[Federal Register Volume 78, Number 97 (Monday, May 20, 2013)]
[Proposed Rules]
[Pages 29442-29498]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2013-11673]
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Vol. 78
Monday,
No. 97
May 20, 2013
Part II
Department of Health and Human Services
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45 CFR Part 98
Child Care and Development Fund (CCDF) Program; Proposed Rule
Federal Register / Vol. 78 , No. 97 / Monday, May 20, 2013 / Proposed
Rules
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DEPARTMENT OF HEALTH AND HUMAN SERVICES
45 CFR Part 98
RIN 0970-AC53
Child Care and Development Fund (CCDF) Program
AGENCY: Office of Child Care (OCC), Administration for Children and
Families (ACF), Department of Health and Human Services (HHS).
ACTION: Notice of proposed rulemaking.
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SUMMARY: The Administration for Children and Families (ACF) proposes to
amend the Child Care and Development Fund (CCDF) regulations. This
proposed rule makes changes to CCDF regulatory provisions in order to
strengthen health and safety requirements for child care providers,
reflect current State and local practices to improve the quality of
child care, infuse new accountability for Federal tax dollars, and
leverage the latest knowledge and research in the field of early care
and education to better serve low-income children and families.
DATES: In order to be considered, comments on this proposed rule must
be received on or before August 5, 2013.
ADDRESSES: Interested persons are invited to submit comments to the
Office of Child Care, 370 L'Enfant Promenade SW., Washington, DC 20024,
Attention: Cheryl Vincent, Office of Child Care, or electronically via
the Internet at http://www.regulations.gov. If you submit a comment,
please 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. You may submit your comments and material by electronic means,
mail, or delivery to the address above, but please submit your comments
and material by only one means. A copy of this Notice of Proposed
Rulemaking may be downloaded from http://www.regulations.gov.
FOR FURTHER INFORMATION CONTACT: Cheryl Vincent, Office of Child Care,
202-205-0750 (not a toll-free call). Deaf and hearing impaired
individuals may call the Federal Dual Party Relay Service at 1-800-877-
8339 between 8 a.m. and 7 p.m. Eastern Time.
SUPPLEMENTARY INFORMATION:
Contents
I. Executive Summary
II. Background
A. Child Care and Development Fund (CCDF)
B. Discussion of Changes Made in this Proposed Rule
III. Statutory Authority
IV. Provisions of Proposed Rule
Subpart A--Goals, Purposes and Definitions
Subpart B--General Application Procedures
Subpart C--Eligibility for Services
Subpart D--Program Operations (Child Care Services) Parental
Rights and Responsibilities
Subpart E--Program Operations (Child Care Services) Lead Agency
and Provider Requirements
Subpart F--Use of Child Care and Development Funds
Subpart G--Financial Management
Subpart H--Program Reporting Requirements
Subpart I--Indian Tribes
Subpart J--Monitoring, Non-Compliance, and Complaints
Subpart K--Error Rate Reporting
V. Paperwork Reduction Act
VI. Regulatory Flexibility Act
VII. Regulatory Impact Analysis
VIII. Unfunded Mandates Reform Act of 1995
IX. Congressional Review
X. Executive Order 13132
XI. Treasury and General Government Appropriations Act of 1999
I. Executive Summary
Need for the regulatory action. The Child Care and Development Fund
(CCDF) is the primary Federal funding source devoted to providing low-
income families with access to child care and improving the quality of
child care. It has the twin goals of promoting families' economic self-
sufficiency by making child care more affordable, and fostering healthy
child development and school success by improving the quality of child
care. This proposed regulatory action is needed to improve
accountability broadly across many areas of the CCDF program, but is
especially focused on ensuring children supported by CCDF funds are in
safe, healthy, quality child care, and empowering parents with
transparent information about the child care choices available to them.
Last reauthorized in 1996, the CCDF program has not undergone any
significant review in more than 15 years, yet it has far-reaching
implications for America's poorest children. It provides child care
assistance to 1.6 million children from nearly 1 million low-income
working families. Half of the children served are living at or below
poverty level. In addition, children who receive CCDF are cared for
alongside children who do not receive CCDF, by approximately 500,000
participating child care providers, some of whom lack basic assurances
needed to ensure children are safe, healthy and learning.
National surveys have demonstrated that most parents logically
assume their child care providers have had a background check, had
training in child health and safety, and are regularly monitored
(National Association of Child Care Resource and Referral Agencies,
National Parent Polling Results, 2011). However, State policies
surrounding the training and oversight of child care providers vary
widely and may not include these requirements. In addition,
approximately 10 percent of CCDF children are cared for in unregulated
centers and homes, meaning there is little to no oversight with respect
to compliance with basic standards designed to safeguard children's
well-being, such as first-aid and safe sleep practices. This can leave
children in unsafe conditions, even as their care is being funded with
public dollars. There have been many documented instances of children
being injured or even dying in child care, some of which were due to a
lack of basic requirements for child care providers. While it is not
possible to eliminate all tragic circumstances, this proposed rule
focuses on preventing these situations by increasing accountability for
protecting the health and safety of children in child care. It would
add requirements for child care providers serving children receiving
CCDF assistance, including background checks, pre-service training in
specific areas of health and safety, and strengthened monitoring of
providers.
Yet, compliance with health and safety standards is not enough to
ensure that children are getting the quality child care they need to
support their healthy development and school success. A growing body of
research demonstrates that the first five years of a child's cognitive
and emotional development establish the foundation for learning and
achievement throughout life. This is especially true for low-income
children who face a school readiness and achievement gap and can
benefit the most from high quality early learning environments.
Children receiving CCDF subsidies come from low-income families and
typically start school far behind their peers in key areas such as
language development and problem-solving skills. Research shows that
the quality and stability of adult, child relationships matter and
positive, lasting interactions with caregivers can help foster the
development and learning needed to help close those gaps. In light of
this research, many States, Territories, and Tribes, working
collaboratively with the Federal
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government, have taken important steps to make the CCDF program more
child-focused and family-friendly; however, implementation of these
evidence-informed practices is uneven across the country and critical
gaps remain.
Beyond improving health and safety, CCDF can address this in two
ways; first by investing in the quality of child care and providing
parents with the transparent information they need to find that care,
and second by improving the stability of care through implementation of
family-friendly policies.
First, parents often lack basic information about child care
providers--including whether they have a consistent track record of
meeting health and safety standards and information about the quality
and qualifications of the caregivers. This proposed rule includes a set
of provisions designed to provide greater transparency to parents so
they can make more informed choices for their families and to
facilitate quality improvement efforts by child care providers. It
makes available, for both CCDF parents and the general public, clear,
easy-to-understand information about the quality of child care
providers in their communities. In addition, it facilitates replication
of best practices across the country by directing States, Territories,
and Tribes toward making more purposeful investments in child care
quality improvement and tracking the progress and success of those
investments.
Secondly, this proposed rule includes provisions to make the CCDF
program more ``family friendly'' by reducing unnecessary administrative
burdens on families (as well as State, Territory, and Tribal agencies
administering the program), and by improving coordination with other
programs serving low-income families. Currently, most families
receiving CCDF-assistance participate in the program for only 3 to 7
months, and many are still eligible when they leave the program.
Parents often find it difficult to navigate administrative processes
and paperwork required to maintain their eligibility and State policies
can be inflexible to changes in a family's circumstances. In some
States, if a parent loses their job they also lose their child care
assistance right away, making it difficult to look for a new job. If a
parent finds a new job they may have to reapply for CCDF and find
themselves on a waiting list. This disrupts both the parents' economic
stability and the relationship that a child has with his or her
caregiver. Research has shown that breaks in the relationship that a
child has with a caregiver is detrimental to optimal child development,
especially for infants and toddlers. Changes in this proposed rule
support a set of policies that will stabilize families' access to child
care assistance and in turn, help stabilize their employment and
maintain the stability of the child's care arrangement.
Legal authority. This proposed regulation is being issued under the
authority granted to the Secretary of Health and Human Services by the
CCDBG Act (42 U.S.C. 9858, et seq.) and Section 418 of the Social
Security Act (42 U.S.C. 618).
Summary of the major provisions of this proposed regulatory action.
This proposed rule includes regulatory changes for CCDF in four
priority areas: (1) improving health and safety in child care; (2)
improving the quality of child care; (3) establishing family-friendly
policies; and (4) strengthening program integrity.
The proposed rule would improve health and safety protections for
children receiving CCDF assistance by specifying minimum State health
and safety standards for their child care providers, including pre-
inspections for compliance with State and local fire, health, and
building codes, criminal background checks and pre-service training in
specific areas, such as first aid and CPR. The proposed rule requires
States to take steps to improve the monitoring of child care providers
who receive CCDF to care for children by conducting unannounced, on-
site visits to CCDF providers.
In addition to establishing a floor of basic health and safety,
this proposed rule seeks to improve the quality of child care and
provide parents with information about child care providers available
to them. It requires that States post information about health, safety
and licensing history of child care providers on a user-friendly Web
site and establish a hotline for parents to submit complaints about
child care providers. The proposal builds on practices adopted by more
than half the States by requiring establishment of provider-specific
quality indicators, such as through a Quality Rating and Improvement
System (QRIS), reflecting teaching staff qualifications, learning
environment, and curricula and activities. This makes it easier for
parents to compare child care providers and choose a provider that best
meets their family's needs. It also encourages States to adopt an
organized framework for their quality improvement activities including
helping child care providers meet higher standards and helping them
improve their education and training. Finally, the proposed rule
addresses the lack of supply of high quality care, by asking States to
identify areas of the highest need and use grants or contracts directly
with child care providers to improve the quality in those places.
To increase stability in the lives of low-income families receiving
CCDF, this proposed rule includes family-friendly policies to make it
easier for parents to access and maintain their child care assistance.
It establishes a 12-month period for re-determining eligibility and
allows parents who lose their job to remain eligible for a period of
time while they look for a new job. It allows States more flexibility
to minimize requirements for families to maintain their eligibility and
to waive co-payments for families. These provisions also make it easier
for States to align CCDF policies with other programs that may be
serving the families, such as the Supplemental Nutrition Assistance
Program (SNAP), Medicaid, the Children's Health Insurance Program, and
Early Head Start and Head Start.
Finally, this proposed rule improves program integrity by requiring
States with high rates of improper payments for the CCDF program to
develop a plan for reducing those rates in accordance with the Improper
Payments Elimination and Reduction Act. It also adds new provisions
requiring States to have in place effective internal controls for sound
fiscal management, processes for identifying fraud and other program
violations, and procedures for accurately verifying a family's
eligibility.
This proposed rule recognizes the importance of State, Territory,
and Tribal flexibility in administration of the program. In many areas
the proposed rule establishes a clear expectation for States,
Territories and Tribes, but allows a range of implementation options to
fit their individual circumstances. For example, it allows States,
Territories, and Tribes to exempt relatives and caregivers in the
child's home from some or all of the CCDF health and safety
requirements and to set the period of time they allow for a family to
search for a job. The preamble highlights the ways that the proposed
rule incorporates practices common in many States and identifies
alternative options for implementing new requirements. In many cases,
the examples are illustrative and States can identify the best
approaches for their jurisdictions. Similarly, we expect especially
wide variation in approaches adopted by Tribes. ACF is committed to
consulting with Tribal leadership on the provisions of this proposed
rule and we
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look forward to working with Tribes on practices that are a good fit
for Tribal communities.
Cost and benefits. Changes in this proposed rule directly benefit
children and parents who use CCDF assistance to pay for child care. The
1.6 million children who are in child care funded by CCDF would have
stronger protections for their health and safety, which addresses every
parent's paramount concern. But the effect of these changes would go
far beyond the children who directly participate in CCDF. Not only
children who receive CCDF, but all the children in the care of a
participating CCDF provider, will be safer because that provider has
had a background check and is more knowledgeable about CPR, first aid,
safe sleep for infants, and the safe transportation of children. The
consumer education and transparency provisions in this proposed rule
will benefit not only CCDF families, but all parents selecting child
care by requiring States to post provider-specific information about
child care providers on a public Web site with information about health
and safety and licensing requirements. Several provisions in this
proposed rule benefit child care providers by encouraging States to
invest in high quality child care providers and professional
development and to take into account quality when they determine child
care payment rates. It also places a stronger emphasis on practices
States use to reimburse providers, such as ensuring timely payments and
paying for absence days which is a common practice in the child care
market.
