[Code of Federal Regulations]
[Title 45, Volume 1]
[Revised as of October 1, 2007]
From the U.S. Government Printing Office via GPO Access
[CITE: 45CFR98]
[Page 546-578]
TITLE 45--PUBLIC WELFARE
AND HUMAN SERVICES
PART 98_CHILD CARE AND DEVELOPMENT FUND
Subpart A_Goals, Purposes and Definitions
Sec.
98.1 Goals and purposes.
98.2 Definitions.
98.3 Effect on State law.
Subpart B_General Application Procedures
98.10 Lead Agency responsibilities.
98.11 Administration under contracts and agreements.
98.12 Coordination and consultation.
98.13 Applying for Funds.
98.14 Plan process.
98.15 Assurances and certifications.
98.16 Plan provisions.
98.17 Period covered by Plan.
[[Page 547]]
98.18 Approval and disapproval of Plans and Plan amendments.
Subpart C_Eligibility for Services
98.20 A child's eligibility for child care services.
Subpart D_Program Operations (Child Care Services)_Parental Rights and
Responsibilities
98.30 Parental choice.
98.31 Parental access.
98.32 Parental complaints.
98.33 Consumer education.
98.34 Parental rights and responsibilities.
Subpart E_Program Operations (Child Care Services)_Lead Agency and
Provider Requirements
98.40 Compliance with applicable State and local regulatory
requirements.
98.41 Health and safety requirements.
98.42 Sliding fee scales.
98.43 Equal access.
98.44 Priority for child care services.
98.45 List of providers.
98.46 Nondiscrimination in admissions on the basis of religion.
98.47 Nondiscrimination in employment on the basis of religion.
Subpart F_Use of Child Care and Development Funds
98.50 Child care services.
98.51 Activities to improve the quality of child care.
98.52 Administrative costs.
98.53 Matching fund requirements.
98.54 Restrictions on the use of funds.
98.55 Cost allocation.
Subpart G_Financial Management
98.60 Availability of funds.
98.61 Allotments from the Discretionary Fund.
98.62 Allotments from the Mandatory Fund.
98.63 Allotments from the Matching Fund.
98.64 Reallotment and redistribution of funds.
98.65 Audits and financial reporting.
98.66 Disallowance procedures.
98.67 Fiscal requirements.
Subpart H_Program Reporting Requirements
98.70 Reporting requirements.
98.71 Content of reports.
Subpart I_Indian Tribes
98.80 General procedures and requirements.
98.81 Application and Plan procedures.
98.82 Coordination.
98.83 Requirements for tribal programs.
98.84 Construction and renovation of child care facilities.
Subpart J_Monitoring, Non-Compliance and Complaints
98.90 Monitoring.
98.91 Non-compliance.
98.92 Penalties and sanctions.
98.93 Complaints.
Subpart K_Error Rate Reporting
98.100 Error Rate Report.
98.101 Case Review Methodology.
98.102 Content of Error Rate Reports.
Authority: 42 U.S.C. 618, 9858.
Source: 63 FR 39981, July 24, 1998, unless otherwise noted.
Subpart A_Goals, Purposes and Definitions
Sec. 98.1 Goals and purposes.
(a) The goals of the CCDF are to:
(1) Allow each State maximum flexibility in developing child care
programs and policies that best suit the needs of children and parents
within the State;
(2) Promote parental choice to empower working parents to make their
own decisions on the child care that best suits their family's needs;
(3) Encourage States to provide consumer education information to
help parents make informed choices about child care;
(4) Assist States to provide child care to parents trying to achieve
independence from public assistance; and
(5) Assist States in implementing the health, safety, licensing, and
registration standards established in State regulations.
(b) The purpose of the CCDF is to increase the availability,
affordability, and quality of child care services. The program offers
Federal funding to States, Territories, Indian Tribes, and tribal
organizations in order to:
(1) Provide low-income families with the financial resources to find
and afford quality child care for their children;
(2) Enhance the quality and increase the supply of child care for
all families,
[[Page 548]]
including those who receive no direct assistance under the CCDF;
(3) Provide parents with a broad range of options in addressing
their child care needs;
(4) Strengthen the role of the family;
(5) Improve the quality of, and coordination among, child care
programs and early childhood development programs; and
(6) Increase the availability of early childhood development and
before- and after-school care services.
(c) The purpose of these regulations is to provide the basis for
administration of the Fund. These regulations provide that Lead
Agencies:
(1) Maximize parental choice through the use of certificates and
through grants and contracts;
(2) Include in their programs a broad range of child care providers,
including center-based care, family child care, in-home care, care
provided by relatives and sectarian child care providers;
(3) Provide quality child care that meets applicable requirements;
(4) Coordinate planning and delivery of services at all levels;
(5) Design flexible programs that provide for the changing needs of
recipient families;
(6) Administer the CCDF responsibly to ensure that statutory
requirements are met and that adequate information regarding the use of
public funds is provided; and
(7) Design programs that provide uninterrupted service to families
and providers, to the extent statutorily possible.
Sec. 98.2 Definitions.
For the purpose of this part and part 99:
The Act refers to the Child Care and Development Block Grant Act of
1990, section 5082 of the Omnibus Budget Reconciliation Act of 1990,
Pub. L. 101-508, as amended and codified at 42 U.S.C. 9858 et seq.
ACF means the Administration for Children and Families;
Application is a request for funding that includes the information
required at Sec. 98.13;
Assistant Secretary means the Assistant Secretary for Children and
Families, Department of Health and Human Services;
Caregiver means an individual who provides child care services
directly to an eligible child on a person-to-person basis;
Categories of care means center-based child care, group home child
care, family child care and in-home care;
Center-based child care provider means a provider licensed or
otherwise authorized to provide child care services for fewer than 24
hours per day per child in a non-residential setting, unless care in
excess of 24 hours is due to the nature of the parent(s)' work;
Child care certificate means a certificate (that may be a check, or
other disbursement) that is issued by a grantee directly to a parent who
may use such certificate only as payment for child care services or as a
deposit for child care services if such a deposit is required of other
children being cared for by the provider, pursuant to Sec. 98.30.
Nothing in this part shall preclude the use of such certificate for
sectarian child care services if freely chosen by the parent. For the
purposes of this part, a child care certificate is assistance to the
parent, not assistance to the provider;
Child Care and Development Fund (CCDF) means the child care programs
conducted under the provisions of the Child Care and Development Block
Grant Act, as amended. The Fund consists of Discretionary Funds
authorized under section 658B of the amended Act, and Mandatory and
Matching Funds appropriated under section 418 of the Social Security
Act;
Child care provider that receives assistance means a child care
provider that receives Federal funds under the CCDF pursuant to grants,
contracts, or loans, but does not include a child care provider to whom
Federal funds under the CCDF are directed only through the operation of
a certificate program;
Child care services, for the purposes of Sec. 98.50, means the care
given to an eligible child by an eligible child care provider;
Construction means the erection of a facility that does not
currently exist;
The Department means the Department of Health and Human Services;
[[Page 549]]
Discretionary funds means the funds authorized under section 658B of
the Child Care and Development Block Grant Act. The Discretionary funds
were formerly referred to as the Child Care and Development Block Grant;
Eligible child means an individual who meets the requirements of
Sec. 98.20;
Eligible child care provider means:
(1) A center-based child care provider, a group home child care
provider, a family child care provider, an in-home child care provider,
or other provider of child care services for compensation that--
(i) Is licensed, regulated, or registered under applicable State or
local law as described in Sec. 98.40; and
(ii) Satisfies State and local requirements, including those
referred to in Sec. 98.41 applicable to the child care services it
provides; or
(2) A child care provider who is 18 years of age or older who
provides child care services only to eligible children who are, by
marriage, blood relationship, or court decree, the grandchild, great
grandchild, sibling (if such provider lives in separate residence),
niece, or nephew of such provider, and complies with any applicable
requirements that govern child care provided by the relative involved;
Facility means real property or modular unit appropriate for use by
a grantee to carry out a child care program;
Family child care provider means one individual who provides child
care services for fewer than 24 hours per day per child, as the sole
caregiver, in a private residence other than the child's residence,
unless care in excess of 24 hours is due to the nature of the parent(s)'
work;
Group home child care provider means two or more individuals who
provide child care services for fewer than 24 hours per day per child,
in a private residence other than the child's residence, unless care in
excess of 24 hours is due to the nature of the parent(s)' work;
Indian Tribe means any Indian Tribe, band, nation, or other
organized group or community, including any Alaska Native village or
regional or village corporation as defined in or established pursuant to
the Alaska Native Claims Settlement Act (43 U.S.C. Sec. 1601 et seq.)
that is recognized as eligible for the special programs and services
provided by the United States to Indians because of their status as
Indians;
In-home child care provider means an individual who provides child
care services in the child's own home;
Lead Agency means the State, territorial or tribal entity designated
under Sec. Sec. 98.10 and 98.16(a) to which a grant is awarded and that
is accountable for the use of the funds provided. The Lead Agency is the
entire legal entity even if only a particular component of the entity is
designated in the grant award document.
Licensing or regulatory requirements means requirements necessary
for a provider to legally provide child care services in a State or
locality, including registration requirements established under State,
local or tribal law;
Liquidation period means the applicable time period during which a
fiscal year's grant shall be liquidated pursuant to the requirements at
Sec. 98.60.;
Major renovation means: (1) structural changes to the foundation,
roof, floor, exterior or load-bearing walls of a facility, or the
extension of a facility to increase its floor area; or (2) extensive
alteration of a facility such as to significantly change its function
and purpose, even if such renovation does not include any structural
change;
Mandatory funds means the general entitlement child care funds
described at section 418(a)(1) of the Social Security Act;
Matching funds means the remainder of the general entitlement child
care funds that are described at section 418(a)(2) of the Social
Security Act;
Modular unit means a portable structure made at another location and
moved to a site for use by a grantee to carry out a child care program;
Obligation period means the applicable time period during which a
fiscal year's grant shall be obligated pursuant to Sec. 98.60;
Parent means a parent by blood, marriage or adoption and also means
a legal guardian, or other person standing in loco parentis;
The Plan means the Plan for the implementation of programs under the
CCDF;
[[Page 550]]
Program period means the time period for using a fiscal year's grant
and does not extend beyond the last day to liquidate funds;
Programs refers generically to all activities under the CCDF,
including child care services and other activities pursuant to Sec.
98.50 as well as quality and availability activities pursuant to Sec.
98.51;
Provider means the entity providing child care services;
The regulation refers to the actual regulatory text contained in
parts 98 and 99 of this chapter;
Real property means land, including land improvements, structures
and appurtenances thereto, excluding movable machinery and equipment;
Secretary means the Secretary of the Department of Health and Human
Services;
Sectarian organization or sectarian child care provider means
religious organizations or religious providers generally. The terms
embrace any organization or provider that engages in religious conduct
or activity or that seeks to maintain a religious identity in some or
all of its functions. There is no requirement that a sectarian
organization or provider be managed by clergy or have any particular
degree of religious management, control, or content;
Sectarian purposes and activities means any religious purpose or
activity, including but not limited to religious worship or instruction;
Services for which assistance is provided means all child care
services funded under the CCDF, either as assistance directly to child
care providers through grants, contracts, or loans, or indirectly as
assistance to parents through child care certificates;
Sliding fee scale means a system of cost sharing by a family based
on income and size of the family, in accordance with Sec. 98.42;
State means any of the States, the District of Columbia, the
Commonwealth of Puerto Rico, the Virgin Islands of the United States,
Guam, American Samoa, the Commonwealth of the Northern Mariana Islands,
and includes Tribes unless otherwise specified;
Tribal mandatory funds means the child care funds set aside at
section 418(a)(4) of the Social Security Act. The funds consist of
between one and two percent of the aggregate Mandatory and Matching
child care funds reserved by the Secretary in each fiscal year for
payments to Indian Tribes and tribal organizations;
Tribal organization means the recognized governing body of any
Indian Tribe, or any legally established organization of Indians,
including a consortium, which is controlled, sanctioned, or chartered by
such governing body or which is democratically elected by the adult
members of the Indian community to be served by such organization and
which includes the maximum participation of Indians in all phases of its
activities: Provided, that in any case where a contract is let or grant
is made to an organization to perform services benefiting more than one
Indian Tribe, the approval of each such Indian Tribe shall be a
prerequisite to the letting or making of such contract or grant; and
Types of providers means the different classes of providers under
each category of care. For the purposes of the CCDF, types of providers
include non-profit providers, for-profit providers, sectarian providers
and relatives who provide care.
Sec. 98.3 Effect on State law.
(a) Nothing in the Act or this part shall be construed to supersede
or modify any provision of a State constitution or State law that
prohibits the expenditure of public funds in or by sectarian
organizations, except that no provision of a State constitution or State
law shall be construed to prohibit the expenditure in or by sectarian
institutions of any Federal funds provided under this part.
(b) If a State law or constitution would prevent CCDF funds from
being expended for the purposes provided in the Act, without limitation,
then States shall segregate State and Federal funds.
Subpart B_General Application Procedures
Sec. 98.10 Lead Agency responsibilities.
The Lead Agency, as designated by the chief executive officer of the
State
[[Page 551]]
(or by the appropriate Tribal leader or applicant), shall:
(a) Administer the CCDF program, directly or through other
governmental or non-governmental agencies, in accordance with Sec.
98.11;
(b) Apply for funding under this part, pursuant to Sec. 98.13;
(c) Consult with appropriate representatives of local government in
developing a Plan to be submitted to the Secretary pursuant to Sec.
98.14(b);
(d) Hold at least one public hearing in accordance with Sec.
98.14(c); and
(e) Coordinate CCDF services pursuant to Sec. 98.12.
Sec. 98.11 Administration under contracts and agreements.
(a) The Lead Agency has broad authority to administer the program
through other governmental or non-governmental agencies. In addition,
the Lead Agency can use other public or private local agencies to
implement the program; however:
(1) The Lead Agency shall retain overall responsibility for the
administration of the program, as defined in paragraph (b) of this
section;
(2) The Lead Agency shall serve as the single point of contact for
issues involving the administration of the grantee's CCDF program; and
(3) Administrative and implementation responsibilities undertaken by
agencies other than the Lead Agency shall be governed by written
agreements that specify the mutual roles and responsibilities of the
Lead Agency and the other agencies in meeting the requirements of this
part.
(b) In retaining overall responsibility for the administration of
the program, the Lead Agency shall:
(1) Determine the basic usage and priorities for the expenditure of
CCDF funds;
(2) Promulgate all rules and regulations governing overall
administration of the Plan;
(3) Submit all reports required by the Secretary;
(4) Ensure that the program complies with the approved Plan and all
Federal requirements;
(5) Oversee the expenditure of funds by subgrantees and contractors;
(6) Monitor programs and services;
(7) Fulfill the responsibilities of any subgrantee in any:
disallowance under subpart G; complaint or compliance action under
subpart J; or hearing or appeal action under part 99 of this chapter;
and
(8) Ensure that all State and local or non-governmental agencies
through which the State administers the program, including agencies and
contractors that determine individual eligibility, operate according to
the rules established for the program.
