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5400 Controlling Person

LPPH September 2012

Policy

Licensing staff conduct all of the following activities related to controlling persons for operations other than temporary shelter child care operations and small employer-based child care operations:

a.   Obtain information on all controlling persons from applicants

b.   Ensure that Licensing has the most current information on all controlling persons for operations with permits

c.   Conduct searches in the CLASS and Adverse Action Record-Sharing (AARS) systems to search for controlling persons at operations that are applying for a permit

d.   Conduct searches in the CLASS system for controlling persons at operations that have a permit

e.   Enter information on controlling persons into the CLASS system

f.    Determine eligibility for persons in the role of a controlling person

g.   Notify the controlling person, applicant, or operation about the controlling person’s eligibility for the role of controlling person

h.   Monitor operations for compliance with statutes, administrative rules, and minimum standards related to controlling person

i.    Conduct due process activities associated with controlling persons who are designated because an operation that the person was a controlling person for had a permit revoked

5410 Definitions of Terms Related to Controlling Persons

5411 Definition of Controlling Person

LPPH September 2012

Policy

A controlling person is a person who, either alone or in connection with others, has the ability to directly or indirectly influence or direct the management, expenditures, or policies of an operation.

Human Resources Code §42.002(18)

All operations must identify persons serving in the role of a controlling person at the operation.

Exception: Identifying controlling persons is not required for temporary shelter child-care operations or small employer-based child care operations.

A controlling person of a child-care operation includes any of the following:

a.   An owner of the operation

b.   A member of the governing body of the operation, including, as applicable, an executive, an officer, a board member, and a partner

c.   A sole proprietor

d.   The sole proprietor’s spouse

e.   The primary caregiver at a child-care home

f.    The spouse of the primary caregiver at a child-care home

g.   A person who manages, administrates, or directs the operation or its governing body, including a day care director or a licensed administrator

h.   A person who, either alone or in connection with others, has the ability to influence or direct the management, expenditures, or policies of the operation. For example, a person may have influence over the operation because of a personal, familial, or other relationship with the governing body, manager, or other controlling person of the operation.

DFPS Rules, 40 TAC §745.901(a)

An employee, lender, secured creditor, or landlord of the operation is not a controlling person, unless the person meets the requirements listed above.

DFPS Rules, 40 TAC §745.901(c)

A person does not have to be present at the operation or hold an official title at the operation or governing body in order to be a controlling person.

DFPS Rules, 40 TAC §745.901(b)

5411.1 Persons Who Are Ineligible to Be a Controlling Person

LPPH March 2013

Policy

A person may not serve as a controlling person at an operation regulated by Licensing if the person:

a.   is ineligible to receive a permit (see 3222 How to Determine Whether the Applicant Is Eligible to Apply);

b.   has been denied a permit for a substantive reason;

c.   has had a permit revoked;

d.   voluntarily closed an operation or relinquished a permit after Licensing notified the operation of the intent to revoke a permit;

e.   voluntarily closed an operation or relinquished a permit after Licensing notified the operation of a decision to revoke a permit;

f.    was a controlling person for an operation at the time the conduct occurred that resulted in the permit being revoked;

g.   was a controlling person for an operation that closed or relinquished a permit after Licensing notified the operation of the intent to revoke a permit; and

h.   who was a controlling person for an operation that closed or relinquished a permit after Licensing notified the operation of a decision to revoke a permit.

Human Resources Code §§42.062, 42.072(c-1), (g)

DFPS Rules, 40 TAC §745.911

5412 Definition of a Match for Controlling Persons

LPPH September 2012

Policy

In regard to controlling persons, a match exists when a search in the CLASS or HHSC Adverse Action Record-Sharing (AARS) systems reveals that a person is:

a.   a designated controlling person;

b.   a sustained controlling person;

c.   ineligible to receive a permit (see 3222 How to Determine Whether the Applicant is Eligible to Apply); or

d.   listed in the AARS system.

5420 When and How Applicants and Operations Submit Information on Controlling Persons

5421 When Applicants and Operations Submit Information on Controlling Persons

LPPH March 2013

Policy

Licensed Operations and Registered Family Homes

The applicant, permit holder, or head of the governing body of a licensed operation or registered family home submits information on controlling persons:

a.   when submitting an application;

b.   within two days after a person becomes a controlling person at the operation; or

c.   within two days after a person ceases to be a controlling person at the operation.

DFPS Rules, 40 TAC §§744.305(a)(6), 745.903, 746.305(a)(6), 747.303(a)(6), 748.103(13); 749.103(18), 750.103(11)

Listed Family Homes

The applicant or permit holder of a listed family home submits information on controlling persons:

  •  when submitting an application; or

  •  within two days after a person becomes a controlling person at the operation.

DFPS Rules, 40 TAC §745.903

5422 How Applicants and Operations Submit Controlling Person Information

LPPH December 2012

Policy

Applicants for a License

An applicant for a license completes Form 2760 Controlling Person to submit controlling person information to Licensing. Before submitting Form 2760, the applicant, designee, or head of the governing body signs the form to indicate that the information submitted is correct.

