45 C.F.R. Subpart F—Use of Child Care and Development Funds
Title 45 - Public Welfare
(a) Of the funds remaining after applying the provisions of paragraphs (c), (d) and (e) of this section the Lead Agency shall spend a substantial portion to provide child care services to low-income working families. (b) Child care services shall be provided: (1) To eligible children, as described in §98.20; (2) Using a sliding fee scale, as described in §98.42; (3) Using funding methods provided for in §98.30; and (4) Based on the priorities in §98.44. (c) Of the aggregate amount of funds expended (i.e., Discretionary, Mandatory, and Federal and State share of Matching Funds), no less than four percent shall be used for activities to improve the quality of child care as described at §98.51. (d) Of the aggregate amount of funds expended (i.e., Discretionary, Mandatory, and Federal and State share of Matching Funds), no more than five percent may be used for administrative activities as described at §98.52. (e) Not less than 70 percent of the Mandatory and Matching Funds shall be used to meet the child care needs of families who: (1) Are receiving assistance under a State program under Part A of title IV of the Social Security Act, (2) Are attempting through work activities to transition off such assistance program, and (3) Are at risk of becoming dependent on such assistance program. (f) Pursuant to §98.16(g)(4), the Plan shall specify how the State will meet the child care needs of families described in paragraph (e) of this section. (a) No less than four percent of the aggregate funds expended by the Lead Agency for a fiscal year, and including the amounts expended in the State pursuant to §98.53(b), shall be expended for quality activities. (1) These activities may include but are not limited to: (i) Activities designed to provide comprehensive consumer education to parents and the public; (ii) Activities that increase parental choice; and (iii) Activities designed to improve the quality and availability of child care, including, but not limited to those described in paragraph (2) of this section. (2) Activities to improve the quality of child care services may include, but are not limited to: (i) Operating directly or providing financial assistance to organizations (including private non-profit organizations, public organizations, and units of general purpose local government) for the development, establishment, expansion, operation, and coordination of resource and referral programs specifically related to child care; (ii) Making grants or providing loans to child care providers to assist such providers in meeting applicable State, local, and tribal child care standards, including applicable health and safety requirements, pursuant to §§98.40 and 98.41; (iii) Improving the monitoring of compliance with, and enforcement of, applicable State, local, and tribal requirements pursuant to §§98.40 and 98.41; (iv) Providing training and technical assistance in areas appropriate to the provision of child care services, such as training in health and safety, nutrition, first aid, the recognition of communicable diseases, child abuse detection and prevention, and care of children with special needs; (v) Improving salaries and other compensation (such as fringe benefits) for full-and part-time staff who provide child care services for which assistance is provided under this part; and (vi) Any other activities that are consistent with the intent of this section. (b) Pursuant to §98.16(h), the Lead Agency shall describe in its Plan the activities it will fund under this section. (c) Non-Federal expenditures required by §98.53(c) (i.e., the maintenance-of-effort amount) are not subject to the requirement at paragraph (a) of this section. (a) Not more than five percent of the aggregate funds expended by the Lead Agency from each fiscal year's allotment, including the amounts expended in the State pursuant to §98.53(b), shall be expended for administrative activities. These activities may include but are not limited to: (1) Salaries and related costs of the staff of the Lead Agency or other agencies engaged in the administration and implementation of the program pursuant to §98.11. Program administration and implementation include the following types of activities: (i) Planning, developing, and designing the Child Care and Development Fund program; (ii) Providing local officials and the public with information about the program, including the conduct of public hearings; (iii) Preparing the application and Plan; (iv) Developing agreements with administering agencies in order to carry out program activities; (v) Monitoring program activities for compliance with program requirements; (vi) Preparing reports and other documents related to the program for submission to the Secretary; (vii) Maintaining substantiated complaint files in accordance with the requirements of §98.32; (viii) Coordinating the provision of Child Care and Development Fund services with other Federal, State, and local child care, early childhood development programs, and before-and after-school care programs; (ix) Coordinating the resolution of audit and monitoring findings; (x) Evaluating program results; and (xi) Managing or supervising persons with responsibilities described in paragraphs (a)(1)(i) through (x) of this section; (2) Travel costs incurred for official business in carrying out the program; (3) Administrative services, including such services as accounting services, performed by grantees or subgrantees or under agreements with third parties; (4) Audit services as required at §98.65; (5) Other costs for goods and services required for the administration of the program, including rental or purchase of equipment, utilities, and office supplies; and (6) Indirect costs as determined by an indirect cost agreement or cost allocation plan pursuant to §98.55. (b) The five percent limitation at paragraph (a) of this section applies only to the States and Territories. The amount of the limitation at paragraph (a) of this section does not apply to Tribes or tribal organizations. (c) Non-Federal expenditures required by §98.53(c) (i.e., the maintenance-of-effort amount) are not subject to the five percent limitation at paragraph (a) of this section. (a) Federal matching funds are available for expenditures in a State based upon the formula specified at §98.63(a). (b) Expenditures in a State under paragraph (a) of this section will be matched at the Federal medical assistance rate for the applicable fiscal year for allowable activities, as described in the approved State Plan, that meet the goals and purposes of the Act. (c) In order to receive