Sec. 98.12 Coordination and consultation.
The Lead Agency shall:
(a) Coordinate the provision of services for which assistance is
provided under this part with the agencies listed in Sec. 98.14(a).
(b) Consult, in accordance with Sec. 98.14(b), with representatives
of general purpose local government during the development of the Plan;
and
(c) Coordinate, to the maximum extent feasible, with any Indian
Tribes in the State receiving CCDF funds in accordance with subpart I of
this part.
Sec. 98.13 Applying for Funds.
The Lead Agency of a State or Territory shall apply for Child Care
and Development funds by providing the following:
(a) The amount of funds requested at such time and in such manner as
prescribed by the Secretary.
(b) The following assurances or certifications:
(1) An assurance that the Lead Agency will comply with the
requirements of the Act and this part;
(2) A lobbying certification that assures that the funds will not be
used for the purpose of influencing pursuant to 45 CFR part 93, and, if
necessary, a Standard Form LLL (SF-LLL) that discloses lobbying
payments;
(3) An assurance that the Lead Agency provides a drug-free workplace
pursuant to 45 CFR 76.600, or a statement that such an assurance has
already been submitted for all HHS grants;
(4) A certification that no principals have been debarred pursuant
to 45 CFR 76.500;
(5) Assurances that the Lead Agency will comply with the applicable
provisions regarding nondiscrimination at 45
[[Page 552]]
CFR part 80 (implementing title VI of the Civil Rights Act of 1964, as
amended), 45 CFR part 84 (implementing section 504 of the Rehabilitation
Act of 1973, as amended), 45 CFR part 86 (implementing title IX of the
Education Amendments of 1972, as amended) and 45 CFR part 91
(implementing the Age Discrimination Act of 1975, as amended), and;
(6) Assurances that the Lead Agency will comply with the applicable
provisions of Public Law 103-277, Part C--Environmental Tobacco Smoke,
also known as the Pro-Children Act of 1994, regarding prohibitions on
smoking.
(c) The Child Care and Development Fund Plan, at times and in such
manner as required in Sec. 98.17; and
(d) Such other information as specified by the Secretary.
Sec. 98.14 Plan process.
In the development of each Plan, as required pursuant to Sec.
98.17, the Lead Agency shall:
(a)(1) Coordinate the provision of services funded under this Part
with other Federal, State, and local child care and early childhood
development programs, including such programs for the benefit of Indian
children. The Lead Agency shall also coordinate with the State, and if
applicable, tribal agencies responsible for:
(A) Public health, including the agency responsible for
immunizations;
(B) Employment services/workforce development;
(C) Public education; and
(D) Providing Temporary Assistance for Needy Families.
(2) Provide a description of the results of the coordination with
each of these agencies in the CCDF Plan.
(b) Consult with appropriate representatives of local governments;
(c)(1) Hold at least one hearing in the State, after at least 20
days of statewide public notice, to provide to the public an opportunity
to comment on the provision of child care services under the Plan.
(2) The hearing required by paragraph (c)(1) shall be held before
the Plan is submitted to ACF, but no earlier than nine months before the
Plan becomes effective.
(3) In advance of the hearing required by this section, the Lead
Agency shall make available to the public the content of the Plan as
described in Sec. 98.16 that it proposes to submit to the Secretary.
Sec. 98.15 Assurances and certifications.
(a) The Lead Agency shall include the following assurances in its
CCDF Plan:
(1) Upon approval, it will have in effect a program that complies
with the provisions of the CCDF Plan, and that is administered in
accordance with the Child Care and Development Block Grant Act of 1990,
as amended, section 418 of the Social Security Act, and all other
applicable Federal laws and regulations;
(2) The parent(s) of each eligible child within the area served by
the Lead Agency who receives or is offered child care services for which
financial assistance is provided is given the option either:
(i) To enroll such child with a child care provider that has a grant
or contract for the provision of the service; or
(ii) To receive a child care certificate as defined in Sec. 98.2;
(3) In cases in which the parent(s), pursuant to Sec. 98.30, elects
to enroll their child with a provider that has a grant or contract with
the Lead Agency, the child will be enrolled with the eligible provider
selected by the parent to the maximum extent practicable;
(4) In accordance with Sec. 98.30, the child care certificate
offered to parents shall be of a value commensurate with the subsidy
value of child care services provided under a grant or contract;
(5) With respect to State and local regulatory requirements (or
tribal regulatory requirements), health and safety requirements, payment
rates, and registration requirements, State or local (or tribal) rules,
procedures or other requirements promulgated for the purpose of the CCDF
will not significantly restrict parental choice from among categories of
care or types of providers, pursuant to Sec. 98.30(f).
(6) That if expenditures for pre-Kindergarten services are used to
meet the maintenance-of-effort requirement, the State has not reduced
its level of effort
[[Page 553]]
in full-day/full-year child care services, pursuant to Sec.
98.53(h)(1).
(b) The Lead Agency shall include the following certifications in
its CCDF Plan:
(1) In accordance with Sec. 98.31, it has procedures in place to
ensure that providers of child care services for which assistance is
provided under the CCDF, afford parents unlimited access to their
children and to the providers caring for their children, during the
normal hours of operations and whenever such children are in the care of
such providers;
(2) As required by Sec. 98.32, the State maintains a record of
substantiated parental complaints and makes information regarding such
complaints available to the public on request;
(3) It will collect and disseminate to parents of eligible children
and the general public, consumer education information that will promote
informed child care choices, as required by Sec. 98.33;
(4) There are in effect licensing requirements applicable to child
care services provided within the State (or area served by Tribal Lead
Agency), pursuant to Sec. 98.40;
(5) There are in effect within the State (or other area served by
the Lead Agency), under State or local (or tribal) law, requirements
designed to protect the health and safety of children that are
applicable to child care providers that provide services for which
assistance is made available under the CCDF, pursuant to Sec. 98.41;
(6) In accordance with Sec. 98.41, procedures are in effect to
ensure that child care providers of services for which assistance is
provided under the CCDF comply with all applicable State or local (or
tribal) health and safety requirements; and
(7) Payment rates for the provision of child care services, in
accordance with Sec. 98.43, are sufficient to ensure equal access for
eligible children to comparable child care services in the State or sub-
State area that are provided to children whose parents are not eligible
to receive assistance under this program or under any other Federal or
State child care assistance programs.
Sec. 98.16 Plan provisions.
A CCDF Plan shall contain the following:
(a) Specification of the Lead Agency whose duties and
responsibilities are delineated in Sec. 98.10;
(b) The assurances and certifications listed under Sec. 98.15;
(c)(1) A description of how the CCDF program will be administered
and implemented, if the Lead Agency does not directly administer and
implement the program;
(2) Identification of the public or private entities designated to
receive private donated funds and the purposes for which such funds will
be expended, pursuant to Sec. 98.53(f);
(d) A description of the coordination and consultation processes
involved in the development of the Plan, including a description of
public-private partnership activities that promote business involvement
in meeting child care needs pursuant to Sec. 98.14(a) and (b);
(e) A description of the public hearing process, pursuant to Sec.
98.14(c);
(f) Definitions of the following terms for purposes of determining
eligibility, pursuant to Sec. Sec. 98.20(a) and 98.44:
(1) Special needs child;
(2) Physical or mental incapacity (if applicable);
(3) Attending (a job training or educational program);
(4) Job training and educational program;
(5) Residing with;
(6) Working;
(7) Protective services (if applicable), including whether children
in foster care are considered in protective services for purposes of
child care eligibility; and whether respite care is provided to
custodial parents of children in protective services.
(8) Very low income; and
(9) in loco parentis.
(g) For child care services pursuant to Sec. 98.50:
(1) A description of such services and activities;
(2) Any limits established for the provision of in-home care and the
reasons for such limits pursuant to Sec. 98.30(e)(1)(iv);
(3) A list of political subdivisions in which such services and
activities are offered, if such services and activities
[[Page 554]]
are not available throughout the entire service area;
(4) A description of how the Lead Agency will meet the needs of
certain families specified at Sec. 98.50(e).
(5) Any additional eligibility criteria, priority rules and
definitions established pursuant to Sec. 98.20(b);
(h) A description of the activities to provide comprehensive
consumer education, to increase parental choice, and to improve the
quality and availability of child care, pursuant to Sec. 98.51;
(i) A description of the sliding fee scale(s) (including any factors
other than income and family size used in establishing the fee scale(s))
that provide(s) for cost sharing by the families that receive child care
services for which assistance is provided under the CCDF, pursuant to
Sec. 98.42;
(j) A description of the health and safety requirements, applicable
to all providers of child care services for which assistance is provided
under the CCDF, in effect pursuant to Sec. 98.41;
(k) A description of the child care certificate payment system(s),
including the form or forms of the child care certificate, pursuant to
Sec. 98.30(c);
(l) Payment rates and a summary of the facts, including a biennial
local market rate survey, relied upon to determine that the rates
provided are sufficient to ensure equal access pursuant to Sec. 98.43;
(m) A detailed description of how the State maintains a record of
substantiated parental complaints and how it makes information regarding
those complaints available to the public on request, pursuant to Sec.
98.32;
(n) A detailed description of the procedures in effect for affording
parents unlimited access to their children whenever their children are
in the care of the provider, pursuant to Sec. 98.31;
(o) A detailed description of the licensing requirements applicable
to child care services provided, and a description of how such licensing
requirements are effectively enforced, pursuant to Sec. 98.40;
(p) Pursuant to Sec. 98.33(b), the definitions or criteria used to
implement the exception, provided in section 407(e)(2) of the Social
Security Act, to individual penalties in the TANF work requirement
applicable to a single custodial parent caring for a child under age
six;
(q)(1) When any Matching funds under Sec. 98.53(b) are claimed, a
description of the efforts to ensure that pre-Kindergarten programs meet
the needs of working parents;
(2) When State pre-Kindergarten expenditures are used to meet more
than 10% of the amount required at Sec. 98.53(c)(1), or for more than
10% of the funds available at Sec. 98.53(b), or both, a description of
how the State will coordinate its pre-Kindergarten and child care
services to expand the availability of child care; and
(r) Such other information as specified by the Secretary.
[63 FR 39981, July 24, 1998, as amended at 72 FR 27979, May 18, 2007]
Sec. 98.17 Period covered by Plan.
(a) For States, Territories, and Indian Tribes the Plan shall cover
a period of two years.
(b) The Lead Agency shall submit a new Plan prior to the expiration
of the time period specified in paragraph (a) of this section, at such
time as required by the Secretary in written instructions.
Sec. 98.18 Approval and disapproval of Plans and Plan amendments.
(a) Plan approval. The Assistant Secretary will approve a Plan that
satisfies the requirements of the Act and this part. Plans will be
approved not later than the 90th day following the date on which the
Plan submittal is received, unless a written agreement to extend that
period has been secured.
(b) Plan amendments. Approved Plans shall be amended whenever a
substantial change in the program occurs. A Plan amendment shall be
submitted within 60 days of the effective date of the change. Plan
amendments will be approved not later than the 90th day following the
date on which the amendment is received, unless a written agreement to
extend that period has been secured.
(c) Appeal of disapproval of a Plan or Plan amendment. (1) An
applicant or Lead Agency dissatisfied with a determination of the
Assistant Secretary pursuant to paragraphs (a) or (b) of this section
with respect to any Plan
[[Page 555]]
or amendment may, within 60 days after the date of receipt of
notification of such determination, file a petition with the Assistant
Secretary asking for reconsideration of the issue of whether such Plan
or amendment conforms to the requirements for approval under the Act and
pertinent Federal regulations.
(2) Within 30 days after receipt of such petition, the Assistant
Secretary shall notify the applicant or Lead Agency of the time and
place at which the hearing for the purpose of reconsidering such issue
will be held.
(3) Such hearing shall be held not less than 30 days, nor more than
90 days, after the notification is furnished to the applicant or Lead
Agency, unless the Assistant Secretary and the applicant or Lead Agency
agree in writing on another time.
(4) Action pursuant to an initial determination by the Assistant
Secretary described in paragraphs (a) and (b) of this section that a
Plan or amendment is not approvable shall not be stayed pending the
reconsideration, but in the event that the Assistant Secretary
subsequently determines that the original decision was incorrect, the
Assistant Secretary shall certify restitution forthwith in a lump sum of
any funds incorrectly withheld or otherwise denied. The hearing
procedures are described in part 99 of this chapter.
Subpart C_Eligibility for Services
Sec. 98.20 A child's eligibility for child care services.
(a) In order to be eligible for services under Sec. 98.50, a child
shall:
(1)(i) Be under 13 years of age; or,
(ii) At the option of the Lead Agency, be under age 19 and
physically or mentally incapable of caring for himself or herself, or
under court supervision;
(2) Reside with a family whose income does not exceed 85 percent of
the State's median income for a family of the same size; and
(3)(i) Reside with a parent or parents (as defined in Sec. 98.2)
who are working or attending a job training or educational program; or
(ii) Receive, or need to receive, protective services and reside
with a parent or parents (as defined in Sec. 98.2) other than the
parent(s) described in paragraph (a)(3)(i) of this section.
(A) At grantee option, the requirements in paragraph (a)(2) of this
section and in Sec. 98.42 may be waived for families eligible for child
care pursuant to this paragraph, if determined to be necessary on a
case-by-case basis by, or in consultation with, an appropriate
protective services worker.
(B) At grantee option, the provisions in (A) apply to children in
foster care when defined in the Plan, pursuant to Sec. 98.16(f)(7).
(b) Pursuant to Sec. 98.16(g)(5), a grantee or other administering
agency may establish eligibility conditions or priority rules in
addition to those specified in this section and Sec. 98.44 so long as
they do not:
(1) Discriminate against children on the basis of race, national
origin, ethnic background, sex, religious affiliation, or disability;
(2) Limit parental rights provided under Subpart D; or
(3) Violate the provisions of this section, Sec. 98.44, or the
Plan. In particular, such conditions or priority rules may not be based
on a parent's preference for a category of care or type of provider. In
addition, such additional conditions or rules may not be based on a
parent's choice of a child care certificate.
Subpart D_Program Operations (Child Care Services)_Parental Rights and
Responsibilities
Sec. 98.30 Parental choice.
(a) The parent or parents of an eligible child who receives or is
offered child care services shall be offered a choice:
(1) To enroll the child with an eligible child care provider that
has a grant or contract for the provision of such services, if such
services are available; or
(2) To receive a child care certificate as defined in Sec. 98.2.
Such choice shall be offered any time that child care services are made
available to a parent.
(b) When a parent elects to enroll the child with a provider that
has a grant or contract for the provision of child care services, the
child will be enrolled
[[Page 556]]
with the provider selected by the parent to the maximum extent
practicable.