DFPS Rules, 40 TAC §745.903

See:

3223 Evaluating an Application for Completeness

5433 Reviewing Form 2760 Controlling Person for Completeness

Applicants for a Registration or Listing

An applicant for a registration or listing submits controlling person information by:

  •  completing Form 2760 Controlling Person, if a paper application is being submitted; or

  •  entering information for all controlling persons online through the DFPS website, if an e-application is being submitted.

If an applicant is submitting Form 2760, the applicant, designee, or head of the governing body must sign the form to indicate that the information submitted is correct.

DFPS Rules, 40 TAC §745.903

See:

3223 Evaluating an Application for Completeness

3610 Listing Application

5433 Reviewing Form 2760 Controlling Person for Completeness

Operations With a Permit – Submit New Controlling Person

An operation with a permit submits information on a new controlling person by:

  •  entering information for the new controlling person online through the DFPS website, if the operation has an online account; or

  •  completing a new Form 2760 Controlling Person, if the operation does not have an online account.

If the operation is submitting Form 2760, the permit holder, designee, or head of the governing body must sign the form to indicate that the information submitted is correct.

See 5433 Reviewing Form 2760 Controlling Person for Completeness.

Exception: Temporary shelter child-care operations and small employer-based child care operations are not required to submit controlling person information.

Operations With a Permit – Submit Updates on Current Controlling Persons

If a person ceases to be a controlling person at an operation or if the controlling person’s contact information has changed, an operation submits this information by:

  •  entering the information online through the DFPS website, if the operation has an online account; or

  •  contacts the inspector to provide the updated information, if the operation does not have an online account.

Exception: Temporary shelter child-care operations and small employer-based child care operations are not required to submit controlling person information.

5422.1 Controlling Persons at a Child-Placing Agency (CPA)

LPPH December 2012

A person may serve as a controlling person for:

  •  the CPA’s main office;

  •  one or more of the CPA’s branch offices; or

  •  any combination of the above.

The chart below outlines which CPA office can submit controlling person information, based upon which office the person serves as a controlling person:

If a Person Serves as a Controlling Person for a …

The Office That Can Submit Controlling Person Information Is …

CPA main office

Main office only

CPA branch office

Branch office where the person serves as a controlling person

OR

Main office

5430 Processing and Reviewing the Information on Controlling Persons Submitted by an Operation

5431 Processing Information on a Controlling Person Before Issuing a Permit

LPPH October 2013

Policy

Before issuing a permit to an applicant, Licensing staff determine whether each person whose name was submitted by the operation is eligible to be a controlling person and document the decision, as follows:

a.   Reviews the controlling person information that the applicant submitted (see 5433 Reviewing Form 2760 Controlling Person for Completeness and 5434 Reviewing Controlling Person Information Submitted Online)

b.   Conducts a Controlling Person Search and a Global Person Search in the CLASS system and searches the HHSC Adverse Action Record Sharing (AARS) systems for records on the person

c.   Associates (links) a controlling person’s existing record with the applicant’s record in CLASS or adds a new record for the controlling person, under the applicant’s record in CLASS (see 5442 Searching for and Adding a Controlling Person Record in CLASS)

d.   Determines the person’s eligibility to be a controlling person by resolving any matches found as a result of searches conducted in the CLASS or AARS systems

e.   Documents the person’s eligibility in CLASS

f.    Notifies the controlling person or applicant about the person’s eligibility

Exception: Persons applying for a permit to operate a temporary shelter child-care operation or small employer-based child care operation are not required to submit information on controlling persons.

See:

1500 Conducting a Search in CLASS

5420 When and How Applicants and Operations Submit Information on Controlling Persons

5440 Conducting Searches for Controlling Persons in the CLASS and AARS Systems and Adding Controlling Persons to CLASS

5450 Determining and Documenting the Eligibility of a Controlling Person

5460 Notifying an Applicant, Permit Holder, or Controlling Person About a Person’s Eligibility to Serve as a Controlling Person

DFPS Rules, 40 TAC§745.913

5432 Processing Information on New Controlling Persons When Submitted by an Operation That Has a Permit

LPPH October 2013

Policy

Within 10 days after an operation with a permit (other than a temporary shelter child-care operation or small employer-based child care operation) submits information on a new controlling person for the operation (see 5421 When Applicants and Operations Submit Information on Controlling Persons and 5422 How Applicants and Operations Submit Controlling Person Information), the inspector determines whether each person is eligible to be a controlling person and documents the decision, as follows:

a.   Reviews the information that the operation submitted (see 5433 Reviewing Form 2760 Controlling Person for Completeness and 5434 Reviewing Controlling Person Information Submitted Online)

b.   Conducts a Controlling Person Search and a Global Person Search in the CLASS system for a record on the person

c.   Associates (links) the controlling person’s existing record with the record for an operation in CLASS or adds a new record for the controlling person under the record for the operation’s record in CLASS (5442 Searching for and Adding a Controlling Person Record in CLASS)

d.   Determines the person’s eligibility to be a controlling person by resolving any matches found as a result of the search in CLASS

e.   Documents the person’s eligibility in CLASS

f.    Notifies the controlling person or operation about the person’s eligibility

