Child Care and Development Fund (CCDF)Notice of Proposed Rulemaking Briefing organized by Subpart – July 2013

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About the CCDF NPRM Federal Register citation: 78 FR 29441-29498 NPRM is available on Federal Register website at:

https://federalregister.gov/a/2013-11673 75-day comment period (ends August 5th). Submit comments

at: http://www.regulations.gov/#!submitComment;D=ACF-2013-0001-0001

Tracked changes (redline) version of CCDF regulations under the proposed rule available on Office of Child Care website: http://www.acf.hhs.gov/programs/occ/child-care-rule

NPRM Process: How it Will Work ACF will consider and respond to public comments as part of

development of a Final Rule. Provisions included in a Final Rule would become effective 30

days from the date of publication of the Final Rule. ACF expects provisions included in a Final Rule would be

incorporated into review of FY 2016-2017 CCDF Plans that would become effective October 1, 2015.

ACF welcomes public comment on specific provisions included in the NPRM that may warrant a longer phase-in period (e.g., requires action of State legislature or rulemaking).

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Today’s Briefing Summarizes changes made in proposed rule organized by

Subpart of the CCDF regulations – Subparts A-K. Provides organizational framework as a tool for commenting. More comprehensive; not limited to priority areas. Discussion of proposed changes in NPRM begins at “IV.

Provisions of Proposed Rule” and follows sequence of Subparts. Briefing not exhaustive – read NPRM for all proposed changes. All provisions applicable to Tribal grantees unless otherwise

noted.

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Goals and purposes (Section 98.1) Adds language to reflect priorities of improving health and safety,

establishing family friendly policies, improving quality and strengthening program integrity.

Definitions (Section 98.2) Deletes definition of “group home child care provider.” Amends definition of “family child care provider” to include larger

family homes or group homes. Effectively eliminates group home as a separately defined category for

CCDF (i.e., reporting in the Plan).

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Subpart A – Goals, Purposes, and Definitions

Administration under contracts and agreements (98.11) Specifies minimum content of written agreements that Lead Agencies have

with sub-recipients that administer CCDF. Plan process (98.14)

Adds new coordinating agencies, including agencies responsible for: pre-k, IDEA, licensing, Head Start collaboration, State Advisory Council, afterschool networks, and emergency management.

Lead Agencies must make Plan and any amendments publicly available. Plan amendments (98.18)

Requires Lead Agencies to provide written notice to parents/providers of substantial changes that adversely affect income eligibility, payment rates, and/or co-pays.

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Subpart B – General Application Procedures

Nearly all major changes coalesce at the Plan provisions section. Most changes are described later in this briefing. Changes not covered later, are below. Plan provisions (98.16)

Describe processes to monitor sub-recipients. Describe continuity policies, including timely processing of applications and

eligibility determination. Lead Agencies must provide some period of job search to CCDF families that

experience job loss. Describe provider-friendly payment practices, including timely

reimbursement. Report describing any changes to State licensing regulations or enforcement

mechanisms based on an annual assessment of serious injuries and deaths occurring in child care; part of QPR. (Tribes are exempt) 7

Subpart B – General Application Procedures

A child’s eligibility for child care services (98.20(a)) SMI - Base eligibility threshold level using the most recent SMI

data published by the Census. Developmental needs of child – Lead Agencies must take into

consideration developmental needs of children when authorizing child care services and are not restricted to limiting authorized child care services based on the work, training, or educational schedule of the parent.

Protective services – Expand definition to include “specific populations of vulnerable children as identified by the Lead Agency.” Not limited to children involved in child welfare. 8

Subpart C – Eligibility for Services

A child’s eligibility for child care services (98.20(b)) Lead Agencies shall re-determine a child’s eligibility no sooner

than 12 months following the initial determination or most recent re-determination.

At its option, the Lead Agency may consider a child to be eligible if the child met some or all eligibility requirements on the date of the most recent eligibility determination or redetermination.

Specify in the Plan any requirement for families to report changes in circumstances that may impact eligibility between re-determinations.

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Subpart C – Eligibility for Services

Changes to Subpart D include: Parental choice (98.30) Parental complaints (98.32) Consumer education (98.33)

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Subpart D – Program Operations (Child Care Services) Parental Rights and Responsibilities

Current regulation requires that parents be offered a choice of enrolling their child with a provider that has a grant or contract for providing services (if such services are available), or to receive a certificate (voucher).Grants or contracts changes: (Tribes are exempt)

Remove language “if such services are available” to require that Lead Agencies employ some use of grants or contracts linked to the supply of high quality child care.

Describe in Plan how grants or contracts will be used to address shortages in the supply of high quality care (see change at 98.16(i)(1)).

