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10 <br />H. Error Rate <br />Annually, the CDSS shall conduct a review of select voucher-based contract <br />agency to determine an error rate in each of the following area s: <br />1. Eligibility; <br />2. Need; <br />3. Family Fee Assessment; and <br />4. Provider payments <br />I. Applicability of Corporations Code <br />Except for partnerships and sole proprietorships, private contractors shall be <br />subject to all applicable sections of the Corporations Code including stan dards of <br />conduct and management of the organization. <br />J. Conflicts of Interest (WIC 10266.5) <br />1. All transactions shall be fair and reasonable and conducted at arm’s length <br />where the contractor is a party to a transaction and the other party is one of <br />the following: <br />a. An officer or employee of the contractor or of an organization having <br />financial interest in the contractor; or <br />b. A partner or controlling stockholder or an organization having a financial <br />interest in the contractor; or <br />c. A family member of a person having a financial interest in the contractor. <br />2. No person employed by the CDE or CDSS in a policymaking position in the <br />area of childcare and development programs shall serve as a member of the <br />board of directors, advisory council, or advisory committee for any agency <br />receiving funds pursuant WIC, Part 1.8 Child Care and Development Services <br />Act. The provisions of this subdivision shall not apply to any person <br />appointed prior to January 1, 1985. <br />3. No retired, dismissed, separated, or formerly employed person of the CDE or <br />CDSS employed under the State Civil Service or otherwise appointed to <br />serve in the CDE or CDSS may enter into a contract pursuant to WIC 10268.5 <br />in which he or she engaged in any of the negotiations, transactions, planning, <br />arrangements, or any part of the decision-making process relevant to the <br />contract while employed in any capacity by the CDE or CDSS. The <br />prohibition contained in this subdivision shall apply to the person only during <br />the two-year period beginning on the date the person left state employment.