See:

1500 Conducting a Search in CLASS

5420 When and How Applicants and Operations Submit Information on Controlling Persons

5440 Conducting Searches for Controlling Persons in the CLASS and AARS Systems and Adding Controlling Persons to CLASS

5450 Determining and Documenting the Eligibility of a Controlling Person

5460 Notifying an Applicant, Permit Holder, or Controlling Person About a Person’s Eligibility to Serve as a Controlling Person

DFPS Rules, 40 TAC§745.913

5432.1 Processing Updates to Controlling Person Information When an Operation Has a Permit

LPPH December 2012

If an operation notifies Licensing staff of updates to information about a current controlling person for the operation (for example, updating a controlling person’s mailing address), Licensing staff enter the updated information in CLASS within 15 days from when the operation notified staff of the change.

If an operation submits updates to information about a current controlling person online through the DFPS website, the information in CLASS is automatically updated by the system unless CLASS determines that there is a conflict or error with the data entered. If CLASS determines there is a conflict or error, Licensing staff process the update submitted online within 15 days of the day staff received the notice that the update has a conflict or error.

5432.11 Controlling Person Online Updates – Conflict Errors Automatically Entered by CLASS

LPPH December 2012

When an operation or applicant submits updates to controlling person information online in the DFPS website, CLASS determines whether there is a conflict error with the data submitted. CLASS automatically determines and selects the conflict error on the Controlling Person – Update submitted by Operation – CONFLICT page. The inspector must review the information on the page and select the Invalidate Submission button to clear the inspector’s To Do and notify the operation of the error.

Below is a chart that explains the different conflict errors.

Conflict Error

Is automatically selected by CLASS when …

Controlling person not active

The operation is attempting to update a controlling person record that the inspector has already end dated in CLASS (that is, the controlling person’s status in CLASS is Withdrawn, Rejected, or Inactive).

Duplicate SSN

The operation is attempting to update a controlling person record with an SSN that is already associated with a different CP record (that is, a different person) in CLASS.

SSN entered does not match the SSN in CLASS

The operation is attempting to update a controlling person record by entering a SSN for the person, but the inspector has already entered a SSN for the same controlling person record in CLASS and the SSNs do not match.

Last active CP cannot be end-dated

The operation is attempting to enter an end date for the only active controlling person in CLASS (that is, there are no other controlling persons in Pending, Identified, or Review status).

5433 Reviewing Form 2760 Controlling Person for Completeness

LPPH December 2012

Policy

When an applicant or operation submits Form 2760 Controlling Person, the inspector reviews the form to ensure that it is complete and signed by the applicant, permit holder, designee, or head of the governing body.

If the inspector receives Form 2760 as part of an application, the inspector cannot accept the application if Form 2760 is not complete and signed by the applicant, designee, or head of the governing body. See 3223.1 If the Application Is Incomplete or Contains Errors.

Procedure

The inspector reviews Form 2760 to ensure that the following identifying information is provided for each controlling person listed.

a.   Name (first, middle, last), including any maiden names, married names, or aliases

b.   Date of birth

c.   Current address and phone number

d.   Title, position, or relationship

e.   Main office or branch office number, for persons associated with a child placing agency

f.    Effective date as a controlling person

g.   Driver license number or state-issued identification card number (Optional)

h.   Social Security number (Optional)

If Form 2760 Is Not Complete or Signed

Licensing staff contact the operation or the controlling person to obtain the information, if all required fields are not completed and Form 2760 is not signed.

See 3223.1 If the Application Is Incomplete or Contains Errors.

If a Person’s Social Security Number Is Not Listed

If a controlling person’s Social Security number is not listed, Licensing staff follow procedures in 5435 If the Controlling Person Submission Did Not Include a Social Security Number.

After Determining Form 2760 Is Complete

After determining that Form 2760 is complete, Licensing staff use the identifying information to search for each controlling person in the CLASS system. If the form was submitted as part of an application, Licensing staff also conduct a search of the HHSC Adverse Action Record Sharing (AARS) system.

See:

5441 Searching for a Controlling Person in the AARS System and Documenting the Results

5442 Searching for and Adding a Controlling Person Record in CLASS

5434 Reviewing Controlling Person Information Submitted Online

LPPH December 2012

Policy

Within three days of when an applicant or operation submits controlling person information online through the DFPS website, the inspector:

a.   reviews and invalidates the submission before conducting a search, if necessary (see 5434.1 Invalidating an Online Controlling Person Submission Before Conducting a Search of the CLASS System);

b.   reviews the submission for a Social Security number (see 5434.2 Reviewing the Submission for a Social Security Number);

c.   conducts searches for an existing controlling person record in the CLASS system (see 5434.3 Conducting Searches in CLASS for an Existing Controlling Person Record); and

d.   after conducting the search, either:

  •  associates an existing controlling person record or adds a new controlling person record (see 5434.3 Conducting Searches in CLASS for an Existing Controlling Person Record); or

  •  invalidates the submission, if necessary (see 5434.4 Invalidation Reasons That Require a Search of the CLASS System Before the Submission Can Be Invalidated)

After associating or adding a controlling person record, the inspector:

  •  determines whether the person is eligible to serve as a controlling person; and

  •  sends the appropriate notification.

