UPDATE ON FISCAL YEAR 1999
STATE SPENDING UNDER THE CHILD CARE AND DEVELOPMENT FUND
(CCDF) AS OF 9/30/00
Overview: Under the Personal
Responsibility and Work Opportunity Reconciliation Act (PRWORA)
of 1996, States are required to submit quarterly financial reports
to HHS detailing how they are spending Federal funds. This document
provides information about State expenditures of CCDF funds that
were awarded in FY 1999. This information, which reflects State
spending through September 30, 2000, is preliminary since States
have until September 30, 2001, to spend FY 1999 Discretionary
CCDF funds. This information updates previously-released data
on expenditures of FY 1999 funds to reflect new State reports.
States must continue to report on FY 1999 funds until expended,
therefore, these numbers are subject to annual updates and cannot
be considered final.
FY 1999 Highlights
Total Expenditures. States
have expended a total (combined Federal and State) of $8.1 billion.
Of that amount, $6.4 billion were in Federal (CCDF and TANF transfers
into CCDF) funds, including $4.9 billion in FY 1999 CCDF funds
and $943 million in prior year (FYs 1996, 1997 and 1998) CCDF/Child
Care Development Block Grant funds. States also expended $1.7
billion in State dollars (matching and MOE) under CCDF in FY 1999.
In addition, direct spending under the Temporary Assistance for
Needy Families (TANF) program for child care services totaled
$604 million of Federal funds.
Maintenance of Effort (MOE).
States are required to continue to spend State funds for child
care at a level equal to the greater of their FY 1994 or FY 1995
historic spending levels in the Title IV-A Child Care programs.
All States reported that they spent their own funds at the required
MOE level of $887 million in FY 1999. Five States reported spending
a total of $111 million over the required MOE level.
Non-Federal Match. The Matching
Fund must be matched by State expenditures in excess of the amount
required to satisfy the MOE requirement and at the 1999 Federal
Medical Assistance Percentage (FMAP) rate. One State chose not
to accept its matching allotment. All other States met the required
match for the CCDF Matching Fund. Total State expenditures totaled
$1.7 billion which consisted of $699 million of State match and
$998 million of MOE expenditures or 25.6 percent of total State
and Federal expenditures.
Temporary Assistance to Needy Families
(TANF) Block Grant Transfers. Personal Responsibility
and Work Opportunity Reconciliation Act authorized States and
Territories to transfer portions of their TANF grant to either
the Child Care and Development Fund or the Social Services Block
Grant. It should be noted that effective
October 1, 1999, States could no longer transfer prior year TANF
funds. States were awarded $976 million in discretionary funds
and transferred $2.38 billion from the TANF program into the CCDF
discretionary fund, making a total of $3.35 billion of Federal
funds available in the discretionary fund. Forty-four States and
two Territories reported transferring funds to the Child Care
and Development Fund in amounts ranging from $30 thousand to $264
million. The transferred amounts equal 43.5 percent of the total
Federal funds made available to States for CCDF in FY 1999.
As reported on the TANF financial reports, States
transferred $2.4 billion from TANF to CCDF in FY 1999, which is
more than twice the $914 million transferred in FY 1998 (transferred
dollars are included in the $4.9 billion above).
NOTE: The transfer amounts reported on the TANF
financial reports ($2.43 billion) are different from the transfer
amounts reported on the CCDF financial reports ($2.38 billion)
because of the lag-time in processing a transfer, reporting deadlines
and returning transfers to TANF.
Direct Services. CCDF expenditures spent by States
directly on child care services totaled $4.6 billion or 82.2 percent
of the FY 1999 combined Federal and State CCDF expenditures (excluding
MOE).
Administrative Costs. By law no more than 5 percent
of the CCDF funds may be used for administrative costs. State
administrative expenditures amounted to $135 million, or 2.4 percent
of FY 1999 total Federal and State expenditures -- well below
the limit.
Quality Services. The statute requires a minimum
of 4 percent of total expenditures be spent on quality activities.
States reported expending $354 million on improving the quality
of child care services, which equates to 6.3 percent of FY 1999
combined Federal and State expenditures.
Non-Direct Services. States reported spending a
total of $504 million in non-direct services or
9 percent of total State and Federal expenditures. A breakout
of non-direct services expenditures shows that roughly $26 million
was spent on child care computer information systems, $274 million
on certification programs and $204 million on making eligibility
determinations and other costs.
Unobligated Balances. States must obligate all of
the mandatory fund by the end of the fiscal year in order to be
eligible for Federal matching funds. In FY 1999, States obligated
100 percent of the Federal mandatory funds. States also obligated
96.4 percent or $907 million of Federal matching funds awarded
in FY 1999. One State chose not to accept its matching allotment
of $33,424,678 (3.6 percent). At the end of second year of spending,
three States did not expend an additional $2.9 million (3.1 percent)
in matching funds. These funds will revert back to the Federal
government.
At the end of FY 2000, States left a total of $37
million or .6 percent of FY 1999 CCDF funds unobligated. Of the
$37 million, four States did not obligate a total of $36.3 million
in the Matching Fund category and $774,332 in the Discretionary
Fund category, which has been recouped.
Overall Expenditures
Mandatory - States have
expended $1.124 billion or 95.5 percent of the $1.177 billion
available. Eight States may continue to spend $53 million in FY
2001.
Matching - States expended
$904 million or 96.1 percent of the $941 million in Federal funds
available. Four States did not expend $36.3 million in Matching
Funds. Those funds were not available for redistribution, therefore,
ACF has recovered those funds.
Discretionary - States have
expended $2.919 billion or 86.9 percent of the $3.4 billion available.
States have until September 30, 2001 to expend the remaining funds.
TABLE A - - Comparison of Expenditures in Federal
Child Care Programs 1/
(Dollars in millions)
|
Expended in FY 97 |
Expended in FY 98 |
FY 99 Expenditures |
|
Federal Share |
State Share |
Total |
Federal Share |
State Share |
Total |
Federal Share |
State Share |
Total |
Child Care Development Block Grant
|
844
|
-
|
844
|
353
|
-
|
353
|
157
|
-
|
157
|
FFY 97 CCDF |
-
|
514
|
2,195
|
397
|
-
|
397
|
98
|
-
|
98
|
FFY 98 CCDF/sp |
-
|
-
|
-
|
2,738
|
548
|
3,286
|
688
|
-
|
688
|
FFY 99 CCDF |
-
|
-
|
-
|
-
|
-
|
-
|
4,876
|
699
|
5,538
|
TANF |
14
|
-
|
14
|
259
|
-
|
259
|
604
|
-
|
604
|
State MOE |
-
|
945
|
945
|
-
|
1,031
|
1,031
|
-
|
998
|
999
|
TOTAL |
$2,539
|
$1,459
|
$3,998
|
$3,747
|
$1,579
|
$5,326
|
$6,423
|
$1,697
|
$8,084
|