RD367 - Annual Child Care and Development Fund (CCDF) Report – October 1, 2020

Executive Summary:

House Bill 30 (Chapter 1289) of the 2020 General Assembly Regular Session, Item 137 M., directs the Virginia Department of Education (VDOE), in collaboration with the Department of Social Services (VDSS), to prepare an annual Child Care and Development Fund (CCDF) report. The specific language of the mandate is as follows:

M. The Department of Education, in collaboration with the Department of Social Services, shall prepare an annual Child Care and Development Fund (CCDF) report that reflects all CCDF expenditures from the previous fiscal year, current grant balances, as well as all anticipated spending for the current and two subsequent fiscal years. Identified spending should, at a minimum, be broken down by subsidies (mandated and discretionary), administrative costs, and quality efforts. In addition, this plan should report, by locality, the number of subsidies (mandated and discretionary) provided, number of providers receiving CCDF dollars, the overall number of child care providers, and the waitlist for services. This information should be provided the previous fiscal year, current fiscal year, and two subsequent fiscal years. The plan shall also include an appendix with the most recently completed CCDF annual report as required by the federal Office of Child Care. The department shall submit the report by October 1 of each year to the Governor and the Chairs of the House Appropriations and Senate Finance and Appropriations Committees. In addition, the department shall post this report on its website along with any reports from previous fiscal years.

Activities funded by CCDF are critical to the health, safety and well-being of Virginia children and their families. CCDF is the primary federal funding source for Virginia’s Child Care Subsidy Program, which helps low-income families access child care while they work or participate in education or training programs. In addition to funding direct services for families, CCDF dollars also support broader quality improvement and supply building efforts for the entire child care system.

In SFY 2020, over 31,000 children participated in Virginia’s Child Care Subsidy Program administered by the Department of Social Services and the 120 local departments of social services. Significant program enhancements in recent years include implementing health and safety standards for unlicensed Subsidy providers with annual inspections to monitor compliance, increasing provider payment rates, adopting 12-month eligibility for families, and implementing graduated exit which enables parents to increase income without losing subsidy assistance, thereby improving their ability to support their children. Virginia implemented fingerprint background checks for child care providers and offers free preservice, first aid, and CPR training for child care providers. The public now has easy access to important child care information through a streamlined child care microsite at www.ChildCareVa.com. Virginia has also responded quickly to the COVID-19 pandemic with significant temporary actions to assist child care providers and families, some of which are shown in Appendix A.

It should be noted that projecting CCDF expenditures for the current state fiscal year (SFY 2021) and future years is challenging in the current context for two primary reasons. First, the COVID-19 pandemic has created significant disruption and uncertainty in the child care field. A large number of child care programs are temporarily closed while others are operating a significantly reduced capacity. Some parents in the Child Care Subsidy Program are not fully utilizing the program due to changes in their employment status and the number of Subsidy applications is fluctuating largely due to high unemployment rates. Moreover, school-age children—who typically would only require part-day care—are learning in fully virtual or hybrid settings and therefore need full-day care during part or all of the week. At the same time, the Virginia Department of Social Services has implemented a number of temporary COVID-19 measures to assist both child care providers and families during the challenging COVID-19 period, which also impact program costs.

Secondly, Virginia is preparing to transition authority for policy and oversight for the Child Care Subsidy Program from VDSS to VDOE effective July 1, 2021. VDSS will continue to administer the program. VDOE will conduct a thorough review of existing subsidy policies and spending patterns in an effort to create alignment with other early care and education programs and maximize public resources. The resulting regulatory changes may have implications for program expenditures starting in SFY 2022 or 2023.

The following sections of the report address:

• CCDF Expenditures

• Program Service Levels (Statewide and By Locality) for:

o Number of Children Receiving Child Care Subsidies
o Number of Providers Receiving CCDF Dollars
o Overall Number of Child Care Providers
o Waitlist for Subsidy Services

• CCDF Annual Report to the Federal Office of Child Care