be in a situation where we're still on stripe. We want to be chipped, tap and stay ahead of them, right? So we don't, we're being proactive towards those issues. So bad actors continue to be more sophisticated. So we have to continue to keep up with them, be proactive, be ahead of them in order to protect all the information and data that we oversee.

In addition, we will be in jeopardy of being out of compliance with CDT's mandated security model. Implementing zero trust architecture will help put the Department in the best position to protect the confidential and sensitive data in our systems. This request is just to start the planning, get a roadmap, and understand what's needed to get zero trust architecture in place. Beyond this, there's going to be additional work to implement that technology, to get the tools and technology in place for that architecture.

So it'll take years to get there. So it's imperative to start now getting ahead of those bad actors and ensure security of our client and state information going forward. So with that, I will take any questions.

Thank you very much. Department of Finance

Aanam Khan, Department of Finance. Nothing further.

Brian Metzger, Lao one alternative to this proposal could be directing the Department of Technology to request increased expenditure authority from its cost recovery Fund to procure vendor contracts that could help provide compliance services like those that are being requested by the Department of Social Services. CDT would then Bill departments for those services, and if departments could not pay for them with their existing funding, they could come forward with bcps to ask for that funding.

This might affect, in the short term, Department of Social Services Compliance, but it would free up those General Fund resources to address the immediate budget problem and also possibly standardize the way that we're approaching compliance with the new directives from CDT.

Department of Finance, what's your feedback on that LAO's recommendation?

Yeah, that's not currently included in the Governor's Budget, but happy to take a look if needed.

Yep, please take a look at that. I mean, obviously, we're looking for pennies under the couch and we saw a penny. And so let's just make sure we continue to have some good dialogue as we kind of move through. Of course, we're still looking at the, waiting for the governor's may revise. And so certainly as we start thinking about priorities, just want to make sure that we're trying to look at all options as possible.

Certainly Department of Finance, if this is a way to save or save some, some dollars, we would certainly possibly welcome that. But I think another question is threats continue to evolve over time. Don't you need this internal capacity, which might actually be cheaper in the long term in terms of, you know, if you actually have internal capacity to continue to deal with the ongoing threats that will certainly happen. I mean, don't we want to move away from the consultants all the time? Which I'm sure will cost us more?

So, like, in this request is to bring in that expertise and the professionals in the field to help us assess how to get there. And how we get there could be internally with our staff, and then we maintain it in the end. But we need that expertise to come in to train us, help us roadmap it. What do we need to do to get us in that architecture? Because we don't have that internal expertise, and then we train up our staff to take that over.

I would just note that that is one of the reasons why this alternative that we're proposing might be beneficial, is that the expertise could be procured by the Department of Technology, which currently has a statewide information security role, and could be able to provide the services that are being requested in this proposal, not only to Department of Social Services, but to other departments that have to do the same compliance activities.

I'm just thinking about just all. And I'm sorry you're sitting in the seat right now while I pontificate, but, you know, you got the short end of the stick. I just. Hardly an item that don't go by that we talk about having to procure consultants, having to, you know, contractors. And I just. I'm just thinking these problems. I don't think these problems will ever go away. Why aren't we building our internal capacity to do these things? Right?

And so I would certainly like to see us move in these directions, because I'm certain there's a lot of young people thinking about all kinds of ways to make your life harder. And I'm sure that once you plug one hole, they'll find another. Right. And so just want to make sure that we reiterate that we want to. I prefer to invest in something. You know, I know you have long term plans, but I'm just trying to figure out a way we can do this.

So let's continue to flesh this out as we move forward, and certainly if we can get to a non General Fund option, that will be preferable, but still making sure that we have the security that we need in terms of keeping our data safe. So I really appreciate it and look forward to more conversations after the May, when the may revise comes out. So we'll hold this issue open and move on to the next subject. Thank you so much. Issue number nine, overview of Department of Community Services and Development.

Mister Wimbley, you have the floor.

Great. So, good afternoon, Chair and Members. I'm Jason Wimbley, acting Director of the Department of Community Services and Development, and thank you for the opportunity to speak with you today. Since the agenda does a good job of providing a solid overview of the Department and our programs, if I may, I just will go directly to the questions posed in the agenda.

Now, regard to the question and agenda about community needs, it won't be a surprise to anyone in this room that we continue to see considerable needs for the services our programs provide as the cost of living increases, and especially in the case of our LIHEAP utility assistance program, as energy costs continue to rise, those increases are having a disproportionate impact on the low-income Californians we serve.

