Child Care and Development Fund, Report to Congress for Fiscal Years 2002 and 2003
Part I: Background
The Child Care and Development Fund (CCDF)
|
CCDF consists of three Federal funding streams: Discretionary, Mandatory and Matching. |
The Personal Responsibility and Work Opportunity Reconciliation Act of 1996 (PRWORA) created three major streams of funding within CCDF. These components include Discretionary Funds under the Child Care and Development Block Grant Act as well as Mandatory and Matching Funds under Section 418 of the Social Security Act. To access the Matching Funds, States must provide a share of the Matching Funds and spend their required Maintenance of Effort (MOE) level. As of October 1, 1996, PRWORA repealed the old welfare-related child care programs provided under the Social Security Act (AFDC/JOBS Child Care, Transitional Child Care, and At-Risk Child Care).
FUNDING, OBLIGATIONS, AND EXPENDITURES
Each of the component funds of CCDF has its own rules regarding funding and periods of obligation and expenditure. The variations are summarized in the chart below and described in more detail in the pages that follow:
| If Source of Funds is 2002 - | Obligation Must Be Made by End of - | And Liquidated by the End of - |
|---|---|---|
| Discretionary | FY 2003 (i.e., by 9/30/03) | FY 2004 (i.e., by 9/30/04) |
| Mandatory | FY 2002 (i.e., by 9/30/02; but ONLY if Matching Funds are used) | No requirement to liquidate by a specific date |
| Matching | FY 2002 (i.e., by 9/30/02) | FY 2003 (i.e., by 9/30/03) |
| MOE | FY 2002 (i.e., by 9/30/02) | FY 2002 (i.e., by 9/30/02) |
Discretionary Fund
PRWORA authorized Discretionary Funds that are subject to annual appropriation. The amount an individual State receives in a fiscal year is determined according to a formula that consists of three factors-
-
Young child factor: The ratio of the number of children under age 5 in the State to the number of children under age 5 in the country
-
School lunch factor: The ratio of the number of children in the State who receive free or reduced-price school lunches under the National School Lunch Act to the number of such children in the country
-
Allotment proportion factor: A weighting factor determined by dividing the 3-year average national per capita income by the 3-year average per capita State income (as calculated every 2 years).
The Discretionary Fund is 100 percent Federal funds. No State match is required. States have 2 years to obligate their Discretionary Funds and an additional year to liquidate those obligations.
Consistent with prior year appropriations, in FY 2002 and FY 2003, Congress earmarked specific amounts of the Discretionary Fund for-
-
Child care quality improvement activities ($172 million)
-
Infant and toddler quality improvement ($100 million)
-
Child care resource and referral and school-age child care activities ($19 million, of which $1 million is for the Child Care Aware toll-free hotline)
-
Child care research, demonstration, and evaluation activities (almost $10 million)
Mandatory Funds
A State's allocation of the Mandatory Funds is the greater of the-
-
Federal share of expenditures in the State IV-A child care programs (AFDC, JOBS, Transitional, and At-Risk Child Care) in 1994 or 1995 (whichever is greater), or
-
Average Federal share of expenditures in the State Title IV-A child care programs (AFDC, JOBS, TCC, At-Risk) for 1992 through 1994
The Mandatory Funds are 100 percent Federal funds. No State match is required. Mandatory Funds are available until expended unless the State chooses to expend its Matching Funds. To qualify for its share of the Matching Funds, a State must obligate its Mandatory Funds by the end of the Federal fiscal year (September 30) in which they are granted.
Matching Funds
|
To access the Matching portion, States must provide a share of the Matching Funds and spend their required Maintenance of Effort (MOE) level. |
The Matching Funds are the remaining amount appropriated under section 418(a)(3) of the Social Security Act after the Mandatory Funds are allotted. A State's allocation of the Matching Funds is based on the number of children under age 13 in the State compared with the national total of children under age 13. The Matching Funds must be matched by a State at its applicable Federal Medical Assistance Percentage (FMAP) rate. Matching Funds are available to a State if-
-
Its Mandatory Funds are obligated by the end of the Federal fiscal year in which they are awarded
-
Within the same fiscal year, the State expends State funds equal to its State MOE level
-
Its Federal and State shares of the Matching Funds are obligated by the end of the fiscal year in which they are awarded
Matching Funds must be fully expended within 2 years of award.
Maintenance of Effort (MOE)
To be eligible for its share of the Matching Funds, a State must continue to spend at least the same amount on child care services that it spent on the repealed Title IV-A child care programs in FY 1994 or FY 1995, whichever was greater.
|
Example At the beginning of FY 2002, a State was awarded $90 million in Mandatory Funds. The State was also awarded Federal Matching Funds of $7 million. To receive the Federal Matching Funds, the State must match the Federal funds with State funds at the State's FMAP rate of 70 percent. Therefore, to receive its $7 million share of Matching Funds, the State had to provide $3 million in State funds. Before the end of FY 2002, the State was required to obligate its $90 million in Mandatory Funds; obligate its $10 million in Matching Funds (both the $7 million of Federal funds and the $3 million of State Matching Funds); and obligate and expend its required MOE level of $15 million in State funds. Before the end of the following year, FY 2003, the State was required to expend all its Matching Funds of $10 million (both the $7 million of Federal funds and the $3 million of State match). There is no time limit for expending the Mandatory Funds. |