CCDF Presentation

1. CCDF Presentation October 8, 2013

2. CCDF: CCDF Budget Development • The CCDF award cycle is based on the federal fiscal year beginning October 1st and ending September 30th the following year. • When the FY14 budget is finalized the Budget Unit begins composing the CCDF budget to allot anticipated expenditures in each GAA line item to an appropriate funding stream. The CCDF budget tracks the status of CCDF FFY13 and the FFY14 awards and the expenditures that the state must achieve (MOE and State Match). The CCDF budget also tracks the amount of expenditures used toward the Commonwealth’s TANF block claim, SSBG, Title IV-E, and pure state funds. • We must properly track our CCDF expenditures to: 1) ensure we do not exceed our CCDF award amount and allotment; and 2) demonstrate that our claim is based on eligible CCDF expenditures. • When completed the CCDF budget is over 20 interlinked worksheets in a workbook. The CCDF budget is amended through the year to account for 9Cs, Supplemental funding, and transfers. Every amendment, however, is complicated because it triggers multiple changes throughout the CCDF budget. • The CCDF budget primarily helps manage the draw process, but also helps inform the various quarterly and annual reports required from the federal government and OSD. • Produce a memo to EHS and DTA for the TANF Transfer amount to CCDF. Include a formal memo (DTA TANF Transfer Letter) to indicate the TANF Transfer, TANF, TANF/Admin and TANF/MOE amounts for the month, state fiscal year to date and federal fiscal year to date.

3. CCDF: Direct Federal Funds

4. CCDF: Historical Funding

5. CCDF Basic Rules • 4% Quality Requirement: Per 45 CFR 98.50(c) – “Of the aggregate amount of funds expended (i.e., Discretionary, Mandatory, and Federal and State share of Matching Funds), no less than four percent shall be used for activities to improve the quality of child care as described at §98.51. States are encouraged to surpass the 4% mandate. We project to have 19% of our FY14 expenditures dedicated to this quality mandate. • Administrative Cap: Per 45 CFR 98.51(a) - Not more than five percent of the aggregate funds expended by the Lead Agency from each fiscal year's allotment, including the amounts expended in the State pursuant to §98.53(b), shall be expended for administrative activities. We currently have budgeted less than 2.5%. Most of these expenditures are in the admin and Access Management accounts. • Direct Services: Per 45 CFR 98.50(e) – “Not less than 70 percent of the Mandatory and Matching Funds shall be used to meet the child care needs of families”. We project to have 88.42% of FY14 CCDF expenditures that satisfy this requirement.

6. CCDF – Family Eligibility • The Child Care and Development Fund (CCDF) serves families with children under the age of 13 (or, if the child is mentally or physically incapable of self-care or is under court supervision, the age may be over 13 and under 19) who meet the following eligibility criteria: • Children must be citizens or qualified aliens and reside with parents, or individuals acting in loco parentis, who are working or participating in education or training activities. • Family income must be at or below 85% of state median income; however, States have the option to set a lower income threshold in order to target services to certain priority groups of families or children. • Children receiving or in need of receiving protective services may be eligible for child care services

7. Obligation and Liquidation • Discretionary Funds: Funds must be obligated in the fiscal year in which funds are awarded or in the succeeding fiscal year. Unliquidated obligations as of the end of the succeeding fiscal year shall be liquidated within one year. Example: With the FFY13 award (October 2012) EEC has until September 30, 2014 to obligate and September 30, 2015 to liquidate. • Mandatory Funds: Mandatory Funds for States requesting Matching Funds per §98.53 shall be obligated in the fiscal year in which the funds are granted and are available until expended. Example: With the FFY12 award (October 2011) EEC has until September 30, 2012 to obligate and there is no expiration. • Matching Funds: Both the Federal and non-Federal share of the Matching Fund shall be obligated in the fiscal year in which the funds are granted and liquidated no later than the end of the succeeding fiscal year. Example: With the FFY12 award (October 2011) EEC has until September 30, 2012 to obligate and September 30, 2013 to liquidate.

8. Federal Funds and EEC’s Budget Above is a breakdown of how federal revenues tie into the EEC budget. The following slides will breakdown the various pieces. Each category has a letter associated with it that will make it easier to follow. For example TANF will be under “A.