See:

5440 Conducting Searches for Controlling Persons in the CLASS and AARS Systems and Adding Controlling Persons to CLASS

5450 Determining and Documenting the Eligibility of a Controlling Person

5434.1 Invalidating an Online Controlling Person Submission Before Conducting a Search of the CLASS System

LPPH December 2012

Procedure

If the online controlling submission meets any of the criteria listed in the chart below, the inspector may invalidate the submission before conducting a search of the CLASS system. To invalidate the submission, the inspector selects the appropriate Invalidate reason on the CLASS Controlling Person – New Submission by Operation page.

Invalidate Reason

Is selected by the inspector when …

Invalid SSN

The SSN provided is obviously incorrect (for example, 111-11-1111).

Invalid Driver’s License

 The driver license number provided is obviously incorrect (for example, 00000).

Not a Valid Controlling Person

An operation is attempting to add a new controlling person who does not meet the definition of a controlling person as defined in 745.901 (for example, the person entered is a child).

Invalid Mailing Address

An operation submits an address for a controlling person that matches the address of the operation (this is not applicable to licensed, registered, or listed homes).

Entered in Error

An operation entered information for a controlling person in error and requests to withdraw the submission.

Facility Closed

This is reserved for state office use only.

5434.2 Reviewing the Submission for a Social Security Number

LPPH December 2012

Procedure

The inspector reviews the submission to determine whether the controlling person’s Social Security number was submitted. 

If the person’s Social Security number was provided, Licensing staff conduct searches for an existing controlling person record as outlined below.

If the person’s Social Security number was not provided, Licensing staff follow procedures in 5435 If the Controlling Person Submission Did Not Include a Social Security Number before conducting the searches outlined below.

5434.3 Conducting Searches in CLASS for an Existing Controlling Person Record

LPPH December 2012

Licensing staff use the identifying information to search for each controlling person to determine whether there is an existing controlling person record in the CLASS system.

See 5442 Searching and Adding a Controlling Person Record in CLASS.

5434.4 Invalidation Reasons That Require a Search of the CLASS System Before the Submission Can Be Invalidated

LPPH December 2012

Procedure

If the online controlling submission meets any of the criteria listed in the chart below, the inspector must conduct a search of the CLASS system before selecting the appropriate Invalidate reason on the CLASS Controlling Person – New Submission by Operation page.

Invalidate Reason

Is selected by the inspector when …

Duplicate Controlling Person at this facility

An operation is attempting to add a new controlling person, but the person is already an active controlling person at the operation (that is, the person is already in Pending, Identified, or Review status).

Invalid SSN

An operation is attempting to add a new controlling person, and:

a.   The SSN that the provider submitted already exists for a different controlling person in CLASS;

b.   The controlling person information that the provider submitted matches a controlling person record in CLASS (that is, it is the same person), but the SSNs do not match ; or

c.   The SSN provided is obviously incorrect (for example, 111-11-1111).

Invalid Driver’s License

a.   An operation is attempting to add a new controlling person, and the driver license number that the provider submitted already exists for a different controlling person in CLASS; or

b.   The driver license number provided is obviously incorrect (for example, 00000).

Effective start date overlaps with earlier end date for Controlling Person

An operation is attempting to add a new controlling person who has previously been associated with the operation. The Start Date entered for the new association is earlier than the End Date for the previous association.

Not a valid Controlling Person

An operation is attempting to add a new controlling person who does not meet the definition of a controlling person as defined in 745.901 (for example, the person entered is a child).

Invalid Mailing Address

An operation submits an address for a controlling person that matches the address of the operation (this is not applicable to licensed, registered, or listed homes).

Entered in Error

An operation entered information for a controlling person in error and requests to withdraw the submission.

Facility Closed

This is reserved for state office use only.

5435 If the Controlling Person Submission Did Not Include a Social Security Number

LPPH December 2012

Procedure

If a controlling person’s Social Security number was not included with the controlling person information submitted by the applicant or operation, Licensing staff:

  •  contact the applicant, operation, or controlling person to ask for the person’s Social Security number; or

  •  obtain the person’s Social Security number by reviewing Licensing records to determine if the operation has submitted a request for a background check on the person.

If the applicant, operation, or controlling person provides the Social Security number, Licensing staff enter the information in the CLASS system.

If Licensing staff obtain the person’s Social Security number by reviewing Licensing background check records, Licensing staff must be certain that the background check record where the Social Security number is listed is for the same person in the controlling person submission before adding the Social Security number to the controlling person record in CLASS.

If the controlling person refuses to provide his or her Social Security number, Licensing staff:

  •  select the Refused to Disclose SSN indicator in CLASS; and

  •  use other identifying information to conduct the search.

5440 Conducting Searches for Controlling Persons in the CLASS and AARS Systems and Adding Controlling Persons to CLASS

LPPH December 2012

Policy

Licensing staff search the HHSC Adverse Action Record Sharing (AARS) system only when controlling person information is submitted before a permit is issued. See 5441 Searching for a Controlling Person in the AARS System and Documenting the Results.

