Program Guidance: ACYF-PI-CC-96-17 |
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Administration for Children and Families |
Administration on Children, Youth and Families |
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| 1. Log No. ACYF-PI-CC-96-17 | 2. Issuance Date: October 30, 1996 | |
| 3. Originating Office: Child Care Bureau | ||
| 4. Key Word: Child Care and Development Fund | ||
| Maintenance of Effort, Administrative Costs | ||
To
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State Lead Agencies administering child care programs under the Child
Care and Development Block Grant Act of 1990 as amended, and other
interested parties.
Contents
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The following table shows the topics discussed in this PI.
| TOPIC |
The Matching Fund of the CCDF |
Meeting the "Maintenance of Effort" |
Administrative Costs |
References
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Section 418(a)(2)(C) of the Social Security Act; The Child Care and
Development Block Grant Act of 1990 as amended; Decision of the Comptroller
General, 31 Comp. Gen. 459 (1952)
Effective Date
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October 1, 1996.
This PI does not apply to FFY 1996 Child Care Development Block Grant Grants
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The Child Care and Development Block Grants for Federal Fiscal Year
(FFY) 1996, made available on September 30, 1996, continue to be subject
to the regulations at 45 CFR Parts 98 and 99, published on August
4, 1992, until they are expended. The guidance in this PI does not
apply to the FFY 1996 Child Care Development Block Grant funds.
Inquiries
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All inquiries should be directed to the ACF Regional
Administrator.
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/s/
James A. Harrell
Deputy Associate Commissioner
Administration on Children, Youth and Families
THE MATCHING FUND OF THE CHILD CARE & DEVELOPMENT FUND
Background: The Child Care and Development Fund
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The Personal Responsibility and Work Opportunity Reconciliation Act
of 1996 repealed the 3 title IV-A child care programs and requires
that all Federal child care funds be spent in accordance with the
provisions of the amended Child Care and Development Block Grant.
In consolidating the Federal child care programs under a single set
of eligibility requirements, Congress nevertheless instituted 3 funding
sources. ACF has chosen to refer to the combined funding as the Child
Care and Development Fund -- CCDF. This term recognizes the different
sources of moneys flowing into child care but the common purposes
for which they may be expended. The 3 sources of Federal moneys are
the:
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o Mandatory Fund
o Discretionary Fund
o Matching Fund
The amounts authorized (and in the case of the Mandatory and Matching Funds, appropriated) for these Funds are:
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| Year | Mandatory Fund | Discretionary Fund | Matching Fund | TOTAL |
|---|---|---|---|---|
| 1997 | $1.2B | $1.0B | $ .767B | $2.967B |
| 1998 | $1.2B | $1.0B | $ .867B | $3.067B |
| 1999 | $1.2B | $1.0B | $ .967B | $3.167B |
| 2000 | $1.2B | $1.0B | $1.167B | $3.367B |
| 2001 | $1.2B | $1.0B | $1.367B | $3.567B |
| 2002 | $1.2B | $1.0B | $1.517B | $3.717B |
Requirements of the Matching Fund
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Both the Mandatory and Discretionary Funds are 100% Federal Funds
-- no State match is required to use these Funds. As its name implies,
the Matching Fund is available to match allowable State costs for
child care. In order to receive Matching Funds the State must:
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o Obligate all of its Mandatory Funds by the end of the fiscal year
(FY). Mandatory Funds need not be obligated before Matching
Funds are claimed, provided that all Mandatory Funds will be obligated
by the end of the FY.
o Expend State-only dollars in an amount that equals the maintenance of effort thresholds in Attachment A. These State-only dollars need not be expended before Matching Funds can be claimed, provided that all of the State-only dollars will be expended by the end of the FY.
NOTE: The amounts in Attachment A are tentative at this time. Final amounts will be provided later.
o Obligate the Federal and State share of the Matching Fund by the end of the FY.
All costs are matched at the Federal Medical Assistance Percentage (FMAP) for FY 1995, irrespective of the year of expenditure. The FMAP rate pertains to both child care services and administrative expenditures.
What counts as "match"
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A State's expenditures must be in cash and may include public and
donated private funds, meeting the conditions described below.
In-kind contributions are not counted as a State expenditure. (31 Comp. Gen. 459 (1952))
Federal matching funds are only available to match State expenditures for those child care service and related activities, including quality activities, that are allowable and are also included by the State as part of its program under the Act and noted in the approved State Plan.
Example: A State provides child care services in some child protective services cases (CPS) using non-Federal funds. The State could claim Federal match for these child care services under the CCDF provided the child care services would be allowable under the CCDF and that the State Plan indicates that it also funds child care for CPS cases from the CCDF.
Parent fees, because they do not represent State expenditures, are not eligible for Federal matching funds.
