Child Care and Development Fund
With a budget of $4.8 billion in FY 2004, CCDF is the largest federal funding source for child care.5 It is administered at the federal level by the U.S. Department of Health and Human Services, which allocates funding to states by formula. In general, states are given latitude to design programs that provide child care subsidies for low-income children under the age of 13 and enhance the quality of child care for all children.
The vast majority of CCDF dollars are used by states to provide eligible low-income families with child care subsidies in the form of vouchers or certificates. Eligible families can use these vouchers or certificates to obtain child care for children up to age 13 in a variety of settings, including centers, group homes, family homes, or in the child's own home. Nationally, 36 percent of children who receive CCDF subsidies are school-age children (ages 6 through 12) and an additional 10 percent are age 5 (and potentially in kindergarten).6
Under federal law, CCDF subsidies can be provided to families that are working or participating in education or training programs and that have incomes less than 85 percent of the state’s median income or a lower income threshold set by the state. States can prioritize services for some families, such as those transitioning from TANF cash assistance. Families that receive subsidies are required to contribute a portion of the cost of care, or co-payment. States must create a sliding fee scale that determines a family’s co-payment based on income and family size. Providers receive reimbursement from the state according to payment rates established by the state. To be eligible to serve subsidized children, providers must comply with state health and safety requirements. Typically, center-based providers must become licensed, though in many states some providers can receive subsidies without becoming licensed. For example, a few states exempt school-based programs from licensing requirements.
Some states also use CCDF funds to provide contracts or grants to eligible providers in order to make available a certain number of child care slots, often to help meet a specific need in the state, such as special-needs care or care in a particular geographic area. Also, federal law requires states to spend a minimum of 4 percent of CCDF funds, as well as additional earmarks, on activities designed to increase the quality and availability of care; these can include comprehensive consumer education, enhancement of parental choice, resource and referral counseling, grants and loans to providers, monitoring and enforcement of requirements, training and technical assistance, and improved compensation of child care staff. Many states dedicate a portion of their quality dollars to out-of-school time activities.
In addition, state lead agencies can spend up to 5 percent of each fiscal year’s expenditures on administrative activities, including agency staff salaries, travel costs, and regulatory and audit services. At the federal level, the Secretary of Health and Human Services may withhold one quarter of 1 percent of annual CCDF funds for the provision of technical assistance.
5 The Personal Responsibility and Work Opportunity Reconciliation Act of 1996 (P.L. 104-93) consolidated
several federal child care funding streams into the Child Care and Development Fund, which includes
discretionary funding authorized by the Child Care and Development Block Grant (CCDBG) Act and
mandatory funding authorized by P.L. 104-93.
6 U.S. Department of Health and Human Services. Child Care & Development Fund FFY 2001 Tables and
Charts. Administration for Children and Families, Child Care Bureau.
21st Century Community Learning Centers
The 21st Century Community Learning Centers program is the only federal program solely dedicated to funding afterschool services. The program began as a discretionary grant program through which the U.S. Department of Education held national competitions open to schools and local education agencies. The No Child Left Behind Act of 2001 transitioned 21CCLC to a formula grant program.7 Each state now manages its own grant competition, and both public and private organizations are eligible to compete for funding. States must target 21CCLC grants to applicants that will serve students from poor and low-performing schools. Successful 21CCLC grantees receive a minimum of $50,000 annually for three to five years.
The purpose of the 21CCLC program is to support community learning centers that provide students with a broad array of academic enrichment services, including tutoring, mentoring, homework help, and community service as well as music, arts, sports, and cultural activities. Families of students served by community learning centers may be offered literacy and related educational development opportunities. Services are targeted to poor and low-performing schools and can be provided before and after the school day or during periods when school is not in session, such as weekends, holidays, and summers.