There are a significant number of States, Territories, and Tribes
that have already implemented many of these policies and we have been
purposeful throughout to note these numbers. The cost of implementing
the changes in this proposed rule will vary depending on a State's
specific situation. ACF does not believe the costs of this proposed
regulatory action would be economically significant and that the
tremendous benefits to low-income children justify costs associated
with this proposed rule.
II. Background
A. Child Care and Development Fund (CCDF)
The CCDF program is administered by the Office of Child Care (OCC),
Administration for Children and Families (ACF) in the Department of
Health and Human Services (HHS). CCDF funds are allocated through
formula grants to State, Territory, and Tribal Lead Agencies. CCDF
provides financial assistance to low-income families to access child
care so they can work or attend a job training or educational program.
The program also provides funding to improve the quality of child care
and increase the supply and availability of child care for all
families, including those who receive no direct assistance through
CCDF.
Over 12 million young children regularly rely on child care to
support their healthy development and school success. Additionally,
more than 8 million children participate in a range of school-age
programs before- and after-school and during summers and school breaks.
CCDF is the primary Federal funding source devoted to providing low-
income families with access to child care and before-and after-school
care and improving the quality of care. Each year, States, Territories,
and Tribes invest $1 billion in CCDF funds to support child care
quality improvement activities that are designed to create better
learning environments and more effective caregivers in child care
centers and family child care homes across the country.
CCDF was created more than 15 years ago, after Congress enacted the
Personal Responsibility and Work Opportunity Reconciliation Act
(PRWORA) of 1996 (Pub. L. 104-193), a comprehensive welfare reform plan
that included new work requirements and provided supports to families
moving from welfare to work, including new consolidated funding for
child care. This funding, provided under section 418 of the Social
Security Act (42 U.S.C. 618), combined with funding from the Child Care
and Development Block Grant (CCDBG) Act of 1990 (42 U.S.C 9858 et
seq.), was designated by HHS as the Child Care and Development Fund.
CCDF regulations published in 1998 at 45 CFR parts 98 and 99
implemented the child care provisions of PRWORA and, excepting the
addition of a new Subpart K to require Lead Agencies to report improper
payments, the regulations have undergone only minor changes since
becoming effective.
At the time current CCDF regulations were drafted, policymakers
were concentrated on re-positioning an entitlement-based welfare system
into one that provided benefits provisionally based on work. The
resulting focus of the CCDF regulations was largely dedicated to the
goal of enabling low-income mothers to transition from welfare to work.
This is evident in a fact sheet developed by HHS shortly after passage
of PRWORA which stated that the new welfare law provided an increase in
child care funding ``to help more mothers move into jobs.'' (http://www.acf.hhs.gov/programs/cse/pubs/1996/news/prwora.htm) CCDF was
closely tied to the new Temporary Assistance for Needy Families (TANF)
program which focused on assisting needy families through promotion of
job preparation and work activities.
In the decade and a half since PRWORA, the focus of the CCDF
program has changed as we have learned a remarkable amount about the
value of high quality early learning environments for young children.
CCDF is a dual purpose Federal program with a two-generational impact.
Low-income parents need access to child care in order to work and gain
economic independence and low-income children benefit the most from a
high quality early learning setting. Traditionally, CCDF has been
understood as primarily providing access to child care to support work,
with a secondary focus on supporting children's development by
improving the quality of child care. We believe these purposes--access
and quality--are not competing, but synergetic.
Federal CCDF dollars should provide access to high quality care in
recognition of the impact CCDF has on our nation's most disadvantaged
and vulnerable children. We do not intend to diminish the importance of
CCDF as a work support. Yet, in order to fully leverage the Federal
investment, we must be accountable for ensuring that children supported
with CCDF funds are placed in safe, healthy, nurturing settings that
are effective in promoting learning, child development and school
readiness. This dual purpose, two-generational framework envisions the
program as an investment supporting the child's long-term development
and providing the parent with an opportunity to work or participate in
job training or educational activities with peace of mind about their
children's safety and learning.
CCDF regulations pre-date much of the current science on brain
development in the early years of children's lives. Ten years ago, HHS
(in collaboration with other Federal agencies and private partners)
funded the National Academies of Science report, Neurons to
Neighborhoods. (National Research Council and Institute of Medicine,
From Neurons to Neighborhoods: The Science of Early Childhood
Development, 2000) The findings from this report showed that brain
development is most rapid during the first five years of life, and that
early experiences matter for healthy development. Nurturing and
stimulating care given in the early years of life build
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optimal brain architecture that allows children to maximize their
enormous potential for learning. On the other hand, hardship in the
early years of life can lead to later problems. Interventions in the
first years of life are capable of helping to shift the odds for those
at risk of poor outcomes toward more positive outcomes. A multi-site
study conducted by the Frank Porter Graham Child Development Institute
found that, ``. . . children who experienced higher quality care are
more likely to have more advanced language, academic, and social
skills. Moreover, the study found that quality child care matters more
for at-risk children.'' (University of North Carolina, The Children of
the Cost, Quality, and Outcomes Study Go to School: Executive Summary,
1999)
Evidence continues to mount regarding the influence children's
earliest experiences have on their later success and the role child
care can play in shaping those experiences. The most recent findings
from the National Institute of Child Health and Human Development
(NICHD) found that the quality of child care children received in their
preschool years had small but detectable effects on their academic
success and behavior all the way into adolescence. (U.S. Department of
Health and Human Services, National Institutes of Health, Study of
Early Child Care and Youth Development, 2010) A recent follow-up study
to the well known Abecedarian Project, which began in 1972 and has
followed participants from early childhood through adolescence and
young adulthood, found that adults who participated in a high quality
early childhood education program are still benefiting from their early
experiences. According to the study, Abecedarian Project participants
had significantly more years of education than peers and were four
times more likely to earn college degrees. (Frank Porter Graham Child
Development Institute, Developmental Psychology, 2012)
In addition, millions of school-age children participate in before-
and after-school programs that support their learning and development.
Participation in high quality out-of-school time programs is correlated
with positive outcomes for youth, including improved academic
performance, work habits and study skills. (Vandell, D., et al., The
Study of Promising After-School Programs, Wisconsin Center for
Education Research, 2005) An analysis of over 70 after-school program
evaluations found that evidence-based programs designed to promote
personal and social skills were successful in improving children's
behavior and school performance. (Durlak, J. and Weissberg, R., The
Impact of Afterschool Programs that Seek to Promote Personal and Social
Skills, Collaborative for the Advancement of Social and Emotional
Learning, 2007)
After-school programs also promote youth safety and family
stability by providing supervised settings during hours when children
are not in school. Parents with school-aged children in unsupervised
arrangements face greater stress that can impact the family's well-
being and successful participation in the workforce. (Barnett and
Gareis, Parental After-School Stress and Psychological Well-Being,
Journal of Marriage and the Family, 2006) CCDF plays a critical role in
providing access to school-age care and improving the quality of
programs, with over a third of children receiving CCDF subsidies being
aged 6 to 12.
Because of the strong relationship between early experience and
later success, investments in improving the quality of early childhood
and before-and after-school programs can pay large dividends. Nurturing
and responsive relationships with parents and caregivers and engaging
learning environments in early care and education settings can provide
young children with the capacity for tremendous growth. Children
attending high quality school-age programs are more likely to succeed
in school and have stronger social and inter-personal skills. In short,
high quality early education is a linchpin to creating an educational
system that is internationally competitive and vital to the country's
workforce development, economic security, and global competitiveness.
As a block grant, CCDF offers a great deal of flexibility to State,
Territory, and Tribal Lead Agencies administering the program. The
first goal listed at section 658A of the CCDBG Act is ``to allow each
State maximum flexibility in developing child care programs and
policies that best suit the needs of children and parents within such
State.'' This structure has allowed many States to test and experiment
with subsidy policies that are child-focused, family-friendly and fair
to child care providers, as well as to implement sophisticated quality
improvement systems that aim to increase the number of low-income
children in high quality child care. Many States also have made
significant progress in shaping and developing coordinated systems of
early learning and have pioneered professional development systems that
offer child care providers opportunities to move towards professional
advancement in their careers.
CCDF is a core component of the early care and education spectrum
and often operates in conjunction with other programs including Head
Start, Early Head Start, State pre-kindergarten, and before-and after-
school programs. States have flexibility to use CCDF to provide
children enrolled in these programs full-day, full-year care, which is
essential to supporting low-income working parents. CCDF also provides
the funding for quality improvements impacting children in all types of
settings, not just those children receiving subsidies. CCDF has helped
lay the groundwork for development of early learning systems,
investments that are leveraged by the Race to the Top Early Learning
Challenge (RTT-ELC), a grant competition administered jointly by the
Department of Education and HHS. RTT-ELC provides incentives and
supports to selected States to build a coordinated system of early
learning and development to ensure more children from low-income
families have access to high quality early learning programs and are
able to start school with a strong foundation for future learning. RTT-
ELC is a vehicle for States to demonstrate ways to integrate and align
resources and policies across the spectrum of early care and education
programs. Much of the existing early learning systems and quality
investments already in place and supported by CCDF parallel many of the
goals and priorities of RTT-ELC, resulting in a complementary national
strategy to improve the quality of early learning programs across the
country.
Finally, ACF recently overhauled and reorganized the structure and
required content of the CCDF Plan (ACF-118). States, Territories, and
Tribes must submit their CCDF Plans every two years. The Plan serves as
the application for CCDF funds and provides a description of the Lead
Agency's child care program and services available to eligible
families. Changes were made to the CCDF Plan to enhance the health and
safety and quality improvement sections with a focus on building
systems for child care quality improvement.
This proposed rule is driven by the same priorities and vision for
child care reform reflected in the changes made to the CCDF Plan and
follows many of the same principles for improvements in early care and
education supported by Congress through creation of RTT-ELC. It is
informed by the many documented tragedies of child injuries and deaths
in child care, it recognizes what has been learned from early childhood
development research, supports replication of best practices across the
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country, and infuses new accountability for Federal dollars to leverage
the full impact of the CCDF dual investment for both parents and
children.
B. Discussion of Changes Made in This Proposed Rule
The changes included in this proposed rule cover four priority
areas: (1) Improving health and safety in child care; (2) improving the
quality of child care; (3) establishing family-friendly policies; and
(4) strengthening program integrity.
First, we know that health and safety is the foundation for
building a high quality early learning environment. Research shows that
licensing and regulatory requirements for child care affect the quality
of care and child development. (Adams, G., Tout, K., Zaslow, M., Early
care and education for children in low-income families: Patterns of
use, quality, and potential policy implications, Urban Institute, 2007)
All States receiving CCDF funds are required to have child care
licensing systems in place and must ensure child care providers serving
children receiving subsidies meet certain health and safety
requirements. In this rule, we propose changes that strengthen health
and safety requirements and monitoring of compliance with these
requirements for child care providers serving children receiving CCDF
assistance.
Second, improving the quality of child care is essential to support
low-income children's early learning and parents need more transparent
information about the quality of child care choices available to them.
States administering the CCDF program have already begun building
quality improvement systems which make strategic investments to provide
pathways for providers to reach higher quality standards. More than
half the States have implemented Quality Rating and Improvement Systems
(QRIS) and the majority of the remaining States are piloting or
planning for implementation of such systems. Our priority for quality
improvement would incorporate a systemic organizational framework for
improving the quality of child care into CCDF regulations, and provide
a consumer education mechanism that helps parents better understand the
health, safety and quality standards met by child care providers.
Third, we have prioritized establishing family-friendly policies in
order to improve continuity of services for parents and stability of
child care arrangements for children. Continuity of services
contributes to improved job stability and is important to a family's
financial health. One of the goals of the CCDF program is to help
families achieve independence from public assistance. This goal can be
undermined by policies that result in unnecessary disruptions to
receipt of a subsidy due to administrative barriers or other processes
that make it difficult for parents to maintain their eligibility and
thus fully benefit from the support it offers. Continuity also is of
vital importance to the healthy development of young children,
particularly the most vulnerable. Unnecessary disruptions in services
can stunt or delay socio-emotional and cognitive development because
safe, stable environments allow young children the opportunity to
develop the relationships and trust necessary to comfortably explore
and learn from their surroundings. Research has also demonstrated a
relationship between child care stability and social competence,
behavior outcomes, cognitive outcomes, language development, school
adjustment, and overall child well-being. (Adams, G., Rohacek, M., &
Danzinger, A. Child Care Instability, The Urban Institute, 2010) This
priority area includes a number of proposed changes including
requirements for determining a child's eligibility for services and
administrative processes for interactions with families and child care
providers.