(c) In cases in which a parent elects to use a child care
certificate, such certificate:
(1) Will be issued directly to the parent;
(2) Shall be of a value commensurate with the subsidy value of the
child care services provided under paragraph (a)(1) of this section;
(3) May be used as a deposit for child care services if such a
deposit is required of other children being cared for by the provider;
(4) May be used for child care services provided by a sectarian
organization or agency, including those that engage in religious
activities, if those services are chosen by the parent;
(5) May be expended by providers for any sectarian purpose or
activity that is part of the child care services, including sectarian
worship or instruction;
(6) Shall not be considered a grant or contract to a provider but
shall be considered assistance to the parent.
(d) Child care certificates shall be made available to any parents
offered child care services.
(e)(1) For child care services, certificates under paragraph (a)(2)
of this section shall permit parents to choose from a variety of child
care categories, including:
(i) Center-based child care;
(ii) Group home child care;
(iii) Family child care; and
(iv) In-home child care, with limitations, if any, imposed by the
Lead Agency and described in its Plan at Sec. 98.16(g)(2). Under each
of the above categories, care by a sectarian provider may not be limited
or excluded.
(2) Lead Agencies shall provide information regarding the range of
provider options under paragraph (e)(1) of this section, including care
by sectarian providers and relatives, to families offered child care
services.
(f) With respect to State and local regulatory requirements under
Sec. 98.40, health and safety requirements under Sec. 98.41, and
payment rates under Sec. 98.43, CCDF funds will not be available to a
Lead Agency if State or local rules, procedures or other requirements
promulgated for purposes of the CCDF significantly restrict parental
choice by:
(1) Expressly or effectively excluding:
(i) Any category of care or type of provider, as defined in Sec.
98.2; or
(ii) Any type of provider within a category of care; or
(2) Having the effect of limiting parental access to or choice from
among such categories of care or types of providers, as defined in Sec.
98.2; or
(3) Excluding a significant number of providers in any category of
care or of any type as defined in Sec. 98.2.
Sec. 98.31 Parental access.
The Lead Agency shall have in effect procedures to ensure that
providers of child care services for which assistance is provided afford
parents unlimited access to their children, and to the providers caring
for their children, during normal hours of provider operation and
whenever the children are in the care of the provider. The Lead Agency
shall provide a detailed description of such procedures.
Sec. 98.32 Parental complaints.
The State shall:
(a) Maintain a record of substantiated parental complaints;
(b) Make information regarding such parental complaints available to
the public on request; and
(c) The Lead Agency shall provide a detailed description of how such
record is maintained and is made available.
Sec. 98.33 Consumer education.
The Lead Agency shall:
(a) Certify that it will collect and disseminate to parents and the
general public consumer education information that will promote informed
child care choices including, at a minimum, information about
(1) The full range of providers available, and
(2) Health and safety requirements;
(b) Inform parents who receive TANF benefits about the requirement
at section 407(e)(2) of the Social Security Act that the TANF agency
make an exception to the individual penalties associated with the work
requirement for any single custodial parent who has a demonstrated
inability to obtain needed child care for a child under six years
[[Page 557]]
of age. The information may be provided directly by the Lead Agency, or,
pursuant to Sec. 98.11, other entities, and shall include:
(1) The procedures the TANF agency uses to determine if the parent
has a demonstrated inability to obtain needed child care;
(2) The criteria or definitions applied by the TANF agency to
determine whether the parent has a demonstrated inability to obtain
needed child care, including:
(i) ``Appropriate child care'';
(ii) ``Reasonable distance'';
(iii) ``Unsuitability of informal child care'';
(iv) ``Affordable child care arrangements'';
(3) The clarification that assistance received during the time an
eligible parent receives the exception referred to in paragraph (b) of
this section will count toward the time limit on Federal benefits
required at section 408(a)(7) of the Social Security Act.
(c) Include in the biennial Plan the definitions or criteria the
TANF agency uses in implementing the exception to the work requirement
specified in paragraph (b) of this section.
Sec. 98.34 Parental rights and responsibilities.
Nothing under this part shall be construed or applied in any manner
to infringe on or usurp the moral and legal rights and responsibilities
of parents or legal guardians.
Subpart E_Program Operations (Child Care Services)_Lead Agency and
Provider Requirements
Sec. 98.40 Compliance with applicable State and local regulatory
requirements.
(a) Lead Agencies shall:
(1) Certify that they have in effect licensing requirements
applicable to child care services provided within the area served by the
Lead Agency;
(2) Provide a detailed description of the requirements under
paragraph (a)(1) of this section and of how they are effectively
enforced.
(b)(1) This section does not prohibit a Lead Agency from imposing
more stringent standards and licensing or regulatory requirements on
child care providers of services for which assistance is provided under
the CCDF than the standards or requirements imposed on other child care
providers.
(2) Any such additional requirements shall be consistent with the
safeguards for parental choice in Sec. 98.30(f).
Sec. 98.41 Health and safety requirements.
(a) Although the Act specifically states it does not require the
establishment of any new or additional requirements if existing
requirements comply with the requirements of the statute, each Lead
Agency shall certify that there are in effect, within the State (or
other area served by the Lead Agency), under State, local or tribal law,
requirements designed to protect the health and safety of children that
are applicable to child care providers of services for which assistance
is provided under this part. Such requirements shall include:
(1) The prevention and control of infectious diseases (including
immunizations). With respect to immunizations, the following provisions
apply:
(i) As part of their health and safety provisions in this area,
States and Territories shall assure that children receiving services
under the CCDF are age-appropriately immunized. Those health and safety
provisions shall incorporate (by reference or otherwise) the latest
recommendation for childhood immunizations of the respective State or
territorial public health agency.
(ii) Notwithstanding paragraph (a)(1)(i) of this section, Lead
Agencies may exempt:
(A) Children who are cared for by relatives (defined as
grandparents, great grandparents, siblings (if living in a separate
residence), aunts, and uncles);
(B) Children who receive care in their own homes;
(C) Children whose parents object to immunization on religious
grounds; and
(D) Children whose medical condition contraindicates immunization;
(iii) Lead Agencies shall establish a grace period in which children
can receive services while families are taking
[[Page 558]]
the necessary actions to comply with the immunization requirements;
(2) Building and physical premises safety; and
(3) Minimum health and safety training appropriate to the provider
setting.
(b) Lead Agencies may not set health and safety standards and
requirements under paragraph (a) of this section that are inconsistent
with the parental choice safeguards in Sec. 98.30(f).
(c) The requirements in paragraph (a) of this section shall apply to
all providers of child care services for which assistance is provided
under this part, within the area served by the Lead Agency, except the
relatives specified in paragraph (e) of this section.
(d) Each Lead Agency shall certify that procedures are in effect to
ensure that child care providers of services for which assistance is
provided under this part, within the area served by the Lead Agency,
comply with all applicable State, local, or tribal health and safety
requirements described in paragraph (a) of this section.
(e) For the purposes of this section, the term ``child care
providers'' does not include grandparents, great grandparents, siblings
(if such providers live in a separate residence), aunts, or uncles,
pursuant to Sec. 98.2.
Sec. 98.42 Sliding fee scales.
(a) Lead Agencies shall establish, and periodically revise, by rule,
a sliding fee scale(s) that provides for cost sharing by families that
receive CCDF child care services.
(b) A sliding fee scale(s) shall be based on income and the size of
the family and may be based on other factors as appropriate.
(c) Lead Agencies may waive contributions from families whose
incomes are at or below the poverty level for a family of the same size.
Sec. 98.43 Equal access.
(a) The Lead Agency shall certify that the payment rates for the
provision of child care services under this part are sufficient to
ensure equal access, for eligible families in the area served by the
Lead Agency, to child care services comparable to those provided to
families not eligible to receive CCDF assistance or child care
assistance under any other Federal, State, or tribal programs.
(b) The Lead Agency shall provide a summary of the facts relied on
to determine that its payment rates ensure equal access. At a minimum,
the summary shall include facts showing:
(1) How a choice of the full range of providers, e.g., center,
group, family, and in-home care, is made available;
(2) How payment rates are adequate based on a local market rate
survey conducted no earlier than two years prior to the effective date
of the currently approved Plan;
(3) How copayments based on a sliding fee scale are affordable, as
stipulated at Sec. 98.42.
(c) A Lead Agency may not establish different payment rates based on
a family's eligibility status or circumstances.
(d) Payment rates under paragraph (a) of this section shall be
consistent with the parental choice requirements in Sec. 98.30.
(e) Nothing in this section shall be construed to create a private
right of action.
Sec. 98.44 Priority for child care services.
Lead Agencies shall give priority for services provided under Sec.
98.50(a) to:
(a) Children of families with very low family income (considering
family size); and
(b) Children with special needs.
Sec. 98.45 List of providers.
If a Lead Agency does not have a registration process for child care
providers who are unlicensed or unregulated under State, local, or
tribal law, it is required to maintain a list of the names and addresses
of unlicensed or unregulated providers of child care services for which
assistance is provided under this part.
Sec. 98.46 Nondiscrimination in admissions on the basis of religion.
(a) Child care providers (other than family child care providers, as
defined in Sec. 98.2) that receive assistance through grants and
contracts under the CCDF shall not discriminate in admissions against
any child on the basis of religion.
[[Page 559]]
(b) Paragraph (a) of this section does not prohibit a child care
provider from selecting children for child care slots that are not
funded directly (i.e., through grants or contracts to providers) with
assistance provided under the CCDF because such children or their family
members participate on a regular basis in other activities of the
organization that owns or operates such provider.
(c) Notwithstanding paragraph (b) of this section, if 80 percent or
more of the operating budget of a child care provider comes from Federal
or State funds, including direct or indirect assistance under the CCDF,
the Lead Agency shall assure that before any further CCDF assistance is
given to the provider,
(1) The grant or contract relating to the assistance, or
(2) The admission policies of the provider specifically provide that
no person with responsibilities in the operation of the child care
program, project, or activity will discriminate, on the basis of
religion, in the admission of any child.
Sec. 98.47 Nondiscrimination in employment on the basis of religion.
(a) In general, except as provided in paragraph (b) of this section,
nothing in this part modifies or affects the provision of any other
applicable Federal law and regulation relating to discrimination in
employment on the basis of religion.
(1) Child care providers that receive assistance through grants or
contracts under the CCDF shall not discriminate, on the basis of
religion, in the employment of caregivers as defined in Sec. 98.2.
(2) If two or more prospective employees are qualified for any
position with a child care provider, this section shall not prohibit the
provider from employing a prospective employee who is already
participating on a regular basis in other activities of the organization
that owns or operates the provider.
(3) Paragraphs (a)(1) and (2) of this section shall not apply to
employees of child care providers if such employees were employed with
the provider on November 5, 1990.
(b) Notwithstanding paragraph (a) of this section, a sectarian
organization may require that employees adhere to the religious tenets
and teachings of such organization and to rules forbidding the use of
drugs or alcohol.
(c) Notwithstanding paragraph (b) of this section, if 80 percent or
more of the operating budget of a child care provider comes from Federal
and State funds, including direct and indirect assistance under the
CCDF, the Lead Agency shall assure that, before any further CCDF
assistance is given to the provider,
(1) The grant or contract relating to the assistance, or
(2) The employment policies of the provider specifically provide
that no person with responsibilities in the operation of the child care
program will discriminate, on the basis of religion, in the employment
of any individual as a caregiver, as defined in Sec. 98.2.
Subpart F_Use of Child Care and Development Funds
Sec. 98.50 Child care services.
(a) Of the funds remaining after applying the provisions of
paragraphs (c), (d) and (e) of this section the Lead Agency shall spend
a substantial portion to provide child care services to low-income
working families.
(b) Child care services shall be provided:
(1) To eligible children, as described in Sec. 98.20;
(2) Using a sliding fee scale, as described in Sec. 98.42;
(3) Using funding methods provided for in Sec. 98.30; and
(4) Based on the priorities in Sec. 98.44.
(c) Of the aggregate amount of funds expended (i.e., Discretionary,
Mandatory, and Federal and State share of Matching Funds), no less than
four percent shall be used for activities to improve the quality of
child care as described at Sec. 98.51.
(d) Of the aggregate amount of funds expended (i.e., Discretionary,
Mandatory, and Federal and State share of Matching Funds), no more than
five percent may be used for administrative activities as described at
Sec. 98.52.
(e) Not less than 70 percent of the Mandatory and Matching Funds
shall
[[Page 560]]
be used to meet the child care needs of families who:
(1) Are receiving assistance under a State program under Part A of
title IV of the Social Security Act,
(2) Are attempting through work activities to transition off such
assistance program, and
(3) Are at risk of becoming dependent on such assistance program.
(f) Pursuant to Sec. 98.16(g)(4), the Plan shall specify how the
State will meet the child care needs of families described in paragraph
(e) of this section.
Sec. 98.51 Activities to improve the quality of child care.
(a) No less than four percent of the aggregate funds expended by the
Lead Agency for a fiscal year, and including the amounts expended in the
State pursuant to Sec. 98.53(b), shall be expended for quality
activities.
(1) These activities may include but are not limited to:
(i) Activities designed to provide comprehensive consumer education
to parents and the public;
(ii) Activities that increase parental choice; and
(iii) Activities designed to improve the quality and availability of
child care, including, but not limited to those described in paragraph
(2) of this section.
(2) Activities to improve the quality of child care services may
include, but are not limited to:
(i) Operating directly or providing financial assistance to
organizations (including private non-profit organizations, public
organizations, and units of general purpose local government) for the
development, establishment, expansion, operation, and coordination of
resource and referral programs specifically related to child care;
(ii) Making grants or providing loans to child care providers to
assist such providers in meeting applicable State, local, and tribal
child care standards, including applicable health and safety
requirements, pursuant to Sec. Sec. 98.40 and 98.41;
(iii) Improving the monitoring of compliance with, and enforcement
of, applicable State, local, and tribal requirements pursuant to
Sec. Sec. 98.40 and 98.41;
(iv) Providing training and technical assistance in areas
appropriate to the provision of child care services, such as training in
health and safety, nutrition, first aid, the recognition of communicable
diseases, child abuse detection and prevention, and care of children
with special needs;
(v) Improving salaries and other compensation (such as fringe
benefits) for full-and part-time staff who provide child care services
for which assistance is provided under this part; and
(vi) Any other activities that are consistent with the intent of
this section.
(b) Pursuant to Sec. 98.16(h), the Lead Agency shall describe in
its Plan the activities it will fund under this section.
(c) Non-Federal expenditures required by Sec. 98.53(c) (i.e., the
maintenance-of-effort amount) are not subject to the requirement at
paragraph (a) of this section.
Sec. 98.52 Administrative costs.