State education agencies may use up to 5 percent of their 21CCLC allocations for state administrative and related tasks. Of a state’s administrative funds, 40 percent can be used for the costs of carrying out a peer review process for grant applications and to supervise the awarding of grants. Up to 60 percent of a state’s administrative allocation can be used to monitor and evaluate programs and activities or to provide capacity-building, training, and technical assistance to organizations that are eligible for or recipients of grant awards. States also have some flexibility around transferring and consolidating 21CCLC administrative funds with administrative funds provided by other Elementary and Secondary Education Act programs.
The following table on pages 7 and 8 highlights the similarities and differences between the 21CCLC and CCDF programs.
7 The No Child Left Behind Act of 2001, PL 107-110, reauthorized the Elementary and Secondary Education Act.
Purpose
CCDF:
To assist low-income families, families receiving public assistance, and those transitioning from public assistance to obtain child care so they can work or attend training/education.
21CCLC:
To establish or expand community learning centers that provide students with academic enrichment opportunities along with activities designed to complement students’ regular academic achievement.
Federal Agency
CCDF:
Department of Health and Human Services
21CCLC:
Department of Education
Funding
CCDF:
$4.8 billion in FY 2003 for children under age 13 (CCDF data do not include estimates of the amount of funding that specifically supports school-age children).
21CCLC:
$1 billion in FY 2003 for afterschool programs.
Flow of Funds
CCDF:
Mandatory, discretionary, and matching funds awarded to states by formula.
States subsidize the cost of child care through vouchers or certificates to families, or through contracts with providers.
Providers are reimbursed based on attendance of eligible children.
States set provider reimbursement rates.
21CCLC:
Funds awarded to states by formula.
States conduct grant competitions to award funds to eligible local entities to start up or expand community learning centers.
Eligible entities apply for funds and are evaluated against criteria set by federal and state government.
Grantees are given a minimum grant award of $50,000.
Use of Funds
CCDF:
Parents may use subsidies to select any legally operating child care provider that meets state health and safety requirements.
Certain amounts of funds must be used to invest in activities that improve care quality and accessibility, resource and referral services, or school-age child care activities.
21CCLC:
Funds are used to implement activities and programs to provide opportunities for academic enrichment, including remedial education, arts and music education, entrepreneurial education, tutoring services and mentoring, recreation, drug and violence prevention, counseling, and character education as well as programs that promote parental involvement and family literacy.
Services must be offered during non-school hours or periods when school is not in session.
Eligible Providers
CCDF
Providers must meet basic health and safety requirements set by states.
These requirements must address prevention and control of infectious diseases, including immunizations; building and physical premises safety; and minimum health and safety training.
Center-based providers typically must be licensed by state; some exceptions are made. Public and private organizations that will primarily serve students who attend high poverty or low-performing schools can compete for funds.
21CCLC
Public and private organizations that will primarily serve students who attend high-poverty or low-performing schools can compete for funds.
Grantees must provide academic enrichment activities to help students meet state and local academic achievement standards in core content areas, such as reading, math, and science.
Eligible Recipients of Services
CCDF:
Children eligible for services must:
Be under 13 years of age, or under 19 years of age and physically or mentally incapable of caring for themselves, or under court supervision.
Reside with a parent or parents who are working or attending a job training or education program; or receive, or need to receive, protective services.
States can serve families whose income level does not exceed 85% of the State Median Income (SMI) for a family of the same size. States can set lower eligibility levels.
Families must contribute to the cost of care on a sliding fee basis. States may exempt families below the poverty level.
21CCLC
No individual eligibility requirements for children and families.
Adult family members of students and pre-kindergarten children may also receive services, if offered.
Programs can charge fees but may not prohibit any family from participating due to their financial situation.
Period of Funding
CCDF
Families must periodically recertify eligibility for subsidies; specific requirements vary by state.
21CCLC
Grants are made to centers for a period of three to five years.
Quality/Administration/Technical Assistance Activities
CCDF
States must spend a minimum of 4% of CCDF funds plus additional earmarks on activities designed to improve quality of child care.
State lead agencies can spend up to 5% of CCDF funds on administrative activities.