Fourth, we have prioritized strengthening program integrity by
proposing changes that address policies for internal controls, fiscal
management, documenting and verifying eligibility, and processes for
identifying fraud and improper payments. In November 2009, the
President issued Executive Order 13520, which underscored the
importance of reducing improper payments and eliminating waste in
Federal programs (74 FR 62201). Program integrity efforts can help
ensure that limited program dollars are going to low-income eligible
families for which assistance is intended. The proposed changes seek to
strengthen accountability while continuing to preserve access for
eligible children and families.
In large part, the changes in this proposed rule articulate a set
of expectations for how Lead Agencies are to satisfy certain
requirements in the CCDBG Act, which the current regulations either
only minimally address or where they remain altogether silent. In some
places, such as Sec. 98.41 regarding health and safety standards for
providers serving subsidized children, the current regulations are
silent as to specific standards providers are expected to meet. The
lack of specificity in regulation effectively undermines the
requirement since there is no clear guidance on what the requirements
mean or the manner in which Lead Agencies should implement them. In
other areas of the regulations, we have proposed changes to better
balance the dual purposes of the program by adding provisions to ensure
that healthy, successful child development is a consideration when Lead
Agencies establish policies for the child care program. For example,
authorization of child care services for eligible families should take
into consideration the value of preserving continuity in child care
arrangements so that young children have stability in their caregivers.
Finally, we have proposed other changes to the regulations that do
not impose new requirements on Lead Agencies, but rather formalize
Federal support for certain best practices and policies. This can be
seen in the proposed changes to Sec. 98.51 of the regulations which
require Lead Agencies to spend a minimum of four percent on child care
quality improvement activities. We have added regulatory language to
this section describing a formal framework for quality spending that is
focused on helping Lead Agencies organize, guide, and measure progress
of quality improvement activities, but we are not requiring Lead
Agencies to adopt that framework.
In developing this proposed rule, we were mindful of the
Administration's emphasis on flexibility as a guiding principle when
considering ways to better accomplish statutory goals. Accordingly, we
have sought to retain much of the flexibility that is afforded to Lead
Agencies inherent within the CCDF block grant. In many areas where we
have added new requirements we are deferring to Lead Agencies to decide
how they will implement the provision and have provided examples of
alternate ways in which the requirement could be met. In other areas we
have added more flexibility to allow Lead Agencies to align eligibility
and other requirements across programs and to tailor policies that
better meet the needs of the low-income families they serve. For
example, we are providing more flexibility for Lead Agencies to
determine when it is appropriate to waive a family's co-pay
requirement.
We do not anticipate that these proposed changes will place
significant new burden on States, Territories or Tribes because many
Lead Agencies have already implemented these practices through their
child care licensing systems and by using the flexibility in the CCDF
program provided under current law. We have
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made it a point throughout this rule to include information about the
number of States and Territories that have already adopted the changes
we are proposing. In addition, a number of Tribes have undertaken
improvements in many of these areas, including health and safety
requirements. This proposed rule at once embraces the progress and
benefits that have resulted from devolving significant program
authority to States, Territories, and Tribes while also identifying
specific areas where new Federal standards and regulation will most
benefit the core principles and goals of the CCDF program.
ACF expects provisions included in a Final Rule to become effective
30 days from the date of publication of the Final Rule. Compliance with
provisions in the Final Rule would be determined through ACF review and
approval of CCDF Plans and through the use of Federal monitoring in
accordance with Sec. 98.90, including on-site monitoring visits as
necessary. ACF expects that provisions included in a Final Rule would
be incorporated into the review of FY 2016-2017 CCDF Plans that would
become effective October 1, 2015. We recognize that some of the
proposed changes may require action on the part of a State's
legislature or require rulemaking in order to implement. It is our
desire to work with Lead Agencies to ensure that adoption of any new
requirements included a Final Rule is done in a thoughtful and
comprehensive manner. ACF welcomes public comment on specific
provisions included in this proposed rule that may warrant a longer
phase-in period and will take these comments into consideration when
developing the Final Rule.
In this proposed rule, we have generally maintained the structure
and organization of the current CCDF regulations. The preamble in this
proposed rule discusses the changes to current regulations and contains
certain clarifications based on ACF's experience in implementing the
prior final rules. Where language of existing regulations remains
unchanged, the preamble explanation and interpretation of that language
published with all prior final rules also is retained unless
specifically modified in the preamble to this proposed rule. (See 57 FR
34352-34413, August 4, 1992; 63 FR 39936-39981, July 24, 1998; 72 FR
27972-27980, May 18, 2007; 72 FR 50889-50900. September 5, 2007)
III. Statutory Authority
This proposed regulation is being issued under the authority
granted to the Secretary of Health and Human Services by the CCDBG Act
(42 U.S.C. 9858, et seq.) and Section 418 of the Social Security Act
(42 U.S.C. 618).
IV. Provisions of Proposed Rule
Subpart A--Goals, Purposes and Definitions
Goals and Purposes (Section 98.1)
We are proposing changes to enhance the regulatory language
describing purposes of the CCDF program to reflect the priorities of
improving health and safety in child care, improving the quality of
child care, establishing family-friendly policies, and strengthening
program integrity. The first part of the regulations at Sec. 98.1(a)
defines the goals of CCDF and mirrors the statutory language describing
goals of the CCDBG Act. We are proposing no changes in this section.
The second part at Sec. 98.1(b) uses regulatory authority to define
purposes for the CCDF program which are based on purposes included in
the conference report accompanying original passage of the CCDBG Act in
1990. We propose to revise the purposes described at Sec. 98.1(b).
We have retained all of the language in the original purposes with
some enhancements and added two new purposes (proposed changes are
represented in italics). Specifically, we propose to revise paragraph
(b) to read: (1) Provide low-income families with the financial
resources to find and afford high quality child care for their children
and serve children in safe, healthy, nurturing child care settings that
are highly effective in promoting learning, child development, school
readiness and success; (2) Enhance the quality and increase the supply
of child care and before-and after-school care services for all
families, including those who receive no direct assistance under the
CCDF, to support children's learning, development, and success in
school; (3) Provide parents with a broad range of options in addressing
their child care needs by expanding high quality choices available to
parents across a range of child care settings and providing parents
with information about the quality of child care programs; (4) Minimize
disruptions to children's development and learning by promoting
continuity of care; (5) Ensure program integrity and accountability in
the CCDF program; (6) Strengthen the role of the family and engage
families in their children's development, education, and health; (7)
Improve the quality of, and coordination among Federal, State, and
local child care programs, before-and after-school programs, and early
childhood development programs to support early learning, school
readiness, youth development, and academic success; and (8) Increase
the availability of early childhood development and before- and after-
school care services.
We believe these changes bring the purposes of CCDF into better
alignment with the current knowledge in the field, result in a more
comprehensive vision of the program, and provide the foundation for a
more balanced approach to program administration that acknowledges the
two-generational impact of the CCDF program.
Definitions (Section 98.2)
We propose to make four technical changes at Sec. 98.2 by deleting
the definition for group home child care provider and by making
conforming changes to the definitions for categories of care, eligible
child care provider, and family child care provider. The current
regulation defines group home child care provider as meaning two or
more individuals who provide child care services for fewer than 24
hours per day per child, in a private residence other than the child's
residence, unless care in excess of 24 hours is due to the nature of
the parent(s)' work. When ACF revised the FY 2012-2013 CCDF Plan, we
received public comments indicating that many States, Territories and
Tribes do not consider group homes to be a separate category of care
when administering their CCDF programs or related efforts, such as
child care licensing. Some States use alternative terminology (e.g.,
large family child care homes), while others treat all family child
care homes similarly regardless of size. Due to this variation, we
propose to delete the separate definition for group home child care
provider which requires a number of technical changes to the
definitions section.
We propose to revise the definition of categories of care at Sec.
98.2 to delete group home child care. Under the proposed rule,
categories of care would be defined to include center-based child care,
family child care, and in-home care (i.e., a provider caring for a
child in the child's home). Similarly, we propose to change the
definition for eligible child care provider at Sec. 98.2 to delete a
group home child care provider. The revised definition defines an
eligible child care provider as a center-based child care provider, a
family child care provider, an in-home child care provider, or other
provider of child care services for compensation. Group home child care
would be considered a family child care provider for these purposes.
Accordingly, we propose to amend the definition for family child care
provider at Sec. 98.2 to include larger family homes or group homes.
The existing definition
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of family child care provider is limited to one individual who provides
services as the sole caregiver. The revised definition defines a family
child care provider as one or more individuals who provide child care
services. The remainder of the definition remains the same, specifying
that services are for fewer than 24 hours per day per child, in a
private residence other than the child's residence, unless care in
excess of 24 hours is due to the nature of the parent(s)' work.
Many Lead Agencies will continue to provide CCDF services for
children in large family child care homes or group homes, and this is
allowable and recognized by the revised definition of family child care
provider--which would now include care in private residences provided
by more than one individual. This proposed change would eliminate group
homes as a separately-defined category of care for purposes of
administering the CCDF--thereby providing States, Territories, and
Tribes with greater flexibility. As a practical impact, CCDF Lead
Agencies will no longer be required to report separately on group homes
in their CCDF Plans (for example, regarding health and safety
requirements), or to consider group homes as a separate category for
purposes of meeting parental choice requirements at Sec. 98.30 and
equal access requirements at Sec. 98.43(b)(1). Rather, group homes
will now be considered as family child care homes for these purposes.
Subpart B--General Application Procedures
Lead Agencies have considerable latitude in administering and
implementing their child care programs. Subpart B of the regulations
describes some of the basic responsibilities of a Lead Agency as found
in the statute. A Lead Agency is designated by the chief executive of a
State or Territory, or by the appropriate Tribal leader or applicant,
and serves as the single point of contact for all child care issues.
The Lead Agency determines the basic use of CCDF funds and the
priorities for spending CCDF funds and promulgates the rules governing
overall administration.
Specifically, under existing rules, the Lead Agency
responsibilities include oversight of CCDF funds spent by sub-grantees
and contractors, monitoring programs and services, responding to
complaints, and developing the CCDF Plan in the manner specified by the
Secretary. In developing the CCDF Plan, the Lead Agency must consult
with the appropriate representatives of local government, coordinate
the provision of services with other Federal, State, and local child
care and early childhood development programs and ``programs, including
such programs for the benefit of Indian children, and hold at least one
public hearing. Other Lead Agency responsibilities include having an
independent audit conducted after the close of each program period,
ensuring that sub-grantees are audited in accordance with appropriate
audit requirements, and submission of fiscal and program reports as
prescribed by HHS.
Lead Agency Responsibilities (Section 98.10)
We propose to add a provision to Lead Agency responsibilities at
Sec. 98.10 to require Lead Agencies to be responsible for implementing
practices and procedures to ensure program integrity and accountability
as a conforming change pursuant to the proposed new section at 98.68
Program Integrity at Subpart G--Financial Management. We include an
explanation for this new section and change later in this proposed
rule.
Administration Under Contracts and Agreements (Section 98.11)
Section 98.11 of the regulations currently requires Lead Agencies
that administer or implement the CCDF program indirectly through other
local agencies or organizations to have written agreements with such
agencies that specify mutual roles and responsibilities. However, it
does not address the content of such agreements. We propose amending
regulatory language at Sec. 98.11(a)(3) to specify that, while the
content of Lead Agency written agreements with other governmental or
non-governmental agencies may vary based on the role the entity is
asked to assume or the type of project undertaken, agreements must, at
a minimum, include tasks to be performed, a schedule for completing
tasks, a budget that itemizes categorical expenditures consistent with
proposed CCDF requirements at Sec. 98.65(h), and indicators or
measures to assess performance.
Many Lead Agencies administer the CCDF program through the use of
sub-recipients that have taken on significant programmatic
responsibilities, including providing services on behalf of the Lead
Agency. For example, some States operate primarily through a county-
based system, while other Lead Agencies devolve decision-making and
administration to local workforce boards, school readiness coalitions
or community-based organizations such as child care resource and
referral agencies. ACF has learned through our efforts working with
grantees to improve program integrity that the quality and specificity
of written agreements vary widely, which hampers accountability and
efficient administration of the program. These proposed changes
represent minimum, common-sense standards for the basic elements of
those agreements, while allowing latitude in determining specific
content. The Lead Agency is ultimately responsible for ensuring that
all CCDF-funded activities meet the requirements and standards of the
program, and thus has an important role to play to ensure written
agreements with sub-recipients appropriately support program integrity
and financial accountability.