(a) Not more than five percent of the aggregate funds expended by
the Lead Agency from each fiscal year's allotment, including the amounts
expended in the State pursuant to Sec. 98.53(b), shall be expended for
administrative activities. These activities may include but are not
limited to:
(1) Salaries and related costs of the staff of the Lead Agency or
other agencies engaged in the administration and implementation of the
program pursuant to Sec. 98.11. Program administration and
implementation include the following types of activities:
(i) Planning, developing, and designing the Child Care and
Development Fund program;
(ii) Providing local officials and the public with information about
the program, including the conduct of public hearings;
(iii) Preparing the application and Plan;
(iv) Developing agreements with administering agencies in order to
carry out program activities;
(v) Monitoring program activities for compliance with program
requirements;
[[Page 561]]
(vi) Preparing reports and other documents related to the program
for submission to the Secretary;
(vii) Maintaining substantiated complaint files in accordance with
the requirements of Sec. 98.32;
(viii) Coordinating the provision of Child Care and Development Fund
services with other Federal, State, and local child care, early
childhood development programs, and before-and after-school care
programs;
(ix) Coordinating the resolution of audit and monitoring findings;
(x) Evaluating program results; and
(xi) Managing or supervising persons with responsibilities described
in paragraphs (a)(1)(i) through (x) of this section;
(2) Travel costs incurred for official business in carrying out the
program;
(3) Administrative services, including such services as accounting
services, performed by grantees or subgrantees or under agreements with
third parties;
(4) Audit services as required at Sec. 98.65;
(5) Other costs for goods and services required for the
administration of the program, including rental or purchase of
equipment, utilities, and office supplies; and
(6) Indirect costs as determined by an indirect cost agreement or
cost allocation plan pursuant to Sec. 98.55.
(b) The five percent limitation at paragraph (a) of this section
applies only to the States and Territories. The amount of the limitation
at paragraph (a) of this section does not apply to Tribes or tribal
organizations.
(c) Non-Federal expenditures required by Sec. 98.53(c) (i.e., the
maintenance-of-effort amount) are not subject to the five percent
limitation at paragraph (a) of this section.
Sec. 98.53 Matching fund requirements.
(a) Federal matching funds are available for expenditures in a State
based upon the formula specified at Sec. 98.63(a).
(b) Expenditures in a State under paragraph (a) of this section will
be matched at the Federal medical assistance rate for the applicable
fiscal year for allowable activities, as described in the approved State
Plan, that meet the goals and purposes of the Act.
(c) In order to receive Federal matching funds for a fiscal year
under paragraph (a) of this section:
(1) States shall also expend an amount of non-Federal funds for
child care activities in the State that is at least equal to the State's
share of expenditures for fiscal year 1994 or 1995 (whichever is
greater) under sections 402(g) and (i) of the Social Security Act as
these sections were in effect before October 1, 1995; and
(2) The expenditures shall be for allowable services or activities,
as described in the approved State Plan if appropriate, that meet the
goals and purposes of the Act.
(3) All Mandatory Funds are obligated in accordance with Sec.
98.60(d)(2)(i).
(d) The same expenditure may not be used to meet the requirements
under both paragraphs (b) and (c) of this section in a fiscal year.
(e) An expenditure in the State for purposes of this subpart may be:
(1) Public funds when the funds are:
(i) Appropriated directly to the Lead Agency specified at Sec.
98.10, or transferred from another public agency to that Lead Agency and
under its administrative control, or certified by the contributing
public agency as representing expenditures eligible for Federal match;
(ii) Not used to match other Federal funds; and
(iii) Not Federal funds, or are Federal funds authorized by Federal
law to be used to match other Federal funds; or
(2) Donated from private sources when the donated funds:
(i) Are donated without any restriction that would require their use
for a specific individual, organization, facility or institution;
(ii) Do not revert to the donor's facility or use;
(iii) Are not used to match other Federal funds;
(iv) Shall be certified both by the Lead Agency and by the donor (if
funds are donated directly to the Lead Agency) or the Lead Agency and
the entity designated by the State to receive donated funds pursuant to
Sec. 98.53(f) (if funds are donated directly to the designated entity)
as available and representing funds eligible for Federal match; and
[[Page 562]]
(v) Shall be subject to the audit requirements in Sec. 98.65 of
these regulations.
(f) Donated funds need not be transferred to or under the
administrative control of the Lead Agency in order to qualify as an
expenditure eligible to receive Federal match under this subsection.
They may be given to the public or private entities designated by the
State to implement the child care program in accordance with Sec. 98.11
provided that such entities are identified and designated in the State
Plan to receive donated funds in accordance with Sec. 98.16(c)(2).
(g) The following are not counted as an eligible State expenditure
under this Part:
(1) In-kind contributions; and
(2) Family contributions to the cost of care as required by Sec.
98.42.
(h) Public pre-kindergarten (pre-K) expenditures:
(1) May be used to meet the maintenance-of-effort requirement only
if the State has not reduced its expenditures for full-day/full-year
child care services; and
(2) May be eligible for Federal match if the State includes in its
Plan, as provided in Sec. 98.16(q), a description of the efforts it
will undertake to ensure that pre-K programs meet the needs of working
parents.
(3) In any fiscal year, a State may use public pre-K funds for up to
20% of the funds serving as maintenance-of-effort under this subsection.
In addition, in any fiscal year, a State may use other public pre-K
funds as expenditures serving as State matching funds under this
subsection; such public pre-K funds used as State expenditures may not
exceed 30% of the amount of a State's expenditures required to draw down
the State's full allotment of Federal matching funds available under
this subsection.
(4) If applicable, the CCDF Plan shall reflect the State's intent to
use public pre-K funds in excess of 10%, but not for more than 20% of
its maintenance-of-effort or 30% of its State matching funds in a fiscal
year. Also, the Plan shall describe how the State will coordinate its
pre-K and child care services to expand the availability of child care.
(i) Matching funds are subject to the obligation and liquidation
requirements at Sec. 98.60(d)(3).
[63 FR 39981, July 24, 1998, as amended at 72 FR 27979, May 18, 2007]
Sec. 98.54 Restrictions on the use of funds.
(a) General. (1) Funds authorized under section 418 of the Social
Security Act and section 658B of the Child Care and Development Block
Grant Act, and all funds transferred to the Lead Agency pursuant to
section 404(d) of the Social Security Act, shall be expended consistent
with these regulations. Funds transferred pursuant to section 404(d) of
the Social Security Act shall be treated as Discretionary Funds;
(2) Funds shall be expended in accordance with applicable State and
local laws, except as superseded by Sec. 98.3.
(b) Construction. (1) For State and local agencies and nonsectarian
agencies or organizations, no funds shall be expended for the purchase
or improvement of land, or for the purchase, construction, or permanent
improvement of any building or facility. However, funds may be expended
for minor remodeling, and for upgrading child care facilities to assure
that providers meet State and local child care standards, including
applicable health and safety requirements.
(2) For sectarian agencies or organizations, the prohibitions in
paragraph (b)(1) of this section apply; however, funds may be expended
for minor remodeling only if necessary to bring the facility into
compliance with the health and safety requirements established pursuant
to Sec. 8.41.
(3) Tribes and tribal organizations are subject to the requirements
at Sec. 98.84 regarding construction and renovation.
(c) Tuition. Funds may not be expended for students enrolled in
grades 1 through 12 for:
(1) Any service provided to such students during the regular school
day;
(2) Any service for which such students receive academic credit
toward graduation; or
(3) Any instructional services that supplant or duplicate the
academic program of any public or private school.
[[Page 563]]
(d) Sectarian purposes and activities. Funds provided under grants
or contracts to providers may not be expended for any sectarian purpose
or activity, including sectarian worship or instruction. Pursuant to
Sec. 98.2, assistance provided to parents through certificates is not a
grant or contract. Funds provided through child care certificates may be
expended for sectarian purposes or activities, including sectarian
worship or instruction when provided as part of the child care services.
(e) The CCDF may not be used as the non-Federal share for other
Federal grant programs.
Sec. 98.55 Cost allocation.
(a) The Lead Agency and subgrantees shall keep on file cost
allocation plans or indirect cost agreements, as appropriate, that have
been amended to include costs allocated to the CCDF.
(b) Subgrantees that do not already have a negotiated indirect rate
with the Federal government should prepare and keep on file cost
allocation plans or indirect cost agreements, as appropriate.
(c) Approval of the cost allocation plans or indirect cost
agreements is not specifically required by these regulations, but these
plans and agreements are subject to review.
Subpart G_Financial Management
Sec. 98.60 Availability of funds.
(a) The CCDF is available, subject to the availability of
appropriations, in accordance with the apportionment of funds from the
Office of Management and Budget as follows:
(1) Discretionary Funds are available to States, Territories, and
Tribes,
(2) Mandatory and Matching Funds are available to States;
(3) Tribal Mandatory Funds are available to Tribes.
(b) Subject to the availability of appropriations, in accordance
with the apportionment of funds from the Office of Management and
Budget, the Secretary:
(1) May withhold no more than one-quarter of one percent of the CCDF
funds made available for a fiscal year for the provision of technical
assistance; and
(2) Will award the remaining CCDF funds to grantees that have an
approved application and Plan.
(c) The Secretary may make payments in installments, and in advance
or by way of reimbursement, with necessary adjustments due to
overpayments or underpayments.
(d) The following obligation and liquidation provisions apply to
States and Territories:
(1) Discretionary Fund allotments shall be obligated in the fiscal
year in which funds are awarded or in the succeeding fiscal year.
Unliquidated obligations as of the end of the succeeding fiscal year
shall be liquidated within one year.
(2)(i) Mandatory Funds for States requesting Matching Funds per
Sec. 98.53 shall be obligated in the fiscal year in which the funds are
granted and are available until expended.
(ii) Mandatory Funds for States that do not request Matching Funds
are available until expended.
(3) Both the Federal and non-Federal share of the Matching Fund
shall be obligated in the fiscal year in which the funds are granted and
liquidated no later than the end of the succeeding fiscal year.
(4) Except for paragraph (d)(5) of this section, determination of
whether funds have been obligated and liquidated will be based on:
(i) State or local law; or,
(ii) If there is no applicable State or local law, the regulation at
45 CFR 92.3, Obligations and Outlays (expenditures).
(5) Obligations may include subgrants or contracts that require the
payment of funds to a third party (e.g., subgrantee or contractor).
However, the following are not considered third party subgrantees or
contractors:
(i) A local office of the Lead Agency;
(ii) Another entity at the same level of government as the Lead
Agency; or
(iii) A local office of another entity at the same level of
government as the Lead Agency.
(6) For purposes of the CCDF, funds for child care services provided
through
[[Page 564]]
a child care certificate will be considered obligated when a child care
certificate is issued to a family in writing that indicates:
(i) The amount of funds that will be paid to a child care provider
or family, and
(ii) The specific length of time covered by the certificate, which
is limited to the date established for redetermination of the family's
eligibility, but shall be no later than the end of the liquidation
period.
(7) Any funds not obligated during the obligation period specified
in paragraph (d) of this section will revert to the Federal government.
Any funds not liquidated by the end of the applicable liquidation period
specified in paragraph (d) of this section will also revert to the
Federal government.
(e) The following obligation and liquidation provisions apply to
Tribal Discretionary and Tribal Mandatory Funds:
(1) Tribal grantees shall obligate all funds by the end of the
fiscal year following the fiscal year for which the grant is awarded.
Any funds not obligated during this period will revert to the Federal
government.
(2) Obligations that remain unliquidated at the end of the
succeeding fiscal year shall be liquidated within the next fiscal year.
Any tribal funds that remain unliquidated by the end of this period will
also revert to the Federal government.
(f) Cash advances shall be limited to the minimum amounts needed and
shall be timed to be in accord with the actual, immediate cash
requirements of the State Lead Agency, its subgrantee or contractor in
carrying out the purpose of the program in accordance with 31 CFR part
205.
(g) Funds that are returned (e.g., loan repayments, funds
deobligated by cancellation of a child care certificate, unused
subgrantee funds) as well as program income (e.g., contributions made by
families directly to the Lead Agency or subgrantee for the cost of care
where the Lead Agency or subgrantee has made a full payment to the child
care provider) shall,
(1) if received by the Lead Agency during the applicable obligation
period, described in paragraphs (d) and (e) of this section, be used for
activities specified in the Lead Agency's approved plan and must be
obligated by the end of the obligation period; or
(2) if received after the end of the applicable obligation period
described at paragraphs (d) and (e) of this section, be returned to the
Federal government.
(h) Repayment of loans, pursuant to Sec. 98.51(a)(2)(ii), may be
made in cash or in services provided in-kind. Payment provided in-kind
shall be based on fair market value. All loans shall be fully repaid.
(i) Lead Agencies shall recover child care payments that are the
result of fraud. These payments shall be recovered from the party
responsible for committing the fraud.
Sec. 98.61 Allotments from the Discretionary Fund.
(a) To the 50 States, the District of Columbia, and the Commonwealth
of Puerto Rico an amount equal to the funds appropriated for the Child
Care and Development Block Grant, less amounts reserved for technical
assistance and amounts reserved for the Territories and Tribes, pursuant
to Sec. 98.60(b) and paragraphs (b) and (c) of this section, shall be
allotted based upon the formula specified in section 658O(b) of the Act.
(b) For the U.S. Territories of Guam, American Samoa, the Virgin
Islands of the United States, and the Commonwealth of the Northern
Mariana Islands an amount up to one-half of one percent of the amount
appropriated for the Child Care and Development Block Grant shall be
reserved.
(1) Funds shall be allotted to these Territories based upon the
following factors:
(i) A Young Child factor--the ratio of the number of children in the
Territory under five years of age to the number of such children in all
Territories; and
(ii) An Allotment Proportion factor--determined by dividing the per
capita income of all individuals in all the Territories by the per
capita income of all individuals in the Territory.
(A) Per capita income shall be:
(1) Equal to the average of the annual per capita incomes for the
most recent period of three consecutive years for which satisfactory
data are available
[[Page 565]]
at the time such determination is made; and
(2) Determined every two years.
(B) Per capita income determined, pursuant to paragraph
(b)(1)(ii)(A) of this section, will be applied in establishing the
allotment for the fiscal year for which it is determined and for the
following fiscal year.
(C) If the Allotment Proportion factor determined at paragraph
(b)(1)(ii) of this section:
(1) Exceeds 1.2, then the Allotment Proportion factor of the
Territory shall be considered to be 1.2; or
(2) Is less than 0.8, then the Allotment Proportion factor of the
Territory shall be considered to be 0.8.
(2)(i) The formula used in calculating a Territory's allotment is as
follows:
[GRAPHIC] [TIFF OMITTED] TR24JY98.000
(ii) For purposes of the formula specified at paragraph (b)(2)(i) of
this section, the term ``YCF<INF>t</INF>'' means the Territory's Young
Child factor as defined at paragraph (b)(1)(i) of this section.
(iii) For purposes of the formula specified at paragraph (b)(2)(i)
of this section, the term ``APF<INF>t</INF>'' means the Territory's
Allotment Proportion factor as defined at paragraph (b)(1)(ii) of this
section.
