2nd Issue: State of California Licensing Requirement (Part 1)
Some wrongs witnessed by whistleblowers are clear, like a
theft from the company or from customers or vendors. Others are ambiguous because they involve an interpretation
of technical rules that may be debated.
Clear-cut wrongs may be resolvable directly with the injured party, but
technical rules often demand arbitration by an external authority empowered to
position the line between right and wrong and decide how resolution will be
accomplished.
The State of California
requires that a residential facility should be licensed by the State if it
performs any of several “care and supervision” activities, including assistance with personal
hygiene, medications, health care, supervision of schedules, and maintenance of
house rules[1]. The regulations seek to protect adults who require
or want assistance with care and supervision due to disabilities or age. The California Community Care Licensing Division
(CCL) oversees the management of licensed residential facilities in the state,
but it does not provide an unambiguous definition of care and supervision,
leaving determination in the hands of its staff in local offices and
Sacramento.
During a meeting of the
Executive Leadership Team – the CEO, CFO, Chief Program Officer, and Chief
Development Officer – in late August 2013, I raised the question whether HomeFirst’s Boccardo Reception Center
(BRC) facility required licensing as an adult residential facility. By
some measures, BRC appeared to be covered by the regulation. More
than half of the clients were classified as disabled, nearly a quarter
were over 60 years old, and many used prescription medications. Some clients, especially those who were recently
discharged from hospitals, received medical care at the site, and all clients
were subject to house and program rules.
The Program Officer and I had
discussed the issue briefly with an attorney five years earlier without coming
to a decision. Jenny, the CEO, offered a
number of counter-arguments: we could not afford to convert BRC to a licensed
facility; we did not have staff to work on a licensure application for the
site; no other shelters were licensed; if CCL forced licensure on BRC and other
shelters, thousands of homeless would be forced on to the streets again; and
the financial impact on HomeFirst could be catastrophic. She argued that BRC had operated in the same
way for years and, if we had avoided the question in the past, there was no
reason to address it now. She did not
think that any other shelter in the area was licensed. In addition, if the CCL decided we were
operating in violation of the law, they might decide against us in a separate
license application for a different location.
It seemed that she protested
too much. Her arguments eluded debate
about the protection of clients and the possible illegality of the operation. While not entirely certain, it seemed to me
likely that BRC provided “care and supervision,” and the Program Officer
generally agreed. I recommended that we
consult CCL or an attorney to get a definitive reading of the case.
The ambiguity of this case
was compounded in two ways. First,
HomeFirst’s activities at BRC had changed over time so that although licensing seemed
not to be required earlier it might be necessary now. Jenny contended that the problem was with CCL,
which had not changed its regulations to avoid trapping new homeless services,
like those provided by HomeFirst at BRC, in the licensed category. Second, separating in Jenny arguments those
that were legitimate justifications from those that were rationalizations for
wrongdoing was difficult. Even when
honestly motivated, we are often deceived by unconscious biases, limits on the
information available to us, and emotions and situational factors that can sway
our decision-making[2]. Despite the
ambiguity, Jenny, I, and the others involved still faced
the need to act in some fashion.
Jenny laid out a plan for
dealing with the licensing question. I
would canvass the 20+ homeless shelter providers in the region to learn whether
anyone else had considered their need to be licensed on their own or when
prodded by funders or auditors. I would
then describe the process for becoming licensed and the risks and opportunities
involved in being licensed in the short and long term. The task was made more difficult by the fact
that the Program Officer, not I, had the contacts at other shelter providers
and the personal experience with making a license application. I was also in the midst of the annual
audit. It was a time-consuming project that
Jenny felt necessary, even if it meant waiting months before we took action.
After email parries over the next few days, I suggested that
I might need to disclose the situation to our auditors. After the Executive Committee of the Board
decided that it was all right for me to discuss it with them, the auditors were
indifferent to the issue I described. Preliminary
research indicated that other providers did not care about the problem,
either. Evidence seemed to confirm
Jenny’s contention that nothing was very wrong here and no great ethical
violation was in progress.
Despite this seeming validation of inaction, I thought that
the core issue – were we required to be licensed at the site? – remained
unaddressed.
[2]
Bazerman, Max H. and Ann E. Tenbrunsel. Blind Spots: Why We Fail to Do What’s Rightand What to Do about It. Princeton, N.J.: Princeton University Press. 2011
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