Plan Process (Section 98.14)
Coordination. Currently, Sec. 98.14(a)(1) requires Lead Agencies
to coordinate provision of program services with other Federal, State,
and local early care and development programs as required by section
658D(b)(1)(D) of the CCDBG Act. Lead Agencies also are required to
consult and coordinate services with agencies responsible for public
health, public education, employment services/workforce development,
and TANF. Over time, the CCDF program has become an essential support
in local communities to provide access to early care and education and
before and afterschool settings and to improve the quality of care.
Partnerships with these agencies and local communities have been an
important factor in improving the availability and quality of child
care. Many Lead Agencies work collaboratively to develop a coordinated
system of planning that includes a governance structure composed of
representatives from the public and private sector, parents, schools,
community-based organizations, child care, Head Start and Early Head
Start, home visitation, as well as health, mental health, child
welfare, family support, and disability services. Local coordinating
councils or advisory boards also often provide input and direction on
CCDF-funded programs.
We propose to amend Sec. 98.14(a)(1) to add new entities with
which Lead Agencies are required to coordinate the provision of child
care services. We have added parenthetical language to paragraph (C)
public education, to specify that coordination with public education
should also include agencies responsible for prekindergarten programs,
if applicable, and educational services provided under Part B and C of
the Individuals with Disabilities Education Act (IDEA) (20 U.S.C. Sec.
1400). Other proposed new coordinating
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entities include agencies responsible for child care licensing,
afterschool networks, Head Start collaboration, the State Advisory
Council on Early Childhood Education and Care authorized by the Head
Start Act (42 U.S.C. 9831 et seq.) (if applicable); and emergency
management and response.
First, we propose to add a specification to the existing regulatory
requirement to coordinate with agencies responsible for public
education at Sec. 98.14(a)(1)(C) to include prekindergarten, if
applicable, and educational services provided through Part B and C of
IDEA. Part B of the IDEA provides funding for Special Education
Preschool grants. According to the National Institute for Early
Education Research (NIEER), 40 States funded preschool programs during
the 2009-2010 school year. (The State of Preschool 2010, NIEER, Rutgers
graduate School of Education) Prekindergarten programs generally serve
3 and 4-year olds and aim to better prepare children to succeed in
kindergarten. Similar to Head Start, many CCDF Lead Agencies coordinate
services with children enrolled in prekindergarten programs to provide
full-day, full-year care. Given the prevalence of State-funded
prekindergarten programs and overlapping populations and purposes with
the CCDF program we believe it is important to include these entities
as a required coordinating partner.
State education agencies use IDEA funds to provide special
education and related services for preschool-aged children with
disabilities. Part C of the IDEA provides funding to provide early
intervention services for infants and toddlers with disabilities and
their families. Since the establishment of the Part C early
intervention program under IDEA, all States have established State
Interagency Coordinating Councils (SICCs) to advise and assist in the
implementation of Part C for infants and toddlers with disabilities and
their families. We believe this specification is important to ensure
that Lead Agencies take into account children with special needs in
child care and coordinate with other services available to children
with disabilities and their families. Linkages between child care
providers caring for children who have physical, developmental,
behavioral, or emotional conditions and medical and therapeutic
services can help make inclusion a reality by integrating additional
resources and expertise needed to help care for children in a
continuous and comprehensive manner. In the FY 2012-2013 CCDF Plans,
nearly all States and Territories reported coordinating with agencies
responsible for children with special needs, including IDEA
implementation. [Note: The analysis of CCDF Plans throughout this
proposed rule includes a total of 56 State and Territorial CCDF Plans,
including American Samoa, Guam, Northern Marianas Islands, Puerto Rico,
and the Virgin Islands.] Through these partnerships, many Lead Agencies
provide joint training and collaborative technical assistance on child
development and on the inclusion of children with disabilities in child
care programs.
We propose to add child care licensing agencies as a required
coordinating entity at new paragraph (E) to formalize a partnership
that already exists in many States. Section 658A of the CCDBG Act
provides that one of the goals of the program is ``to assist States in
implementing the health, safety, licensing, and registration standards
established in State regulations.'' According to the FY 2012-2013 CCDF
Plans, 34 States and Territories indicate coordinating provision of
CCDF services with agencies responsible for child care licensing. Child
care licensing regulations and monitoring and enforcement policies help
provide a baseline of protection for the health and safety of children
in out-of-home care. According to the 2011 Child Care Licensing Study
(prepared by the National Child Care Information and Technical
Assistance Center and the National Association for Regulatory
Administration), there are a total of 312,000 licensed facilities in
the U.S. with more than 10 million licensed child care slots. In
addition, the study found that most State licensing agencies use CCDF
funds to hire and support child care licensing staff.
We believe it is important that CCDF Lead Agencies collaborate with
agencies responsible for child care licensing to ensure that
information is shared about the licensing or regulatory status of
providers serving children receiving subsidies, especially any history
of licensing violations. To the extent that child care licensing
agencies are responsible for monitoring compliance with State
regulatory requirements, strong partnerships can help improve program
integrity within CCDF by ensuring that providers serving children
receiving subsidies are accountable for meeting health and safety and
other regulatory requirements. We encourage CCDF Lead Agencies also to
coordinate with licensing agencies when developing quality improvement
systems to incorporate basic licensing requirements as part of the
framework for determining program standards and a foundation for
improving the quality of care.
We propose to add the Head Start collaboration office as a required
coordinating entity at new paragraph (F) because CCDF services can be
linked with the Head Start program to help support provision of full-
day, full year care for children enrolled in Head Start and eligible
for the CCDF program. The Head Start Act (42 U.S.C. 9801, et seq.)
provides funding for each State to establish a Head Start collaboration
office to promote linkages between Head Start, Early Head Start, and
other child and family services. This proposed change has reciprocity
with the requirement in the Head Start Act and would formalize a
partnership that already exists in 46 States and Territories according
to the FY 2012-2013 CCDF Plans. In both Head Start and CCDF,
collaboration efforts extend to linking with other key services for
young children and their families, such as medical, dental and mental
health care, nutrition, services to children with disabilities, child
support, refugee resettlement, adult and family literacy, and
employment training. These comprehensive services are crucial in
helping families progress towards self-sufficiency and in helping
parents provide a better future for their young children.
We propose to add the agency responsible for the State Advisory
Council on Early Childhood Education and Care, if applicable, at new
paragraph (G) in recognition of provisions included in the Head Start
Reauthorization Act of 2007 (Pub. L. 110-134) which require States to
create State Advisory Councils on Early Childhood Education and Care to
improve coordination and collaboration among Head Start and Early Head
Start agencies, pre-k programs, and other early childhood education
providers. In FY 2009, the American Recovery and Reinvestment Act
(ARRA) (Pub. L. 111-5) provided funding to States to convene these
councils. Fifty States and Territories indicated in the FY 2012-2013
CCDF Plans that they coordinate with the State Advisory Council. State
Advisory Councils are often responsible for conducting a statewide
needs assessment for early childhood education, developing
recommendations for a statewide professional development and career
plan for the early childhood education and care workforce, and
developing recommendations for establishing a unified data collection
system for publicly funded programs offering early childhood education
services. Advisory councils may also play a role in making
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linkages with Early Childhood Comprehensive Systems (ECCS) grantees
within the State. Adding the State Advisory Council on Early Childhood
Education and Care to the list of coordinating entities will ensure
CCDF Lead Agencies continue to consult with and maintain effective
collaboration with this important stakeholder.
We propose to add agencies responsible for administering Statewide
afterschool networks or other coordinating entities for out-of-school
time care (if applicable) at new paragraph (H). Approximately, 39
States have established statewide afterschool networks. (National
Network of Statewide Afterschool Networks,
www.statewideafterschoolnetworks.net) These networks bring together
different stakeholders to consider ways to improve the quality,
quantity, and sustainability of school-age programs in their State. The
CCDF program provides assistance to children up to age 13, therefore we
believe it is critical that child care administrators partner with
statewide afterschool networks or other entities, such as State
associations of school-age programs, in order to better understand and
respond to the unique issues related to improving access to and the
quality of before-and-after school programs.
Finally, we propose to add coordination with State and local
government agencies responsible for emergency management and response
at new paragraph (I) because maintaining the safety of children in
early care and school-age programs in the event of a disaster or
emergency necessitates advance planning by Lead Agencies and child care
providers. In many disasters, including Hurricane Katrina in 2005, the
tornado disaster in Joplin, Missouri in 2011, and Hurricane Sandy in
2012, the provision of emergency child care services and rebuilding of
child care facilities emerged as a critical need. At the Federal level,
ACF has worked with the National Commission on Children and Disasters
(NCCD) and the Federal Emergency Management Agency (FEMA) to raise
awareness of child care as a key component in disaster preparedness and
response. For example, ACF published an Information Memorandum (CCDF-
ACF-IM-2011-01) that provided guidance to assist Lead Agencies in the
development of comprehensive statewide emergency preparedness and
response plans for child care and the CCDF program.
State, Territorial, and Tribal Lead Agencies can play an important
role in helping to better prepare child care providers and support
programs after a disaster to help them quickly recover and provide care
for children in a safe and effective manner. Child care providers need
to be prepared to maintain the safety of children in the event of a
disaster or emergency and facilitate safe return of children to
families in the immediate aftermath of an event. Additionally, it is
important that providers receive the support and help they need to
repair damaged property and rebuild so they can re-open and provide
child care services for families recovering from the disaster. Lead
Agencies must be concerned with ensuring continuity of care and
services for families receiving assistance through the CCDF program and
providers caring for children who receive subsidies when a disaster
strikes. Lead Agencies also may be called upon to assist emergency
management officials and voluntary organizations with the provision of
emergency child care services after a disaster. We believe adding
emergency management agencies as a coordinating partner in the
regulation will enable Lead Agencies to better handle these wide-
ranging and important roles. Paragraphs (b) and (c) of this section
would remain unchanged. As a technical matter, upon publication of the
Final Rule we propose to correct the paragraph designations in Sec.
98.14 by changing (a)(1)(A) through (I) to (a)(1)(i) through (ix).
Public availability of Plans. We propose to add a new paragraph
Sec. 98.14(d) to require Lead Agencies to make their CCDF Plan and any
Plan amendments publicly available. Ideally, Plans and Plan amendments
would be available on the Lead Agency Web site or other appropriate
State Web site to ensure that there is transparency for the public, and
particularly for parents seeking assistance, about how the child care
program operates. We believe this is especially important for Plan
amendments, given that Lead Agencies often make substantive changes to
program rules or administration during the two-year Plan period through
submission of Plan amendments (subject to ACF approval), but are not
currently required to make those amendments available to the public.
Plan Provisions (Section 98.16)
Submission and approval of the CCDF Plan is the primary mechanism
by which ACF works with Lead Agencies to ensure program implementation
meets Federal regulatory requirements. All provisions that are
currently required to be included in the CCDF Plan are outlined at
Sec. 98.16. Accordingly, this section of the regulation is the point
at which our four priorities converge. Nearly all of our proposed
regulatory changes are reflected in this section. The revisions and
proposed additions to this section correspond to proposed changes
throughout the regulations, many of which we provide explanation for
later in this proposed rule. In addition, these proposed changes are
consistent with changes included in the overhaul of the CCDF Plan. The
Plan has been reorganized to better reflect State and Territorial
practice in CCDF, to focus on a number of areas that are of high
interest to both the Federal government and CCDF grantees, and to
better capture the hallmarks of CCDF programs throughout the country,
which have evolved significantly since its inception in 1996. Paragraph
(a) of section 98.16 would continue to require that the Plan specify
the Lead Agency.
Written agreements. A new paragraph Sec. 98.16(b) is proposed to
correspond with changes at Sec. 98.11(a)(3) discussed earlier, related
to administration of the program through agreements with other
entities. In the CCDF Plan, the proposed change would require the Lead
Agency to include a description of processes it will use to monitor
administrative and implementation responsibilities undertaken by
agencies other than the Lead Agency including descriptions of written
agreements, monitoring, and auditing procedures, and indicators or
measures to assess performance. This is consistent with the desire to
strengthen program integrity within the context of current State
practices that devolve significant authority for administering the
program to sub-recipients. Current paragraphs (b) through (e) would be
re-designated as paragraphs (c) through (f) and otherwise would remain
unchanged.