(c) For Indian Tribes and tribal organizations, including any
Alaskan Native Village or regional or village corporation as defined in
or established pursuant to the Alaska Native Claims Settlement Act (43
U.S.C. 1601 et seq) an amount up to two percent of the amount
appropriated for the Child Care and Development Block Grant shall be
reserved.
(1) Except as specified in paragraph (c)(2) of this section, grants
to individual tribal grantees will be equal to the sum of:
(i) A base amount as set by the Secretary; and
(ii) An additional amount per Indian child under age 13 (or such
similar age as determined by the Secretary from the best available
data), which is determined by dividing the amount of funds available,
less amounts set aside for eligible Tribes, pursuant to paragraph
(c)(1)(i) of this section, by the number of all Indian children living
on or near tribal reservations or other appropriate area served by the
tribal grantee, pursuant to Sec. 98.80(e).
(2) Grants to Tribes with fewer than 50 Indian children that apply
as part of a consortium, pursuant to Sec. 98.80(b)(1), are equal to the
sum of:
(i) A portion of the base amount, pursuant to paragraph (c)(1)(i) of
this section, that bears the same ratio as the number of Indian children
in the Tribe living on or near the reservation, or other appropriate
area served by the tribal grantee, pursuant to Sec. 98.80(e), does to
50; and
(ii) An additional amount per Indian child, pursuant to paragraph
(c)(1)(ii) of this section.
(3) Tribal consortia will receive grants that are equal to the sum
of the individual grants of their members.
(d) All funds reserved for Territories at paragraph (b) of this
section will be allotted to Territories, and all funds reserved for
Tribes at paragraph (c) of this section will be allotted to tribal
grantees. Any funds that are returned by the Territories after they have
been allotted will revert to the Federal government.
(e) For other organizations, up to $2,000,000 may be reserved from
the tribal funds reserved at paragraph (c) of this section. From this
amount the Secretary may award a grant to a Native Hawaiian
Organization, as defined in section 4009(4) of the Augustus F. Hawkins-
Robert T. Stafford Elementary and Secondary School Improvement
Amendments of 1988 (20 U.S.C. 4909(4)) and to a private non-profit
organization established for the purpose of serving youth who are
Indians or Native Hawaiians. The Secretary will establish selection
criteria and procedures for the award of grants under this subsection by
notice in the Federal Register.
Sec. 98.62 Allotments from the Mandatory Fund.
(a) Each of the 50 States and the District of Columbia will be
allocated from the funds appropriated under section 418(a)(3) of the
Social Security Act, less the amounts reserved for technical assistance
pursuant to Sec. 98.60(b)(1) and the amount reserved for
[[Page 566]]
Tribes pursuant to paragraph (b) of this section, an amount of funds
equal to the greater of:
(1) the Federal share of its child care expenditures under
subsections (g) and (i) of section 402 of the Social Security Act (as in
effect before October 1, 1995) for fiscal year 1994 or 1995 (whichever
is greater); or
(2) the average of the Federal share of its child care expenditures
under the subsections referred to in subparagraph (a)(1) of this section
for fiscal years 1992 through 1994.
(b) For Indian Tribes and tribal organizations up to 2 percent of
the amount appropriated under section 418(a)(3) of the Social Security
Act shall be allocated according to the formula at paragraph (c) of this
section. In Alaska, only the following 13 entities shall receive
allocations under this subpart, in accordance with the formula at
paragraph (c) of this section:
(1) The Metlakatla Indian Community of the Annette Islands Reserve:
(2) Arctic Slope Native Association;
(3) Kawerak, Inc.;
(4) Maniilaq Association;
(5) Association of Village Council Presidents;
(6) Tanana Chiefs Conference;
(7) Cook Inlet Tribal Council;
(8) Bristol Bay Native Association;
(9) Aleutian and Pribilof Islands Association;
(10) Chugachmuit;
(11) Tlingit and Haida Central Council;
(12) Kodiak Area Native Association; and
(13) Copper River Native Association.
(c)(1) Grants to individual Tribes with 50 or more Indian children,
and to Tribes with fewer than 50 Indian children that apply as part of a
consortium pursuant to Sec. 98.80(b)(1), will be equal to an amount per
Indian child under age 13 (or such similar age as determined by the
Secretary from the best available data), which is determined by dividing
the amount of funds available, by the number of Indian children in each
Tribe's service area pursuant to Sec. 98.80(e).
(2) Tribal consortia will receive grants that are equal to the sum
of the individual grants of their members.
Sec. 98.63 Allotments from the Matching Fund.
(a) To each of the 50 States and the District of Columbia there is
allocated an amount equal to its share of the total available under
section 418(a)(3) of the Social Security Act. That amount is based on
the same ratio as the number of children under age 13 residing in the
State bears to the national total of children under age 13. The number
of children under 13 is derived from the best data available to the
Secretary for the second preceding fiscal year.
(b) For purposes of this subsection, the amounts available under
section 418(a)(3) of the Social Security Act excludes the amounts
reserved and allocated under Sec. 98.60(b)(1) for technical assistance
and under Sec. 98.62(a) and (b) for the Mandatory Fund.
(c) Amounts under this subsection are available pursuant to the
requirements at Sec. 98.53(c).
Sec. 98.64 Reallotment and redistribution of funds.
(a) According to the provisions of this section State and Tribal
Discretionary Funds are subject to reallotment, and State Matching Funds
are subject to redistribution. State funds are reallotted or
redistributed only to States as defined for the original allocation.
Tribal funds are reallotted only to Tribes. Funds granted to the
Territories are not subject to reallotment. Any funds granted to the
Territories that are returned after they have been allotted will revert
to the Federal government.
(b) Any portion of a State's Discretionary Fund allotment that is
not required to carry out its Plan, in the period for which the
allotment is made available, shall be reallotted to other States in
proportion to the original allotments. For purposes of this paragraph
the term ``State'' means the 50 States, the District of Columbia, and
the Commonwealth of Puerto Rico. The other Territories and the Tribes
may not receive reallotted State Discretionary Funds.
(1) Each year, the State shall report to the Secretary either the
dollar amount from the previous year's grant that it will be unable to
obligate by the
[[Page 567]]
end of the obligation period or that all funds will be obligated during
such time. Such report shall be postmarked by April 1st.
(2) Based upon the reallotment reports submitted by States, the
Secretary will reallot funds.
(i) If the total amount available for reallotment is $25,000 or
more, funds will be reallotted to States in proportion to each State's
allotment for the applicable fiscal year's funds, pursuant to Sec.
98.61(a).
(ii) If the amount available for reallotment is less than $25,000,
the Secretary will not reallot any funds, and such funds will revert to
the Federal government.
(iii) If an individual reallotment amount to a State is less than
$500, the Secretary will not issue the award, and such funds will revert
to the Federal government.
(3) If a State does not submit a reallotment report by the deadline
for report submittal, either:
(i) The Secretary will determine that the State does not have any
funds available for reallotment; or
(ii) In the case of a report postmarked after April 1st, any funds
reported to be available for reallotment shall revert to the Federal
government.
(4) States receiving reallotted funds shall obligate and expend
these funds in accordance with Sec. 98.60. The reallotment of funds
does not extend the obligation period or the program period for
expenditure of such funds.
(c)(1) Any portion of the Matching Fund granted to a State that is
not obligated in the period for which the grant is made shall be
redistributed. Funds, if any, will be redistributed on the request of,
and only to, those other States that have met the requirements of Sec.
98.53(c) in the period for which the grant was first made. For purposes
of this paragraph the term ``State'' means the 50 States and the
District of Columbia. Territorial and tribal grantees may not receive
redistributed Matching Funds.
(2) Matching Funds allotted to a State under Sec. 98.63(a), but not
granted, shall also be redistributed in the manner described in
paragraph (1) of this section.
(3) The amount of Matching Funds granted to a State that will be
made available for redistribution will be based on the State's financial
report to ACF for the Child Care and Development Fund (ACF-696) and is
subject to the monetary limits at paragraph (b)(2) of this section.
(4) A State eligible to receive redistributed Matching Funds shall
also use the ACF-696 to request its share of the redistributed funds, if
any.
(5) A State's share of redistributed Matching Funds is based on the
same ratio as the number of children under 13 residing in the State to
the number of children residing in all States eligible to receive and
that request the redistributed Matching Funds.
(6) Redistributed funds are considered part of the grant for the
fiscal year in which the redistribution occurs.
(d) Any portion of a Tribe's allotment of Discretionary Funds that
is not required to carry out its Plan, in the period for which the
allotment is made available, shall be reallotted to other tribal
grantees in proportion to their original allotments. States and
Territories may not receive reallotted tribal funds.
(1) Each year, the Tribe shall report to the Secretary either the
dollar amount from the previous year's grant that it will be unable to
obligate by the end of the obligation period or that all funds will be
obligated during such time. Such report shall be postmarked by a
deadline established by the Secretary.
(2) Based upon the reallotment reports submitted by Tribes, the
Secretary will reallot Tribal Discretionary Funds among the other
Tribes.
(i) If the total amount available for reallotment is $25,000 or
more, funds will be reallotted to other tribal grantees in proportion to
each Tribe's original allotment for the applicable fiscal year pursuant
to Sec. 98.62(c).
(ii) If the total amount available for reallotment is less than
$25,000, the Secretary will not reallot any funds, and such funds will
revert to the Federal government.
(iii) If an individual reallotment amount to an applicant Tribe is
less than $500, the Secretary will not issue
[[Page 568]]
the award, and such funds will revert to the Federal government.
(3) If a Tribe does not submit a reallotment report by the deadline
for report submittal, either:
(i) The Secretary will determine that Tribe does not have any funds
available for reallotment; or
(ii) In the case of a report received after the deadline established
by the Secretary, any funds reported to be available for reallotment
shall revert to the Federal government.
(4) Tribes receiving reallotted funds shall obligate and expend
these funds in accordance with Sec. 98.60. The reallotment of funds
does not extend the obligation period or the program period for
expenditure of such funds.
Sec. 98.65 Audits and financial reporting.
(a) Each Lead Agency shall have an audit conducted after the close
of each program period in accordance with OMB Circular A-133 and the
Single Audit Act Amendments of 1996.
(b) Lead Agencies are responsible for ensuring that subgrantees are
audited in accordance with appropriate audit requirements.
(c) Not later than 30 days after the completion of the audit, Lead
Agencies shall submit a copy of their audit report to the legislature of
the State or, if applicable, to the Tribal Council(s). Lead Agencies
shall also submit a copy of their audit report to the HHS Inspector
General for Audit Services, as well as to their cognizant agency, if
applicable.
(d) Any amounts determined through an audit not to have been
expended in accordance with these statutory or regulatory provisions, or
with the Plan, and that are subsequently disallowed by the Department
shall be repaid to the Federal government, or the Secretary will offset
such amounts against any other CCDF funds to which the Lead Agency is or
may be entitled.
(e) Lead Agencies shall provide access to appropriate books,
documents, papers and records to allow the Secretary to verify that CCDF
funds have been expended in accordance with the statutory and regulatory
requirements of the program, and with the Plan.
(f) The audit required in paragraph (a) of this section shall be
conducted by an agency that is independent of the State, Territory or
Tribe as defined by generally accepted government auditing standards
issued by the Comptroller General, or a public accountant who meets such
independent standards.
(g) The Secretary shall require financial reports as necessary.
Sec. 98.66 Disallowance procedures.
(a) Any expenditures not made in accordance with the Act, the
implementing regulations, or the approved Plan, will be subject to
disallowance.
(b) If the Department, as the result of an audit or a review, finds
that expenditures should be disallowed, the Department will notify the
Lead Agency of this decision in writing.
(c)(1) If the Lead Agency agrees with the finding that amounts were
not expended in accordance with the Act, these regulations, or the Plan,
the Lead Agency shall fulfill the provisions of the disallowance notice
and repay any amounts improperly expended; or
(2) The Lead Agency may appeal the finding:
(i) By requesting reconsideration from the Assistant Secretary,
pursuant to paragraph (f) of this section; or
(ii) By following the procedure in paragraph (d) of this section.
(d) A Lead Agency may appeal the disallowance decision to the
Departmental Appeals Board in accordance with 45 CFR part 16.
(e) The Lead Agency may appeal a disallowance of costs that the
Department has determined to be unallowable under an award. A grantee
may not appeal the determination of award amounts or disposition of
unobligated balances.
(f) The Lead Agency's request for reconsideration in (c)(2)(i) of
this section shall be postmarked no later than 30 days after the receipt
of the disallowance notice. A Lead Agency may request an extension
within the 30-day time frame. The request for reconsideration, pursuant
to (c)(2)(i) of this section, need not follow any prescribed form, but
it shall contain:
(1) The amount of the disallowance;
(2) The Lead Agency's reasons for believing that the disallowance
was improper; and
[[Page 569]]
(3) A copy of the disallowance decision issued pursuant to paragraph
(b) of this section.
(g)(1) Upon receipt of a request for reconsideration, pursuant to
(c)(2)(i) of this section, the Assistant Secretary or the Assistant
Secretary's designee will inform the Lead Agency that the request is
under review.
(2) The Assistant Secretary or the designee will review any material
submitted by the Lead Agency and any other necessary materials.
(3) If the reconsideration decision is adverse to the Lead Agency's
position, the response will include a notification of the Lead Agency's
right to appeal to the Departmental Appeals Board, pursuant to paragraph
(d) of this section.
(h) If a Lead Agency refuses to repay amounts after a final decision
has been made, the amounts will be offset against future payments to the
Lead Agency.
(i) The appeals process in this section is not applicable if the
disallowance is part of a compliance review, pursuant to Sec. 98.90,
the findings of which have been appealed by the Lead Agency.
(j) Disallowances under the CCDF program are subject to interest
regulations at 45 CFR part 30. Interest will begin to accrue from the
date of notification.
Sec. 98.67 Fiscal requirements.
(a) Lead Agencies shall expend and account for CCDF funds in
accordance with their own laws and procedures for expending and
accounting for their own funds.
(b) Unless otherwise specified in this part, contracts that entail
the expenditure of CCDF funds shall comply with the laws and procedures
generally applicable to expenditures by the contracting agency of its
own funds.
(c) Fiscal control and accounting procedures shall be sufficient to
permit:
(1) Preparation of reports required by the Secretary under this
subpart and under subpart H; and
(2) The tracing of funds to a level of expenditure adequate to
establish that such funds have not been used in violation of the
provisions of this part.
Subpart H_Program Reporting Requirements
Sec. 98.70 Reporting requirements.
(a) Quarterly Case-level Report--
(1) State and territorial Lead Agencies that receive assistance
under the CCDF shall prepare and submit to the Department, in a manner
specified by the Secretary, a quarterly case-level report of monthly
family case-level data. Data shall be collected monthly and submitted
quarterly. States may submit the data monthly if they choose to do so.
