Join us for a chat with Jessica Hobbs, Owner and Managing Director of ECE Compliance Gurus and a Compliance & Regulatory Affairs Strategist. With expertise in child care licensing, Jessica shares insights on managing compliance in multisite ECE companies in the first part of our discussion.
Challenges in Compliance Adoption
How do you perceive the challenges faced by educational institutions of different sizes when it comes to adopting new compliance methods and systems?
The challenges at hand vary depending on the size and operational model of the institution. In the mid-market, typically comprising 10 to 75 schools, there is a hands-on approach, and the need for a more efficient system becomes evident due to day-to-day compliance audits and data management struggles. In this context, the prospect of transitioning to a new system may be met with enthusiasm rather than being overwhelming. On the contrary, larger franchises or those with over 75 schools often operate with deeply ingrained multiple systems, making the idea of migrating to a new system daunting. This transition becomes more complex with increasing scale, particularly given the industry’s limited adoption of advanced technology like business intelligence tools. Moreover, there are still government agencies that prefer paper documents over more efficient digital systems.
What factors, in your opinion, typically hinder institutions from making necessary changes in compliance methods and systems?
It often boils down to two significant challenges. Firstly, the perceived adequacy of the current systems within the manpower constraints becomes a comfort zone. There’s a resistance to overhaul the existing setup if it seems to generally serve the purpose because of bandwidth concerns. The question becomes, “Will this transition take away from our day-to-day operations?” Secondly, the consideration of whether the potential improvement is significant enough to justify the resources and efforts required. Is it worth the investment to bring in additional support or expertise, perhaps even temporarily, to implement these changes without disrupting daily operations?
Urgency for Change
When does the need for change become urgent for educational institutions?
When campuses face crises that affect the safety of children and the financial stability of the campus. The call for urgent change becomes imperative when operational problems not only impact the financial ability of the campus to remain open but also pose tangible threats to the safety of children. Instances where campuses grapple with significant issues resulting in closures or probation due to non-compliance become pivotal moments. For example, problems with supervision—such as compromising children’s safety due to lapses in safety checks, insufficient staff qualifications resulting from inconsistent interpretations of regulations, or qualification requirements that are unattainable in the local job market—may result in closures or warnings from licensing authorities (some warranted and some unwarranted). Ultimately, the tipping point is reached when these issues start to significantly impact the safety of children, enrollment, and financial stability of a campus.
What defines a “crash and burn” scenario for educational institutions?
There are varying degrees of severity in “crash and burn” situations. At an extreme level, it could involve critical safety breaches, like a child being unsupervised or exposed to hazardous materials due to lapses in safety protocols, leading to immediate closures and loss of trust among parents. Even issues with staff qualifications, when discovered by authorities, can prompt sudden closures, causing families to distrust the organization. It is important to note that some of these closures are not the fault of the organization but involve inconsistencies in state agency practices or interpretations of the regulations. A perfect example is one regulatory agent approving qualifications for a teacher and another regulatory agent not approving the same qualifications for another teacher. These situations, whether justified or not, significantly affect enrollment and credibility, demanding substantial time and effort for rebuilding.
Stringency in Licensing and Compliance
Do you believe that instances of compliance issues leading to closures and significant problems are more prevalent within the educational industry than commonly acknowledged?
Absolutely. I think there is hesitancy to openly address the challenges we encounter, possibly stemming from concerns about reputation or regulatory repercussions. However, I also see an opportunity for organizations to collaborate and enhance the industry, focusing on both health and safety as well as advocacy perspectives.
In your opinion, have state licensing authorities become stricter in enforcing regulations, leading to more immediate actions like closures?
I feel like there has been a trend toward stricter enforcement. In my experience across multiple states, I’ve observed a shift in how licensing authorities approach compliance. While I agree that some actions are absolutely necessary to ensure the safety of children, it’s also apparent that certain measures from governing agencies appear to impose punishments that may not always align proportionately with the severity of the violations. It seems they are more inclined to take swift and decisive action, often immediately requiring closures or significant remediation.
