The department shall have the following powers and duties:

(a) Development of an orderly grant application process culminating in a prescribed contract.

(b) Ensuring that eligible entities will have a timely cashflow within the guidelines of the federal Cash Management Improvement Act of 1990 (P.L. 101-453), as amended. The department shall issue to each eligible entity an advance payment at the beginning of the contract period equal to 25 percent of the eligible entity’s total contract amount. Payments thereafter shall be equal to expenditures reported on the eligible entity’s financial progress reports, not to exceed the eligible entity’s total contract amount.

(c) Promulgation of uniform contracts management standards to include:

(1) Standards for fiscal control and fund accounting that do all of the following:

(A) Require new eligible entities to be certified by an accountant prior to receiving financial assistance.

(B) Require periodic financial reporting to the office and an annual audit.

(C) Permit a defined range of flexibility from approved budgets and the use of negotiated indirect costs rates.

(D) For the purpose of administrative expenditures, permit an eligible entity to use funds allocated under this chapter in an amount not to exceed 12 percent of the total operating funds of its community action program.

(E) Limit the use of funds for construction, as required by federal law.

(2) Minimum standards for procurement to prevent conflict of interest or malfeasance.

(3) Standards regarding property that provide that title to property purchased with funds granted under this chapter or with funds formerly granted pursuant to the federal Economic Opportunity Act of 1964 (Chapter 34 (commencing with Section 2701) of Title 42 of the United States Code) shall vest in the grantee, subject to conditions requiring prudent property management and the provision for disposition of the property among other eligible entities in the event of closeout.

(4) Procedures for the withholding of payments or recovery of moneys where the underlying cost expenditures or obligations claimed by the eligible entity are disallowed.

(5) Standards for termination or reduction of financial assistance to an eligible entity, or revocation of the designation of a community action agency, for failure to comply with this chapter. The department may terminate or reduce any financial assistance provided to an eligible entity under this chapter forthwith, if the department finds there is evidence of fraud or illegal use of funds. The department also may terminate or reduce any financial assistance to an eligible entity, if the department determines that “cause,” as defined in Section 9908(c) of Title 42 of the United States Code, as amended, exists and after providing notice and an opportunity for a hearing on the record, subject to review by the secretary consistent with Section 9915 of Title 42 of the United States Code, as amended.

(d) Promulgation of regulations pursuant to the Administrative Procedure Act (Chapter 3.5 (commencing with Section 11340), Chapter 4 (commencing with Section 11370), and Chapter 5 (commencing with Section 11500), of Part 1) that are necessary and appropriate for the effective administration of this chapter. At a minimum these regulations shall clearly define all of the following:

(1) The due process rights, including notification, right of appeal, and opportunity for a fair hearing, of eligible entities, and the procedures to be followed in order to guarantee those rights, in cases of denial of refunding, suspension, reduction, or termination of funding, or revocation of designation by the department.

(2) The obligation of eligible entities to provide a fair procedure for clients denied services by eligible entities.

(3) The requirement that community action agencies select tripartite boards that include persons who represent the poor. These regulations shall ensure that democratic procedures are fully operative and may include criteria for tenure, geographic representation, and election procedures.

(e) Establishment of procedures for orderly closeout of terminated entities.

(f) Monitoring and periodic evaluation of eligible entities, using evaluation methods and standards that have been published prior to the evaluation and that provide eligible entities an opportunity to respond to evaluation findings.

(g) Development of standards to ensure compliance by eligible entities with federal and state requirements for public access to records, prohibition of partisan political activities, and nondiscrimination.

(h) Establishment of policies and procedures that ensure freedom of information.

(i) Fostering cooperation among community action agencies, including providing opportunities for community action agencies to work together and publishing a directory, that shall be periodically updated, of all grantees under this program and the Low-Income Home Energy Assistance Program (Subchapter II (commencing with Section 8621) of Chapter 94 of Title 42 of the United States Code).

(j) Establishment of procedures for the allocation of the funds available pursuant to subdivision (c) of Section 12759.

(k) Identification and encouragement of linkages with other state departments, local governments or private groups that oversee programs providing resources for low-income persons in order to coordinate existing efforts to overcome poverty.

(Amended by Stats. 2007, Ch. 46, Sec. 32. Effective January 1, 2008. Repealed conditionally as prescribed by Section 12790.)