CCDF Expenditures Overview for FY 2019 (all appropriation years)

CHILD CARE AND DEVELOPMENT FUND  FISCAL YEAR 2019 STATE AND TERRITORY SPENDING FROM ALL AWARD YEARS

Background:

The Child Care and Development Fund (CCDF) financial expenditure report (ACF-696) details state and territory expenditures from each of the CCDF funding streams (Mandatory, Matching, and Discretionary), as well as funds transferred from the Temporary Assistance for Needy Families (TANF) program to CCDF. Reported expenditures are for administration, direct and non-direct services, and congressionally mandated quality activities and activities to improve the quality of care for infants and toddlers¹.

Highlights:

The summary provides information on the expenditure of CCDF funds during the Fiscal Year (FY) 2019², which includes CCDF funding awarded in three grant years (GY), GY 2017, GY 2018, and GY 2019. States and territories report the CCDF expenditure data on the ACF-696. In FY 2019, states and territories expended a total of $10.3 billion of combined federal and state funds, which includes both CCDF and TANF transfers into CCDF. Expenditures of federal CCDF funds were $8.2 billion, comprised of $4.8 billion from GY 2019, $3 billion from GY 2018, and $400 million from GY 2017. Expenditures of state Matching and Maintenance of Effort (MOE) funds were $2.1 billion. Some states report state expenditures in excess of the state share amounts required to draw down their full allotment of federal Matching funds; however, they are not required to do so. In FY 2019, states reported about $14 million in “excess” state Match and MOE expenditures.

Table 1 - Expenditures in FY 2019 by Award Year³

Direct Services. CCDF expenditures on direct child care services were $7.7 billion or 75 percent of total federal and state expenditures (including MOE) in FY 2019.

Quality Activities.⁴ States and territories spent $1.2 billion (including targeted funds) or 12 percent of total federal and state expenditures in FY 2019 on quality activities. The reauthorized Child Care and Development Block Grant (CCDBG) Act of 2014 increased the amount of CCDF expenditures that states and territories must spend on quality activities. States and territories must spend 7 percent of their GY 2017 awards on quality activities and 8 percent of their GY 2018 and GY 2019 awards. Compliance with these spending requirements is assessed at the end of the liquidation period for the award.

Infant/Toddler Quality Activities. States and territories spent $374 million or 4 percent of total federal and state expenditures in FY 2019 on activities to improve the supply and quality of care for infants and toddlers. The CCDBG Act of 2014 included a new requirement for states and territories to spend a minimum of 3 percent of all CCDF expenditures from individual award years on activities to improve the supply and quality of child care for infants and toddlers. These expenditures are in addition to the minimum expenditures that states and territories must make on quality activities. Compliance with this requirement is assessed at the end of the liquidation period.

Administration. During FY 2019, states and territories expended $330 million or 3 percent of total federal and state expenditures (including MOE) on administrative activities. The statute limits CCDF administrative expenditures from each grant award year to no more than 5 percent. Compliance with this requirement is assessed at the end of the liquidation period.

Non-Direct Services. States and territories spent $673 million on non-direct services, or 7 percent of total state and federal expenditures in FY 2019. The breakdown of non-direct services expenditures is $103 million on child care computer information systems, $277 million on certificate programs and eligibility determinations, and $292 million for other costs.

Unobligated Funds. States and territories reported unobligated balances of about $1.8 billion.

Table 2 - Unobligated⁵ Funds as of 09/30/18

Unliquidated Obligations. Of funds that have been obligated, states and territories reported unliquidated balances of $3.4 billion.

Table 3 - Unliquidated⁶ Funds as of 09/30/18

1 In prior years, states were congressionally mandated to target discretionary funds towards quality expansion, infants and toddlers, and resource and referral and school age care. Targeted discretionary spending is no longer required, though the ACF-696 allowed reporting on all three of these categories for GY 2019, GY 2018, and GY 2017.

2 Fiscal Year (FY) refers to the period from October 1 through September 30, during which states and territories may spend funds awarded in the current and prior years. Grant Year (GY) refers to the year the funds were awarded, although states and territories may liquidate some CCDF funding streams in later fiscal years.

3 Expenditures may be negative because of changes in reported excess state Match and MOE in prior fiscal years.

4 For the purposes of this summary, quality expansion and resource and referral and school age care targeted discretionary spending were collapsed into Quality Activities and spending on infant and toddler discretionary targeted funds were collapsed into Infant and Toddler Quality Activities.

5 Funds not meeting obligation deadlines are subject to de-obligation by ACF. States have 1 year to obligate mandatory funds if Matching funds are requested, 1 year to obligate Matching funds, and 2 years to obligate Discretionary funds.

6 Funds not meeting liquidation deadlines are subject to de-obligation by ACF. Mandatory funds do not have a liquidation deadline. States have 2 years to liquidate Matching funds and 3 years to liquidate Discretionary funds.