Child Care and Development Fund, Report to Congress for Fiscal Years 2004 and 2005
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CCDF SPENDING BY CATEGORY
This summary provides information obtained from the State CCDF ACF-696 reports submitted for the Fiscal Year (FY) 2005 CCDF expenditure year from all open appropriation years. States report on how expenditures are used: direct services, quality improvement activities, nondirect services, and administration. TANF spending on child care directly (as opposed to TANF transferred to CCDF) is not categorized and therefore is not included in Figure 3.2.
1 Nondirect Services include expenditures related to the operation of voucher programs, eligibility determination and redetermination, and developing and maintaining computer systems.
2 Quality Activities include quality expenditures as well as expenditures of targeted funds for quality activities.
Direct Services
States spend the majority of their funds on direct services for child care services, primarily through vouchers and contracts. In FY 2004, States spent $7.8 billion, or 83 percent, on direct services. This decreased slightly in FY 2005, with States spending $7.5 billion, or 79 percent, on direct services. Because TANF direct spending on child care services is not categorized, the total amount spent on direct services (and other costs) is underestimated.
Quality Improvement Activities
While direct services make up the bulk of total spending, the largest percentage growth has occurred for quality improvement activities. Including targeted funds for child care resource and referral and school-age activities, improving the quality of infant and toddler child care, and quality expansion activities established above the 4 percent minimum quality spending requirement, FY 2004 and FY 2005 quality expenditures reached $920 million or 10 percent of total spending. (Refer to Figure 3.3.)
1Total quality spending includes discretionary targeted funds for specific quality improvement activities.
Nondirect Services
Nondirect spending on items such as information technology, referral services, and eligibility determination increased from $452 million or 5 percent of total State and Federal expenditures in FY 2004 to $731 million or 8 percent of total expenditures in FY 2005.
Administrative Expenses
In FY 2004 administrative expenses made up 2 percent of total expenditures at $212 million. In FY 2005, administrative expenses made up 3 percent of total expenditures at $268 million. By law, no more than 5 percent of the aggregate CCDF funds expended by the Lead Agency from each year’s fiscal allotment may be used for administrative activities.