(1) AUTHORIZATION. (a) The department may contract with public or voluntary agencies or others to: 1. Purchase in full or in part care and services which it is authorized by any statute to provide as an alternative to providing such care and services itself. 2. Purchase or provide in full or in part the care and services which county agencies may provide or purchase under any statute and to sell to county agencies such portions thereof as the county agency may desire to purchase. 3. Sell services, under contract, which the department is authorized to provide by statute, to any federally recognized tribal governing body. (b) The department may: 1. Contract with public, private or voluntary agencies for the purchase of goods, care and services for persons committed or sentenced to a state correctional or penal institution, placed on probation or lifetime supervision to the department by a court of record, or released from a state correctional or penal institution. Services shall include, but are not limited to, diagnostic services, evaluation, treatment, counseling, referral and information, day care, inpatient hospitalization, transportation, recreation, special education, vocational training, work adjustment, sheltered employment, special living arrangements and legal and protective services. 2. Contract with one public, private or voluntary agency for the supervision, maintenance and operation of one minimum security correctional institution in a county having a population of 750,000 or more. To be eligible, an agency must have prior relevant experience. 3. Contract with public, private, or voluntary agencies for the supervision, maintenance, and operation of juvenile correctional facilities, residential care centers for children and youth, as defined in s. 938.02 (15d), and secured residential care centers for children and youth for the placement of juveniles who have been convicted under s. 938.183 or adjudicated delinquent under s. 938.183 or 938.34 (4d), (4h), or (4m). The department may designate a juvenile correctional facility or a residential care center for children and youth contracted for under this subdivision as a Type 2 juvenile correctional facility, as defined in s. 938.02 (20), and may designate a residential care center for children and youth contracted for under this subdivision as a Type 2 residential care center for children and youth, as defined in s. 938.02 (19r). (c) 2. Beginning on January 1, 1996, the department may contract with public, private or voluntary vendors for the supervision or for any component of the supervision of probationers, parolees and persons on extended supervision who are under minimum supervision or administrative supervision. 3. Except as provided in subd. 3m., a contract under subd. 2. shall authorize a vendor to charge a fee to probationers, parolees and persons on extended supervision sufficient to cover the cost of supervision and administration of the contract. 3m. A contract under subd. 2. shall permit the department to prohibit a vendor from charging a fee to a probationer, parolee or person on extended supervision who is supervised under the contract if the probationer, parolee or person on extended supervision demonstrates that he or she is unable to pay the fee because of any of the following: a. The probationer, parolee or person on extended supervision is undergoing treatment approved by the department and is unable to work. b. The probationer, parolee or person on extended supervision has a statement from a physician certifying to the department that the probationer, parolee or person on extended supervision should be excused from working for medical reasons. 4. If the department collects any moneys from a vendor under a contract under subd. 2., the department shall credit those moneys to the appropriation account under s. 20.410 (1) (gf). 5. The department shall promulgate rules for fees, collec- tions, reporting and verification regarding probationers, parolees and persons on extended supervision supervised by a vendor who contracts with the department under subd. 2. and shall promulgate rules defining “administrative supervision” and “minimum supervision”. (2) RESTRICTIONS. (a) All care and services purchased by the department and all juvenile correctional services purchased by a county department under s. 46.215, 46.22, or 46.23 shall be authorized and contracted for under the standards established under this subsection. For purchases of $10,000 or less the requirement for a written contract may be waived by the department. No contract is required for care provided by foster homes required to be licensed under s. 48.62. If the department directly contracts for services, it shall follow the procedures in this subsection in addition to meeting purchasing requirements established in s. 16.75. (b) All care and services purchased shall meet standards established by the department and other requirements specified by purchaser in the contract. Based on these standards the department shall establish standards for cost accounting and management information systems that shall monitor the utilization of those services, and document the specific services in meeting the service plan for the client and the objective of the service. (c) 1. Purchase of service contracts shall be written in accordance with rules and procedures established by the department. Contracts for client services shall show the total dollar amount to be purchased and for each service the number of clients to be served, number of client service units, the unit rate per client service and the total dollar amount for each service. 2. Payments under a contract may be made on the basis of actual allowable costs or on the basis of a unit rate per client service multiplied by the actual client units furnished each month. The contract may be renegotiated when units vary from the contracted number. The purchaser shall determine actual marginal costs for each service unit less than or in addition to the contracted number. 3. For proprietary agencies, contracts may include a percentage add-on for profit according to rules promulgated by the department. 4. Reimbursement to an agency may be based on total costs agreed to by the parties regardless of the actual number of service units to be furnished, when the agency is entering into a contract for a new or expanded service that the purchaser recognizes will require a start-up period not to exceed 180 days. The reimbursement applies only if identified client needs necessitate the establishment of a new service or expansion of an existing service. 5. If the purchaser finds it necessary to terminate a contract prior to the contract expiration date for reasons other than nonperformance by the provider, actual cost incurred by the provider may be reimbursed for an amount determined by mutual agreement of the parties. 