9. Description of the Federal Funds • A. TANF: This is not direct federal funds, but are tied to the Commonwealth’s overall federal claiming efforts. EHS uses roughly$188M of EEC expenditures for the Commonwealth’s TANF block grant claiming. Each month EEC, after fulfilling the CCDF Block grant obligations, notifies the EHS revenue team the amount of TANF eligible expenditures (basically most of the expenditures are eligible under goal 2 of the TANF block grant – “To end the dependence of needy parents on government benefits by promoting job preparation, work, and marriage, provided that the individuals receiving such services are income eligible.”) • B. CCDF Mandatory and Matching: These are direct federal funds amounting to $77M that reimburse eligible CCDF expenditures. The annual amount hardly fluctuates and the department generally liquidates both these award in 12 to 13 month period. • C. Discretionary Funds: These are direct federal funds amounting to $26.1M that reimburse eligible CCDF expenditures. Within the $27M are three earmarks totaling $3.7M tied to quality improvements. These earmarks are not counted toward the 4% quality rule for CCDF (which will be discussed in later slides). The department generally liquidates both these award in 13 to 14 month period. • D. TANF Transfer to CCDF: These are direct federal funds amounting to $91.8M that are transferred to EEC from the state’s TANF block grant award. EHS transfers the funds to EEC and the funds take the color of CCDF Discretionary funds. These funds are fully allotted to the four caseload accounts.

10. Description of the Federal Funds • E. Social Service Block Grant (SSBG): DCF can claim expenditures in child care programs administered by the EEC for federal SSBG reimbursement. Child care services provided with SSBG funds would qualify as being supported in part by SSBG funds in order to allow for-profit providers to be eligible for the Child and Adult Care Food Program (CACFP). EEC carves out $25K from the Supportive account child care expenditures for DCF’s SSBG claiming. These expenditures are for services provided to foster care children. • F. Federal Title IV-E: A portion of supportive child care funds are provided for youth in foster care. On a quarterly basis, DCF determines IV-E eligibility of children and EEC conducts a match on those children receiving child care. In doing so, EEC (through PCG) prepares a quarterly Title IV-E claim. EEC collects the revenue and the revenue is ultimately swept into the general fund. EEC, therefore, sets aside $1M of Supportive funds to tie to the federal portion and another $1M to fulfill the state match portion. • G. State Match: Per 45 CFR §98.53 (b) – “Expenditures in a State under paragraph (a) of this section will be matched at the Federal medical assistance rate for the applicable fiscal year for allowable activities, as described in the approved State Plan, that meet the goals and purposes of the Act”. Not direct funds, but required that the state expend a $1 for $1 match to the federal match award amount. • H. Maintenance of Effort (MOE): The state is required to expend $44.9M per year to satisfy the federal MOE requirement. 45 CFR §98.53 (c)(1) “States shall also expend an amount of non-Federal funds for child care activities in the State that is at least equal to the State's share of expenditures for fiscal year 1994 or 1995 (whichever is greater) under sections 402(g) and (i) of the Social Security Act as these sections were in effect before October 1, 1995”.

11. Description of the Federal Funds • I. State Title IV-E: See “F. Federal Title IV-E” • J. Projected FY13 State Budget: This is a projected FY13 based on the maintenance budget submitted to the House and Senate Ways and Means. • K. Percentage of Budget Claimed or Used as a Match: The purpose of the chart is to give readers an idea of how tied EEC’s budget is to federal funds. Not all the expenditures are directly tied to federal reimbursement, but most of expenditures not directly tied to federal reimbursement still play a key role in the Commonwealth’s effort to maximize federal revenues.

12. 3000-1000 Fed Allocations CCDF Qualified • Expenditures in this line item are CCDF allowable according to the following regulations and tracking control functions:  • All expenditure types in this line item meet one of the following allowable six cost categories defined by § 98.52 Administrative costs: • Both program/administrative staff salaries, • Travel costs incurred for business in carrying out the program, • Administrative services performed by grantees or agreements with third parties, • Audit services, • Overhead costs: Other costs for goods and services required for the administration of the program, including rental or purchase of equipment, utilities, and office supplies, and • Indirect costs, as determined by an indirect cost agreement or cost allocation plan. • EEC currently uses licensing-related expenditures as CCDF Quality, §98.51   Activities to improve the quality of child care.

13. 3000-2000 Fed Allocations CCDF Qualified By definition (see above), all components of 3000-2000 are eligible under CCDF. • Quality Eligible: According to allowable quality activities, § 98.51(2) (i), operating and/or providing financial assistance to organizations for the establishment, development, expansion, and operation of child care resource and referral programs are allowable. Furthermore, making loans and grants to child care providers and offering training and technical service to assist in meeting child care standards are allowable. In addition, both program/administrative staff salaries are allowable as CCDF under § 98.52. • Note that $225,727 of this line item is allocated as Targeted Discretionary expenditures to meet the School Age Child Care Resource & Referral target.

