CHILD CARE AND DEVELOPMENT FUND FISCAL YEAR 2021 STATE AND TERRITORY SPENDING FROM ALL APPROPRIATION YEARS
Background:
The Child Care and Development Fund (CCDF) state and territory financial expenditure reports (ACF-696) 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. Additionally, lead agencies expended funds from the Coronavirus Aid, Relief, and Economic Security (CARES) Act of 2020; the Coronavirus Response and Relief Supplemental Appropriations (CRRSA) Act of 2021; the American Rescue Plan (ARP) Act of 2021; and the Supplemental Appropriations for Disaster Relief Act of 2019.
Reported expenditures are for administration, direct and non-direct services1, quality activities, activities to improve the quality of care for infants and toddlers. States and territories continue to report on their expenditures of CCDF funds for each grant award year until expended.
Highlights:
The summary provides information on the expenditure of CCDF funds during the Fiscal Year (FY) 20212, which includes funding from the Grant Years (GY) 2018, GY 2019, GY 2020, and GY 2021 CCDF appropriations as well as CARES, CRRSA, ARP, and disaster funds. The CCDF expenditure data are reported by states and territories on the ACF-696. In FY 2021, states and territories expended a total of $14.3 billion of combined federal and state funds, which includes both CCDF and TANF transfers into CCDF. Expenditures of federal CCDF funds were $14.3 billion, comprised of $827,872 from GY 2018, $576 million in GY 2019, $4.5 billion in GY 2020, and $11.6 million in GY 2021.
Expenditures of State Matching and Maintenance of Effort (MOE) funds3 were $1.8 billion. Some states report state expenditures in excess of the state share amounts required to draw down their full allotment of federal Matching funds; however, they are not required to do so. In GY 2021, about $145 million in “excess” State Match and MOE expenditures were reported.
Table 1 - Expenditures in FY 2021 by Appropriation Year4
| FY 2018 | FY 2019 | FY 2020 | FY 2021 | Total by Fund | |
|---|---|---|---|---|---|
| Mandatory | $11,576 | $15,247,238 | $168,092,662 | $957,388,352 | $1,140,739,828 |
| Matching Federal | $579,441 | -$1,064,604 | $367,752,165 | $1,483,007,483 | $1,850,274,485 |
| Discretionary | $816,291 | $557,000,369 | $2,732,041,093 | $2,504,983,775 | $5,794,841,528 |
| Discretionary CARES | $0 | $0 | $1,252,619,546 | $0 | $1,252,619,546 |
| Discretionary Disaster Relief | $0 | $0 | $14,730,431 | $7,023 | $14,737,454 |
| Discretionary CRRSA | $0 | $0 | $0 | $3,403,920,011 | $3,403,920,011 |
| ARP Supplemental | $0 | $0 | $0 | $11,612,980 | $11,612,980 |
| ARP Stabilization | $0 | $0 | $0 | $1,118,659,723 | $1,118,659,723 |
| Subtotal Federal | $1,407,308 | $571,183,003 | $4,535,235,897 | $9,479,579,347 | $14,587,405,555 |
| Matching State | -$579,442 | $4,700,465 | -$10,624,879 | $954,441,195 | $947,937,339 |
| CCDF MOE | $0 | -$187,703 | -$2,397,724 | $903,158,317 | $900,572,890 |
| Subtotal State | -$579,442 | $4,512,762 | -$13,022,603 | $1,857,599,512 | $1,848,510,229 |
| Total | $827,866 | $575,695,765 | $4,522,213,294 | $11,337,178,859 | $16,435,915,784 |
Direct Services. CCDF expenditures on direct child care services were $10.9 billion or 71 percent of total federal and state expenditures (including MOE) in FY 2021.
Quality Activities. States spent $3 billion or 20 percent of total federal and state expenditures in FY 2021 on quality activities. States and territories must spend eight percent of their GY 2018 and GY 2019 appropriations on quality activities, and nine percent of their GY 2020 and GY 2021 appropriations. Compliance with this spending requirements is assessed at the end of the liquidation period for the award.
Infant/Toddler Quality Activities. States spent $570 million or four percent of total federal and state expenditures in FY 2021 on activities to improve the supply and quality of care for infants and toddlers. States and territories are required to spend a minimum of three percent of CCDF expenditures from individual appropriation years on activities to improve the supply and quality of child care for infants and toddlers. Compliance with this spending requirements is assessed at the end of the liquidation period for the award.
Administration. During FY 2021, states expended $388 million or two percent of total federal and state expenditures (including MOE) on administrative activities. The statute limits CCDF administrative expenditures from each grant award year to no more than five percent. Compliance with this requirement is assessed at the end of the liquidation period.
