(1) To protect the health, safety, and welfare of the public and to insure to the greatest extent possible the efficient, adequate, and safe care of children, the department may adopt and promulgate rules and regulations consistent with the Children's Residential Facilities and Placing Licensure Act as necessary for:
(a) The proper care and protection of children in residential child-caring agencies and child-placing agencies regulated under the act;
(b) The issuance, discipline, and reinstatement of licenses; and
(c) The proper administration of the act.
(2) Such rules and regulations shall establish standards for levels of care and services which may include, but are not limited to, supervision and structured activities designed to address the social, emotional, educational, rehabilitative, medical, and physical needs of children residing in or being placed by a residential child-caring agency or child-placing agency and may include the use of community resources to meet the needs of children and qualifications of staff.
(3) Contested cases of the department under the act shall be in accordance with the Administrative Procedure Act.