California Code, Welfare and Institutions Code - WIC § 10244

(1) The contractor is on conditional status because of fiscal or programmatic noncompliance, as described in Section 18303 or 18304 of Title 5 of the California Code of Regulations.

(2) The contractor is on provisional status and is applying for additional funding.  For purposes of this paragraph, a contractor is considered to be on provisional status if they were awarded a childcare and development contract in the prior year's childcare and development expansion application cycle, regardless of whether a contract has been executed.  A contractor remains on provisional status until they receive a clear contract from the department.

(3) The department has conducted a compliance review pursuant to Section 18023 of Title 5 of the California Code of Regulations, and the contractor has failed to clear items of fiscal and programmatic noncompliance identified in the review within 12 months of the issuance of the compliance review report, as described in Section 18001 of Title 5 of the California Code of Regulations.

(4) The contractor has in place, or places, a person in a position of fiscal responsibility or control who has been convicted of a crime involving misuse or misappropriation of state or federal funds, or a state or federal crime involving moral turpitude, as described in Section 10399.

(5) The contractor was previously awarded expansion funding and has not yet begun to provide services with that funding.

(6) The department has evidence that the contractor has not been able to successfully fulfill current contract requirements by serving children in a quality program and in a fiscally responsible manner   1

(7) The contractor has a delinquent audit with the department, as described in Section 18073 of Title 5 of the California Code of Regulations.