Licensing staff search the CLASS system when controlling person information is submitted:

  •  before a permit is issued; and

  •  when the operation has a permit.

See 5442 Searching for and Adding a Controlling Person Record in CLASS.

Exception: Searches are not completed for temporary shelter child-care operations or small employer-based child care operations.

After conducting the appropriate searches, Licensing staff resolve any matches and determine a controlling person’s eligibility to serve as a controlling person. See 5450 Determining and Documenting the Eligibility of a Controlling Person.

5441 Searching for a Controlling Person in the AARS System and Documenting the Results

LPPH December 2012

Policy

Licensing staff search the HHSC Adverse Action Record Sharing (AARS) system only when controlling person information is submitted before a permit is issued for an operation other than a temporary shelter child-care operation or small employer-based child care operation.

A designated Licensing employee that has access to the AARS system conducts the search to determine whether an applicant or each of the persons submitted by the applicant is eligible to be a controlling person. The designated employee documents the results of the search in the CLASS system. The AARS search is completed in addition to the search conducted to determine whether an applicant is qualified to apply for a permit (see 3222 How to Determine Whether the Applicant Is Eligible to Apply).

Exception: An AARS search is not conducted if staff determine that a person does not meet the definition of a controlling person. See 5411 Definition of a Controlling Person.

Procedure

After an applicant submits controlling person information, the inspector assigned to process the application coordinates with a designated user of the AARS system to conduct a search in the AARS system for the controlling person.

If a paper application is submitted, the designated user of the AARS system uses the information on the application and on Form 2760 to conduct the search.

If a registered family home or a listed family home submits an e-application, the designated user of the AARS system conducts the AARS search by using the controlling person information:

  •  entered on the e-application; and

  •  submitted online through the DFPS website.

Documenting AARS Search Results

After conducting the AARS search, the designated user of the AARS system creates a Chronology in CLASS, with a chronology type of Application, to:

  •  document that a search of the AARS system was conducted for each controlling person; and

  •  document the results of the search for each controlling person.

5441.1 If a Controlling Person Is Listed in the AARS System

LPPH December 2012

Policy

If the controlling person is found in the HHSC Adverse Action Record-Sharing (AARS) system:

  •  the designated user of the AARS system follows procedures in 5441 to document the results of the AARS search in the CLASS system; and

  • the inspector follows the procedures in 5450 Determining and Documenting the Eligibility of a Controlling Person to resolve the match.

5442 Searching for and Adding a Controlling Person Record in CLASS

LPPH December 2012

Procedure

For applicants and operations with a permit, the inspector conducts a search for the controlling person in the CLASS system, under the CLASS record for the applicant or operation that submitted the controlling person information.

After conducting the search, the inspector:

a.   associates (links) a controlling person’s existing record with the applicant’s or operation’s record in CLASS (see 5442.1 Associating a Controlling Person With an Existing Record in CLASS);

b.   adds a new record for the controlling person under the applicant’s or operation’s record in CLASS, if an existing record is not found after staff manually enter the controlling person information obtained from Form 2760 to conduct the search in the CLASS system (see 5442.2 Manually Adding a New Record for a Controlling Person in CLASS);

c.   accepts the submission to add a new record for the controlling person under the applicant’s or operation’s record in CLASS, if the search was completed using the controlling person information the applicant or operation submitted online through the DFPS website (see 5442.3 Accepting an Online Submission of a New Controlling Person Record in CLASS).

After each search, the inspector associates the record, adds a new record, or accepts the submission of a new record even if the person is found to be ineligible to be a controlling person, unless the submission is invalidated (see 5434.1 Invalidating an Online Controlling Person Submission Before Conducting a Search of the CLASS System and 5434.4 Invalidation Reasons That Require a Search of the CLASS System Before the Submission Can Be Invalidated).

The inspector leaves the Status field on the Controlling Person Details page as Pending until:

a.   the search for the controlling person in the CLASS system is complete;

b.   the search for the controlling person in the HHSC Adverse Action Record Sharing (AARS) system is complete (see 5441 Searching for a Controlling Person in the AARS System and Documenting the Results), if the operation is applying for a permit; and

c.   matches for the controlling person, when found as a result of the searches, are resolved (see 5450 Determining and Documenting the Eligibility of a Controlling Person).

Additional Steps for a CPA Controlling Person Record

Child-placing agency (CPA) controlling person records are entered under the CLASS record for each office (main office or branch office) that the person serves as a controlling person for.

The CPA designates which office the person serves as a controlling person for when submitting Form 2760 Controlling Person or submitting the information online through the DFPS website (See 5422.1 Controlling Persons at a Child-Placing Agency (CPA)).

If Form 2760 was submitted to the inspector for the CPA’s main office, the inspector:

  •  enters the record under the CPA’s main office; and

  •  indicates which office(s) the person serves as a controlling person for by selecting the following from the Main/Branch drop-down box in the Selected Association section of the Controlling Persons Detail page:

  •  M, if the person serves as a controlling person for the CPA’s main office; and

  •  the applicable branch number(s), if the person serves as a controlling person for a branch office of the CPA.