14. Supportive Account Fed Allocation CCDF Qualified • All expenditures under 3000-3050 adhere to § 98.20—a child is eligible for services if s/he is qualified under certain provisions: • (1)(i) under 13 years of age; or, • (1) (ii) At the option of the Lead Agency, be under age 19 and physically or mentally incapable of caring for himself or herself, or under court supervision; • (2) Reside with a family whose income does not exceed 85 percent of the State's median income for a family of the same size; and • (3)(i) Reside with a parent or parents (as defined in §98.2) who are working or attending a job training or educational program; or • (3)(ii) Receive, or need to receive, protective services and reside with a parent or parents

15. DTA Account Fed Allocation CCDF Qualified • Expenditures within this line item follow CCDF requirements under § 98.20, a child is eligible for services if s/he qualifies under certain provisions: • (1)(i) under 13 years of age; or, • (1)(ii) At the option of the Lead Agency, be under age 19 and physically or mentally incapable of caring for himself or herself, or under court supervision; EEC runs a query to determine the 13 and over expenses for each draw period. Those costs are not claimed. • (2) Reside with a family whose income does not exceed 85 percent of the State's median income for a family of the same size; and By receiving TANF, families are below 100% of the Federal Poverty Level (FPL), which is below 85% of the State Median Income (SMI). Alternatively, families with closed TANF cases are assessed by CCR&Rs to ensure families are below the 85% SMI. • (3)(i) Reside with a parent or parents (as defined in §98.2) who are working or attending a job training or educational program; or By being a TANF recipient, families are part of the DTA Employment Service program, therefore they meet CCDF work requirements. • (ii) Receive, or need to receive, protective services and reside with a parent or parents TANF Qualified • Expenditures in this line item may be claimed under TANF as Goal 2: To end the dependence of needy parents on government benefits by promoting job preparation, work, and marriage, provided that the individuals receiving such services are income eligible.

16. IE/Waitlist Account Fed Allocation CCDF Qualified • A portion of expenditures under this line item are eligible as direct childcare expenditures under § 98.20, a child is eligible for services if s/he qualifies under certain provisions:   • (1)(i) under 13 years of age; or, • (ii) At the option of the Lead Agency, be under age 19 and physically or mentally incapable of caring for himself or herself, or under court supervision;   • (2) Reside with a family whose income does not exceed 85 percent of the State's median income for a family of the same size; and • (3)(i) Reside with a parent or parents (as defined in §98.2) who are working or attending a job training or educational program; or • (ii) Receive, or need to receive, protective services and reside with a parent or parents • The following contracts are CCDF-eligible, as Direct Child Care Expenditures under § 98.20: • Income-Eligible • Teen-Parent • Note that $44,973,368 of the 3000-4060 Income Eligible line item is used for MOE. These expenditures meet the Direct Child Care Expenditures requirements under § 98.20. TANF Qualified • By providing contracts and vouchers for child care for income eligible individuals fall within the scope of TANF Goals, particularly Goal 2: To end the dependence of needy parents on government benefits by promoting job preparation, work, and marriage. Note that all individuals being served through this line item are low income eligible.

17. UPK Fed Allocation General Fund • General fund expenditures are allocated to Head Start Collaborative match (3000-0708), CCDF and TANF. All non Quality related payroll expenditures are segregated into the Admin tier of the tracking sheet. CCDF Qualified • Expenditures under this line item meet the CCDF requirements under § 98.51:Activities to improve the quality of child care and help meet our CCDF Quality mandate. TANF Qualified • Expenditures under this line item support the improvement in quality and expansion of access to pre-school programs and services, which can be claimed as federal TANF under Goal 3 (prevent and reduce the incidence of out-of-wedlock pregnancies) and Goal 4 (encourage the formation and maintenance of two-parent families).

18. Mental Health Fed Allocation CCDF Qualified • Expenditures under this line item meet the CCDF requirements under § 98.51:Activities to improve the quality of child care. Most of these funds help the Commonwealth meet the Quality requirement. Early childhood mental health consultation services are considered an activity designed to improve the quality and availability of child care. In addition, expenditures are allowed for training and technical assistance in areas “appropriate to the provision of child care services, such as training in health and safety, nutrition, first aid, the recognition of communicable diseases.”

19. 3000-7050: Fed Allocation CCDF Qualified • Expenditures under this line item meet the CCDF requirements under § 98.51: Activities to improve the quality of child care. Services for infants and toddlers are considered activities that are designed to “provide comprehensive consumer education to parents and the public.” Funds from this account assist the Commonwealth fulfill the quality requirement and the targeted quality mandate. TANF Qualified • TANF Goal 3: To prevent and reduce the incidence of out-of-wedlock pregnancies. Part of the Coordinated Family Community Engagement (CFCE) supports the Parent-Child Home Program and the Mass Family Networks Program. Both of these programs seek to promote family literacy and school readiness, activities which fall under TANF Goal 3.

20. CCDF: Reporting Schedule