Federal matching funds for a fiscal year under paragraph (a) of this section: (1) States shall also expend an amount of non-Federal funds for child care activities in the State that is at least equal to the State's share of expenditures for fiscal year 1994 or 1995 (whichever is greater) under sections 402(g) and (i) of the Social Security Act as these sections were in effect before October 1, 1995; and (2) The expenditures shall be for allowable services or activities, as described in the approved State Plan if appropriate, that meet the goals and purposes of the Act. (3) All Mandatory Funds are obligated in accordance with §98.60(d)(2)(i). (d) The same expenditure may not be used to meet the requirements under both paragraphs (b) and (c) of this section in a fiscal year. (e) An expenditure in the State for purposes of this subpart may be: (1) Public funds when the funds are: (i) Appropriated directly to the Lead Agency specified at §98.10, or transferred from another public agency to that Lead Agency and under its administrative control, or certified by the contributing public agency as representing expenditures eligible for Federal match; (ii) Not used to match other Federal funds; and (iii) Not Federal funds, or are Federal funds authorized by Federal law to be used to match other Federal funds; or (2) Donated from private sources when the donated funds: (i) Are donated without any restriction that would require their use for a specific individual, organization, facility or institution; (ii) Do not revert to the donor's facility or use; and (iii) Are not used to match other Federal funds; (iv) Shall be certified both by the donor and by the Lead Agency as available and representing expenditures eligible for Federal match; and (v) Shall be subject to the audit requirements in §98.65 of these regulations. (f) Donated funds need not be transferred to or under the administrative control of the Lead Agency in order to qualify as an expenditure eligible to receive Federal match under this subsection. They may be given to the entity designated by the State to receive donated funds pursuant to §98.16(c)(2). (g) The following are not counted as an eligible State expenditure under this Part: (1) In-kind contributions; and (2) Family contributions to the cost of care as required by §98.42. (h) Public pre-kindergarten (pre-K) expenditures: (1) May be used to meet the maintenance-of-effort requirement only if the State has not reduced its expenditures for full-day/full-year child care services; and (2) May be eligible for Federal match if the State includes in its Plan, as provided in §98.16(q), a description of the efforts it will undertake to ensure that pre-K programs meet the needs of working parents. (3) In any fiscal year, a State may use public pre-K funds for up to 20% of the funds serving as maintenance-of-effort under this subsection. In any fiscal year, a State may use other public pre-K funds for up to 20% of the expenditures serving as the State's matching funds under this subsection. (4) If applicable, the CCDF Plan shall reflect the State's intent to use public pre-K funds in excess of 10%, but not for more than 20%, of either its maintenance-of-effort or State matching funds in a fiscal year. Also, the Plan shall describe how the State will coordinate its pre-K and child care services to expand the availability of child care. (i) Matching funds are subject to the obligation and liquidation requirements at §98.60(d)(3). (a) General. (1) Funds authorized under section 418 of the Social Security Act and section 658B of the Child Care and Development Block Grant Act, and all funds transferred to the Lead Agency pursuant to section 404(d) of the Social Security Act, shall be expended consistent with these regulations. Funds transferred pursuant to section 404(d) of the Social Security Act shall be treated as Discretionary Funds; (2) Funds shall be expended in accordance with applicable State and local laws, except as superseded by §98.3. (b) Construction. (1) For State and local agencies and nonsectarian agencies or organizations, no funds shall be expended for the purchase or improvement of land, or for the purchase, construction, or permanent improvement of any building or facility. However, funds may be expended for minor remodeling, and for upgrading child care facilities to assure that providers meet State and local child care standards, including applicable health and safety requirements. (2) For sectarian agencies or organizations, the prohibitions in paragraph (b)(1) of this section apply; however, funds may be expended for minor remodeling only if necessary to bring the facility into compliance with the health and safety requirements established pursuant to §8.41. (3) Tribes and tribal organizations are subject to the requirements at §98.84 regarding construction and renovation. (c) Tuition. Funds may not be expended for students enrolled in grades 1 through 12 for: (1) Any service provided to such students during the regular school day; (2) Any service for which such students receive academic credit toward graduation; or (3) Any instructional services that supplant or duplicate the academic program of any public or private school. (d) Sectarian purposes and activities. Funds provided under grants or contracts to providers may not be expended for any sectarian purpose or activity, including sectarian worship or instruction. Pursuant to §98.2, assistance provided to parents through certificates is not a grant or contract. Funds provided through child care certificates may be expended for sectarian purposes or activities, including sectarian worship or instruction when provided as part of the child care services. (e) The CCDF may not be used as the non-Federal share for other Federal grant programs. (a) The Lead Agency and subgrantees shall keep on file cost allocation plans or indirect cost agreements, as appropriate, that have been amended to include costs allocated to the CCDF. (b) Subgrantees that do not already have a negotiated indirect rate with the Federal government should prepare and keep on file cost allocation plans or indirect cost agreements, as appropriate. (c) Approval of the cost allocation plans or indirect cost agreements is not specifically required by these regulations, but these plans and agreements are subject to review.
Title 45: Public Welfare
PART 98—CHILD CARE AND DEVELOPMENT FUND
Subpart F—Use of Child Care and Development Funds
§ 98.50 Child care services.
§ 98.51 Activities to improve the quality of child care.
§ 98.52 Administrative costs.
§ 98.53 Matching fund requirements.
§ 98.54 Restrictions on the use of funds.
§ 98.55 Cost allocation.