An inspector for a branch office can only enter controlling persons for the office to which they are assigned.

5442.1 Associating a Controlling Person With an Existing Record in CLASS

LPPH December 2012

Procedure

If a controlling person has an existing record in CLASS, the inspector associates (links) the person’s record to the operation’s record in CLASS by:

  •  selecting the controlling person’s record found through the search; and

  •  selecting Associate.

If the inspector associated the controlling person record as a result of an operation submitting Form 2760, the inspector also updates the information entered in the Person Details, Alternate Names, and Selected Association sections of the Controlling Person Details page, as needed.

If the inspector associated the controlling person record as a result of an online submission, the inspector also updates the information entered in the Person Details section of the Controlling Person Details page, as needed.

5442.2 Manually Adding a New Record for a Controlling Person in CLASS

LPPH December 2012

Procedure

If an existing record for a controlling person is not found after staff manually enter the information obtained from Form 2760 to conduct the search in the CLASS system, the inspector adds a new record for the controlling person to the applicant’s or operation’s record in CLASS by:

  •  selecting Add New on the Controlling Person Search page; and

  •  completing the Person Details, Alternate Names, and Selected Association sections of the Controlling Person Details page.

5442.3 Accepting an Online Submission of a New Controlling Person Record in CLASS

LPPH December 2012

Procedure

If an existing record for a controlling person is not found after staff complete a search of the CLASS system using the controlling person information the applicant or operation submitted online through the DFPS website, the inspector adds a new record for the controlling person to the Controlling Person – New Submission by Operation page in the applicant’s or operation’s record in CLASS by:

  •  updating the Person Details, if necessary; and

  •  selecting Accept Submission; and

5450 Determining and Documenting the Eligibility of a Controlling Person

LPPH December 2012

Policy

After searching the CLASS and HHSC Adverse Action Record Sharing (AARS) systems, as appropriate, for a record on a controlling person and adding or associating a record for the controlling person in CLASS, the inspector:

a.   determines whether a match exists;

b.   resolves any matches found in the CLASS or AARS system; and

c.   updates the status of the controlling person in CLASS.

See:

5412 Definition of a Match for Controlling Persons

5451 Resolving Matches Found in the AARS System

5452 Eligibility to Receive a Permit After Finding a Match for an Applicant

5453 Eligibility to Serve As a Controlling Person After Finding a Match

5454 Documenting the Eligibility of a Controlling Person by Updating the Status in CLASS

5451 Resolving Matches Found in the AARS System

LPPH December 2012

Policy

If a search of the HHSC Adverse Action Record Sharing (AARS) system results in a match, Licensing staff resolve the match by:

  •  determining the reason for the match; and

  •  consulting with the Licensing attorney to determine whether the match makes the person ineligible to be a controlling person.

Procedure

After determining that a person has a match in the AARS system, the inspector determines whether the person has had a permit denied, revoked, or suspended by another HHSC agency because the applicant or person:

a.   committed an act or omission that resulted in physical or mental harm to an individual;

b.   is a threat to the health, safety, or well-being of an individual;

c.   engaged in the physical, mental, or financial exploitation of an individual; or

d.   committed an act or omission that renders the person unqualified or unfit to fulfill the obligations of the license.

The inspector and supervisor then consult with a Licensing attorney to determine whether the person’s listing in the AARS qualifies as a substantive reason to either deny the application or request that the operation remove the person from the role of controlling person.

See:

5452 Eligibility to Receive a Permit After Finding a Match For an Applicant

5453 Eligibility to Serve As a Controlling Person After Finding a Match

5452 Eligibility to Receive a Permit After Finding a Match for an Applicant

LPPH December 2012

Policy

The chart below outlines whether a person is eligible to receive a permit, based on the results found after finding a match found on a controlling person who is also the applicant during a search of the CLASS or HHSC Adverse Action Record Sharing (AARS) systems.

If the controlling person with a match is not the applicant, see 5453 Eligibility to Serve as a Controlling Person After Finding a Match.

If the applicant is …

Does Licensing Issue a Permit?

a designated controlling person …

No.

Licensing will not issue a permit until due process is final.

Licensing may deny a permit, if the person applies before due process is final.

a sustained controlling person …

No.

Licensing denies the person a permit, if the application is received within 5 years after the designation is sustained.

ineligible to apply for a permit because of adverse action …

No.

listed in the HHSC Adverse Action Record Sharing (AARS) system …

Maybe.

Licensing may issue a permit only if a Licensing attorney determines that the reason the person is listed in the AARS system does not constitute a substantive reason to deny the person a permit.

DFPS Rules, 40 TAC §§745.907, 745.8605(15)

5453 Eligibility to Serve As a Controlling Person After Finding a Match

LPPH December 2012

Policy

The chart below outlines whether a person (who is not the applicant) is eligible to serve as a controlling person at an operation, based on the type of match found on the controlling person during a search of the CLASS or HHSC Adverse Action Record Sharing (AARS) systems.

If the controlling person with a match is the applicant, see 5452 Eligibility to Receive a Permit After Finding a Match For an Applicant.