U.S. Department of Health and Human Services may withhold one-quarter of 1% of CCDF funds for the provision of technical assistance.
21CCLC
State education agencies can spend up to 5% of 21CCLC funds for state administration and activities.
U.S. Department of Education may reserve up to 1% of 21CCLC funds to carry out national activities. These funds are being used to provide resources and assistance for improving program quality.
Evaluation Requirements
CCDF
No specific evaluation requirements.
21CCLC
States must evaluate programs and activities using performance indicators and performance measures.
Grantees must periodically evaluate their programs to assess progress toward achieving the goal of providing high-quality opportunities for academic achievement.
21CCLC
Sources:
U.S. Department of Education. 21st Century Community Learning Centers: Non-Regulatory Guidance. Office of Elementary and Secondary
Education, February 2003.
U.S. Department of Health and Human Services. Child Care and Development Fund; Final Rule. Administration for Children and Families,
July 24, 1998. 45 CFR Parts 98 and 99.
Why Align CCDF and 21CCLC Funds?
Several reasons are motivating states to enable programs to better coordinate and align CCDF and 21CCLC funds. First, 21CCLC dollars are generally intended to be a short-term source of funding for the startup or expansion of afterschool programs. States award grants for a period of three to five years, and while continuation grants can be made, many states will commit these funds only once. Consequently, many programs that receive 21CCLC funds must seek other resources, and CCDF funds offer a potentially sustainable source to replace a portion of a 21CCLC
grant.
In addition, enhancing children’s access to quality programs and facilitating parental choice is a key focus of the CCDF program. Sustaining new afterschool programs, especially those in low-income neighborhoods, is a way to expand opportunities and choices for CCDF families. Coordination between the CCDF and 21CCLC programs also holds the promise of improving program quality, as both programs offer resources for technical assistance and quality improvement.
Finally, in an era of tight budgets, many states are looking for ways to make better use of all resources in the system. A growing number of states are therefore undertaking initiatives to build a coordinated system of programs and supports for students during non-school hours. Determining how various funding sources are currently used and how they can be coordinated into a single system is critical to the drive for greater efficiency. By coordinating and aligning the two largest funding sources, CCDF and 21CCLC, states are finding ways to provide additional supports and services without added costs.
Strategies to Facilitate the Coordination of
CCDF and 21CCLC
States can undertake a number of strategies that will encourage the coordinated use of federal funds to support afterschool programs. These strategies include modifying regulations, working with intermediary organizations, providing joint training and technical assistance, building state-level partnerships, and experimenting with pilot projects. The remainder of this brief outlines three key challenges to the coordination of CCDF and 21CCLC funds and a variety of strategies to facilitate better coordination:
• Philosophical and Cultural Differences
• Program Administration
• Competition for Scarce Resources
Philosophical and Cultural Differences
The current landscape of afterschool care options in the United States reflects the wide variety of program models that have evolved over time. Traditional child care providers, youth development workers, educators, and community organizations have each created their own approaches to addressing the needs of school-age children and youth. While all providers share the goal of keeping young people safe and providing enriching opportunities, questions persist about what the philosophy of an afterschool program should be—especially when it comes to coordinating and aligning funding from multiple sources. How should activities be structured? What kinds of activities are appropriate? Is there too much or not enough focus on academic outcomes? Do children need options for enrichment outside of the school building? Are non-school providers equipped to help students meet learning standards?
The origins of the CCDF and 21CCLC programs reflect this debate. In 1996, Congress consolidated several federal child care subsidy programs into the Child Care and Development Fund. Its motivation was to create an integrated system of child care to support low-income working families and families participating in education or training programs. Overseen by the U.S. Department of Health and Human Services, CCDF is typically administered by the state human service agency. By contrast, the 21st Century Community Learning Center program was created in 1994 to make better use of schools during non-school hours. The program’s mission has since evolved to focus on funding programs that enhance academic enrichment and student achievement during non-school hours. Originally, the program was federally administered and only schools were eligible to compete for funds. In 2001, however, Congress shifted administration to the state level and opened up competition to private as well as public entities.
