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CHILD CARE AND DEVELOPMENT FUND (CCDF)
REPORT TO CONGRESS—FISCAL YEAR 2001

Introduction

This report to Congress is required by Section 658L of the Child Care and Development Block Grant Act as amended by PRWORA (P.L. 104-193) and the Balanced Budget Act of 1997 (PL 105-33).  In this report, ACF describes and analyzes the most current information about the Child Care and Development Fund (CCDF) including from State Plans effective October 1, 2001, FY 2001 expenditure reports, FY 2000 case-level reports, and emerging research.  It also includes information about training and technical assistance that is provided to States, Territories and Tribes.

CCDF, including funds transferred by States from Temporary Assistance to Needy Families (TANF) to CCDF, is a significant source of Federal support to improve the affordability, supply, and quality of child care in the United States.  CCDF assists low-income families, including families receiving or transitioning from temporary public assistance, in obtaining child care so they can work or, at State option, attend training or education.

For Fiscal Year (FY) 2001, $4.6 billion in CCDF was made available through block grants to all 50 States, the District of Columbia, five Territories and 257 tribal grantees (representing approximately 500 Indian Tribes).  With State Matching and Maintenance of Effort (MOE) funds and TANF dollars transferred to CCDF or spent directly by States on child care services, more than $11 billion in CCDF and TANF-related funds was available for child care in FY 2001.  This compares with $3.2 billion in FY 1996.

The CCDF is administered by the Child Care Bureau, Administration on Children, Youth and Families of the Administration for Children and Families (ACF) in collaboration with ACF Regional Offices.  States, Territories and Tribes are responsible for ensuring that their CCDF grants are administered in compliance with statutory and regulatory requirements.  In their administering CCDF, States have significant discretion in how funds will be used and where emphasis will be placed in achieving the overall goals of CCDF.

CCDF funds are used primarily to provide subsidized child care services to low-income working families through vouchers or certificates.  Parents may select any legally operating child care provider—including child care centers, family members, neighbors, family child care homes, after-school programs, and faith-based programs.  Providers serving children funded by CCDF must meet basic health and safety requirements set by States, Territories and Tribes.  Within general Federal rules, States decide how their subsidy system will be administered and determine the payment rates that providers receive, the co-payment amounts that parents pay, the specific eligibility requirements that a family must meet in order to receive a subsidy, and how CCDF services will be prioritized.

CCDF Lead Agencies must use a minimum of four percent (4%) of CCDF funds to improve the quality of child care.  CCDF also includes earmarks for specific purposes: quality enhancement; improving the quality of care for infants and toddlers; and improving school-age care and child care resource and referral services.  Quality activities include training, grants and loans to providers, health and safety improvements, and other initiatives.  In FY 2001, $716 million or nine percent (9%) of CCDF expenditures were used by States to improve child care quality and accessibility.

The Report consists of seven parts:

• Part I provides background on the CCDF program including funding, eligibility requirements, a description of how funds may be used, and information about program administration.
  
• Part II provides information from aggregate and case-level data reported by States for FY 2000, including information about children receiving subsidized care and the providers who cared for them.
  
• Part III summarizes expenditure data obtained from State quarterly financial reports submitted to ACF in FY 2001 (October 1, 2000-September 30, 2001).
  
• Part IV presents information reported by States in their CCDF plans that were effective October 1, 2001.  States are required to submit plans every two years that describe CCDF policies and services.
  
• Part V describes ongoing research efforts, highlighting projects funded by the U.S. Department of Health and Human Services (HHS), and summarizing some of the latest research findings about child care.
  
• Part VI describes technical assistance provided by the Child Care Bureau to assist States, Territories and Tribes in administering the CCDF.
  
• Part VII, the Appendix, provides detailed information about services provided as reported in the FY 2000 State aggregate and case-level reports as well as State policies and practices from State Plans which became effective October 1, 2001 and Child Care Bureau-funded research initiatives.

The administrative data included in this report is from FY 2000, which is the most recent data available.  With technical assistance provided by the Child Care Bureau, many States have made progress in their ability to report data; however, some States still face challenges in collecting the required information and reporting it in a timely manner.