Tracking American Recovery and Reinvestment Act Child Care Funds: October Update
Oct 28, 2009 | Danielle Ewen and Hannah Matthews
Child Care and Development Block Grant (CCDBG) ARRA funds are available until September 30, 2010. The U.S. Department of Health and Human Services issues weekly reports tracking state outlays of ARRA funds. As of October 16, states, territories, and tribes have drawn down a total of $244.8 million in child care funds, or 12 percent of the $2 billion allocation.
Eleven states currently report that they have not drawn down any funds (Illinois, Iowa, Kentucky, Missouri, New York, North Carolina, Pennsylvania, Rhode Island, Vermont, West Virginia, and the District of Columbia, which we count as a state). Six states (Arizona, Connecticut, Hawaii, Maryland, Ohio, and Oregon) have drawn down over 50 percent of allocated dollars. Please note that ARRA reporting of state outlays includes any tribal funds drawn down within the state.
There are several reasons why only a relatively small share of funds nationally has been spent to date.
- Due to the rules governing CCDBG, states often first expend funds and then request grant funds to reimburse those expenditures. Therefore, it may be that actual expenditures are higher than the amount shown.
- In an effort to ensure accountability, several states held off spending ARRA funds until their most recent biennial state plans became final on October 1 or until they received additional federal reporting requirements. Reporting requirements on Section 1512 of the ARRA were released by the Office of Management and Budget on September 30 and the Child Care Bureau has issued subsequent guidance to states on the reporting terms. The Child Care Bureau has also released specific data reporting requirements for state child care assistance programs.
- States are also limited in that they can only drawdown actual planned expenses, as federal law prohibits states from accruing interest on these funds. Therefore, a state can at most only spend out its monthly planned service expenditures, or 1/12 of the annual expenditures for child care assistance. And, because states may provide reimbursement to child care providers for CCDBG services up to two months after services are provided, there may be a further delay in shown expenditures.
- Finally, CCDBG ARRA funds are available until September 30, 2010. Essentially states received two years of CCDBG funds, nearly halfway into one fiscal year. Drawdown percents are based on the entire $2 billion, not on one year's worth of funds.
While ARRA funds are meant to be spent quickly to serve more families and improve the quality of care, states are appropriately considering what policy changes may be most effective to help families and make systematic improvements in their child care programs. As states continue moving forward with their plans, we expect to see an increase in ARRA drawdowns.
States have already reported to the Child Care Bureau that they are spending the money in a variety of ways to benefit families during the economic crisis, including:
- At least 11 states or territories avoided or will avoid cuts in service or reduced their waiting list.
- At least 11 states or territories have increased or plan to increase their payment rates.
- At least 10 states or territories have increased or plan to increase the period of time that parents can look for jobs.
- At least four states or territories lowered or are planning to lower their copayments.
- At least 41 states or territories have plans for the quality portion that include QRIS, professional development and infant/toddler care.