Requirements for public funds to be used as match
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Public funds which are expended for child care may be claimed as State
expenditures for reimbursement from the Matching Fund when the public
funds are:
o Appropriated directly to the lead agency, or transferred from
another public agency to the lead agency and under its administrative
control, or certified by the contributing public agency as representing
expenditures eligible for Federal match.
o Not used to match other Federal funds.
o Not Federal funds, or are authorized by Federal law to be used
to match other Federal funds.
Requirements for private funds to be used as match
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Funds donated from private sources which are expended for child care
may be claimed as State expenditures for reimbursement from the Matching
Fund when the donated funds:
o Are transferred directly to the lead agency and under its administrative
control.
o Do not revert to the donor's facility or use.
o Are donated without any restriction which would require their
use for a specific individual, organization, facility or institutions.
(Donated funds may be designated for a specific geographic area,
however.)
o Are not used to match other Federal funds.
How the quality requirement applies to the Matching Fund
Section 658G of the Child Care Development Block Grant Act requires that not less than 4% of the Child Care and Development Fund must be expended on < "activities to improve the quality of child care."
This "not less than 4%" requirement applies to the total of CCDF: the Mandatory Fund, the Discretionary Fund and the Matching Fund -- including the State's share of the Matching Fund -- it need not be applied individually to the 3 Funds (i.e., States need not allocate the costs of quality improvements to each of the 3 funds).
States need not expend Matching Funds on quality activities to receive Federal match, provided not less than 4% of the total expenditures from the State's CCDF was spent on quality activities as defined in Section 658G. The "not less than 4%" requirement applies to the amounts expended by the State, not to the amounts allocated.
How to claim match
ACF is developing a single financial form which States will use to request Funds. Instructions will be issued later.
MEETING THE "MAINTENANCE OF EFFORT" REQUIREMENT FOR CHILD CARE Background
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Section 418(a)(2)(C) of the Social Security Act requires a State to
spend a specified amount of non-Federal funds on child care before
it may claim Federal match from the Matching Fund. The State "maintenance
of effort" (MOE) amounts are shown in Attachment A.
What counts?
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Section 418(a)(2)(C) may be read to mean that the funds that must
be expended to meet the MOE requirement must be expended on the types
of services that were allowable under sections 402(g) & (i) of
the Social Security Act -- the now-repealed IV-A child care programs.
These sections describe child care services to low income families
on public assistance, who are working or in training/education activities,
families transitioning off such assistance and families at risk of
needing such assistance if they did not receive child care. ACF believes
that States should include in their maintenance of effort totals only
those amounts for activities which would have been allowable under
the now-repealed title IV-A child care programs.
In addition to non-Federal expenditures for services, States may include in their maintenance of effort total amounts for administrative costs which would have been allowable under title IV-A. The preamble to the title IV-A regulations (54 FR 42231, dated October 13, 1989) describes those administrative costs that would have been allowable, either in whole or on a share-of-cost basis.
Activities counted in the MOE and Matching Funds are not the same
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Costs allowable under title IV-A -- either service or administrative
-- were limited in scope (e.g., licensing, provider training/technical
assistance, and quality activities were not allowable title
IV-A costs.). States should recognize that although an activity may
not be counted towards meeting the maintenance of effort threshold,
the same activity may nevertheless be eligible for Federal match under
the Matching Fund. For example, State expenditures on general child
care resource development were not allowable under title IV-A. However,
such activities may be claimed for Federal match under the "not
less that 4%" quality requirement of the Matching fund.
No double counting State expenditures
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The State may not include an expenditure in its maintenance
of effort total and claim Federal match for that same expenditure
from the Matching Fund. Only State expenditures above the maintenance
of effort thresholds may be claimed for Federal match. For example,
the State may not include the cost of services to at-risk families
in its MOE total and claim match for those costs from the Matching
Fund.
Reminder: As described on page 3 of this PI, States need not expend all their State-only maintenance of effort dollars before Matching Funds are claimed provided that all of the State-only maintenance of effort dollars are expended by the end of the FY.
ADMINISTRATIVE COSTS Background
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Section 658E(c)(3)(C) of the amended Child Care Development Block
Grant Act limits administrative costs to not more than 5% of the Child
Care and Development Fund. Although the Act does not define administrative
costs, it does state that administrative costs do not include "the
costs of providing direct services".
The Conference Agreement directs the Secretary "to define and determine true administrative costs, as distinct from expenditures for services" and goes on to list some activities that should not be considered administrative costs.
Because of the amendments, ACF will regulate in the area of administrative costs. Until regulations are published, States should be guided by the language of the Act and the Conference Agreement.
Applicability of this guidance
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The Child Care and Development Block Grants made available on September
30, 1996 are subject to the regulations at 45 CFR Parts 98 and 99,
published on August 4, 1992, until they are expended. The September
30, 1996 grants (and prior FY grants) are not subject to requirements
contained in the amendments to the Child Care Development Block Grant
Act, and hence the guidance in this PI. This means, for example, that
the regulations at 45 CFR 98.50 and 98.52 apply (i.e., administrative
cost as defined in those regulations is limited to a maximum 15%),
rather than the 5% limit at Section 658E(c)(3)(C) of the amended Child
Care Development Block Grant Act.