And because funding for all of our federal grant programs is limited, our ability to address these rising needs will always be contingent upon the level of available funding. Taking a big-picture look at the budgets for CSD's federal programs. We are emerging from several years of significant funding augmentations for CSBG and LIHEAP that came through federal initiatives like the American Rescue Plan Act. In response to the pandemic that supplemental funding has largely come to an end.

As a result, funding for our federal programs is returning to historical levels or normalizing. This means that our community partners and low-income Californians may feel an impact as available services or benefits returned to pre-pandemic levels. Programmatically, our response to lower funding levels for programs like the LIHEAP program means more strictly prioritizing benefits for households with the greatest need for energy assistance. That includes households with the lowest incomes, highest energy burden, or include members of the vulnerable populations such as children, elderly, and the disabled.

The Department also is in the process of winding down a recently created limited-term federal water assistance program. The Low-Income Household Water Assistance Program, or LIWOP, was established as part of the Consolidated Appropriations Act of 2021 and provided financial assistance to low-income Californians to help them manage their residential water utility costs. Modeled on the LIHEAP program, LIWOP sunset on March 31 at the federal program deadline. Over 85,000 low-income households receive water and sewer Bill assistance under the program.

While the application period for LIWOP has closed, CSD is distributing remaining available funding to eligible program enrollees as a second benefit or sewer bill benefit. Those benefits are scheduled to be released in the next 30 days to utilities and will be credited directly to eligible low-income household accounts. Now, I will pause here and answer any questions you may have.

Department of Finance.

Omar Sanchez with the Department of Finance. Nothing further to add.

LAO.

Angela Short, LAO. No comments for the overview. Thank you.

Mister Wimbley.

Yes.

I only see you once a year.

That's true.

Why can't we hang out sometime?

We can make that happen. We can. And I can drink a couple of Mountain Dews with you. Yeah. Yeah. Yeah.

All right. Don't you. Don't play with me. You talking my language now? Okay. Anyway.

Yeah. I would welcome that.

No, seriously, I want to. You know, I think that the kind of programs that you administer. I'm wondering how we can better utilize the expertise of the office to continue to find ways. I mean, you know, we have a housing crisis, we have a homelessness crisis. Child poverty has skyrocketed since the federal child tax credit has, has expired. Right? What can we do?

I want to think about, you know, what can be done to address some of these issues that has to primarily do with people in poverty, people in survival mode, that have a whole host of needs. I wonder if we can better utilize your. I'm not. I just don't think we're utilizing your Department enough as a state.

Okay, well, I'll follow up with you and we'll schedule that meeting, and I'll bring a six pack of Mountain Dews for that long conversation.

Okay. Now you. I got this recording. You know this is recorded, right? Don't you come to my office without no Mountain Dew. So I think that that's the most important part also is, you know, obviously, one of the things that I've seen also is, as you've worked through Cal EITC and with the young child tax credit, and it seems as though you're the kind of that function that works with a Franchise Tax Board in terms of how to make all that stuff happen, right?

RIght. To promote the programs and develop.

I wonder if, also we can think about, number one, how can. Is there still a percentage of people who are eligible, but are not utilizing these various tax credits? And have we reassessed our outreach strategies and things like that? Do you have any thoughts about that?

I mean, there's always room for improvement, and we can certainly take up those conversations at a later date or later time. But most of our programs, we rely on local implementers to implement the programs at the local level.

One of the benefits of that is that we're using organizations that are often nonprofit, community-based organizations that are connected to the very communities that they serve and utilize different strategies on how to either outreach, the availability of these services, or to make sure that the limited services that we have are directed to the right population-based in those communities, which often are those that have the greatest need.

So we certainly will embrace any conversations about different ways that we can approach tackling these complex issues and figuring out ways that we can either better leverage or tie in the partners that we use at the local level.

Okay, I appreciate that. We will move on to the next item, and I will see you in my office.

Yes, you will. The next item pertains to the Department's budget change proposal, and CSD has one budget change proposal this year related to a federal trust fund authority augmentation. It proposes increasing the department's federal trust fund baseline authority for local assistance to align with the current funding levels for our core federal programs.

This BCP will streamline the department's ability to release grant funds in a more timely fashion to our community partners and ensure the timely delivery of energy assistance and community service supports to disadvantaged low-income communities. Our proposal includes no new funding or no new funding is associated with this BCP.

I'm just reading through. Department of Finance.