(2) The information shall be reported for the three-month federal
fiscal period preceding the required report. The first report shall be
submitted no later than August 31, 1998, and quarterly thereafter. The
first report shall include data from the third quarter of FFY 1998
(April 1998 through June 1998). States and Territorial Lead Agencies
which choose to submit case-level data monthly must submit their report
for April 1998 no later than July 30, 1998. Following reports must be
submitted every thirty days thereafter.
(3) State and territorial Lead Agencies choosing to submit data
based on a sample shall submit a sampling plan to ACF for approval 60
days prior to the submission of the first quarterly report. States are
not prohibited from submitting case-level data for the entire population
receiving CCDF services.
(4) Quarterly family case-level reports to the Secretary shall
include the information listed in Sec. 98.71(a).
(b) Annual Report--
(1) State and territorial Lead Agencies that receive assistance
under CCDF shall prepare and submit to the Secretary an annual report.
The report shall be submitted, in a manner specified by the Secretary,
by December 31 of each year and shall cover the most recent federal
fiscal year (October through September).
(2) The first annual aggregate report shall be submitted no later
than December 31, 1997, and every twelve months thereafter.
(3) Biennial reports to Congress by the Secretary shall include the
information listed in Sec. 98.71(b).
(c) Tribal Annual Report--
[[Page 570]]
(1) Tribal Lead Agencies that receive assistance under CCDF shall
prepare and submit to the Secretary an annual aggregate report.
(2) The report shall be submitted in the manner specified by the
Secretary by December 31 of each year and shall cover services for
children and families served with CCDF funds during the preceding
Federal Fiscal Year.
(3) Biennial reports to Congress by the Secretary shall include the
information listed in Sec. 98.71(c).
Sec. 98.71 Content of reports.
(a) At a minimum, a State or territorial Lead Agency's quarterly
case-level report to the Secretary, as required in Sec. 98.70, shall
include the following information on services provided under CCDF grant
funds, including Federal Discretionary (which includes any funds
transferred from the TANF Block Grant), Mandatory, and Matching Funds;
and State Matching and Maintenance-of-Effort (MOE) Funds:
(1) The total monthly family income for determining eligibility;
(2) County of residence;
(3) Gender and month/year of birth of children;
(4) Ethnicity and race of children;
(5) Whether the head of the family is a single parent;
(6) The sources of family income, from employment (including self-
employment), cash or other assistance under the Temporary Assistance for
Needy Families program under Part A of title IV of the Social Security
Act, cash or other assistance under a State program for which State
spending is counted toward the maintenance of effort requirement under
section 409(a)(7) of the Social Security Act, housing assistance,
assistance under the Food Stamp Act of 1977; and other assistance
programs;
(7) The month/year child care assistance to the family started;
(8) The type(s) of child care in which the child was enrolled (such
as family child care, in-home care, or center-based child care);
(9) Whether the child care provider involved was a relative;
(10) The total monthly child care copayment by the family;
(11) The total expected dollar amount per month to be received by
the provider for each child;
(12) The total hours per month of such care;
(13) Social Security Number of the head of the family unit receiving
child care assistance;
(14) Reasons for receiving care; and
(15) Any additional information that the Secretary shall require.
(b) At a minimum, a State or territorial Lead Agency's annual
aggregate report to the Secretary, as required in Sec. 98.70(b), shall
include the following information on services provided through all CCDF
grant funds, including Federal Discretionary (which includes any funds
transferred from the TANF Block Grant), Mandatory, and Matching Funds;
and State Matching and MOE Funds:
(1) The number of child care providers that received funding under
CCDF as separately identified based on the types of providers listed in
section 658P(5) of the amended Child Care and Development Block Grant
Act;
(2) The number of children served by payments through certificates
or vouchers, contracts or grants, and cash under public benefit
programs, listed by the primary type of child care services provided
during the last month of the report period (or the last month of service
for those children leaving the program before the end of the report
period);
(3) The manner in which consumer education information was provided
to parents and the number of parents to whom such information was
provided;
(4) The total number (without duplication) of children and families
served under CCDF; and
(5) Any additional information that the Secretary shall require.
(c) At a minimum, a Tribal Lead Agency's annual report to the
Secretary, as required in Sec. 98.70(c), shall include the following
information on services provided through all CCDF tribal grant awards:
(1) Unduplicated number of families and children receiving services;
(2) Children served by age;
(3) Children served by reason for care;
[[Page 571]]
(4) Children served by payment method (certificate/voucher or
contract/grants);
(5) Average number of hours of care provided per week;
(6) Average hourly amount paid for care;
(7) Children served by level of family income; and
(8) Children served by type of child care providers.
Subpart I_Indian Tribes
Sec. 98.80 General procedures and requirements.
An Indian Tribe or tribal organization (as described in Subpart G of
these regulations) may be awarded grants to plan and carry out programs
for the purpose of increasing the availability, affordability, and
quality of child care and childhood development programs subject to the
following conditions:
(a) An Indian Tribe applying for or receiving CCDF funds shall be
subject to all the requirements under this part, unless otherwise
indicated.
(b) An Indian Tribe applying for or receiving CCDF funds shall:
(1) Have at least 50 children under 13 years of age (or such similar
age, as determined by the Secretary from the best available data) in
order to be eligible to operate a CCDF program. This limitation does not
preclude an Indian Tribe with fewer than 50 children under 13 years of
age from participating in a consortium that receives CCDF funds; and
(2) Demonstrate its current service delivery capability, including
skills, personnel, resources, community support, and other necessary
components to satisfactorily carry out the proposed program.
(c) A consortium representing more than one Indian Tribe may be
eligible to receive CCDF funds on behalf of a particular Tribe if:
(1) The consortium adequately demonstrates that each participating
Tribe authorizes the consortium to receive CCDF funds on behalf of each
Tribe or tribal organization in the consortium; and
(2) The consortium consists of Tribes that each meet the eligibility
requirements for the CCDF program as defined in this part, or that would
otherwise meet the eligibility requirements if the Tribe or tribal
organization had at least 50 children under 13 years of age; and
(3) All the participating consortium members are in geographic
proximity to one another (including operation in a multi-State area) or
have an existing consortium arrangement; and
(4) The consortium demonstrates that it has the managerial,
technical and administrative staff with the ability to administer
government funds, manage a CCDF program and comply with the provisions
of the Act and of this part.
(d) The awarding of a grant under this section shall not affect the
eligibility of any Indian child to receive CCDF services provided by the
State or States in which the Indian Tribe is located.
(e) For purposes of the CCDF, the determination of the number of
children in the Tribe, pursuant to paragraph (b)(1) of this section,
shall include Indian children living on or near reservations, with the
exception of Tribes in Alaska, California and Oklahoma.
(f) In determining eligibility for services pursuant to Sec.
98.20(a)(2), a tribal program may use either:
(1) 85 percent of the State median income for a family of the same
size; or
(2) 85 percent of the median income for a family of the same size
residing in the area served by the Tribal Lead Agency.
Sec. 98.81 Application and Plan procedures.
(a) In order to receive CCDF funds, a Tribal Lead Agency shall apply
for funds pursuant to Sec. 98.13, except that the requirement at Sec.
98.13(b)(2) does not apply.
(b) A Tribal Lead Agency shall submit a CCDF Plan, as described at
Sec. 98.16, with the following additions and exceptions:
(1) The Plan shall include the basis for determining family
eligibility pursuant to Sec. 98.80(f).
(2) For purposes of determining eligibility, the following terms
shall also be defined:
(i) Indian child; and
[[Page 572]]
(ii) Indian reservation or tribal service area.
(3) The Tribal Lead Agency shall also assure that:
(i) The applicant shall coordinate, to the maximum extent feasible,
with the Lead Agency in the State in which the applicant shall carry out
CCDF programs or activities, pursuant to Sec. 98.82; and
(ii) In the case of an applicant located in a State other than
Alaska, California, or Oklahoma, CCDF programs and activities shall be
carried out on an Indian reservation for the benefit of Indian children,
pursuant to Sec. 98.83(b).
(4) The Plan shall include any information, as prescribed by the
Secretary, necessary for determining the number of children in
accordance with Sec. Sec. 98.61(c), 98.62(c), and 98.80(b)(1).
(5) Plans for those Tribes specified at Sec. 98.83(f) (i.e., Tribes
with small grants) are not subject to the requirements in Sec.
98.16(g)(2) or Sec. 98.16(k) unless the Tribe chooses to include such
services, and, therefore, the associated requirements, in its program.
(6) The Plan is not subject to requirements in Sec. 98.16(f)(8) or
Sec. 98.16(g)(4).
(7) In its initial Plan, an Indian Tribe shall describe its current
service delivery capability pursuant to Sec. 98.80(b)(2).
(8) A consortium shall also provide the following:
(i) A list of participating or constituent members, including
demonstrations from these members pursuant to Sec. 98.80(c)(1);
(ii) A description of how the consortium is coordinating services on
behalf of its members, pursuant to Sec. 98.83(c)(1); and
(iii) As part of its initial Plan, the additional information
required at Sec. 98.80(c)(4).
(c) When initially applying under paragraph (a) of this section, a
Tribal Lead Agency shall include a Plan that meets the provisions of
this part and shall be for a two-year period, pursuant to Sec.
98.17(a).
Sec. 98.82 Coordination.
Tribal applicants shall coordinate as required by Sec. Sec. 98.12
and 98.14 and:
(a) To the maximum extent feasible, with the Lead Agency in the
State or States in which the applicant will carry out the CCDF program;
and
(b) With other Federal, State, local, and tribal child care and
childhood development programs.
Sec. 98.83 Requirements for tribal programs.
(a) The grantee shall designate an agency, department, or unit to
act as the Tribal Lead Agency to administer the CCDF program.
(b) With the exception of Alaska, California, and Oklahoma, programs
and activities shall be carried out on an Indian reservation for the
benefit of Indian children.
(c) In the case of a tribal grantee that is a consortium:
(1) A brief description of the direct child care services funded by
CCDF for each of their participating Tribes shall be provided by the
consortium in their two-year CCDF Plan; and
(2) Variations in CCDF programs or requirements and in child care
licensing, regulatory and health and safety requirements shall be
specified in written agreements between the consortium and the Tribe.
(3) If a Tribe elects to participate in a consortium arrangement to
receive one part of the CCDF (e.g., Discretionary Funds), it may not
join another consortium or apply as a direct grantee to receive the
other part of the CCDF (e.g. Tribal Mandatory Funds).
(4) If a Tribe relinquishes its membership in a consortium at any
time during the fiscal year, CCDF funds awarded on behalf of the member
Tribe will remain with the tribal consortium to provide direct child
care services to other consortium members for that fiscal year.
(d) Tribal Lead Agencies shall not be subject to the requirements at
Sec. Sec. 98.41(a)(1)(i), 98.44(a), 98.50(e), 98.52(a), 98.53 and
98.63.
(e) The base amount of any tribal grant is not subject to the
administrative cost limitation at paragraph (g) of this section or the
quality expenditure requirement at Sec. 98.51(a). The base amount may
be expended for any costs consistent with the purposes and requirements
of the CCDF.
(f) Tribal Lead Agencies whose total CCDF allotment pursuant to
Sec. Sec. 98.61(c)
[[Page 573]]
and 98.62(b) is less than an amount established by the Secretary shall
not be subject to the following requirements:
(1) The assurance at Sec. 98.15(a)(2);
(2) The requirement for certificates at Sec. 98.30(a) and (d); and
(3) The requirements for quality expenditures at Sec. 98.51(a).
(g) Not more than 15 percent of the aggregate CCDF funds expended by
the Tribal Lead Agency from each fiscal year's (including amounts used
for construction and renovation in accordance with Sec. 98.84, but not
including the base amount provided under Sec. 98.83(e)) shall be
expended for administrative activities. Amounts used for construction
and major renovation in accordance with Sec. 98.84 are not considered
administrative costs.
(h)(1) CCDF funds are available for costs incurred by the Tribal
Lead Agency only after the funds are made available by Congress for
Federal obligation unless costs are incurred for planning activities
related to the submission of an initial CCDF Plan.
(2) Federal obligation of funds for planning costs, pursuant to
paragraph (h)(1) of this section is subject to the actual availability
of the appropriation.
Sec. 98.84 Construction and renovation of child care facilities.
(a) Upon requesting and receiving approval from the Secretary,
Tribal Lead Agencies may use amounts provided under Sec. Sec. 98.61(c)
and 98.62(b) to make payments for construction or major renovation of
child care facilities (including paying the cost of amortizing the
principal and paying interest on loans).
(b) To be approved by the Secretary, a request shall be made in
accordance with uniform procedures established by program instruction
and, in addition, shall demonstrate that:
(1) Adequate facilities are not otherwise available to enable the
Tribal Lead Agency to carry out child care programs;
(2) The lack of such facilities will inhibit the operation of child
care programs in the future; and
(3) The use of funds for construction or major renovation will not
result in a decrease in the level of child care services provided by the
Tribal Lead Agency as compared to the level of services provided by the
Tribal Lead Agency in the preceding fiscal year.
(c)(1) Tribal Lead Agency may use CCDF funds for reasonable and
necessary planning costs associated with assessing the need for
construction or renovation or for preparing a request, in accordance
with the uniform procedures established by program instruction, to spend
CCDF funds on construction or major renovation.
(2) A Tribal Lead Agency may only use CCDF funds to pay for the
costs of an architect, engineer, or other consultant for a project that
is subsequently approved by the Secretary. If the project later fails to
gain the Secretary's approval, the Tribal Lead Agency must pay for the
architectural, engineering or consultant costs using non-CCDF funds.
(d) Tribal Lead Agencies that receive approval from the Secretary to
use CCDF funds for construction or major renovation shall comply with
the following:
(1) Federal share requirements and use of property requirements at
45 CFR 92.31;
(2) Transfer and disposition of property requirements at 45 CFR
92.31(c);
(3) Title requirements at 45 CFR 92.31(a);
(4) Cost principles and allowable cost requirements at 45 CFR 92.22;
(5) Program income requirements at 45 CFR 92.25;
(6) Procurement procedures at 45 CFR 92.36; and;
(7) Any additional requirements established by program instruction,
including requirements concerning:
(i) The recording of a Notice of Federal Interest in the property;
(ii) Rights and responsibilities in the event of a grantee's default
on a mortgage;
(iii) Insurance and maintenance;
(iv) Submission of plans, specifications, inspection reports, and
other legal documents; and
(v) Modular units.
(e) In lieu of obligation and liquidation requirements at Sec.
98.60(e), Tribal Lead Agencies shall liquidate CCDF funds used for
construction or major
[[Page 574]]
renovation by the end of the second fiscal year following the fiscal
year for which the grant is awarded.
(f) Tribal Lead Agencies may expend funds, without requesting
approval pursuant to paragraph (a) of this section, for minor
renovation.
