Form ACF-696 - Financial Reporting Form for State and Territory Child Care and Development Fund (CCDF) Lead Agencies

PROGRAM INSTRUCTIONS

1. Log No: CCDF-ACF-PI-2024-06 
2. Issuance Date: September 24, 2024 
3. Originating Office: Office of Child Care 
4. Key Words:  Child Care and Development Fund (CCDF); ACF-696; Financial Reporting Form for States and Territories

TO

State and territory lead agencies administering child care programs under the Child Care and Development Block Grant (CCDBG) Act of 1990, as amended, and other interested parties.

SUBJECT

Form ACF-696 - Financial Reporting Form for State and Territory Child Care and Development Fund (CCDF) Lead Agencies.

REFERENCES

The Child Care and Development Block Grant (CCDBG) Act, as amended (42 U.S.C. § 9857 et seq.); Section 418 of the Social Security Act (42 U.S.C. § 618); 45 CFR Parts 98 and 99.

PURPOSE

This Program Instruction (PI) distributes the revised Form ACF-696 Financial Reporting Form for State and territory CCDF lead agencies. The Office of Management and Budget (OMB) approved the Form ACF-696 under OMB 0970-0510.

BACKGROUND

Under 45 CFR Part 98, Subpart H, state and territory CCDF lead agencies are required to submit quarterly fiscal reports detailing obligations and expenditures of CCDF funds, which is completed through the submission of the ACF-696 form (see attachment A). This form is used to monitor compliance with the CCDF spending requirements outlined in 45 CFR Part 98, Subpart F, as well as the obligation and liquidation dates specified in 45 CFR Part 98, Subpart G.

GUIDANCE

Spending Requirements

The ACF-696 is used to determine compliance with the spending requirements set forth in 45 CFR Part 98, Subpart F. States and territories must meet various CCDF spending requirements, which are calculated after all funds have been expended or at the end of the liquidation period.

State and territory CCDF lead agencies must spend at least 9 percent of the aggregated CCDF expenditures on quality improvement activities. State and territory CCDF lead agencies must spend at least 3 percent of the aggregated CCDF expenditures on quality improvement activities for infants and toddlers (in addition to the quality spending requirement).

State and territory lead agencies may not spend more than 5 percent of their aggregated CCDF expenditures on administrative activities.

For CCDF Mandatory and Matching funding, states must expend no less than 70 percent of the aggregate amount of CCDF Mandatory and the federal and state share of CCDF Matching funds on direct services to meet the child care needs of TANF families, families transitioning off TANF, or families at risk of becoming TANF recipients. Territories must expend not less than 70 percent of CCDF Mandatory funds to provide direct services to meet the child care needs of TANF families, families transitioning off TANF, or families at risk of becoming TANF recipients.

State and territory lead agencies must also expend a percentage of CCDF Discretionary funds to provide direct services to meet the child care needs of children. After reserving the minimum 9 percent quality expenditure requirement, the 3 percent Infant/Toddler quality expenditure requirement, and the amounts expended by the lead agency for administrative costs, 70 percent of the remaining CCDF Discretionary expenditures must be spent on providing direct services. Additional information regarding this calculation is provided in the ACF-696 Instructions (attachment C).

State and Territory CCDF lead agencies must submit separate quarterly reports for each grant year (the federal fiscal year in which CCDF funds were awarded) until all funds are expended or the liquidation period expires, whichever is sooner. Therefore, a state and territory CCDF lead agency may be submitting multiple, separate ACF-696 reports at the end of each quarter.

Obligation and Liquidation

CCDF Lead Agencies have differing obligation and liquidation requirements based on the CCDF funding stream and if the Lead Agency serves a state or territory. Obligation and liquidation dates for the available CCDF funding streams can be found in Attachment B of this PI.

Territory lead agencies may have differing and individualized obligation and liquidation deadlines from those described above due to the availability of extraordinary circumstances waivers offered to territories to extend these deadlines due to the impact of the COVID-19 pandemic. If a territory CCDF lead agency has requested an extraordinary circumstances waiver, the territory should reference their approval letter from OCC or may contact OCC or the Office of Grants Management for information about specific obligation and liquidation dates.