Job search. We propose to require Lead Agencies to allow for some
period of job search for families receiving CCDF assistance that
experience job loss. The goal of this change is to minimize temporary
disruption to subsidy receipt to promote children's development and
learning by helping to sustain their early learning or school-age care
placement through temporary periods of parental unemployment. We know
that parents are better able to find new jobs quickly if they are
allowed to retain their subsidy eligibility, providing the stability
and flexibility to search for new employment. This is also consistent
with changes we are proposing at Sec. 98.20 describing a child's
eligibility for services to promote continuity of subsidy receipt and
care arrangements discussed later in this proposed rule.
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Families can experience rapid and multiple changes within a short
period of time and unemployment and job loss are very disruptive to
families. Instability in a family's child care arrangement can make it
difficult for parents to seek new employment, and retention of
eligibility during a job search or temporary period of unemployment can
alleviate some of the stress on families and facilitate a smoother
transition back into the workforce. According to analysis of the FY
2012-2013 CCDF Plans, many States and Territories provide CCDF
assistance during periods of job search. However, some States only
offer job search for certain subsets of families receiving CCDF
assistance, such as those also receiving assistance through TANF. Under
this proposed change Lead Agencies must allow some period of job search
for all families receiving CCDF.
In order to implement this change we propose to add parenthetical
language at paragraph Sec. 98.16(g)(6), as re-designated, to require
the Lead Agency to include some period of job search in its definition
of ``working'' in the CCDF Plan. Currently, paragraph (f) requires Lead
Agencies to provide definitions for the following terms in the CCDF
Plan: (1) Special needs child; (2) physical or mental incapacity (if
applicable); (3) attending (a job training or educational program); (4)
job training or educational program; (5) residing with; (6) working;
(7) protective services (if applicable); (8) very low-income; and (9)
in loco parentis.
We propose to require job search in the definition of ``working''
in the regulation because we view job search as closely linked to work
and most Lead Agencies that allow job search already include job search
in that definition in the Plan. However, some Lead Agencies currently
elect to define job search under their definition of ``attending (a job
training or education program)'' rather than ``working'' in the Plan,
since job search also can be associated with activities such as
attending interviews, job fairs, and r[eacute]sum[eacute] building
classes; completing applications; and/or participating in job shadowing
or unpaid internship opportunities. Therefore, as a technical matter,
and in deference to State flexibility, when determining compliance with
this provision through review of the CCDF Plan, ACF will continue to
allow Lead Agencies to decide whether to include job search in their
definition of ``working'' or ``attending (a job training or educational
program).''
It should be noted that this proposed change continues to allow
Lead Agencies discretion to determine the length of time that ``job
search activities'' are counted as a qualifying activity and whether to
allow job search as an eligible activity for families applying for
subsidy in addition to those currently receiving a subsidy who
subsequently become unemployed. This proposal is consistent with the
practices that already exist in many programs as well as provisions in
the revised CCDF Plan that requires that Lead Agencies describe their
policies promoting continuity of care for children and stability for
families.
Continuity of care. We propose to add a provision at paragraph
Sec. 98.16(h), as re-designated, requiring Lead Agencies to include a
description of policies to promote continuity of care for children and
stability for families receiving CCDF services, including policies
which take into account developmental needs of children when
authorizing child care services; timely eligibility determination and
processing of applications; and policies that promote employment and
income advancement for parents. This change complements proposed
changes at Sec. 98.20 describing a child's eligibility for services,
which are discussed later in this proposed rule.
The Lead Agency would be required to specify in the Plan the time
limit it has established for making eligibility determinations and
processing applications. Lead Agencies have flexibility in determining
the policies and practices related to parent applications and
eligibility determination processes for CCDF subsidies. It is critical
for Lead Agencies to design processes that promote timely eligibility
determinations for CCDF subsidy applicants, particularly in cases where
families need immediate assistance. For example, a parent may be unable
to start employment or may risk losing their job if they cannot secure
a child care arrangement while waiting for the CCDF subsidy application
to be approved. Many Lead Agencies already have implemented policies to
improve the timeframe between the receipt of an application and the
approval of child care services using web-based application submissions
and other systems enhancements to reduce processing time allowing for
families and providers to receive authorization more quickly.
A study of mid-western States found that the time for processing
applications ranged from 7 to 45 days. (Adams, G., Synder, K., and
Banghardt, P., Designing Subsidy Systems to Meet the Needs of Families,
2008) This research also identified a number of customer-friendly State
practices that promoted timely eligibility determinations, including
certain administrative structures (such as consolidated eligibility
units) and caseworker targets and timeframes for processing. Many Lead
Agencies have established policies that set a time limit for
eligibility determinations and electronically track and monitor the
eligibility process.
Grants or contracts. We propose to add language at paragraph Sec.
98.16(i)(1), as re-designated, requiring a Lead Agency to include a
description of how it will use grants or contracts to address shortages
in the supply of high quality child care. Grants and contracts can play
an important role in building the supply and availability of high
quality child care in underserved areas and for underserved
populations, and provide greater financial stability for child care
providers. This regulatory change complements proposed changes at Sec.
98.30(a)(1) describing parental choice requirements and Sec.
98.50(b)(3) describing funding methods for child care services,
discussed later in this proposed rule. The new provision regarding
grants and contracts maintains the principle of parental choice and the
requirement that parents be offered a certificate.
Under this proposed change, the Lead Agency would be required to
provide a description that identifies any shortages in the supply of
high quality child care providers for specific localities and
populations, includes the data sources used to identify shortages, and
explains how grants or contracts for direct services will be used to
address such shortages. To identify supply shortages, the Lead Agency
may analyze available data from market price studies, resource and
referral agencies, and other sources. ACF recommends that the Lead
Agency examine all localities in its jurisdiction, recognizing that
each local child care market has unique characteristics--for example,
many rural areas face supply shortages. The Lead Agency also should
consider the supply of child care for underserved populations such as
infants and toddlers and children with special needs. Further, we
recommend that the Lead Agency's analysis consider all categories of
care, recognizing that a community with an adequate supply of one
category of care (e.g., centers) may face shortages for another
category (e.g., family child care).
Eligibility policies. We also propose to add language at Sec.
98.16(i)(5) in this section. Currently the provision requires Lead
Agencies to describe any eligibility criteria, priority rules and
definitions established pursuant to Sec. 98.20(b). We propose to
expand the required information to include other eligibility policies,
particularly any requirements
[[Page 29452]]
for families to report changes in circumstances that may impact
eligibility between redetermination periods. The revised provision also
adds a reference to Sec. 98.20(c), in addition to the existing
reference to Sec. 98.20(b). This change complements proposed changes
at Sec. 98.20, which are discussed later in this proposed rule.
Consumer education and quality indicators. We also propose to add
language at paragraph Sec. 98.16(j), as re-designated, requiring Lead
Agencies to include a description of a transparent system of quality
indicators that provides parents with provider-specific information
about the quality of child care providers in their communities as part
of the description of consumer education activities. This change
complements proposed changes at Sec. 98.33 describing consumer
education activities, which are discussed later in this proposed rule.
Co-payments. We propose to revise language at paragraph Sec.
98.16(k), as re-designated, requiring Lead Agencies to include a
description of how payments are affordable for families as part of the
requirement to implement a sliding fee scale that provides for cost
sharing for families receiving CCDF subsidies. This proposed change is
consistent with the existing regulatory requirement at Sec.
98.43(b)(3), which requires Lead Agencies to provide a summary of facts
relied upon to determine that its payment rates ensure equal access
including how copayments based on a sliding fee scale are affordable.
In addition, we propose to add language requiring the Lead Agency to
include the criteria established for waiving contributions for
families, pursuant to proposed changes at Sec. 98.42(c), discussed
later in this proposed rule.
Monitoring of health and safety requirements. We propose to add a
provision at paragraph Sec. 98.16(l), as re-designated, requiring Lead
Agencies to provide a description of unannounced, on-site monitoring
and other enforcement procedures in effect to ensure that child care
providers serving children receiving subsidies comply with applicable
health and safety requirements. The change complements proposed changes
at Sec. 98.41 describing health and safety requirements, which are
discussed later in this proposed rule. Paragraph (k), requiring a
description of the child care certificate payment system would be re-
designated as paragraph (m), but otherwise would remain unchanged.
Payment rates. We propose to revise language at paragraph Sec.
98.16(n), as re-designated, requiring a description of a biennial local
valid market price study, or other alternate approved methodology, and
a description of how the quality of child care providers serving
children receiving subsidies is taken into account when determining
payment rates. This change complements proposed changes at Sec. 98.43
describing equal access provisions, which are discussed later in this
proposed rule.
Hotline for parental complaints. We propose to add language at
paragraph Sec. 98.16(o), as re-designated, to require States to
establish or designate a hotline for parental complaints. This change
complements the proposed change at Sec. 98.32 describing requirements
for maintaining a record of parental complaints, which is discussed
later in this proposed rule. Current paragraph (n) would be re-
designated as paragraph (p), but otherwise would remain unchanged.
Licensing exemptions. We propose to add language at paragraph Sec.
98.16(q), as re-designated, requiring a description of any exemptions
to licensing requirements and a rationale for such exemptions. This
change complements the proposed change at Sec. 98.40 which asks Lead
Agencies to certify they have in place licensing requirements for child
care services, discussed later in this proposed rule. Paragraph (p),
requiring a description of the definitions or criteria used to
implement the exception to individual penalties in the TANF program
would be re-designated as paragraph (r), but otherwise would remain
unchanged.
Provider payment practices and timely reimbursement. We propose to
add a new paragraph Sec. 98.16(t) requiring CCDF Lead Agencies to
describe payment practices for child care providers of services for
which assistance is provided under this part, including timely
reimbursement for services, how payment practices support providers'
provision of high quality services, and to promote the participation of
child care providers in the subsidy system.
Lead Agencies have flexibility to determine payment processes for
subsidies, and should use that flexibility to ensure payment practices
are fair to child care providers and support the provision of high
quality services. As noted in the preamble to the 1998 Final Rule, a
system of child care payments that does not reflect the realities of
the market makes it economically infeasible for many providers to serve
low-income children--undermining the statutory and regulatory
requirements of equal access and parental choice. In addition, failure
to compensate in a timely manner may cause providers to refuse to care
for children with subsidies (63 FR 39958). Surveys and focus groups
with child care providers have found that some providers experience
problems with late payments, including issues with receiving the full
payment on time and difficulties resolving payment disputes. (Adams,
G., Rohacek, M., and Snyder, K., Child Care Voucher Programs: Provider
Experiences in Five Counties, 2008) This research also found that
delayed payments creates significant financial hardships for the
impacted providers, and forces some providers to stop serving or limit
the number of children receiving child care subsidies.
A number of Lead Agencies have developed streamlined, provider-
friendly payment policies and administrative processes, such as paying
providers based on enrollment and paying for a limited number of
absence days. Administrative improvements such as direct deposit, on-
line training for providers for electronic voucher reimbursement,
provider self-service components in an automated system for children
authorized into their care, and web-based electronic attendance and
billing systems also can help facilitate the participation of providers
in the subsidy system. Lead Agencies can allow providers to be paid for
days when a child is absent due to an illness and/or allow families a
limited number of vacation days where providers would continue to
receive payment. These policies would promote continuity of care by
allowing the provider to retain the slot for the child without a
financial penalty. Private-paying parents generally pay for an entire
period (e.g., a week, a month) even if the child is out sick within
that period. This policy would align subsidy policies with the general
child care market and positively affect subsidy providers while also
enabling families to retain child care services.
Program integrity. We propose to add a new paragraph Sec. 98.16(u)
requiring a description of processes a Lead Agency has in place to
investigate and recover fraudulent payments and to impose sanctions on
providers or clients in response to fraud. This change complements
proposed changes at section 98.68 describing program integrity
requirements, which are discussed later in this proposed rule.
Quality performance report. We also propose to add a new paragraph
Sec. 98.16(v) requiring States and Territories to establish
performance goals and targets in the Plan for expenditures on
activities to improve the quality of care, and report annually a
description of progress towards
[[Page 29453]]
meeting those goals. This change is consistent with proposed changes at
Sec. 98.51(f) regarding quality improvement activities, which are
discussed later in this preamble.
The Quality Performance Report (QPR) was recently added as an
appendix to the CCDF Plan to improve accountability for quality
expenditures and encourage more strategic, intentional planning between
the subsidy system and quality initiatives. The report is organized to
align with the CCDF Plan and asks Lead Agencies to report on the goals
and performance measures that they set for themselves in the Plan. In
addition, it asks for key data on the quality of child care. Over time,
this data will be used to report to Congress, stakeholders, and the
general public on the quality of child care and CCDF's critical role in
improving quality. This proposed change would mandate submission of the
Quality Performance Report appendix as part of the CCDF Plan process.