6. Advance payments of up to one-twelfth of an annual contract may be allowed under the contract. If the advance payment exceeds $10,000, the provider shall supply a surety bond for an amount equal to the amount of the advance payment applied for. No surety bond is required if the provider is a state agency. The cost of the surety bond shall be allowable as an expense. (d) For purposes of this subsection and as a condition of reimbursement, each provider under contract shall: 1. Except as provided in s. 46.036 (4) (a), maintain a uniform double entry accounting system and a management information system which are compatible with cost accounting and control systems prescribed by the department. 2. Cooperate with the department and purchaser in establishing costs for reimbursement purposes. 3. Unless waived by the department, biennially, or annually if required under federal law, provide the purchaser with a certified financial and compliance audit report. The audit shall follow standards that the department prescribes. A purchaser may waive the requirements of this subdivision as provided in s. 46.036 (4) (c). 4. Transfer a client from one category of care or service to another only with the approval of the purchaser. 5. Charge a uniform schedule of fees established under s. 301.03 (18) unless waived by the purchaser with approval of the department. Whenever providers recover funds attributed to the client, the funds shall offset the amount paid under the contract. (e) Except as provided in par. (em), the purchaser shall recover from provider agencies money paid in excess of the conditions of the contract from subsequent payments made to the provider. (em) 1. In this paragraph: a. “Provider” means a nonstock corporation organized under ch. 181 that is a nonprofit corporation, as defined in s. 181.0103 (17), and that contracts under this section to provide client services on the basis of a unit rate per client service or a county department under s. 46.215, 46.22, 46.23, 51.42, or 51.437 that contracts under this section to provide client services on the basis of a unit rate per client service. b. “Rate-based service” means a service or a group of services, as determined by the department, that is reimbursed through a prospectively set rate and that is distinguishable from other services or groups of services by the purpose for which funds are provided for that service or group of services and by the source of funding for that service or group of services. 2. If revenue under a contract for the provision of a ratebased service exceeds allowable costs incurred in the contract period, the contract shall allow the provider to retain from the surplus up to 5 percent of the revenue received under the contract unless a uniform rate is established by rule under subd. 6., in which case the contract shall allow the provider to retain the uniform percentage rate established by the rule. The retained surplus is the property of the provider. 3. If on December 31 of any year the provider’s accumulated surplus from all contract periods ending during that year for a rate-based service exceeds the allowable retention rate under subd. 2., the provider shall provide written notice of that excess to all purchasers of the rate-based service. Upon the written request of such a purchaser received no later than 6 months after the date of the notice, the provider shall refund the purchaser’s proportional share of that excess. If the department determines based on an audit or fiscal review that the amount of the excess identified by the provider was incorrect, the department may seek to recover funds after the 6-month period has expired. The department shall commence any audit or fiscal review under this subdivision within 6 years after the end of the contract period. 4. Notwithstanding subd. 2., a county department under s. 46.215 providing client services in a county having a population of 750,000 or more or a nonstock, nonprofit corporation providing client services in such a county may not retain a surplus generated by a rate-based service or accumulate funds from more than one contract period for a rate-based service from revenues that are used to meet the maintenance-of-effort requirement under the federal temporary assistance for needy families program under 42 USC 601 to 619. 5. All providers that are subject to this paragraph shall comply with any financial reporting and auditing requirements that the department may prescribe. Those requirements shall include a requirement that a provider provide to any purchaser and the department any information that the department needs to claim fed- eral reimbursement for the cost of any services purchased from the provider and a requirement that a provider provide audit reports to any purchaser and the department according to standards specified in the provider’s contract and any other standards that the department may prescribe. 6. The department, in consultation with the department of health services and the department of children and families, shall promulgate rules to implement this paragraph including all of the following: a. Requiring that contracts for rate-based services under this subsection allow a provider to retain from any surplus revenue up to 5 percent of the total revenue received under the contract, or a different percentage rate determined by the department. The percentage rate established under this subd. 6. a. shall apply uniformly to all rate-based service contracts under this paragraph. b. Establishing a procedure for reviewing rate-based service contracts to determine whether a contract complies with the provisions of this paragraph. (f) Contracts may be renegotiated by the purchaser under conditions specified in the contract. (g) The service provider under this section may appeal decisions of the purchaser in accordance with terms and conditions of the contract and ch. 68 or 227. (3) NOTIFICATION CONCERNING PLANS FOR TRANSITIONAL HOUSING. (a) In this subsection, “political subdivision” means a city, village, town or county. (b) Before contracting under this section for transitional housing for the temporary placement of persons on parole, extended supervision or probation, the department shall notify all of the following of the proposed contract: 1. The police department of the political subdivision in which the transitional housing will be located. 2. The sheriff for the county in which the transitional housing will be located. 3. The chief elected official of the political subdivision in which the transitional housing will be located. 4. The newspaper designated as the official newspaper of the political subdivision in which the transitional housing will be located, or, if there is no designated official newspaper, a newspaper published or having general circulation in the political subdivision and eligible under s. 985.03 as an official newspaper. (c) A person notified under par. (b) of a proposed contract for transitional housing shall notify the general public of the proposed contract in a manner and to the extent that the person determines is appropriate.
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