It is not that the two programs serve exclusive purposes; it is that understanding the differences between them—including philosophical differences—can inform state policymakers as they develop policies that will create a more cohesive system of afterschool care.
Strategies for States to Consider
· Building state-level partnerships. One effective strategy for bridging these philosophical differences is to bring together the various players in the afterschool field—child care providers, educators, state and local policymakers—to form a state-level partnership around a common goal: the importance of afterschool programs. The Charles Stewart Mott Foundation has begun a major initiative to advance and provide technical assistance to statewide afterschool networks. So far, the foundation has supported networks in Arizona, California, Connecticut, Illinois, Iowa, Kansas, Massachusetts, Missouri, Nebraska, New Hampshire, New Mexico, New York, North Carolina, Ohio, Rhode Island, South Carolina, Vermont, and Washington. Likewise, The Afterschool Investments project, funded by the Federal Child Care Bureau (and supporter of the development of this brief), is working to nurture the coordination of state policies and resources for afterschool care. State agencies are also coordinating to create a more cohesive afterschool system in their states. In Missouri, the state Department of Social Services provides $1.4 million of its CCDF quality dollars to the Department of Elementary and Secondary Education for the School-Age Care Grant Program. This program, which also receives state funding, provides grants for before- and afterschool activities in public schools.
· Working through intermediary organizations. Intermediary organizations can play an important role in identifying the needs of afterschool programs and in working to bring together the various players. PlusTime New Hampshire (PlusTime NH) is an afterschool intermediary organization established in 1990 through a grant from the state Department of Health and Human Services using CCDF quality dollars. As an intermediary, PlusTime NH provides technical support, training, information, and funding assistance to programs across the state. To take advantage of the work that PlusTime NH has done to develop the field of afterschool programming in New Hampshire, the state Department of Education recently chose to house the program officer for the new state-level 21CCLC program at PlusTime NH’s offices. The program officer is still a state employee and reports to her supervisors at the Department of Education, but her proximity allows her to take full advantage of the resources, knowledge, and established networks that PlusTime NH has amassed around school-age care. As a result of this decision and their close working relationship, PlusTime NH and the state are using a shared request for proposals to issue 21CCLC and other grants administered by PlusTime NH, thus lessening the burden on programs trying to access funds to support their work.
Funding Tradeoffs: Fee Versus Free
In some cases, differing funding source requirements may create dilemmas for providers. For example, many afterschool providers, including those who receive 21CCLC funds, do not charge program fees. By contrast, CCDF is designed to subsidize payments that families make for child care, and providers that receive CCDF funds are required to charge fees or co-payments to families. Furthermore, the CCDF subsidy payments that a provider receives are typically capped at the level that the provider charges to nonsubsidized, private-paying families. Family co-payments are established by the state according to a sliding fee scale and can be waived at state option for families with incomes at or below the poverty level.
Some afterschool providers believe strongly that their programs should be available to all children free of charge, regardless of family income. They are concerned that even a small fee could discourage some of the neediest children from participating. On the other hand, some providers believe that it is important to charge a fee, even if it is minimal. They argue that families should share in the cost of the services they receive and that clients value services more highly if they are contributing financially. Fees are a critical part of operating revenue for some providers; they indicate that without the fees they would have to close their doors. For these providers, charging a fee is an important sustainability strategy.
In any case, programs must charge a co-payment to access CCDF subsidy dollars.
Programs that do not currently charge fees but wish to access CCDF funding will have to determine what impact charging a fee will have on their program.
Program Administration
Another important distinction between the CCDF and 21CCLC programs is that CCDF subsidy dollars are attached to a particular eligible child who attends an afterschool program, whereas 21CCLC funds are attached to the program itself. This fundamental difference can create difficulties for programs that seek to bring together CCDF and 21CCLC funds.