(g) A new tribal grantee (i.e., one that did not receive CCDF funds
the preceding fiscal year) may spend no more than an amount equivalent
to its Tribal Mandatory allocation on construction and renovation. A new
tribal grantee must spend an amount equivalent to its Discretionary
allocation on activities other than construction or renovation (i.e.,
direct services, quality activities, or administrative costs).
(h) A construction or renovation project that requires and receives
approval by the Secretary must include as part of the construction and
renovation costs:
(1) planning costs as allowed at Sec. 98.84(c);
(2) labor, materials and services necessary for the functioning of
the facility; and
(3) initial equipment for the facility. Equipment means items which
are tangible, nonexpendable personal property having a useful life of
more than five years.
Subpart J_Monitoring, Non-compliance and Complaints
Sec. 98.90 Monitoring.
(a) The Secretary will monitor programs funded under the CCDF for
compliance with:
(1) The Act;
(2) The provisions of this part; and
(3) The provisions and requirements set forth in the CCDF Plan
approved under Sec. 98.18;
(b) If a review or investigation reveals evidence that the Lead
Agency, or an entity providing services under contract or agreement with
the Lead Agency, has failed to substantially comply with the Plan or
with one or more provisions of the Act or implementing regulations, the
Secretary will issue a preliminary notice to the Lead Agency of possible
non-compliance. The Secretary shall consider comments received from the
Lead Agency within 60 days (or such longer period as may be agreed upon
between the Lead Agency and the Secretary).
(c) Pursuant to an investigation conducted under paragraph (a) of
this section, a Lead Agency shall make appropriate books, documents,
papers, manuals, instructions, and records available to the Secretary,
or any duly authorized representatives, for examination or copying on or
off the premises of the appropriate entity, including subgrantees and
contractors, upon reasonable request.
(d)(1) Lead Agencies and subgrantees shall retain all CCDF records,
as specified in paragraph (c) of this section, and any other records of
Lead Agencies and subgrantees that are needed to substantiate compliance
with CCDF requirements, for the period of time specified in paragraph
(e) of this section.
(2) Lead Agencies and subgrantees shall provide through an
appropriate provision in their contracts that their contractors will
retain and permit access to any books, documents, papers, and records of
the contractor that are directly pertinent to that specific contract.
(e) Length of retention period. (1) Except as provided in paragraph
(e)(2) of this section, records specified in paragraph (c) of this
section shall be retained for three years from the day the Lead Agency
or subgrantee submits the Financial Reports required by the Secretary,
pursuant to Sec. 98.65(g), for the program period.
(2) If any litigation, claim, negotiation, audit, disallowance
action, or other action involving the records has been started before
the expiration of the three-year retention period, the records shall be
retained until completion of the action and resolution of all issues
that arise from it, or until the end of the regular three-year period,
whichever is later.
Sec. 98.91 Non-compliance.
(a) If after reasonable notice to a Lead Agency, pursuant to Sec.
98.90 or Sec. 98.93, a final determination is made that:
(1) There has been a failure by the Lead Agency, or by an entity
providing services under contract or agreement
[[Page 575]]
with the Lead Agency, to comply substantially with any provision or
requirement set forth in the Plan approved under Sec. 98.16; or
(2) If in the operation of any program for which funding is provided
under the CCDF, there is a failure by the Lead Agency, or by an entity
providing services under contract or agreement with the Lead Agency, to
comply substantially with any provision of the Act or this part, the
Secretary will provide to the Lead Agency a written notice of a finding
of non-compliance. This notice will be issued within 60 days of the
preliminary notification in Sec. 98.90(b), or within 60 days of the
receipt of additional comments from the Lead Agency, whichever is later,
and will provide the opportunity for a hearing, pursuant to part 99.
(b) The notice in paragraph (a) of this section will include all
relevant findings, as well as any penalties or sanctions to be applied,
pursuant to Sec. 98.92.
(c) Issues subject to review at the hearing include the finding of
non-compliance, as well as any penalties or sanctions to be imposed
pursuant to Sec. 98.92.
Sec. 98.92 Penalties and sanctions.
(a) Upon a final determination that the Lead Agency has failed to
substantially comply with the Act, the implementing regulations, or the
Plan, one of the following penalties will be applied:
(1) The Secretary will disallow the improperly expended funds;
(2) An amount equal to or less than the improperly expended funds
will be deducted from the administrative portion of the State allotment
for the following fiscal year; or
(3) A combination of the above options will be applied.
(b) In addition to imposing the penalties described in paragraph (a)
of this section, the Secretary may impose other appropriate sanctions,
including:
(1) Disqualification of the Lead Agency from the receipt of further
funding under the CCDF; or
(2)(i) A penalty of not more than four percent of the funds allotted
under Sec. 98.61 (i.e., the Discretionary Funds) for a Fiscal Year
shall be withheld if the Secretary determines that the Lead Agency has
failed to implement a provision of the Act, these regulations, or the
Plan required under Sec. 98.16;
(ii) This penalty will be withheld no earlier than the second full
quarter following the quarter in which the Lead Agency was notified of
the proposed penalty;
(iii) This penalty will not be applied if the Lead Agency corrects
the failure or violation before the penalty is to be applied or if it
submits a plan for corrective action that is acceptable to the
Secretary; or
(iv) The Lead Agency may show cause to the Secretary why the amount
of the penalty, if applied, should be reduced.
(c) If a Lead Agency is subject to additional sanctions as provided
under paragraph (b) of this section, specific identification of any
additional sanctions being imposed will be provided in the notice
provided pursuant to Sec. 98.91.
(d) Nothing in this section, or in Sec. 98.90 or Sec. 98.91, will
preclude the Lead Agency and the Department from informally resolving a
possible compliance issue without following all of the steps described
in Sec. Sec. 98.90, 98.91 and 98.92. Penalties and/or sanctions, as
described in paragraphs (a) and (b) of this section, may nevertheless be
applied, even though the issue is resolved informally.
(e) It is at the Secretary's sole discretion to choose the penalty
to be imposed under paragraphs (a) and (b) of this section.
Sec. 98.93 Complaints.
(a) This section applies to any complaint (other than a complaint
alleging violation of the nondiscrimination provisions) that a Lead
Agency has failed to use its allotment in accordance with the terms of
the Act, the implementing regulations, or the Plan. The Secretary is not
required to consider a complaint unless it is submitted as required by
this section. Complaints with respect to discrimination should be
referred to the Office of Civil Rights of the Department.
(b) Complaints with respect to the CCDF shall be submitted in
writing to the Assistant Secretary for Children and Families, 370
L'Enfant Promenade,
[[Page 576]]
SW., Washington, DC 20447. The complaint shall identify the provision of
the Plan, the Act, or this part that was allegedly violated, specify the
basis for alleging the violation(s), and include all relevant
information known to the person submitting it.
(c) The Department shall promptly furnish a copy of any complaint to
the affected Lead Agency. Any comments received from the Lead Agency
within 60 days (or such longer period as may be agreed upon between the
Lead Agency and Department) shall be considered by the Department in
responding to the complaint. The Department will conduct an
investigation of complaints, where appropriate.
(d) The Department will provide a written response to complaints
within 180 days after receipt. If a final resolution cannot be provided
at that time, the response will state the reasons why additional time is
necessary.
(e) Complaints that are not satisfactorily resolved through
communication with the Lead Agency will be pursued through the process
described in Sec. 98.90.
Subpart K_Error Rate Reporting
Source: 72 FR 50898, Sept. 5, 2007, unless otherwise noted.
Sec. 98.100 Error Rate Report.
(a) Applicability--The requirements of this subpart apply to the
fifty States, the District of Columbia and Puerto Rico.
(b) Generally--States, the District of Columbia and Puerto Rico
shall calculate, prepare and submit to the Department, a report of
errors occurring in the administration of CCDF grant funds, at times and
in a manner specified by the Secretary in instructions. States, the
District of Columbia and Puerto Rico must use this report to calculate
their error rates, which is defined as the percentage of cases with an
error (expressed as the total number of cases with an error compared to
the total number of cases); the percentage of cases with an improper
payment (expressed as the total number of cases with an improper payment
compared to the total number of cases); the percentage of improper
payments (expressed as the total amount of improper payments in the
sample compared to the total dollar amount of payments made in the
sample); the average amount of improper payment; and the estimated
annual amount of improper payments. The report also will provide
strategies for reducing their error rates and allow States, the District
of Columbia and Puerto Rico to set target error rates for the next
cycle.
(c) Error Defined--For purposes of this subpart, an ``error'' shall
mean any violation or misapplication of statutory, contractual,
administrative, or other legally applicable requirements governing the
administration of CCDF grant funds, regardless of whether such violation
results in an improper payment.
(d) Improper Payment Defined--For purposes of this subpart,
``improper payment.''
(1) Means any payment of CCDF grant funds that should not have been
made or that was made in an incorrect amount (including overpayments and
underpayments) under statutory, contractual, administrative, or other
legally applicable requirements governing the administration of CCDF
grant funds; and
(2) Includes any payment of CCDF grant funds to an ineligible
recipient, any payment of CCDF grant funds for an ineligible service,
any duplicate payment of CCDF grant funds and payments of CCDF grant
funds for services not received.
(e) Costs of Preparing the Error Rate Report--Provided the error
rate calculations and reports focus on client eligibility, expenses
incurred by the States, the District of Columbia and Puerto Rico in
complying with this rule, including preparation of required reports,
shall be considered a cost of direct service related to eligibility
determination and therefore is not subject to the five percent
limitation on CCDF administrative costs pursuant to Section 98.52(a).
Sec. 98.101 Case Review Methodology.
(a) Case Reviews and Sampling--In preparing the error reports
required by this subpart, States, the District of Columbia and Puerto
Rico shall conduct comprehensive reviews of case records using a
methodology established by the
[[Page 577]]
Secretary. For purposes of the case reviews, States, the District of
Columbia and Puerto Rico shall select a random sample of case records
which is estimated to achieve the calculation of an estimated annual
amount of improper payments with a 90 percent confidence interval of
<plus-minus<ls-thn-eq>5.0 percent.
(b) Methodology and Forms--States, the District of Columbia and
Puerto Rico must prepare and submit forms issued by the Secretary,
following the accompanying instructions setting forth the methodology to
be used in conducting case reviews and calculating the error rates.
(c) Reporting Frequency and Cycle--States, the District of Columbia
and Puerto Rico shall conduct case reviews and submit error rate reports
to the Department according to a staggered three-year cycle established
by the Secretary such that each State, the District of Columbia, and
Puerto Rico will be selected once, and only once, in every three years.
(d) Access to Federal Staff--States, the District of Columbia and
Puerto Rico must provide access to Federal staff to participate and
provide oversight in case reviews and error rate calculations, including
access to forms related to determining error rates.
(e) Record Retention--Records pertinent to the case reviews and
submission of error rate reports shall be retained for a period of five
years from the date of submission of the applicable error rate report
or, if the error rate report was revised, from the date of submission of
the revision. Records must be made available to Federal staff upon
request.
Sec. 98.102 Content of Error Rate Reports.
(a) Baseline Submission Report--At a minimum, States, the District
of Columbia and Puerto Rico shall submit an initial error rate report to
the Department, as required in Sec. 98.100, which includes the
following information on errors and resulting improper payments
occurring in the administration of CCDF grant funds, including Federal
Discretionary Funds (which includes any funds transferred from the TANF
Block Grant), Mandatory and Matching Funds and State Matching and
Maintenance-of-Effort (MOE Funds):
(1) Percentage of cases with an error (regardless of whether such
error resulted in an over or under payment), expressed as the total
number of cases in the sample with an error compared to the total number
of cases in the sample;
(2) Percentage of cases with an improper payment (both over and
under payments), expressed as the total number of cases in the sample
with an improper payment compared to the total number of cases in the
sample;
(3) Percentage of improper payments (both over and under payments),
expressed as the total dollar amount of improper payments in the sample
compared to the total dollar amount of payments made in the sample;
(4) Average amount of improper payments (gross over and under
payments, divided by the total number of cases in the sample that had an
improper payment (both over and under payments));
(5) Estimated annual amount of improper payments (which is a
projection of the results from the sample to the universe of cases
statewide during the 12-month review period) calculated by multiplying
the percentage of improper payments by the total dollar amount of child
care payments that the State, the District of Columbia or Puerto Rico
paid during the 12-month review period
(6) For each category of data listed above, targets for errors and
improper payments in the next reporting cycle;
(7) Summary of methodology used to arrive at estimate, including
fieldwork preparation, sample generation, record review and error rate
computation processes;
(8) Discussion of the causes of improper payments identified and
actions that will be taken to correct those causes in order to reduce
the error rates;
(9) Description of the information systems and other infrastructure
that assist the State, the District of Columbia and Puerto Rico in
identifying and reducing improper payments, or if the State, the
District of Columbia or Puerto Rico does not have these tools, a
description of actions that will be
[[Page 578]]
taken to acquire the necessary information systems and other
infrastructure; and
(10) Such other information as specified by the Secretary.
(b) Standard Report--At a minimum, the State, the District of
Columbia and Puerto Rico shall submit an error rate report to the
Department, as required in Sec. 98.100, made subsequent to the baseline
submission report as set forth in Sec. 98.102(a) which includes the
following information on errors and resulting improper payments
occurring in the administration of CCDF grant funds, including Federal
Discretionary Funds (which includes any funds transferred from the TANF
Block Grant), Mandatory and Matching Funds and State Matching and
Maintenance-of-Effort (MOE Funds):
(1) All the information reported in the baseline submission, as set
forth in Sec. 98.102(a), updated for the current cycle;
(2) For each category of data listed in Sec. 98.102(a)(1) through
(5), States, the District of Columbia and Puerto Rico must include data
and targets from the prior cycle in addition to data from the current
cycle and targets for the next cycle;
(3) Description of whether the State, the District of Columbia or
Puerto Rico met error rate targets set in the prior cycle and, if not,
an explanation of why not;
(4) Discussion of the causes of improper payments identified in the
prior cycle and actions that were taken to correct those causes, in
addition to a discussion on the causes of improper payments identified
in the current cycle and actions that will be taken to correct those
causes in order to reduce the error rates; and
(5) Such other information as specified by the Secretary.
------------------------------------------------------------------
TITLE 45--PUBLIC WELFARE
AND HUMAN SERVICES
PART 99_PROCEDURE FOR HEARINGS FOR THE CHILD CARE
AND DEVELOPMENT FUND
Subpart A_General
Sec.
99.1 Scope of rules.
99.2 Presiding officer.
99.3 Records to be public.
99.4 Suspension of rules.
99.5 Filing and service of papers.
Subpart B_Preliminary Matters_Notice and Parties
99.11 Notice of hearing or opportunity for hearing.
99.12 Time of hearing.
99.13 Place.
99.14 Issues at hearing.
99.15 Request to participate in hearing.
Subpart C_Hearing Procedures
99.21 Authority of presiding officer.
99.22 Rights of parties.
99.23 Discovery.
99.24 Evidentiary purpose.
99.25 Evidence.
99.26 Unsponsored written material.
99.27 Official transcript.
99.28 Record for decision.
Subpart D_Posthearing Procedures, Decisions
99.31 Posthearing briefs.
99.32 Decisions following hearing.
99.33 Effective date of Assistant Secretary's decision.
Authority: 42 U.S.C. 618, 9858.
