Form ACF-696 - FY2025 Financial Reporting Form for State and Territory Child Care and Development Fund (CCDF) Lead Agencies

PROGRAM INSTRUCTION

1. Log No:CCDF-ACF-PI-2025-07
2. Issuance Date:December 9, 2025
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; the American Relief Act (ARA) of 2025 (Pub. Law No. 118-158).

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.

GUDIANCE

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. If a territory CCDF lead agency has requested and received approval for 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 may only be distributed to other territories. Redistributed funds are considered part of the grant for the fiscal year in which the redistribution occurs.

REVISIONS

American Relief Act (ARA) of 2025 Supplemental Discretionary Disaster and Non-Disaster Funds

The revised ACF-696 Completion Instructions include reporting instructions for the ARA CCDF Supplemental Discretionary Disaster and Non-Disaster funds awarded to state and territory Agencies. The revised ACF-696 includes reporting in Column F ARA CCDF Supplemental Discretionary Non-Disaster funds.

ACTION REQUIRED

State and territory lead agencies must submit their ACF-696 electronically through the PSC/Payment Management System (PMS; see Action Transmittal No. OGM-AT-13-01). PMS reduces paperwork, allows for quicker processing, automatically completes required calculations, and checks for potential errors. CCDF lead agencies with PMS assignments may access the system through pmsapp.psc.gov/pms/app/login .

New users needing access to PMS may refer to the detailed instructions available on the official PMS Website: User Access | HHS PSC FMP Payment Management Services . A user who already has access to PMS can modify the current access level to gain access to the CCDF financial reporting functionality. To update User Access: Login to PMS — select "Menu" — User Account Maintenance — Update Privileges. Locate and select “Financial Report ACF CCDF 696/696T” to access the report. Once updated, navigate to the report from the main menu: Menu — Federal Financial Reporting — ACF Financial Reporting — CCDF Report.

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 ACF Office of Grants Management staff at OGM_OCC@acf.hhs.gov.

/s/

Anne-Marie D. Twohie

Acting Director

Office of Child Care

ATTACHMENTS

1. Form ACF-696 Financial Report (PDF (PDF)) (Excel (XLSX))
2. Obligation and Liquidation Chart (PDF)
3. Instructions for completing Form ACF-696 (PDF)