What are not administrative costs
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The Conference Agreement directs that the following activities are
not administrative costs:
o eligibility determination
o redetermination of eligibility
o child care placement
o provider recruitment
o resource & referral
o preparation/participation in judicial hearings
o establishment & maintenance of computerized child care information
o licensing
o inspection
o rate setting
o training
o provider reviews & supervision
NOTE: Some of these activities (e.g., eligibility determination) were defined as administrative costs under the existing regulations at 45 CFR 98.52(b). As noted above, in the absence of new regulations, States should be guided by the language of the Act and the Conference Agreement in this area for funds granted on or after October 1, 1996, not the existing regulations.
Administrative costs per 45 CFR 98.52
Where the Conference Agreement did not exclude an activity from considerations of administrative costs (or was silent), the Child Care Development Block Grant regulations at 45 CFR 98.52(b) might still apply. Those regulations indicate that the following might still be considered administrative activities and subject to the 5% limitation at section 658E(c)(3)(C):
o Developing the child care program and Plan (§98.52(b)(1)(ii)
& (v))
o Maintaining substantiated complaints files (§98.52(b)(1)(x)).
o Developing agreements (§98.52(b)(1)(vii))
o Monitoring program activities for compliance with program requirements
(§98.52(b)(1)(viii))
o Preparing reports (§98.52(b)(1)(ix))
o Providing local officials and citizens with information about
the program, including the conduct of the public hearings. (§98.52(b)(1)(iv))
o Coordination activities (§98.52(b)(1)(xi))
o Coordination of the resolution of monitoring & auditing findings;
evaluation of program results (§98.52(b)(1)(xii) & (xiii)
o Management of personnel involved in the above activities (§98.52(b)(1)(xiv))
o Travel, rent, equipment, supplies, etc. (§98.52(b)(2) &
(5))
o Administrative & audit services (§98.52(b)(3) & (4))
o Indirect costs per §98.55 (§98.52(b)(6))
NOTE: The above list paraphrases the regulations. States should refer to the full text of the regulation cited (including the Preamble discussion) for a more complete description of an activity.
ACF anticipates continuing to consider these as administrative activities when new regulations are issued.
Some §98.52 activities may not now be administrative activities
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At least some of the activities listed in §98.52 may not now
necessarily be an administrative activity. For example, the activities
attendant to "establishing and operating a certificate program"
(§98.52(b)(1)(iii)) may fall under the Conference Agreement language
on (re)determining eligibility and or establishing/maintaining child
care information.
Applying costs across Funds
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Section 658E(c)(3)(C) of the amended Child Care Development Block
Grant Act limits administrative costs to "not more than 5%"
of the Child Care and Development Fund. This "not more than 5%"
limitation applies to the total of Child Care and Development
Fund: the Mandatory Fund, the Discretionary Fund and the Matching
Fund -- including the State's share of the Matching Fund --
it need not be applied individually to each of the 3 Funds.
Estimated State Maintenance of Effort Thresholds
Alabama 6,896,415 Alaska 3,544,811 Arizona 10,065,324 Arkansas 1,886,541 California 92,945,659 Colorado 8,985,899 Connecticut 18,738,357 Delaware 5,179,351 District of Columbia 4,720,514 Florida 33,424,300 Georgia 22,167,213 Hawaii 5,220,634 Idaho 1,175,819 Illinois 59,609,473 Indiana 15,356,949 Iowa 5,299,427 Kansas 6,672,989 Kentucky 7,274,356 Louisiana 5,219,484 Maine 1,928,151 Maryland 23,301,407 Massachusetts 44,973,373 Michigan 24,360,587 Minnesota 19,690,395 Mississippi 1,715,431 Missouri 16,548,755 Montana 1,315,298 Nebraska 6,955,059 Nevada 2,580,422 New Hampshire 5,051,606 New Jersey 31,662,653 New Mexico 3,034,328 New York 104,893,534 North Carolina 37,978,185 North Dakota 1,017,135 Ohio 45,628,354 Oklahoma 10,650,305 Oregon 11,714,991 Pennsylvania 46,628,930 Rhode Island 5,321,126 South Carolina 4,087,361 South Dakota 802,897 Tennessee 18,975,714 Texas 34,681,426 Utah 4,474,925 Vermont 2,804,331 Virginia 21,328,766 Washington 38,768,113 West Virginia 2,971,393 Wisconsin 16,470,677 Wyoming 1,553,781
Note: Preliminary calculation based on available aggregate data; may need to be adjusted. In order to be eligible for Matching Funds States are required to maintain the greater of FY 1994 or FY 1995 expenditures for IV-A child care.