Is the increased stringency in licensing enforcement consistent across all states, or do you notice regional variations?
While the trend toward increased stringency is apparent in most states I’ve worked in (about 25-26), there are regional differences in baseline regulations. Some states tend to be more stringent in enforcing regulations, whereas others might be comparatively more lenient. The regulations vary depending on regional values and priorities, particularly concerning teacher and administrator credentials. For example, some states may only require a few early childhood classes while others require a bachelor’s degree and a state teaching certificate. This can pose challenges for campuses to comply, especially in a job market experiencing a shortage of qualified teachers.
Impact and Challenges of Compliance
What do you think could be the motivation behind this more stringent interpretation of standards and regulations by licensing authorities?
I can’t say for sure. It could be influenced by various factors, such as legislative changes, increased health and safety incidents, an increased number of lawsuits or a broader societal shift towards a more litigious culture. The motivations behind this shift would require a more in-depth analysis and understanding of the specific dynamics influencing each state’s regulatory landscape.
How do educational institutions typically become aware of legal liabilities arising from compliance issues, especially when using less sophisticated systems?
Larger multi-site companies enjoy a certain advantage due to their internal legal/compliance teams, which strategically plan for risk management. In contrast, smaller schools may lack access to risk management experts, leading to the occasional oversight of legal issues. These oversights are often only discovered post-incident, typically following a health and safety issue or a dissatisfied parent that escalates into legal action. Additionally, communication gaps within organizations may contribute to delayed awareness. Despite the significance of audits and compliance checks, resource constraints and competing priorities frequently relegate these essential tasks to the sidelines until a problem surfaces. Compliance, while foundational, can sometimes take a backseat until a crisis unfolds, but by implementing proper health and safety checks, conducting compliance audits, engaging in risk management, and fostering strong relationships, campuses can adopt a proactive approach to prevent many legal occurrences.
What are the challenges in maintaining compliance and risk management within educational institutions, particularly as they scale?
Compliance tends to lose priority amidst the multitude of other pressing concerns such as enrollment, budgeting, and leadership training. The challenge intensifies for larger institutions as they manage various tasks, potentially leading to the sidelining of compliance checks due to resource constraints and the surface perception that compliance doesn’t directly generate revenue. While I agree that compliance itself may not contribute to revenue, it certainly has the potential to severely impact revenue in the event of an incident, making it the highest priority.
Impact Beyond Finances and Industry Concerns
How do these compliance issues impact institutions beyond immediate financial liabilities?
Compliance issues act as a “silent killer” for institutions. When overlooked, they compromise not just finances but also reputation, culture, and enrollment. The aftermath of a compliance breach requires rebuilding everything—from brand image to enrollment numbers. It becomes a reactive, urgent matter when it should be a proactive, foundational concern.
Proactive Approach and Insurance Challenges
How do you think early education institutions should approach compliance and risk management to proactively address challenges rather than reacting after an incident occurs?
It is vital for a campus or organization to adopt a proactive rather than reactive mindset, instituting systems where compliance is prioritized by everyone involved. If not already in place, this shift requires a cultural change and a shared understanding that each individual plays a role in upholding compliance and risk management. This also means knowing the regulations, deciding what is truly right for children, families, and businesses. It involves making decisions that work, fostering education innovation, and advocating for practices that go beyond mere rule-following. The goal is to integrate this ethos into the very fabric of operations.
Efforts Addressing Compliance and Risk Management
How crucial is it to address and prevent major occurrences that can involve children or staff members within early education institutions?
It’s paramount. Major occurrences, especially those involving children or staff, can have devastating consequences, potentially resulting in the worst-case scenario of death. Incidents like a child being left unsupervised or a missed background check can have significant repercussions. Preventative measures are critical, as these occurrences can be avoided with proper risk management and compliance strategies.
This is part 1 with our discussion with Jessica, continue here for part 2.