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Subpart D – Parental Choice (98.30)

Parental choice and child care quality changes: Parental choice provisions should not be construed as

prohibiting a Lead Agency from requiring child care providers that serve children receiving subsidies to meet high standards of quality. (98.30(g))

New paragraph clarifies that Lead Agencies may provide parents with information and incentives that encourage the selection of high quality child care without violating parental choice provisions. (98.30(h))

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Subpart D – Parental Choice (98.30)

Regulations currently require Lead Agencies to maintain a record of substantiated parental complaints and make them available to the public upon request. Hotline for parental complaints:

NPRM would add provision to require Lead Agencies to establish or designate a hotline for parents to submit complaints about child care providers.

Corresponds to proposed change in Plan section at 98.16(o); describe the hotline in the Plan.

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Subpart D – Parental Complaints (98.32)

1. Consumer education website (98.33(a)) (Tribes are exempt)States must establish a user-friendly, easy-to-understand, website that

includes provider-specific information about health and safety, licensing violations, date of last inspection.

Also include plain language description of regulatory requirements for child care and processes for conducting background checks.

2. Transparent system of quality indicators (98.33(b)) Lead Agencies must establish system of quality indicators, such as QRIS, to

differentiate quality of providers and make information publicly available.

3. Consumer education for CCDF families (98.33(c)) Lead Agencies must provide CCDF parents with information about the

provider they select, including health and safety requirements met, or explanation that the provider is exempt (relative providers and in-home).

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Subpart D – Consumer Education (98.33)

Changes to Subpart E include:Health and safety requirements (98.41)

Building and physical premises safety (98.41(a)(2)) Minimum health and safety training (98.41(a)(3)) Monitoring (98.41(d)) Relative and in-home providers (98.41(e))

Sliding fee scales (98.42)Equal access (98.43)

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Subpart E – Program Operations (Child Care Services) Lead Agency and Provider

Requirements

Building and physical premises safety (98.41(a)(2))Lead Agencies would be required to ensure child care providers serving CCDF children meet the following:

Comprehensive criminal background checks, including fingerprints;

Compliance with applicable State and local fire, health and building codes, including the ability to evacuate children; and

Emergency preparedness and response planning, including procedures for evacuation and re-location, shelter-in-place, and family reunification.

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Subpart E – Health and Safety (98.41)

Minimum health and safety training (98.41(a)(3))Lead Agencies would be required to ensure CCDF providers have pre-service or orientation training in the following areas:

-First Aid & CPR -Preventing spread of infectious disease

-Medication administration -Recognition of child abuse and neglect

-Poison prevention -Emergency preparedness and response

-Safe sleep practices/SIDS -Mgmt. of common childhood illness-Shaken baby syndrome -Transportation and child

passenger safety-Nutrition and physical activity -Caring for children with special

needs-Child development

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Subpart E – Health and Safety (98.41)

Monitoring (98.41(d))Lead Agencies would be required to establish the following monitoring procedures for providers serving CCDF children:

Include unannounced on-site monitoring; Not rely on child care provider self-certification of

compliance without documentation or verification; Require unannounced visit in response to complaint

pertaining to health and safety of children; and Require child care providers to report any serious injuries

or death of children occurring in child care.18

Subpart E – Health and Safety (98.41)

Relative and In-Home Providers(98.41(e)) The regulations currently allow Lead Agencies the option

to exempt relative providers from CCDF health and safety requirements, including monitoring.

The NPRM would add in-home child care providers (in the child’s home).

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Subpart E – Health and Safety (98.41)

Allows Lead Agencies to establish criteria for waiving family co-pays; must describe criteria in the Plan (see 98.16(k))

Adds provision that Lead Agencies may not use cost of care or subsidy payment rate as a factor in setting co-payment amounts. Clarifies existing contradiction between the 1992 and

1998 preambles; intended to protect parental choice and equal access.

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Subpart E – Sliding Fee Scales (98.42)

Market Rate Survey → Market Price Study Allows Lead Agencies to use an alternative methodology, such

as a cost estimation model, to establish payment rates; must be approved by ACF.

Requires Lead Agencies to take into account the quality of care when determining payment rates.

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Subpart E – Equal Access (98.43)

Changes to Subpart F include: Child care services (98.50) Activities to improve the quality of child care (98.51) Administrative costs (98.52) Restrictions on the use of funds (98.54)

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Subpart F – Use of Child Care and Development Funds

Grants or contracts. Corresponding change in this section, which describes “funding methods” for child care services, to reflect 98.30 requirement that States include some use of grants or contracts for the provision of direct services linked to the supply of high quality care.