First, providers must fulfill certain requirements in order to serve CCDF-eligible children (that is, children who receive vouchers or certificates). All CCDF providers must meet state health and safety standards. Whether an afterschool program must also become licensed depends on the state and the type of program; in a few states, for example, school-based programs are exempt from licensing requirements.8 Though provider experiences vary, some providers have found the licensing process to be burdensome. School-based programs have reported difficulties with becoming licensed due to the failure of some—especially older—schools to meet physical plant requirements.
In addition, families must be eligible for and apply to receive a child care subsidy. Subject to the availability of funds, subsidies can be used to purchase care for children under 13 years of age who reside with a parent or parents who are working or attending a job training or education program, or for children who receive or need to receive protective services. Families must meet income eligibility requirements; the federal maximum eligibility is 85 percent of State Median Income (SMI), although states can set lower eligibility levels. Families must contribute to the cost of care on a sliding fee basis, and providers are responsible for collecting these fees. Finally, families must periodically recertify their eligibility for subsidies, according to state rules.
For providers who are used to being funded by grants, which are generally received upfront, adjusting to the subsidy system’s reimbursement process can be burdensome. Programs receive CCDF funds as reimbursement for services provided to children who receive child care subsidies. Participating providers must document the services that have been delivered to each child and apply for reimbursement. The speed with which providers receive reimbursement can vary from a few weeks to a few months. State policies regarding reimbursement for days when a child is absent, for field trip or registration fees, or for part-time care can also affect a provider’s experience with the subsidy system.9
8 For individual states’ licensure requirements, see the National Resource Center for Health and Safety in
Child Care website, http://nrc.uchsc.edu/STATES/states.htm. Additional information about licensing is
found on the National Child Care Information Center’s website at http://www.nccic.org.
9 Adams, Gina, and Kathleen Sylvester. Essential but Often Ignored: Child Care Providers in the Subsidy
System.Washington, DC: Urban Institute, February 2003.
Strategies for States to Consider
· Modifying regulations. Several states have modified regulations to make it easier for afterschool programs, particularly school-based programs, to meet state licensing requirements. For example, Michigan recently adopted new licensing requirements for school-basedafterschool programs: If programs have been licensed for four years and have no substantial violations, they can apply for an automatic exemption from licensing requirements. If they have never been licensed, school-based afterschool programs can produce valid fire safety documents from the school in lieu of traditional safety inspection standards. In South Carolina, licensing is not required for programs that operate for less than 20 hours per week, which exempts many afterschool programs. The Montana Child Care Resource and Referral Network (MCCR&R Network) found that school-based afterschool programs had inconsistent experiences with the licensing process that seemed to depend on the approach of the licenser. In response to these uneven experiences, the state licensing agency worked with the resource and referral agency to draft new regulations that are designed to make licensure more of a uniform process.
· Working through intermediary organizations. Intermediary organizations can help providers understand and navigate program requirements. In South Dakota and Montana, the state child care resource and referral agencies provide technical assistance to all afterschool programs in an effort to help providers work within the various funding source rules and regulations. In Massachusetts, the Office of Child Care Services—the state agency that administers CCDF—contracts with ten regional child care resource and referral agencies to administer child care billing and reimbursement. Providers report attendance and participation data for subsidized children to the resource and referral agencies, who submit the required information to the state for voucher reimbursement. The resource and referral agencies manage this process using a technology system developed and paid for by the state.
· Providing joint training and technical assistance. Providing joint training and technical assistance to 21CCLC and CCDF grantees is another strategy for creating a cohesive system. Both CCDF and 21CCLC allocate state lead agencies a portion of funds for administrative activities, which can be used for joint training and technical assistance. In Montana, the MCCR&R Network provides outreach to 21CCLC programs to help them understand the benefits of child care licensing as a sustainability strategy. The network coordinates closely with the state Department of Education and offers joint technical assistance to CCDF and 21CCLC grantees. For the past several years, Ohio has been using a combination of general funds and CCDF quality dollars to start up new afterschool programs. As part of the sustainability plan for these programs, the state Department of Education and the Child Care Administration have held joint teleconferences to help providers serving low-income children learn how to access CCDF subsidy dollars. Representatives from both departments participate in the phone calls, answering technical questions regarding the administration of both programs and encouraging the use of CCDF funds to support and sustain services.