Assessment of serious injuries and deaths in child care. In this
paragraph we also propose to add Sec. 98.16(v)(2) asking Lead Agencies
to describe, as part of the Quality Performance Report, any changes to
State regulations, enforcement mechanisms, or other State policies
addressing health and safety based on an annual review and assessment
of serious injuries or deaths of children occurring in child care.
Currently, the Quality Performance Report gives Lead Agencies the
option to list and describe the annual number of child injuries and
fatalities in child care. We are proposing to require Lead Agencies to
answer these questions and to describe the results of an annual review
of all serious child injuries and deaths occurring in child care
(including both regulated and unregulated child care centers and family
child care homes). The review would be publicly available and would
include an assessment of whether any State or local regulatory
requirements, enforcement mechanism, or other State or local policies
addressing health and safety were changed in response to the review.
ACF strongly encourages Lead Agencies to work with the State entity
responsible for child care licensing in conducting their review.
The primary purpose of this proposed change is prevention of future
tragedies. Often, incidents of child injury or death in child care are
avoidable. For example, one State recently reviewed the circumstances
surrounding a widely-publicized, tragic death in child care and
identified several opportunities to improve State monitoring and
enforcement that might otherwise have identified the very unsafe
circumstances surrounding the child's death and prevented the tragedy.
The State moved quickly to make several changes to its monitoring
procedures. It is important to learn from these tragedies to better
protect children in the future. Lead Agencies should review all serious
child injuries and deaths in child care, including lapses in health and
safety (e.g., unsafe sleep practices for infants, transportation
safety, issues with physical safety of facilities, etc. * * *) to help
identify training needs of providers.
The utility of this assessment is reliant upon the State obtaining
accurate, detailed information about any child injuries and deaths that
occur in child care. Therefore, as discussed later in this preamble, we
are requiring at 98.41(d)(4) that Lead Agencies establish policies and
procedures for child care providers serving children receiving CCDF
support to report any incidents of serious child injuries or deaths to
a designated State, territorial or tribal agency, such as the licensing
agency. We recommend that States, Territories and Tribes require all
child care providers, regardless of subsidy receipt, to report
incidents of serious child injuries or death to a designated agency.
Lead Agencies are strongly encouraged to work with their
established Child Death Review systems and with the National Center for
the Review and Prevention of Child Death (www.childdeathreveiw.org) to
conduct their annual reviews. The National Center for the Review and
Prevention of Child Death, which is funded by the Maternal and Child
Health Bureau in the Health Resources and Services Administration
(HRSA), reports that all 50 States and the District of Columbia already
review child deaths through 1,200 State and local Child Death Review
panels (National Center for Child Death Review, Keeping Kids Alive: A
Report on the Status of Child Death Review in the Unities States,
2011). The Child Death Review system is a process in which
multidisciplinary teams of people meet to share and discuss case
information on deaths in order to understand how and why children die
so that they can take action to prevent other deaths. These review
systems vary in scope and in the types of death reviewed, but every
review panel is charged with making both policy and practice
recommendations which are usually submitted to the State governor and
are publicly available. The National Center for the Review and
Prevention of Child Death provides support to local and State teams
throughout the child death review process through training and
technical assistance designed to strengthen the review and the
prevention of future deaths.
Lead Agencies may also work in conjunction with the recently-
established National Commission to Eliminate Child Abuse and Neglect
Fatalities, established by the Protect Our Kids Act, H.R. 6655. The
Commission, consisting of 12 members appointed by the President and
Congress, will work to develop recommendations to reduce the number of
children who die from abuse and neglect. The Commission will hold
hearings and gather information about current Federal programs and
prevention efforts in order to recommend a comprehensive strategy to
reduce and prevent child abuse and neglect fatalities nationwide. Their
report will be issued to both Congress and the President no later than
two years after the date on which the majority of members of the
Commission have been appointed. Although this Commission will only be
studying a subsection of child injuries and death, it is important that
the commissioners examine the issue of child abuse and neglect in child
care settings.
Finally, we note that the requirement to submit a Quality
Performance Report is not applicable to Tribal Lead Agencies, as we are
mindful of the reporting burden on Tribes. In the future, ACF may
consider asking Tribes to report performance outcomes associated with
spending on quality improvement activities through the existing Tribal
ACF-700 or ACF-696T reports using the information collection process,
which would provide opportunity for public comment. We have re-
designated paragraph (r) as paragraph (w) with no other changes.
Approval and Disapproval of Plans and Plan Amendments (Section 98.18)
This section of the regulations describes processes and timelines
for CCDF Plan approvals and disapprovals, as well as submission of Plan
amendments. CCDF Plans are submitted biennially and prospectively
describe how the Lead Agency will implement the program. To make a
substantive change to a CCDF program after the Plan has been approved,
a Lead Agency must submit a Plan amendment to ACF for approval. The
purpose of Plan amendments is to ensure that grantee expenditures
continue to be made in accordance with the statutory and regulatory
requirements of CCDF, if the grantee makes changes to the program
during the two-year Plan period.
Advance written notice. In conjunction with the change discussed
[[Page 29454]]
at Sec. 98.14(d) to make the Plan and any Plan amendments publicly
available, we propose to add a provision at Sec. 98.18(b)(2) to
require Lead Agencies to provide advance written notice to affected
parties, specifically parents and child care providers, of changes in
the program made through an amendment that adversely affect income
eligibility, payment rates, or sliding fee scales. The Lead Agency must
provide written notice to affected recipients and child care providers
prior to a policy change that will reduce or terminate benefits. The
notice should describe the action to be taken (including the amount of
any benefit reduction), the reason for the reduction or termination,
and the effective date of the action. We are providing Lead Agencies
with flexibility to determine an appropriate, specific time period for
advance notice, since this may vary depending on the type of policy
change being implemented and/or the effective date of that policy
change. Advance notice will add transparency to the Plan amendment
process and provide a mechanism to ensure that affected parties remain
informed of any substantial changes to the Lead Agency's CCDF Plan that
may affect their ability to participate in the child care program. For
example, if a Lead Agency submits a Plan amendment to revise its
sliding fee scale and raise family co-pay amounts, it is important to
give advance notice to those families and child care providers because
this change may have implications for their ability to continue with
their child care arrangement.
We note that section 98.14(c)(1) of the current regulations
requires Lead Agencies to conduct at least one statewide public hearing
before the CCDF Plan is submitted to ACF. The public hearing serves as
a mechanism to provide broad notice and comment for families, child
care providers, and other stakeholders regarding key elements of the
CCDF program. Lead Agencies routinely submit amendments to their CCDF
Plans throughout the two-year period during which the Plan is in
effect; yet there is no similar transparency requirement with regards
to Plan amendments. We are not requiring the Lead Agency to hold a
formal public hearing and solicit comments on each Plan amendment;
however, we encourage solicitation of public input whenever possible.
We are only requiring notification of substantial changes in the
program that adversely affect income eligibility, payment rates, or
sliding fee scales. This regulatory change is consistent with the
spirit and intent of the public hearing provision. The Lead Agency may
choose to issue the notification in a variety of ways, including a
mailed letter or email sent to all participating child care providers
and families. Paragraph (c) of this section describing appeal and
disapproval of a Plan or Plan amendment would remain unchanged.
Subpart C--Eligibility for Services
This subpart establishes parameters for a child's eligibility for
child care services under the CCDF program and how Lead Agencies
determine and verify eligibility. The current regulatory language
defining an eligible child mirrors statutory language in the CCDBG Act.
In order to be eligible for child care services, a child must be under
the age of 13 (or at the option of the Lead Agency, be under age 19 and
physically or mentally incapable of caring for himself or herself, or
under court supervision); reside with a family whose income does not
exceed 85 percent of State median income for a family of the same size;
reside with a parent or parents who are working or attending a job
training or educational program; or receive or need to receive
protective services, at grantee option this may include children in
foster care. The section also describes provisions related to
establishment of additional eligibility conditions and priority rules
by the Lead Agency. We propose to revise and update this section to
promote continuity of care, make a technical change regarding the State
Median Income (SMI), expand the scope of the protective services
category to provide more flexibility, and refine the regulations
concerning eligibility determinations.
A Child's Eligibility for Child Care Services (Section 98.20)
We propose to make several revisions to eligibility requirements
under this section that will promote continuity of child care services.
As envisioned in this proposed rule, the purpose of CCDF is to develop
high-quality child care programs that best suit the needs of children
and families as they pursue the dual goals of financial self-
sufficiency and healthy development and school success for their
children. With those two goals in mind, it is important to emphasize
continuity of subsidy receipt when developing eligibility policies.
Continuity of subsidy receipt supports financial self-sufficiency by
offering working families stability to establish a strong financial
foundation while also preparing children for school by creating stable
conditions necessary for healthy child development and early learning.
Many families receive CCDF assistance for only short periods of
time and have frequent spells of cycling on and off the program. For
example, a five-State study has shown that the median length of child
care subsidy receipt is often very short, ranging from 3 to 7 months.
(Meyers, M.K., et al., The Dynamics of Child Care Subsidy Use: A
Collaborative Study of Five States, National Center for Children in
Poverty, 2002) Preliminary findings from other studies using CCDF
administrative data also indicate short subsidy spells. Short periods
of subsidy receipt can be the result of a variety of factors, but
developing eligibility policies that provide increased continuity for
families that continue to need child care assistance would offer
valuable support and relief to families working toward long-term
stability.
In addition, research has shown that children have better
educational and developmental outcomes when they have continuity in
their child care arrangements. (Raikes, H., Secure Base for Babies:
Applying Attachment Theory Concepts to the Infant Care Setting, Young
Children 51, no. 5, 1996) For young children, safe, stable environments
provide the opportunity to develop the relationships and trust
necessary to comfortably explore and learn from their surroundings.
Concurrently, research has shown that frequent changes in care
arrangements are associated with higher levels of distress and negative
behavior in infants and toddlers. (Dicker, S., & Gordon, E., Ensuring
the Healthy Development of Infants in Foster Care; A Guide for Judges,
Advocates, and Child Welfare Professionals, Zero to Three, 2004)
Continuity of care also is important for school-age children
because the amount of exposure to programming, or dosage, has been
shown to determine the impact such services have on a child. One study
revealed that children who actively attended after-school programming
showed marked improvement in test scores and school attendance when
compared to their peers who were less active or did not participate in
the program at all. (Welsh, M., Russell, C., Willimans, I., Reisner,
E., and Whites, R., Promoting Learning and School Attendance through
After-school Programs, Policy Studies Associates, 2002) The effect on
attendance is of particular importance because school attendance has
been found to be significantly related to sociological and academic
outcomes for school-age children. (Gottfried, M., Evaluating the
Relationship Between Student Attendance and Achievement in Urban
Elementary and Middle
[[Page 29455]]
Schools: An Instrumental Variables Approach, American Education
Research Journal, 2009)
State eligibility policies should take into consideration the
importance of continuity in arrangements for children receiving
subsidies and what policies make the most sense for supporting the
child's developmental outcomes and school readiness, especially if a
child is enrolled with a high quality child care provider. Many of the
proposed changes in this section seek to improve continuity through
implementation of more family-friendly eligibility policies, while
recognizing that Lead Agencies need flexibility to make decisions to
ensure that funds are appropriately targeted to families in need. The
Lead Agency, however, must ensure that its eligibility policies (e.g.,
related to frequency of eligibility re-determination) are not only
included in policy, but also consistently implemented in practice--for
example by the localities, sub-recipients, and eligibility workers that
implement the program on the Lead Agency's behalf.
As mentioned earlier, the revisions to Sec. 98.20, discussed
below, complement new Sec. 98.16(h), which requires Lead Agencies to
include in their CCDF Plans a description of policies to promote
continuity of care for children and stability for families receiving
CCDF services, including policies that take into account developmental
needs of children when authorizing child care services, timely
eligibility determination and processing of applications, and policies
that promote employment and income advancement for parents.
Income eligibility. Lead Agencies are required to report their
income eligibility threshold in the CCDF Plan. However, neither the
statute nor regulations specify a source or basis for SMI. Therefore,
each Lead Agency currently has the ability to determine the data source
for the SMI. From a national perspective, this means the SMI levels are
not comparable--making it more difficult to get a true understanding of
where Lead Agencies are setting their thresholds. We propose to revise
Sec. 98.20(a)(2) by adding new paragraph (i) to clarify that
eligibility threshold levels should be based on the most recent SMI
data that is published by the Bureau of the Census. The proposed
clarification would ensure that eligibility criteria are based on the
most current and valid available data and provide consistency that
allows for cross-State comparisons. SMI data may not be available from
the Census Bureau for some Territories, in which case the Territory may
use an alternative source.