If the person submitted by the operation Is …

Is the person eligible to serve as a controlling person?

a designated controlling person …

Yes.

a sustained controlling person …

No.

This person may not serve as a controlling person at an operation for 5 years after the designation is sustained.

If the operation has a permit, the permit holder must remove the person who is ineligible to serve as a controlling person from the role of controlling person. If the permit holder refuses or is unable to remove the person from the role of controlling person, Licensing must revoke the permit.

If the operation is applying for a permit, the applicant must remove the person who is ineligible to serve as a controlling person from the role of controlling person before Licensing can issue a permit. If the applicant refuses or is unable to remove the person from the role of controlling person, Licensing cannot issue the permit.

ineligible to apply for a permit because of adverse action …

Maybe.

If the operation has a permit and if a Licensing attorney determines that the reason the person is ineligible to serve as a controlling person constitutes a substantive reason to prohibit the person from being a controlling person in a DFPS-regulated operation, then the permit holder must remove the person who is ineligible to serve as a controlling person from the role of controlling person. If the permit holder refuses or is unable to remove the person from the role of controlling person, Licensing must revoke the permit.

If the operation is applying for a permit and a Licensing attorney determines that the reason the person is ineligible to serve as a controlling person constitutes a substantive reason to prohibit the person from being a controlling person in a DFPS-regulated operation, then the applicant must remove the person who is ineligible to serve as a controlling person from the role of controlling person before Licensing can issue a permit. If the applicant refuses or is unable to remove the person from the role of controlling person, Licensing cannot issue the permit.

listed in the HHSC Adverse Action Record Sharing (AARS) system …

Maybe.

If the operation has a permit and if a Licensing attorney determines that the reason the person is listed in the AARS system constitutes a substantive reason to prohibit the person from being a controlling person in a DFPS-regulated operation, then the permit holder must remove the person who is ineligible to serve as a controlling person from the role of controlling person. If the permit holder refuses or is unable to remove the person from the role of controlling person, Licensing must revoke the permit.

If the operation is applying for a permit and if a Licensing attorney determines that the reason the person is listed in the AARS system constitutes a substantive reason to prohibit the person from being a controlling person in a DFPS-regulated operation, then the applicant must remove the person who is ineligible to serve as a controlling person from the role of controlling person before Licensing can issue a permit. If the applicant refuses or is unable to remove the person from the role of a controlling person, Licensing cannot issue the permit.

DFPS Rules, 40 TAC §§745.403; 745.907; 745.911, 745.8605(15)

Human Resources Code §42.072(c-1)

5454 Documenting the Eligibility of a Controlling Person by Updating the Status in CLASS

LPPH March 2017

Policy

The inspector updates the status of a controlling person in the Status field of the Controlling Person Details page in CLASS after determining that the person:

a.   is eligible to serve as a controlling person;

b.   is ineligible to serve as a controlling person;

c.   has ceased to serve as a controlling person at an operation; or

d.   was entered in error.

Procedure

The following chart explains the meaning of each option in the Status field.

The Status selected is …

when …

Pending …

a new record on a controlling person is entered for the operation.

Pending is the default value when adding or associating a controlling person record.

Identified …

a controlling person has no history that prohibits the person from being a controlling person (that is, the person is eligible to be a controlling person).

Identified is the status for each person who is:

1.   currently serving as a controlling person for the operation; and

2.   is eligible to serve as controlling person.

Rejected …

an operation submits the name of a controlling person for consideration, but the person has a history that prohibits the person from being a controlling person (that is, the person is ineligible to be a controlling person). See 5454.1 Entering the Reason for Rejecting a Controlling Person.

Review …

a controlling person is sustained because the person’s record is associated with an operation that had its permit revoked.

CLASS automatically updates the status to Review when this occurs. See 7000 Voluntary Actions and Enforcement Actions

Inactive …

a controlling person ceases to be a controlling person at an operation.

A status is changed to Inactive only when an end date is entered.

Withdrawn …

a person is entered into CLASS in error (for example, entered under the wrong operation), or the operation withdraws the person from consideration. See 5454.1 Entering the Reason for Withdrawing a Controlling Person.

This does not include when an operation removes a person from a controlling person role after being notified by Licensing that the person is ineligible to be a controlling person.

5454.1 Entering the Reason for Rejecting a Controlling Person

LPPH December 2012

Procedure

If the Status selected in the CLASS system for a controlling person is Rejected, the inspector selects a reason for the rejection from the Rejection or Withdrawal Reason drop-down box.

The following chart explains the meaning of each Rejection reason.

The option selected under Rejection Reason  is or has a (an) …

and when the person is rejected from being a controlling person because …

Sustained Controlling Person

the person is listed as a sustained controlling person in CLASS.

AARS History

  •  the person is listed in the HHSC Adverse Action Record Sharing (AARS) system; and

  •  a licensing attorney has determined that the person is ineligible to be a controlling person.

Previous Application Denied

the person is ineligible to receive a permit.