/Omar Sanchez, Department of Finance. Nothing further to add.

LAO.

Yes, we've reviewed the BCP, and we find it to be reasonable for a few key reasons. First, as the Department indicated, this is a request to adjust federal expenditure authority so there's no General Fund impact or additional cost. It's simply the authority to expend federal grant monies received. Second, the proposal would be limited term, and the Department plans to reevaluate its needs after a few years.

And then finally, as you heard from the Department, the intent is really to ensure that federal monies can be received in a timely manner. Over the past few years, there's been a trend that the department's base federal grant levels have exceeded its authority. So the Department has needed to submit requests to be able to get the needed authority to receive those grants, which has, you know, which requires time to do.

However, because the Department is anticipating that its federal awards will continue to be at that higher level, we would agree that it makes sense to proactively increase the authority as part of the budget process. So again, overall, we think this proposal makes sense.

Well, this is a good item because it was short and sweet. Thank you so much.

You're welcome.

This ends the panel presentation portion of our hearing for today, and with that, we will move on to public comment. Folks, make your own way for public comment. Remember, you have two minutes. Please state your name and affiliation.

Good afternoon. Rebecca Gonzalez with the Western Center on Law and Poverty. I want to thank the Chair for your comments on the improper use of the Safety Net Reserve. And we agree we should not empty the reserves. And we also should not make the deep cuts to CalWORKs because this is a program that is serving people who are in deep poverty and trying to improve their situation for their families.

And we also want to echo the comments made by others to emphasize that we should balance access and security with the rollout of EBT chip cards and to make sure that people are made whole if fraud happens. Thank you.

Thank you. Name and affiliation, please?

My name is Judy Jackson and I'm affiliated with me.

Yes ma'am, that's a great affiliation.

I'm a consumer of several of these programs and item five in particular. I moved from Alameda County to San Benito County and I had to start all over again and apply for everything I qualified for. And I asked the SNAP people why you couldn't get the information from the other county and they said they closed the account, they didn't transfer it.

Why is one county that has all the data not giving that information to the other county when I called them and told them where I moved to?

It's just not right to have the consumer have to start all over again with all this paperwork at the age of 78 when they all had that information and I qualified for all of it and took me over three years to do so to begin with and then they just canceled the account and I had to start all over again.

Thank you very much. Name and affiliation.

Hi, Gabby Davidson with the California Association of Food Banks. I want to echo Becca's comments from the Western Center on protecting our CalWORKs and also on EBT theft. And then I just also wanted to echo Jen Tracy's comments on issue five regarding that the legislators support suggestions that will help address our community's needs, like you just heard from Judy, and also ensuring that the development of the BenefitsCal website better includes the public and provides data to make informed decisions for the investment of resources. Thank you.

Thank you very much. Name and affiliation, please.

Tiffany Whiten with SEIU California. Appreciate the discussion here today and just echo the comments about not emptying our reserves and also protecting CalWORKs and other safety net programs from the deep cuts. And then also, just as we continue to progress with CalSAWS. just making sure that the workers that are utilizing the systems also have the resources and the abilities to do what they need to do to provide for the consumers. Thank you.

Thank you very much. Naaman affiliation, please.

Yeah. Kevin Aslan, Coalition of California Welfare Rights Organization. We oppose the $900 million rainy day fund that they're going to take away from us. In addition to $300 million. In addition to that, the Governor's Budget shows that there's $9.4 billion that is budgeted for CalWORKs. Only 4.4 is used to payments to families. The rest of the $5 million 5 billion is used for Administration. Of that, 2.2 2.3 is used for non-CalWORKs programs. So whichever way we turn, they hit us.

They hit us when they do the budget. They hit us when they $900 million. And the other thing I wanted to say is about the chip and tap. California has over 1000 welfare fraud investigators and counties and this should be the top priority to investigate every claim that comes in. They should go to that store, look at the video cam, see who's downloading it. It's very simple. And catch him. That will stop all of this.

But those thousand or more welfare fraud investigators are not doing that kind of work. They're just harassing poor people because they failed to report something or whatever. Thank you very much.

Thank you very much. Seeing no other Members, want to thank everyone. As always, I want to thank Committee staff on both Democrat and Republican side. Want to thank our sergeants, want to thank Administration, Department of Finance and LAO. With that, the next time we come together will be after when May Revise comes out. So make sure everyone's hydrated and eat well and sleep well because next time we come together, it's game time. We're adjourned. It.