Income eligibility policies can also play an important role in
promoting continuity of services. Lead Agencies have flexibility to
establish income eligibility thresholds up to 85 percent of SMI,
however many Lead Agencies set eligibility levels at a lower threshold
due to resource constraints and competing budgetary priorities. When
setting an eligibility threshold that is below 85 percent of SMI, some
Lead Agencies have instituted a two-tiered eligibility threshold which
provides for initial and continuing income eligibility limits. A
preliminary analysis of the FY 2012-2013 CCDF plans shows that 16
States and Territories have implemented policies which provide an entry
level eligibility threshold and a higher exit income eligibility
threshold.
As an example, a Lead Agency may have a policy that families must
have an income at or below 50 percent of SMI in order to access the
subsidized child care system. The parent(s) may be determined eligible
at an income level just below 50 percent of SMI. Over the course of the
next 3 to 6 months the parent may receive a small hourly wage increase
which results in exceeding the income eligibility level and losing the
family's child care subsidy. This scenario not only could disrupt the
child care arrangement, it undermines the goal of helping low-income
parents to work and gain economic independence because the increase in
child care costs experienced by the family may exceed the amount of the
wage increase. The wage increase becomes detrimental to the family's
financial success by jeopardizing receipt of a child care subsidy. As
an alternative, the Lead Agency could have a policy which requires that
parents applying for subsidies have income below 50 percent of SMI, but
once determined eligible, allows those parents to have incomes up to 60
percent of SMI before becoming ineligible for the subsidy. This two-
tiered approach supports financial success by allowing for a modest
amount of wage growth and a gradual transition out of the program by
minimizing abrupt disruptions in services.
In recognition of the fact that many States set eligibility
thresholds below 85 percent of SMI, we are not proposing a regulatory
change to require a two-tiered eligibility policy. Yet, ACF recommends
that Lead Agencies consider this policy as a strategy that allows
families to retain child care assistance while experiencing modest
success in the job market. This approach is consistent with the goal of
improving continuity of child care services and can help prevent
unnecessary churning on and off of the program by allowing for some
amount of wage growth as families work towards greater self-
sufficiency.
Protective services. Section 658P(3) of the CCDBG Act indicates
that, for CCDF purposes, an eligible child includes a child who is
receiving or needs to receive protective services. Under current
regulations at Sec. 98.20(a)(3)(ii)(B), at the option of the Lead
Agency, this category may include children in foster care. The
regulations allow that children deemed eligible based on protective
services may reside with a guardian or other person standing ``in loco
parentis'' and that person is not required to be working or attending
job training or education activities in order for the child to be
eligible. In addition, the regulations allow grantees to waive income
eligibility and co-payment requirements as determined necessary on a
case-by-case basis, by, or in consultation with, an appropriate
protective services worker for children in this eligibility category.
According to a preliminary analysis of the FY 2012-2013 CCDF Plans, at
least 44 States and Territories provide child care subsidies to
children receiving or in need of protective services. Additionally, at
least 35 States and Territories elect to waive, on a case-by-case
basis, the fee and income eligibility requirements for cases in which
children receive, or need to receive, protective services. For children
in foster care, 11 States and Territories have elected to provide child
care subsidies regardless of the foster parents' work status or
participation in education or training activities.
The regulatory provision concerning protective services was put in
place in recognition of the unique and distinct aspects of children in
protective services wherein child care serves the child's needs as much
or more than the parents' needs. Additionally, because the statute
references children who ``need to receive protective services,'' we
believe the intent of this language was to provide services to at-risk
children, not to limit this definition to serve children already in the
child protective services system. We are proposing to formally clarify
this in regulation by adding language as Sec. 98.20(a)(3)(ii)
specifying that the protective services category may include specific
sub-populations of vulnerable children as identified by the Lead
Agency. Thus, children need not be formally involved with child
protective services or the child welfare system in order to be
considered eligible for CCDF assistance under this category. Similarly,
we also propose to delete the language indicating that the case-by-
[[Page 29456]]
case determination of income and co-payment requirements for this
category must be made by, or in consultation with, a protective
services worker. These changes will provide Lead Agencies with
additional flexibility to offer services to those who have the greatest
need, including high-risk populations.
As an example, a family living in a homeless shelter may not meet
certain eligibility requirements (e.g. work or income requirements),
but the child is in a vulnerable situation and could benefit greatly
from access to high-quality child care services. This would have a dual
benefit of offering the child access to care that supports child
development, education, and health while also offering support to the
family as they work towards finding a home and stabilizing their lives.
Another vulnerable population that could benefit from access to child
care services is the migrant worker community. Since the employment or
income status of a migrant family may fluctuate throughout the year,
stable access to child care services would prevent the child's
development from being negatively impacted by variable working and
living conditions.
Eligibility re-determination periods. Neither the CCDBG Act nor the
CCDF regulations currently address the frequency of eligibility re-
determinations or whether the Lead Agency must ensure the child is
eligible on a continuous basis. We propose to add a new paragraph Sec.
98.20(b) establishing that Lead Agencies may re-determine a child's
eligibility for child care services no sooner than 12 months following
the initial eligibility determination or most recent re-determination.
In conjunction with this change, the proposed new paragraph provides
that during the period of time between re-determinations, a Lead
Agency, at its option, may consider a child to be eligible pursuant to
some or all of the eligibility requirements specified in paragraph (a),
if the child met all of the requirements in paragraph (a) on the date
of the most recent eligibility determination or re-determination.
Finally, this proposed change would require Lead Agencies to specify in
the CCDF Plan any requirements for families to report changes in
circumstances that may impact eligibility between re-determinations.
These provisions would also apply to any localities or sub-recipients
that implement the CCDF program on the Lead Agency's behalf.
Over time, many Lead Agencies have changed their policies to allow
for longer eligibility re-determination periods. One State found that
86 percent of its families were still eligible for subsidies at the
time of their required 6 month re-determination. As a result, in order
to reduce administrative burden on families, the State switched to a 12
month re-determination period for most families. Studies also suggest
that a significant number of families are still income-eligible for
child care services, by both Federal and State eligibility criteria,
when they leave the CCDF program. (Grobe, D., Weber, R.B., & Davis,
E.E., Why Do They Leave? Child Care Subsidy Use in Oregon. Oregon State
University, 2006) According to the FY 2012-2013 CCDF Plans, slightly
more than half of the States and Territories require eligibility re-
determination at 6 months, one State has an 8 month re-determination
requirement, and the remainder have 12 month eligibility re-
determination periods.
ACF believes a 12 month re-determination period is the most
consistent with the programmatic goals of promoting continuity of care
and financial self-sufficiency for CCDF families. Lead Agencies would
be allowed to adopt re-determination periods longer than 12 months. For
example, a Lead Agency could establish a child's eligibility to
continue until kindergarten entry to align with Head Start or extend
eligibility to facilitate partnerships between child care and Early
Head Start programs serving infants and toddlers. We recognize that
this proposed change would require some Lead Agencies to change policy
in this area by moving from a 6 month to a 12 month re-determination
period. Therefore we are requesting comment regarding the impact of
this change, particularly any benefits or burdens it may have for CCDF
families and to better understand implications for Lead Agencies.
In conjunction with this change we propose to add language that
would allow Lead Agencies the option to consider a child eligible
(pursuant to some or all of the eligibility requirements) during the
period of time between re-determinations, as long as the child met CCDF
eligibility requirements on the date of eligibility determination or
re-determination. We believe this proposed change would allow Lead
Agencies to adopt more family-friendly eligibility policies, to align
eligibility requirements with other assistance programs, and promote
continuity in child care subsidy receipt. In the past, ACF has received
questions from Lead Agencies seeking guidance regarding instances in
which a family's circumstances may change after initial eligibility
determination or between re-determination periods, and whether the Lead
Agency would be subject to a disallowance if it was determined that,
during those interim periods, the family no longer met CCDF eligibility
requirements.
This proposed change acknowledges that there are costs and other
challenges associated with monitoring and verifying eligibility on a
continuous basis to ensure that at any given point in time a family is
eligible for services. These include costs to families that are trying
to balance work and family obligations as well as costs to Lead
Agencies administering the program. This proposed change clarifies that
the Lead Agency is responsible for correctly determining and verifying
eligibility at the time of initial eligibility determination and
periodic re-determinations conducted thereafter, as the most reasonable
and practical application of the statutory intent establishing
eligibility criteria for CCDF. Lead Agencies are not required to
implement policies that ``look back'' at a family's eligibility in the
months prior to a re-determination and, if the family is found to be
ineligible upon re-determination, seek to recoup funds from the family
for benefits received in prior months.
We note the proposed change indicates that a Lead Agency, at its
option, may consider a child to be eligible pursuant to some or all of
the eligibility requirements between eligibility re-determinations.
This gives States latitude to decide which elements of CCDF
eligibility, if any, to track between eligibility re-determinations. A
Lead Agency may establish a family's eligibility for 12 months (or
longer) and only identify changes to a family's circumstances at the
time of the next re-determination and make necessary adjustments to the
CCDF benefit then as appropriate. Alternately, a Lead Agency could set
criteria for limited, significant changes that it will track between
eligibility re-determinations, examining all other eligibility criteria
at the time of the next re-determination. For example, the Lead Agency
may establish criteria that require families to report changes in
circumstances (if the State does not have other mechanisms for learning
about the change) related to any changes in income above a certain
threshold--but evaluate other eligibility criteria at the time of re-
determination. ACF recommends that States require parents receiving
subsidies to report a job loss between eligibility determinations to
initiate the allowable period of job search. However, State policies
that track all eligibility criteria on a
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continuous basis and require more frequent reporting of changes in
circumstances remain allowable, but are not recommended. Under the
proposed change, Lead Agencies would be required to specify in the Plan
any requirements for families to report changes in circumstances that
may impact eligibility between re-determinations.
For school-age children, the proposed change would allow Lead
Agencies to avoid terminating access to valuable high quality before-
and after-school care in a manner that may be detrimental to positive
youth development and academic success or put the child at-risk if a
parent is working and cannot be with the child after school. As an
example, in order to promote continuity of care for a 12-year old child
enrolled in a before-or after-school program and supported by CCDF, the
Lead Agency could schedule the family's re-determination date at the
beginning of the school year and schedule the next re-determination to
occur after the school year has ended. Therefore, if the child turned
13 during the school year, the child would continue to be able to
participate in their before-or after-school program, as opposed to
being abruptly removed immediately after the child's birthday. In
addition, this type of policy can ease administration of school-age
programs by making the eligibility of children receiving subsidies more
commensurate with the school year.
We strongly encourage Lead Agencies to adopt reasonable policies
for tracking eligibility that minimize compliance burdens on families
and promote self-sufficiency. Many low-income families have frequent
fluctuations in work schedules and hours of work. Strict requirements
that families report all changes in circumstances in a short time
frame, even those that do not directly impact eligibility, can make it
more difficult for working families to maintain their eligibility,
increase administrative burden, and could result in children having to
leave child care providers with whom they have bonded. According to the
FY 2012-2013 CCDF Plans, 20 States and Territories report implementing
policies to minimize reporting requirements for changes in family
circumstances that have no effect on a family's eligibility in order to
promote continuity of care.
We also encourage Lead Agencies to consider how they can align CCDF
eligibility policies with other programs serving low-income families.
This proposed change is consistent with practices in other Federal
programs serving low-income families which allow States the option to
certify families as eligible for a specified period of time. For
example, the Head Start program requires that families be eligible at
an initial eligibility determination and allows the child to remain
eligible until they enter school. A Lead Agency could establish
eligibility periods longer than 12 months for children enrolled in Head
Start and receiving CCDF, since children enrolled in Head Start remain
eligible until they enter school--creating a better alignment between
programs. Similarly, a Lead Agency could establish longer eligibility
periods during an infant and toddler's enrollment in Early Head Start.
The Supplemental Nutrition Assistance Program's (SNAP) simplified
reporting requirements provide States the option of requiring
households to report changes in income between certification and
scheduled reporting periods only when total countable income rises
above 130 percent of the poverty level. In SNAP, a Lead Agency may
require a household that has been certified as eligible for a 12 or 6-
month period to submit a periodic report (as opposed to a face-to-face
visit), generally about halfway through the certification period, for
which certain changes that have occurred since certification must be
reported. Similarly, provisions in the Medicaid and Children's Health
Insurance Program (CHIP) allow States the option to provide children
with continuous 12 month eligibility. The changes proposed in this rule
promote conformity across Federal programs by providing options to Lead
Agency's to simplify CCDF reporting and eligibility requirements for
families receiving assistance from multiple programs.