If a state CCDF lead agency is unable to obligate the full CCDF Discretionary award within the required time period, the lead agency must report in a letter to ACF no later than April 1^st of the last fiscal year in which the funds must be obligated containing the dollar amount from the grant that the Lead Agency will be unable to obligate prior to the obligation deadline. These unobligated funds may be reallotted by ACF to other state lead agencies.

State Matching and Territory Mandatory funds are also subject to redistribution. The amount of the redistributed funds is dependent on the Lead Agency’s ACF-696 submission, which is also where a Lead Agency indicates interest in receiving redistributed funds. State Matching funds may only be distributed to other states, and territory Mandatory funds will only be distributed to other territories. Redistributed funds are considered part of the grant for the fiscal year in which the redistribution occurs.

REVISIONS

Utilizing Grants and Contracts to Provide Direct Services

The ACF-696 instructions were revised to provide guidance to state and territory lead agencies regarding the use of CCDF funding for grants or contracts with child care providers to finance direct services to children. Lead agencies may consider any funds paid through grants or contracts directly to child care providers for operational, staff, or other costs related to providing direct services for children receiving CCDF subsidies as direct services when completing the ACF-696. If a grant or contract provides funds to a provider serving both children participating in CCDF as well as other children, the portion of funding dedicated or reserved for services for children participating in CCDF can be counted as direct services. These expenses should be reported in line 1(d) in the ACF-696.

Signature Authority

The ACF-696 instructions were revised to highlight the need for lead agencies to have separate individuals entering data into the ACF-696 (the data entry person) and certifying and submitting the data to ACF (the certifier). This facilitates the development of stronger internal controls and assures the accuracy of the reporting.

Disaster Relief Funding

The revised ACF-696 includes reporting in Column E for Disaster Relief Funds awarded through the 2023 Consolidated Appropriations Act (Pub. L. No. 117-328), for state and territory lead agencies to address impacts of Hurricanes Ian and Fiona. The revised report removed column F, which was reserved for funds awarded through the Discretionary Disaster Relief Act of 2019 and used to document expenditures for construction or major renovations of child care facilities. These funds have reached their liquidation deadline and are no longer available to lead agencies.

The ACF-696 instructions were revised to clarify that expenditures from Disaster Relief funds are included in the calculations for the quality and infant/toddler quality spending requirements.

ACTION REQUIRED

State and territory lead agencies must submit their ACF-696 electronically through the Online Data Collection system (OLDC; see Action Transmittal No. OGM-AT-13-01). OLDC reduces paperwork, allows for quicker processing, automatically completes required calculations, and checks for potential errors. CCDF lead agencies with OLDC assignments may access the system through the Grant Solutions platform .

For CCDF lead agencies that currently lack access to OLDC, please request access using the OLDC Request Form (attachment D), which is available (along with OLDC help sheets, user guides, and tutorials) online. A completed OLDC Request Form should be emailed to help@grantsolutions.gov as well as your ACF Office of Grants Management contact for each staff person who will play a role in using OLDC. ACF will create a User Identification (ID) based on the information provided on the OLDC Request Form. An email message is automatically sent to the staff member identified on the Request Form when an OLDC User ID and password is created for that person.

NON-REPORTING PENALTIES

Failure to submit the ACF-696 report on or before the due date may be a basis for ACF withholding financial payments, grant suspension, or grant termination.

INQUIRIES 

Inquiries should be made to the appropriate ACF Office of Grants Management staff.

/s/ 
__________________________ 
Ruth Friedman, Ph.D.
Director
Office of Child Care

ATTACHMENTS

1. Attachment A Form ACF-696 (CCDF-ACF-PI-2024-06) Section 508 PDF version (PDF) and Excel version (XLSX)
2. Attachment B: Obligation and Liquidation Chart (PDF)
3. Attachment C: Instructions for Completing the Form ACF-696 (PDF)