List of Potential Options for Narrow Cost Analysis

CCDF-ACF-PI-2018-01 Attachment

Publication Date: March 1, 2018
  • Use information from existing studies

In some States, researchers or organizations have conducted cost analyses of at least some types of child care settings. Lead Agencies may use cost information from these existing studies as the basis to develop their cost estimates. Cost estimates from these reports could be outdated, so Lead Agencies shall adjust for inflation and other factors.

  • Develop a cost model using the PCQC

Lead Agencies may use the Provider Cost of Quality Calculator (PCQC) or a similar calculator to develop and conduct a narrow cost analysis. PCQC Visit disclaimer page is a publicly available web-based tool that estimates the cost of care based on site-level provider data. It includes professional development costs and it accounts for additional time a provider spends on quality-related activities. PCQC enables States and territories the ability to determine the cost of providing child care services at a particular level of quality (based on QRIS standards or licensing). To translate program level costs to child level costs, first, Lead Agencies should estimate the cost of care at the classroom level by dividing the total costs by the number of classrooms to obtain the average cost per classroom. After calculating the cost per classroom Lead Agencies could then calculate the cost per child by dividing the total costs per classroom by the number of children enrolled per classroom. The annual per-child cost may be converted to a monthly, weekly, or daily cost.

  • Conduct a limited cost survey or study

Lead Agencies may conduct a small-scale cost survey or study to examine the cost of child care services. For instance Lead Agencies could survey high quality child care providers to examine the cost to provide child care. States could potentially focus their study on primary cost drivers such a staffing costs.

  • Examine cost differentials for higher-quality care

States could examine cost differentials for higher-quality care. For instance, Lead Agencies could determine the typical percentage difference in salaries and benefits paid to staff with higher qualifications or staff in higher quality settings (while also considering variations in geography, provider types, and age of children). States can use this information to take into account the cost of higher quality at different levels of quality.

  • Use other existing information

Lead agencies could use per-child funding amounts set in State contracts or grants for CCDF direct services or grants to pre-kindergarten or Head Start programs as a source of information about costs of delivering higher-quality services.

  • Use information from market rate survey data

For Lead Agencies conducting a market rate survey, the survey may contain information related to key factors that impact the cost of providing care—such as: staff salaries and benefits, training and professional development, group size and ratios, enrollment levels, facility size and characteristics, and other features of the program’s services (e.g., non-traditional hours, care for children with special needs).

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