Non-Direct Services5. States spent $453 million on non-direct services, or three percent of total state and federal expenditures in FY 2021.
Unobligated Funds. States reported unobligated balances of about $16.3 billion.
Table 2 - Unobligated6 Funds as of 09/30/21
| FY 2018 | FY 2019 | FY 2020 | FY 2021 | Total by Fund | |
|---|---|---|---|---|---|
| Mandatory | $4,600,568 | $0 | $25,812,534 | $252,298,723 | $282,711,825 |
| Matching Federal | $0 | $883 | $8,611,744 | $713,889,785 | $722,502,411 |
| Discretionary | $766,029 | $73,814,118 | $986,483,658 | $2,695,294,063 | $3,756,357,868 |
| Discretionary CARES | $0 | $0 | $316,564,801 | $0 | $316,564,801 |
| Discretionary Disaster Relief | $0 | $0 | $11,883,027 | $41,000 | $11,924,027 |
| Discretionary CRRSA | $0 | $0 | $0 | $2,466,175,736 | $2,466,175,736 |
| ARP Supplemental | $0 | $0 | $0 | $2,888,890,878 | $2,888,890,878 |
| ARP Stabilization | $0 | $0 | $0 | $5,850,243,832 | $5,850,243,832 |
| Total | $5,366,597 | $73,815,000 | $1,349,355,764 | $14,866,834,016 | $16,295,371,378 |
Unliquidated Obligations. Of funds that have been obligated, states reported unliquidated balances of $34.5 billion as of 9/30/2023.
Table 3 - Unliquidated7 Funds as of 09/30/21
| FY 2018 | FY 2019 | FY 2020 | FY 2021 | Total by Fund | |
|---|---|---|---|---|---|
| Mandatory | $0 | $0 | $0 | $64,216,324 | $64,216,324 |
| Matching Federal | $11,339,384 | $2,675,394 | $0 | $8,025,872 | $22,040,650 |
| Discretionary | $55,600,774 | $29,196,411 | $30,327,290 | $1,575,900,177 | $1,691,024,653 |
| Discretionary CARES | $0 | $0 | $215,820,661 | $0 | $215,820,661 |
| Discretionary Disaster Relief | $0 | $0 | $1,312,321 | $842,143 | $2,154,464 |
| Discretionary CRRSA | $0 | $0 | $0 | $3,997,328,794 | $3,997,328,794 |
| ARP Supplemental | $0 | $0 | $0 | $11,760,909,363 | $11,760,909,363 |
| ARP Stabilization | $0 | $0 | $0 | $16,700,464,408 | $16,700,464,408 |
| Total | $66,940,158 | $31,871,805 | $247,460,271 | $34,107,687,082 | $34,453,959,317 |
1 Non-direct services are the costs of providing child care subsidies not considered administrative costs under the definition at 45 CFR §98.52 of CCDF regulations. These activities include: establishment and maintenance of computerized child care information systems; establishing and operating a certificate program; eligibility determination and re-determination; Costs associated with conducting error rate reviews and compliance with Error Rate Reporting requirements per Subpart K of CCDF Regulations; preparation/participation in judicial hearings; Recruitment, licensing, inspection, reviews, and supervision of child care placements; training of child care providers on billing and claims processes associated with the subsidy program; reviews and supervision of child care placements; rate setting; resource and referral services; and training of child care staff on CCDF administrative issues.
2 Beginning in FY 2020, OCC began distinguishing between Fiscal Year (FY) and Grant Year (GY). FY refers to the period from October 1 through September 30, during which states and territories may spend funds awarded in the current and prior years. GY refers to the year the funds were awarded, although states and territories may liquidate some CCDF funding streams in later fiscal years.
3 One state reported that they did not meet their MOE requirement. OCC will confirm with the state and address in subsequent reports.
4 Expenditures may be negative because of changes in reported excess State Match and MOE in prior fiscal years.
5 Non-Direct services include expenditures related to the operation of voucher programs, eligibility determination and re-determination, and developing and maintaining computer systems.
6 Funds not meeting obligation deadlines are subject to de-obligation by ACF. States have 1 year to obligate mandatory funds if Matching funds are requested, 1 year to obligate Matching funds, and 2 years to obligate Discretionary funds.
7 Funds not meeting liquidation deadlines are subject to de-obligation by ACF. Mandatory funds do not have a liquidation deadline. States have 2 years to liquidate Matching funds and 3 years to liquidate Discretionary funds.