5454.2 Entering the Reason for Withdrawing a Controlling Person

LPPH December 2012

Procedure

If the Status selected in the CLASS system for a controlling person is Withdrawn, the inspector selects a reason for the withdrawal from the Rejection or Withdrawal Reason dropdown box.

The following chart explains the meaning of the each Withdrawal reason.

The option selected under Withdrawal Reason selected is …

when …

Operation Request

the operation withdrew the person’s name from consideration as a controlling person.

Entered in Error

the person was entered in error; for example, a person was entered for the wrong operation.

Do NOT chose  this option if Licensing staff made a data entry error. In these instances, staff must request that the CLASS IT team complete a data fix.

Examples of data entry errors include:

  •  Licensing staff created a controlling person record when a record for the person already existed.

  •  Licensing staff made an error when entering a Social Security number.

5460 Notifying an Applicant, Permit Holder, or Controlling Person About a Person’s Eligibility to Serve as a Controlling Person

LPPH December 2012

Policy

If the person submitted for consideration as a controlling person by an applicant or operation is determined to be eligible to be a controlling person, the inspector notifies the controlling person about the determination. See 5461 Notifying a Controlling Person About Eligibility.

If the person submitted by an applicant or operation is determined to be ineligible to serve as a controlling person, the inspector notifies the applicant or permit holder about the determination. See 5462 Notifying an Operation About an Ineligible Controlling Person.

DFPS Rules, 40 TAC §§745.907; 745.911; 745.915

5461 Notifying a Controlling Person About Eligibility

LPPH December 2012

Procedure

If a person submitted as a controlling person by an operation is eligible to be a controlling person, the inspector notifies the person of their eligibility by creating and sending CLASS Form 2761 Identifying a Controlling Person to the controlling person.

Additional Requirement for Child-Placing Agencies

If the inspector assigned to a CPA’s main office creates Form 2761 regarding a controlling person at a branch office for the CPA, the inspector for the main office sends a copy of the completed Form 2761 to the inspector for the branch office.

5462 Notifying an Applicant or Permit Holder About an Ineligible Controlling Person

LPPH December 2012

Procedure

If an inspector determines that a person submitted as a controlling person by an operation is ineligible to be a controlling person, the inspector does as follows:

  •  Notifies the applicant or permit holder about the person’s ineligibility to be a controlling person by creating and sending CLASS Form 2765 Match of an Ineligible Controlling Person to the applicant or operation

      The form includes a compliance date and directs the operation to complete and return the Operation Action Form (located on the last page of CLASS Form 2765) to Licensing by the compliance date.

  •  Discusses with the applicant or permit holder the accuracy of the details on the person’s ineligibility, if the person who is ineligible to be a controlling person contacts the local Licensing office that sent the notice to say that he or she believes that the details are inaccurate

Unless Licensing determines that the details on the person’s ineligibility are inaccurate, the permit holder must remove the person from the operation.

Additional Requirement for Child-Placing Agencies

If the inspector assigned to a CPA’s main office creates Form 2765 regarding a controlling person at a branch office for the CPA, the inspector for the main office sends a copy of the completed Form 2765 to the inspector for the branch office.

5462.1 Following Up With an Applicant or Permit Holder Who Does Not Return the Operation Action Form

LPPH March 2013

Policy

If an applicant or permit holder fails to return the Operation Action Form to Licensing by the compliance date specified on the form, the inspector contacts the applicant or permit holder to ensure that the ineligible person has been removed from the role of controlling person. (The Operation Action Form is located on the last page of CLASS Form 2765 Match of an Ineligible Controlling Person.)

If appropriate, the inspector takes one or more of the following actions:

a.   Cites an operation with a permit for a violation of TAC §§745.911(1), 748.103(12), 749.103(16), or 750.103(10), as applicable, when the violation is for a sustained controlling person

b.   Cites an operation with a permit for a violation of TAC §745.911(2) when the violation is because an adverse action sustained within the previous five years makes the person ineligible to apply for a permit

c.   Cites an operation with a permit for a violation of TAC §745.911(3) when the violation is because the person is associated with an operation that had its permit denied, revoked, suspended, or terminated by another state health and human services agency within the last 10 years

d.   Revokes the permit

e.   Denies the permit

DFPS Rules, 40 TAC §§745.907; 745.911; 745.915

Texas Government Code §531.953

5470 Additional Duties of Inspectors in Relation to Controlling Persons

LPPH March 2017

Policy

In addition to the duties explained in 5400 Controlling Person, inspectors also are responsible for the following:

a.   Monitoring operations for compliance with the requirements related to an operation’s controlling persons in statute, administrative rules, and minimum standards (see 4000 Inspections)

b.   Ensuring that a person who is ineligible to be a controlling person at an operation that is regulated by Licensing does not serve in the role of a controlling person (see 7773.4 Reviewing the Status of a Sustained Controlling Person in CLASS)

c.   Notifying controlling persons about corrective or adverse action taken against an operation (see 7110 Notifying an Operation When Licensing Takes Enforcement Action)

d.   Designating a controlling person (see 7771 Choosing the Persons to Designate as Controlling)

e.   Sustaining a designated controlling person (see 7770 Administrative Review and Due Process Hearing for a Designated Controlling Person)

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