Source: 57 FR 34428, Aug. 4, 1992, unless otherwise noted.
Editorial Note: Nomenclature changes to part 99 appear at 63 FR
39998, July 24, 1998.
Subpart A_General
Sec. 99.1 Scope of rules.
(a) The rules of procedure in this section govern the practice for
hearings afforded by the Department to Lead Agencies pursuant to
Sec. Sec. 98.18(c) or 98.91, and the practice relating to the decisions
of such hearings.
(b) Nothing in this part is intended to preclude or limit
negotiations between the Department and the Lead Agency, whether before,
during, or after the hearing, to resolve the issues which are, or
otherwise would be, considered at the hearing. Such negotiations and
resolution of issues are not part of the hearing and are not governed by
the rules in this part, except as expressly provided herein.
Sec. 99.2 Presiding officer.
(a) (1) The presiding officer at a hearing shall be the Assistant
Secretary or the Assistant Secretary's designee.
[[Page 579]]
(2) The designation of the presiding officer shall be in writing. A
copy of the designation shall be served on all parties.
(b) The presiding officer, for all hearings, shall be bound by all
applicable laws and regulations.
Sec. 99.3 Records to be public.
All pleadings, correspondence, exhibits, transcripts of testimony,
exceptions, briefs, decisions, and other documents filed in the docket
in any proceeding may be inspected and copied in the office of the
Assistant Secretary. Inquiries may be made at the Administration for
Children and Families, 370 L'Enfant Promenade SW., Washington, DC 20447.
Sec. 99.4 Suspension of rules.
With notice to all parties, the Assistant Secretary for Children and
Families or the presiding officer, with respect to pending matters, may
modify or waive any rule in this part upon determination that no party
will be unduly prejudiced and the ends of justice will thereby be
served.
Sec. 99.5 Filing and service of papers.
(a) An original and two copies of all papers in the proceedings
shall be filed with the presiding officer. For exhibits and transcripts
of testimony, only the originals need be filed.
(b) All papers in the proceedings shall be served on all parties by
personal delivery or by certified mail. Service on the party's
designated attorney will be deemed service on the party.
Subpart B_Preliminary Matters_Notice and Parties
Sec. 99.11 Notice of hearing or opportunity for hearing.
Proceedings commence when the Assistant Secretary mails a notice of
hearing or opportunity for hearing to the Lead Agency. The notice shall
state the time and place for the hearing, and the issues which will be
considered. A copy of the notice shall be published in the Federal
Register.
Sec. 99.12 Time of hearing.
The hearing shall be scheduled not less than 30 days nor more than
90 days after the date of the notice of the hearing furnished to the
applicant or Lead Agency, unless otherwise agreed to, in writing, by the
parties.
Sec. 99.13 Place.
The hearing shall be held in the city in which the regional office
of the Department responsible for oversight of the Lead Agency is
located or in such other place as the Assistant Secretary determines,
considering both the circumstances of the case and the convenience and
necessity of the parties or their representatives.
Sec. 99.14 Issues at hearing.
(a) The Assistant Secretary may, prior to a hearing under Sec.
98.91 of this part, notify the Lead Agency in writing of additional
issues which will be considered at the hearing. Such notice shall be
published in the Federal Register. If such notice is received by the
Lead Agency less than 20 days before the date of the hearing, a
postponement of the hearing shall be granted at the request of the Lead
Agency or any other party. The hearing shall be held on a date 20 days
after such notice was received, or on such later date as agreed to by
the Assistant Secretary.
(b) If, as a result of negotiations between the Department and the
Lead Agency, the submittal of a Plan amendment, a change in the Lead
Agency program, or other action by the Lead Agency, any issue is
resolved in whole or in part, but new or modified issues are presented,
as specified by the Assistant Secretary, the hearing shall proceed on
such new or modified issues. A notice of such new or modified issues
shall be published in the Federal Register. If such notice is received
by the Lead Agency less than 20 days before the date of the hearing, a
postponement of the hearing shall be granted at the request of the Lead
Agency or any other party. The hearing shall be held on a date 20 days
after such notice was received, or on such later date as agreed to by
the Assistant Secretary.
(c)(1) If, at any time, the Assistant Secretary finds that the Lead
Agency
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has come into compliance with Federal statutes and regulations on any
issue, in whole or in part, the Assistant Secretary shall remove such
issue from the proceedings, in whole or in part, as may be appropriate.
If all issues are removed, the Assistant Secretary shall terminate the
hearing.
(2) Prior to the removal of any issue from the hearing, in whole or
in part, the Assistant Secretary shall provide all parties other than
the Department and the Lead Agency (see Sec. 99.15(b)) with written
notice of the intention, and the reasons for it. Such notice shall
include a copy of the proposed CCDF Plan provision on which the Lead
Agency and Assistant Secretary have settled. The parties shall have 15
days from the receipt of such notice to file their views or any
information on the merits of the proposed Plan provision and the merits
of the Assistant Secretary's reasons for removing the issue from the
hearing.
(d) The issues considered at the hearing shall be limited to those
issues of which the Lead Agency is notified, as provided in paragraph
(a) of this section, and new or modified issues described in paragraph
(b) of this section; they shall not include issues or parts of issues
removed from the proceedings pursuant to paragraph (c) of this section.
Sec. 99.15 Request to participate in hearing.
(a) The Department and the Lead Agency are parties to the hearing
without making a specific request to participate.
(b)(1) Other individuals or groups may be recognized as parties, if
the issues to be considered at the hearing have directly caused them
injury and their interest is immediately within the zone of interests to
be protected by the governing Federal statute and regulations.
(2) Any individual or group wishing to participate as a party shall
file a petition with the presiding officer within 15 days after notice
of the hearing has been published in the Federal Register and shall
serve a copy on each party of record at that time, in accordance with
Sec. 99.5(b). Such petition shall concisely state:
(i) Petitioner's interest in the proceeding;
(ii) Who will appear for petitioner;
(iii) The issues on which petitioner wishes to participate; and
(iv) Whether petitioner intends to present witnesses.
(3) Any party may, within 5 days of receipt of such petition, file
comments on it.
(4) The presiding officer shall promptly determine whether each
petitioner has the requisite interest in the proceedings and shall
permit or deny participation accordingly. Where petitions to participate
as parties are made by individuals or groups with common interests, at
the presiding officer's discretion, the presiding officer may request
that all such petitioners designate a single representative or may
recognize one or more of such petitioners to represent all such
petitioners. The presiding officer shall give each petitioner written
notice of the decision on the petition, and if the petition is denied,
the presiding officer shall briefly state the grounds for denial. If the
petition is denied, the presiding officer may recognize the petitioner
as an amicus curiae.
(c)(1) Any interested person or organization wishing to participate
as an amicus curiae shall file a petition with the presiding officer
before the commencement of the hearing. Such petition shall concisely
state:
(i) The petitioner's interest in the hearing;
(ii) Who will represent the petitioner; and
(iii) The issues on which petitioner intends to present argument.
An amicus curiae is not a party but may participate as provided in
this paragraph.
(2) The presiding officer may grant the petition upon finding that
the petitioner has a legitimate interest in the proceedings, that such
participation will not unduly delay the outcome, and it may contribute
materially to the proper disposition of the issues.
(3) An amicus curiae may present a brief oral statement at the
hearing, at the point in the proceedings specified by the presiding
officer. The amicus curiae may submit a written statement of position to
the presiding officer
[[Page 581]]
prior to the beginning of a hearing and shall serve a copy on each
party. The amicus curiae may also submit a brief or written statement at
such time as the parties submit briefs and shall serve a copy on each
party.
Subpart C_Hearing Procedures
Sec. 99.21 Authority of presiding officer.
(a) The presiding officer shall have the duty to conduct a fair
hearing, to avoid delay, maintain order, and make a record of the
proceedings. The presiding officer shall have all powers necessary to
accomplish these ends, including, but not limited to, the power to:
(1) Change the date, time, and place of the hearing, upon due notice
to the parties. This authority includes the power to continue the
hearing in whole or in part;
(2) Hold conferences to settle or simplify the issues in a
proceeding, or to consider other matters that may aid in the expeditious
disposition of the proceeding;
(3) Regulate participation of parties and amici curiae and require
parties and amici curiae to state their position with respect to the
various issues in the proceeding;
(4) Administer oaths and affirmations;
(5) Rule on all pending motions and other procedural items including
issuance of protective orders or other relief to a party against whom
discovery is sought;
(6) Regulate the course of the hearing and conduct of counsel
therein;
(7) Examine witnesses;
(8) Receive, rule on, exclude or limit evidence or discovery;
(9) Fix the time for filing motions, petitions, briefs, or other
items in matters pending;
(10) If the presiding officer is the Assistant Secretary, make a
final decision;
(11) If the presiding officer is not the Assistant Secretary,
certify the entire record including the recommended findings and
proposed decision to the Assistant Secretary; and
(12) Take any action authorized by the rules in this part or in
conformance with the provisions of 5 U.S.C. 551 through 559.
(b) The presiding officer does not have authority to compel by
subpoena the production of witnesses, papers, or other evidence.
Sec. 99.22 Rights of parties.
All parties may:
(a) Appear by counsel or other authorized representative, in all
hearing proceedings;
(b) Participate in any prehearing conference held by the presiding
officer;
(c) Agree to stipulations as to facts which will be made a part of
the record;
(d) Make opening statements at the hearing;
(e) Present relevant evidence on the issues at the hearing;
(f) Present witnesses who then must be available for cross-
examination by all other parties;
(g) Present oral arguments at the hearing; and
(h) Submit written briefs, proposed findings of fact, and proposed
conclusions of law, after the hearing.
Sec. 99.23 Discovery.
The Department, the Lead Agency, and any individuals or groups
recognized as parties shall have the right to conduct discovery
(including depositions) against opposing parties. Rules 26-37 of the
Federal Rules of Civil Procedure shall apply to such proceedings; there
will be no fixed rule on priority of discovery. Upon written motion, the
presiding officer shall promptly rule upon any objection to such
discovery action initiated pursuant to this section. The presiding
officer shall also have the power to grant a protective order or relief
to any party against whom discovery is sought and to restrict or control
discovery so as to prevent undue delay in the conduct of the hearing.
Upon the failure of any party to make discovery, the presiding officer
may, at the presiding officer's discretion, issue any order and impose
any sanction (other than contempt orders) authorized by rule 37 of the
Federal Rules of Civil Procedure.
[[Page 582]]
Sec. 99.24 Evidentiary purpose.
The purpose of the hearing is to receive factual evidence and expert
opinion testimony related to the issues in the proceeding. Argument will
not be received in evidence; rather, it should be presented in
statements, memoranda, or briefs, as determined by the presiding
officer. Brief opening statements, which shall be limited to statement
of the party's position and what the party intends to prove, may be made
at hearings.
Sec. 99.25 Evidence.
(a) Testimony. Testimony shall be given orally under oath or
affirmation by witnesses at the hearing. Witnesses shall be available at
the hearing for cross-examination by all parties.
(b) Stipulations and exhibits. Two or more parties may agree to
stipulations of fact. Such stipulations, or any exhibit proposed by any
party, shall be exchanged at the prehearing conference or otherwise
prior to the hearing if the presiding officer so requires.
(c) Rules of evidence. Technical rules of evidence shall not apply
to hearings conducted pursuant to this part, but rules or principles
designed to assure production of the most credible evidence available
and to subject testimony to test by cross-examination shall be applied
where reasonably necessary by the presiding officer. A witness may be
cross-examined on any matter material to the proceeding without regard
to the scope of direct examination. The presiding officer may exclude
irrelevant, immaterial, or unduly repetitious evidence. All documents
and other evidence offered or taken for the record shall be open to
examination by the parties, and opportunity shall be given to refute
facts and arguments advanced on either side of the issues.
Sec. 99.26 Unsponsored written material.
Letters expressing views or urging action and other unsponsored
written material regarding matters at issue in a hearing will be placed
in the correspondence section of the docket of the proceeding. These
data are not deemed part of the evidence or record in the hearing.
Sec. 99.27 Official transcript.
The Department will designate the official reporter for all
hearings. The official transcripts of testimony taken, together with any
stipulations, exhibits, briefs, or memoranda of law filed therewith
shall be filed with the Department. Transcripts of testimony in hearings
may be obtained from the official reporter by the parties and the public
at rates not to exceed the maximum rates fixed by the contract between
the Department and the reporter. Upon notice to all parties, the
presiding officer may authorize corrections to the transcript which
involve matters of substance.
Sec. 99.28 Record for decision.
The transcript of testimony, exhibits, and all papers and requests
filed in the proceedings, except the correspondence section of the
docket, including rulings and any recommended or initial decision, shall
constitute the exclusive record for decision.
Subpart D_Posthearing Procedures, Decisions
Sec. 99.31 Posthearing briefs.
The presiding officer shall fix the time for filing posthearing
briefs, which may contain proposed findings of fact and conclusions of
law. The presiding officer shall also fix the time for reply briefs, if
permitted.
Sec. 99.32 Decisions following hearing.
(a) If the Assistant Secretary is the presiding officer, the
Assistant Secretary shall issue the decision within 60 days after the
time for submission of posthearing briefs has expired.
(b)(1) If the presiding officer is not the Assistant Secretary, the
presiding officer shall certify the entire record, including the
recommended findings and proposed decision, to the Assistant Secretary
within 60 days after the time for submission of posthearing briefs has
expired. The Assistant Secretary shall serve a copy of the recommended
findings and proposed decision upon all parties, and amici, if any.
(2) Any party may, within 20 days of receipt of the recommended
findings and proposed decision, file exceptions
[[Page 583]]
and a supporting brief or statement with the Assistant Secretary.
(3) The Assistant Secretary shall thereupon review the recommended
decision and, within 45 days after the receipt of the exceptions to the
recommended findings and proposed decision, issue the decision.
(c) The decision of the Assistant Secretary under this section shall
be the final decision of the Secretary and shall constitute ``final
agency action'' within the meaning of 5 U.S.C. 704. The Assistant
Secretary's decision shall be promptly served on all parties, and amici,
if any.
Sec. 99.33 Effective date of Assistant Secretary's decision.
If, in the case of a hearing pursuant to Sec. 98.18(b) of this
chapter, the Assistant Secretary concludes that a Plan amendment does
not comply with the Federal statutes and regulations, the decision that
further payments will not be made to the Lead Agency, or payments will
be limited to categories under other parts of the CCDF Plan not
affected, shall specify the effective date for the withholding of
Federal funds.