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FFY
2002 CCDF State Expenditures
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STATE SPENDING
UNDER THE FISCAL YEAR 2002 APPROPRIATION FOR
CHILD CARE AND DEVELOPMENT FUND (CCDF)
AS OF 9/30/2002
Background:
Under the Personal Responsibility and Work Opportunity Reconciliation
Act (PRWORA) of 1996, the Child Care and Development Fund makes
available to States three child care funding streams: Mandatory,
Matching and Discretionary. Each of these funding streams requires
that the States meet specific financial requirements.
The Mandatory fund is 100 percent Federal funds. No State
match is required. Mandatory funds are available until expended.
To qualify for its share of the Matching funds, a State must obligate
its Mandatory funds by the end of the Federal Fiscal Year (FY).
The Matching fund must be matched by a State at its applicable
Federal Medical Assistance Percentage (FMAP) rate. In order to receive
Matching funds a State must (1) obligate its Mandatory funds by
9/30; and (2) expend State funds equal to its State Maintenance
of Effort (MOE) level. Matching funds must be fully expended in
two years.
The Discretionary fund is 100 percent Federal funds. No
State match is required. Discretionary funds must be obligated in
two years and the obligations liquidated in the subsequent year.
In FY 2002, Congress earmarked specific amounts of the Discretionary
fund for (1) Child Care Quality Improvement Activities ($172.6 million);
(2) Infant and Toddler Quality Improvement ($100 million); and (3)
Child Care Resource and Referral and School Age Care ($19.1 million).
FY 2002 Highlights:
This summary provides information obtained from State financial
reports submitted for the FY 2002 CCDF appropriation (October 1,
2001-September 30, 2002). The FY 2002 State reports detail 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 in FY 2002.
Included are expenditures for administration, quality activities
including Congressionally-mandated earmarks, and direct and non-direct
services. States continue to report on their expenditures of FY
2002 funds until expended; therefore, these numbers are subject
to annual updates. Note: This summary does not include expenditures
in FY 2002 from funds appropriated in prior fiscal years. To see
a complete picture of total child care expenditures during FY 2002
from prior year funds and TANF direct child care expenditures, click
on the following web link.
Total Expenditures - In FY 2002, States expended a total
of $6.2 billion of FY 2002 combined Federal and State funds, which
includes both CCDF and TANF transfers into CCDF. An additional $1.4
billion was expended in "direct spending for child care services"
under the TANF program. Expenditures of Federal CCDF funds were
$4.2 billion and State Matching and MOE funds were $2.0 billion.
Maintenance of Effort. To be entitled to Matching funds,
States must expend State funds for child care at a level at least
equal to the greater of FY 1994 or FY 1995 Title IV-A child care
program expenditures. States reported spending $888 billion of State
funds meeting the required MOE levels. Eight States reported spending
a total of $129 million over the required MOE level with total MOE
expenditures equaling $1 billion. It is possible that the MOE expenditures
reported for CCDF may also be reported as part of the State's TANF
basic MOE expenditures. (TANF Final Regulations, Section 263.3(a))
Non-Federal Match. In addition to meeting the above MOE
requirement and obligating their Mandatory funds by 9/30/02, States
must match Federal expenditures with State funds at the applicable
2002 Federal Medical Assistance Percentages rate to be eligible
for Federal Matching funds. For the $1.1 billion of Federal expenditures,
States contributed $973 million of State funds complying with the
required match. (See Unobligated Balance paragraph for Matching
funds returned for reallotment.)
Temporary Assistance for Needy Families (TANF) Block Grant Transfers.
PRWORA of 1996 allows States to transfer portions of their TANF
grant to either the CCDF or the Social Services Block Grant. Forty-one
States transferred funds to CCDF in amounts ranging from $749,000
to $423 million. A total of $2.1 billion in FY 2002 Federal TANF
funds were transferred to CCDF comprising 30 percent of total CCDF
Federal funds ($6.8 billion including TANF transfers) available
to States for FY 2002. As stipulated in the TANF Final Regulations,
States may transfer current year TANF funds only.
Direct Services. CCDF spent by States on direct child care
services was $4.1 billion or 80.6 percent of the FY 2002 total Federal
and State CCDF expenditures (excluding MOE). MOE expenditures on
direct services were an additional $875 million or 86.1 percent
of total MOE expenditures. In total, $5 billion or 81.5 percent
of the FY 2002 total Federal and State CCDF expenditures (including
MOE) were spent on direct services.
Administrative Costs. By law, no more than five percent
of CCDF funds may be used for administrative costs. Compliance with
this requirement is assessed at the end of the liquidation period
(9/30/04). State administrative expenditures were $147 million in
FY 2002, or 2.9 percent of FY 2002 total Federal and State expenditures
-- well below the limit. MOE expenditures, which are not included
in the five percent calculation, amounted to $21 million for administrative
costs.
Quality Services. The statute requires that a minimum of
four percent of CCDF expenditures be spent on quality activities
(excluding Earmarked funds). Compliance with this requirement is
assessed at the end of the liquidation period (9/30/04). State spending
on improving the quality of child care services was $359 million
in FY 2002, or 7.0 percent of FY 2002 total Federal and State expenditures.
An additional $48 million was spent on quality activities from the
States' MOE expenditures.
Earmarked Funds. Of the $292 million Earmarked, States have
spent $141 million. States have until the end of the liquidation
period to expend their earmarked funds. Earmarked expenditures include:
$73 million on Child Care Quality Improvement Activities; $43 million
on Infant and Toddler Quality Improvement; and $25 million on Child
Care Resource and Referral and School Age Care.
Non-Direct Services. States have spent $350 million in
non-direct services, or 6.8 percent of FY 2002 total State and Federal
expenditures. The breakdown of non-direct services expenditures
is $21 million on child care computer information systems, $146
million on certificate programs and eligibility determinations and
$183 million for other costs. MOE expenditures on non-direct services
were $73 million.
Unobligated Balances. In FY 2002, States obligated 100 percent
of the Federal Mandatory funds. At the end of the year, five States
released $23 million, or 1.5 percent in Matching funds for reallotment
in FY 2003. The unobligated balance for the $4.1 billion of Discretionary
funds was $915 million, or 22.3 percent. States have an additional
year to obligate these funds.
Expended Funds. States spent $967 million, or 82 percent,
of FY 2002 Mandatory funds, and $1.1 billion, or 75 percent of the
Federal Matching funds. States spent $2.1 billion, or 50 percent
of the Discretionary funds (including TANF transfers).
Unliquidated Funds. Seventeen States have a balance of $210
million of Mandatory funds, and 28 States have $347 million of Matching
funds to liquidate. Thirty-four States and Territories have $1.1
billion of Discretionary funds to liquidate. States will continue
to expend FY 2002 funds in Fiscal Years 2003 and 2004.
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