RD181 - Annual Report on Strategies to Obtain the Maximum Amount of Federal Funding Available for Child Care Services for Families who Receive Temporary Assistance for Needy Families (TANF)


Executive Summary:
Section 63.2-620 of the Code of Virginia mandates the Department of Social Services (Department) to report annually on strategies to obtain the maximum amount of federal funding available for child care services for families who receive Temporary Assistance for Needy Families (TANF) or whose income is at or below 185 percent of the federal poverty level. The legislative report must be submitted to the chairmen of the House Committees on Appropriations and Health, Welfare and Institutions, and the Senate Committees on Finance and Rehabilitation and Social Services by December 15th of each year.

Since the implementation of welfare reform, child care expenditures have increased significantly, from $49,661,876 in state fiscal year (SFY) 1995 to over $122 million in SFY 2004. As TANF recipients entered the workforce, child care became a necessary component in enabling families to work and to move toward the goal of self-sufficiency. In SFY 2004, the cost of providing child care assistance to Virginia’s TANF and low income families totaled $139,915,088. (*1) This amount includes $122,027,448 in subsidy payments and $17,887,640 in support staff to maintain caseloads. Approximately fifty percent of the funding for the subsidy program is allocated to Fee Child Care to serve low income families.

Fee Child Care funds are a combination of federal dollars, state general fund dollars and local match monies. Some localities have been hindered from fully utilizing the Fee Child Care funds allotted to them for reasons such as the local government’s inability to allocate the required ten percent match or the need for additional staff to handle the caseloads. In order to fully utilize dollars that are allocated for Fee Child Care, the Department allows localities that have more than the ten percent required match to access the monies that would otherwise go unspent.

The spending outlook for SFY 2005 is expected to increase over SFY 2004 spending, particularly in the area of TANF and Virginia Initiative for Employment not Welfare Program. Strategies employed by the Department in SFY 2004 to maximize nonfederal funding sources used as match included: reporting the Department of Education’s Pre-Kindergarten expenditures as Maintenance of Effort and match for the Child Care and Development Fund; claiming local-only child care expenditures that have not been previously submitted to the State for reimbursement; modifying the allocation of funds to local departments of social services for the Fee Child Care program, and increasing the family eligibility level for Fairfax County. The use of donated funds and spending from other state agencies are also being explored as additional nonfederal sources.
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(*1) Expenditure data provided by the Virginia Department of Social Services’ Locality Automated System for Expenditure Reimbursement (LASER)