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Subpart F – Child Care Services (98.50)

• Framework for quality improvement activities. Replaces current list of suggested quality improvement activities with an updated list that has a greater focus on systemic investments. All activities in the old list are incorporated into the new quality framework, which includes:– Activities to ensure health and safety– Establishment of early learning guidelines– Implementation of quality improvement systems– Implementation of professional development systems– Implementation of infrastructure of support– Assessment and evaluation of quality activities (98.51(a)(2))

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Subpart F – Activities to Improve the Quality of Care (98.51(a))

Clarifies that activities to improve the quality of child care are not restricted to children meeting CCDF eligibility requirements. (98.51(d))

Clarifies that targeted funds for quality improvement included in annual appropriations may not count towards meeting the 4% minimum quality requirement. (98.51(e))

Corresponding change to reflect Quality Performance Report (QPR) requirement at 98.16(v) that Lead Agencies must provide a description of performance goals associated with quality expenditures. (98.51(f)) (Tribes are exempt)

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Subpart F – Activities to Improve the Quality of Care (98.51(d-f))

Administrative activities. Formally adds list of activities which should not be counted towards the 5% limitation on administrative costs (i.e., non-direct services).

Sub-recipients. Clarifies that if a Lead Agency enters into agreements with sub-recipients for operation of the CCDF program, the amount of the contract or grant attributable to administrative activities must be counted toward the administrative costs limit.

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Subpart F – Administrative Costs (98.52)

Construction and renovation. Clarifies “minor remodeling” – Improvements or upgrades to a

facility which are not specified under the definitions of construction or major renovation at 98.2 may be considered minor remodeling and are, therefore, allowable.

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Subpart F – Restrictions on Use of Funds (98.54)

Availability of funds (98.60): TA Set-Aside. Increases the set-aside for technical assistance to

1/2 of 1%. Obligations. Clarifies when an obligation occurs in instances

where third party agencies (e.g., local government, CCR&R) issue child care certificates (vouchers); funds are considered to be obligated when the Lead Agency enters into the sub-grant or contract with the third party agency.

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Subpart G – Financial Management

Allotments from discretionary fund (98.61) Adds reference to Targeted Funds (e.g., quality, infant/toddler

quality, school-age and resource and referral).Audits and financial reporting (98.65) Adds details regarding financial reporting. These details are

consistent with existing reporting requirements under the ACF-696 (for States and Territories) and ACF-696T (for Tribes).

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Subpart G – Financial Management

NEW – Program integrity (98.68): Adds new section on program integrity that requires State,

Territorial, and Tribal CCDF Agencies to have:– Internal controls.– Processes for identifying fraud and program violations.– Procedures for documenting and verifying children’s eligibility.– Processes to investigate and recover fraudulent payments and to

impose sanctions in response to fraud.

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Subpart G – Financial Management

Content of reports (98.71) Requires States and Territories to report case-level data on the

quality of the child care provider for each child receiving CCDF services—consistent with recent revisions to the ACF-801 report.

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Subpart H – Program Reporting Requirements

Tribal Lead Agencies are generally subject to the new and revised provisions in this proposed rule.

Tribes are exempt from the requirement to use grants and contracts. (98.81(b)(6); 98.83(d))

Tribes must ensure that children receiving CCDF are age appropriately immunized. (98.83(d))

Tribes are exempt from the website requirement. (98.83(d)) All Tribes must now spend at least 4% on quality. (98.83(f))

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Subpart I – Indian Tribes

Preamble changes (non-regulatory): Smaller Tribes continue to be exempt from operating a

certificate program. ACF intends to raise the threshold for exempt Tribes from $500,000 to $700,000.

ACF intends to increase the base amount of funding from $20,000 to $30,000.

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Subpart I – Indian Tribes

The NPRM does not include any changes at Subpart J.

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Subpart J – Monitoring, Non-Compliance, and Complaints

Lead Agencies would no longer be required to submit the estimated annual amount of improper payments in their Error Rate Reports. (98.100(b); 98.102(a))

Lead Agencies with an improper payment rate that exceeds a threshold established by the Secretary must submit a comprehensive corrective action plan, as well as subsequent reports describing progress in implementing the plan. (98.102(c))

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Subpart K – Error Rate Reporting

Submit comments electronically at: http://www.regulations.gov/#!submitComment;D=ACF2013-0001-0001 Or mail comments to the Office of Child Care, 370 L’Enfant Promenade, SW., Washington, DC 20024, Attention: Cheryl Vincent, Office of Child Care. Include your name and address, identify the docket number for this rulemaking (ACF-2013-0001), indicate the specific section of this document to which each comment applies, and give the reason for each comment.Comments due by August 5th!

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Submitting Public Comment