Competition for Scarce Resources
Competition for funds is another reality faced by programs seeking both CCDF and 21CCLC funding. Turf issues and a sense of competitiveness can occur between early care and education providers, who currently receive the bulk of CCDF investments, and afterschool providers who wish to access those funds. Tensions may also exist between afterschool providers who currently receive CCDF and 21CCLC funds and those just entering the field. Since both CCDF and 21CCLC are formula grants with fixed allocations, providers applying for the first time will be competing for dollars that are currently being received by other providers.
Strategies for States to Consider
· Building state-level partnerships. State-level partnerships can help lessen competition by uniting providers around a shared vision or goal. In addition to the statewide afterschool networks funded by the Mott Foundation, the National Governors Association Center for Best Practices—with support from the Charles Stewart Mott Foundation and The Wallace Fund—has funded summits in 13 states on extra learning opportunities, including afterschool programs. The summits, which emphasize state and local collaboration, provide an opportunity for a range of stakeholders to create and enhance partnerships around afterschool programs.
· Pilot projects. States may also consider demonstration or pilot projects to coordinate afterschool funding sources. In South Carolina, the state Departments of Education and Health and Human Services have implemented a pilot project using 21CCLC and CCDF quality dollars. A state intermediary organization, Communities in Schools, works with four sites to increase the supply of afterschool care in underserved areas. The state is also using the pilot project to better understand and resolve any differences in program requirements and philosophy between the 21CCLC and CCDF programs.
Supporting Needs Assessments:
Estimating Supply and Demand
Another strategy for addressing competition for scarce resources is to quantify the need for afterschool programs. By identifying gaps between the supply and demand for afterschool programs, decisionmakers can more efficiently direct limited funding and avoid duplication of services. The Afterschool Investments project has created a tool to help state and local policymakers estimate supply and demand. The tool outlines a process for planning and collecting supply and demand data, and offers guidance on the process and some lessons learned from the field. Find the tool at http://www.nccic.org/afterschool.
Conclusion
For many afterschool programs, CCDF and 21CCLC are critical components of funding and sustainability plans. While aimed at the same population of low-income children, each source was established to respond to particular needs. Due to their differences in structure, administration, and regulatory requirements, it is often difficult for recipients of one type of funding to also benefit from the other. This brief provides a clear summary of the similarities and differences between these two programs and a description of the challenges providers face in trying to access funds from both sources. It also offers examples of innovative approaches that states are adopting to make it easier for programs to effectively utilize available funding. The brief clearly demonstrates how flexible policies and strategic thinking on the part of state officials are generating new ideas about coordinating and aligning these funding sources.
Acknowledgments
This brief was prepared by Michelle Ganow Jones of The Finance Project for the Afterschool Investments Project, a multiyear technical assistance effort funded by the Child Care Bureau of the U.S. Department of Health and Human Services. The author would like to thank the many individuals who contributed their comments and guidance on earlier drafts, including Sharon Deich, Dionne Dobbins, Heather Clapp Padgette, and Elisabeth Wright, with special thanks to Bob Stonehill and Carol Mitchell of the U.S. Department of Education. Many thanks, also, to the numerous program developers and state agency staff who were willing to share their experiences to educate others in the field, including Lisa Benfield, Janet Bush, Alina Columbus, Julie Hancock, Rosemary Hayward, Karen Jackson, Sabrina Moore, Gary Pfister, Eunice Sauls, Sharon Scott-Chandler, and Barb Sherrill.
Contact us:
email afterschool@financeproject.org
web www.nccic.org/afterschool
The Finance Project
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National Governors Association
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U.S. Department of Health and Human Services
Administration for Children and Families
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