In proposing this change, ACF is cognizant of the importance of
ensuring CCDF funds are effectively and efficiently targeted towards
eligible low-income families. Policies to promote continuity, such as
lengthening eligibility periods and allowing a child to remain eligible
between re-determination periods, necessarily must be founded on a
strong commitment to program integrity. ACF expects Lead Agencies to
have rigorous processes in place to detect fraud and improper payments,
but these should be reasonably balanced with family-friendly practices.
In order to ensure that only eligible families receive CCDF assistance,
Lead Agencies should focus administrative dollars on making sure that a
family's eligibility is determined accurately at the initial
determination and at times designated for re-determination. For this
reason, the proposed rule includes the addition of a new section at
Sec. 98.68 titled Program Integrity that requires Lead Agencies to
have procedures in place for documenting and verifying that children
meet eligibility criteria at the time of eligibility determination and
re-determination.
Lead Agencies receive a fixed amount of CCDF funds and often face
challenges determining how to appropriately allocate resources. When
implementing their CCDF programs, Lead Agencies must balance ensuring
compliance with eligibility requirements with other considerations,
including administrative feasibility, program integrity, promoting
continuity of care for children, and aligning child care with Head
Start, Early Head Start, and other early childhood programs to promote
partnerships. This proposed change removes any uncertainty regarding
applicability of Federal eligibility requirements for CCDF and the
threat of potential penalties or disallowances that otherwise may
inhibit a Lead Agencies' ability to balance these priorities in a way
that best meets the needs of children in families within their
jurisdiction.
Developmental needs of the child. We propose to amend Sec. 98.20
to add paragraph (d) requiring Lead Agencies to take into account the
developmental needs of the child when authorizing child care services.
Under this proposed change, Lead Agencies would not be restricted to
limiting authorized child care services based on the work, training, or
educational schedule of the parent(s). This is consistent with the
current regulations at Sec. 98.20(a)(3)(i) requiring that the child
``reside with'' a parent or parents who are working or attending a job
training or educational program. One of the goals of this proposed rule
is to enhance recognition of the role of CCDF as a child development
program by emphasizing access to early learning and afterschool
settings that support children's success, as well as enabling parents
to work. In service of this goal, this proposed change clarifies that
Lead Agencies should take into account the developmental and academic
needs of children--not just their parents' work or training needs--as
part of eligibility, intake, authorization, and other CCDF policies and
practices.
As an example, in serving a preschool aged child (e.g., age 3 or
4), the Lead Agency should consider whether or not the child has access
to a high quality preschool setting and how CCDF can make attendance at
a high quality preschool more likely. Many Lead Agencies tie access to
child care subsidies closely with parental work
[[Page 29458]]
hours, which may limit access to high quality settings. If most local
high quality early learning programs offer only full-time slots, but
the child care authorization reflects only the parent's part-time work
schedule, the child may be unable to attend a high quality early
learning program, which is especially critical for low-income children
in the year preceding kindergarten. Lead Agencies are encouraged to
authorize adequate hours to allow the child to participate in a high
quality program. Alternatively, Lead Agencies can partner with Early
Head Start, Head Start, prekindergarten, or other high quality programs
to build an intentional package of arrangements for the child--that
allows for both attendance at preschool and perhaps a second
arrangement that accommodates the parents' work schedule.
Specifically, it is important for infants and toddlers to build
secure attachments and maintain relationships with caregivers over time
to promote healthy child development. For example, a Lead Agency may
wish to authorize part-day CCDF services that accommodate a child's
participation in Early Head Start, while also maintaining a secondary
child care arrangement to preserve the relationship with a familiar
caregiver. A Lead Agency could also offer parents the choice to select
high-quality infant slots that are funded through contracts or grants
with infant and toddler programs. For children of all ages, a Lead
Agency could provide more intensive case management for children with
multiple risk factors to increase the likelihood that the family will
find a stable, quality child care arrangement that will work with other
services providers in assisting the child and family.
This proposed provision acknowledges that both the child's
development and the parent's need to work are factors in the service
needs of each family. We recognize that given constraints on funding,
limited human resource capacity, and the inadequate supply of high
quality care, a perfect arrangement will not be found in all cases.
Rather, we expect Lead Agencies to consider how they can infuse the
needs of children into their policies and practices and encourage
partnerships with high quality providers, child care resource and
referral agencies, and case management partners to look for ways to
strengthen CCDF's capacity to fulfill its child development mission for
families. Lead Agencies retain flexibility on how to carry out this
provision and ACF expects to provide technical assistance to support
innovation in this area.
Subpart D--Program Operations (Child Care Services) Parental Rights and
Responsibilities
In the description of goals for the child care program, section
658A(b)(2) of the CCDBG Act includes, ``to promote parental choice to
empower working parents to make their own decisions on the child care
that best suits their family's needs.'' Subpart D of the regulations
describes parental rights and responsibilities and provisions related
to parental choice, including unlimited parental access to their
children, requirements that Lead Agencies maintain a record of parental
complaints, and consumer education activities conducted by Lead
Agencies to increase parental awareness of the range of child care
options available to them. We have proposed a number of changes to this
subpart including provisions directed towards increasing the supply of
high quality child care, establishment of a hotline for parental
complaints, consumer education activities to increase awareness of the
quality of child care choices available to parents receiving subsidies,
and ensuring parents receive specific information about the child care
provider they select.
Parental Choice (Section 98.30)
Use of grants or contracts. Section 658E(c)(2)(A)(i) of the CCDBG
Act requires that Lead Agencies provide assurances that parents are
given the option to enroll their child with a child care provider that
has a grant or contract to provide child care services or to receive a
child care certificate. Current regulations at Sec. 98.30(a) require
that Lead Agencies offer eligible parents a child care certificate, or
to enroll the child with a provider that has a grant or contract ``if
such services are available.'' The statutory language does not include
this clause; instead it was added through regulation. The proposed
change would delete the phrase ``if such services are available'' at
Sec. 98.30(a)(1) and add ``in accordance with Sec. 98.50.'' As
discussed later in this preamble, we propose to modify Sec.
98.50(b)(3) to read that child care services shall be provided using
methods provided for in Sec. 98.30, which must include the use of
grants or contracts for the provision of direct services, with the
extent of such services determined by the Lead Agency after
consideration of supply shortages described in the Lead Agency's Plan
pursuant to Sec. 98.16(i)(1), and other factors as determined by the
Lead Agency. We believe the current regulatory language undermines the
strength of the parental choice statutory requirement by sending the
message that contracts are of secondary importance to vouchers and need
not be used as a mechanism for providing direct services. The proposed
change would retain the requirement for Lead Agencies to offer parents
a child care certificate or voucher.
In 2011, CCDF administrative data showed that approximately 90
percent of children receiving child care assistance were served through
certificates (also referred to as vouchers). According to a preliminary
analysis of the FY 2012-2013 CCDF Plans, only 21 States and Territories
indicated that they provide child care services through grants or
contracts through child care slots. We do not believe the intent of the
CCDBG statute was to create a system solely operated through
certificates. In fact, the statute does not give priority or preference
to the use of certificates or vouchers, but reflects a balance between
using both certificates and grants or contracts to provide child care
assistance. Grants and contracts play a vital role in meeting the needs
of underserved populations, and increase the choices available to
parents.
While the majority of States and Territories rely on certificates
to provide child care assistance to eligible families, some States and
Territories have reported in their CCDF Plans using grants and
contracts to increase the supply of specific types of child care. These
include contracts to fund programs to serve children with special
needs, targeted geographic areas, infants and toddlers, and school-age
children. Grants and contracts are also used to provide wrap-around
services to children enrolled in Head Start and prekindergarten to
provide full-day, full-year care and to fund programs that provide
comprehensive services. Additionally, Lead Agencies report using grants
and contracts to fund child care programs that provide higher quality
child care services.
The proposed revision retains the requirement that the Lead Agency
operate a certificate program and that eligible families be offered a
certificate, however the change requires Lead Agencies to find ways to
also incorporate grants or contracts into their administration of the
CCDF program, with specific consideration for how grants or contracts
can be used to address shortage in the supply of high quality child
care. Child care certificates can be an effective means of ensuring
parental choice when providing child care assistance. However, demand-
side mechanisms like certificates are only fully effective when there
is an adequate
[[Page 29459]]
supply of child care. Multiple research studies have shown a lack of
supply of certain types of child care and for certain localities. Child
care supply in many low-income and rural communities is often low,
particularly for infant and toddler care, school-age children, children
with disabilities, and families with non-traditional work schedules.
Parents in low-income communities also report that the regulated infant
and toddler care or care for special needs children that is available
is often unaffordable or of low quality. (Paulsell, D., Nogales, R.,
and Cohen, Quality Child Care for Infants and Toddlers, 2003) We
provide further discussion of this proposed change regarding grants and
contracts at Subpart F--Use of Child Care and Development Funds.
Current paragraphs (b), (c), and (d) would remain unchanged.
We also propose a technical change at Sec. 98.30(e) to delete
group home child care from the variety of child care categories from
which parents receiving a certificate for child care service must be
able to choose. This is consistent with the changes made at Sec. 98.2
removing group home child care from the definition of categories of
care and eligible child care provider. As discussed earlier, instead we
have modified the definition of family child care provider to include
one or more individuals to be inclusive of group home care within this
category. Current paragraph (f) at this section would remain unchanged.
Parental choice and child care quality. In order to be meaningful,
we believe the parental choice requirements included in this section
should give parents access to high quality child care arrangements
across different types of providers that foster healthy development and
learning for children. Many Lead Agencies have invested a significant
amount of CCDF funds to implement quality rating and improvement
systems (QRIS) to promote high quality early care and education
programs, and some have expressed concerns that the current language of
the parental choice regulatory provisions inhibits their ability to
link the child care subsidy program to these systems. In order to fully
leverage their investments, Lead Agencies are seeking to increase the
number of children receiving CCDF subsidies that are enrolled with
providers participating in the quality improvement system. ACF
published a Policy Interpretation Question (CCDF-ACF-PIQ-2011-01)
clarifying that parental choice provisions within regulations do not
automatically preclude a Lead Agency from implementing policies that
require child care providers serving subsidized children to meet
certain quality requirements, including those specified within a
quality improvement system. As long as certain conditions are met to
protect a parent's ability to choose from a variety of categories of
care, a Lead Agency could require that in order to provide care to
children receiving subsidies, the provider chosen by the parent must
meet requirements associated with a specified level in a quality
improvement system.
We propose to incorporate this policy interpretation into
regulation by adding paragraph (g) at Sec. 98.30 to clarify that, as
long as parental choice provisions at paragraph (f) of this section are
met, parental choice provisions should not be construed as prohibiting
a Lead Agency from establishing policies that require child care
providers that serve children receiving subsidies to meet higher
standards of quality as defined in a quality improvement system or
other transparent system of quality indicators (discussed later in this
proposed rule). Section 98.30(f) prohibits Lead Agencies from
implementing health and safety or regulatory requirements that
significantly restrict parental choice by expressly or effectively
excluding any category or type of provider, as defined at Sec. 98.2,
or any type of provider within a category of care. Section 98.2
currently defines categories of care as center-based child care, group
home child care, family child care, and in-home care (i.e., a provider
caring for a child in the child's own home). (Note: We are proposing to
delete group homes as a category of care at Sec. 98.30(e)(1)). Types
of providers are defined as non-profit, for-profit, sectarian, and
relative providers.
When establishing such policies, we encourage Lead Agencies to
assess the availability of care across categories and types, and
availability of care for specific subgroups (e.g. infants, school-age
children, families who need weekend or evening care) and within rural
and underserved areas, to ensure that eligible parents have access to
the full range of categories of care and types of providers before
requiring them to choose providers that meet certain quality levels.
Should a Lead Agency choose to implement a quality improvement system
that does not include the full range of providers, the Lead Agency
would need to have reasonable exceptions to the policy to allow parents
to choose a provider that is not eligible to participate in the quality
improvement system (e.g. relative care). As an example, a Lead Agency
may implement a system that incorporates only center-based and family
child care providers. In cases where a parent selects a center-based or
family child care provider, the Lead Agency may require that the
provider meet a specified level or rating. However, the policy also
must allow parents to choose other categories and types of child care
providers that may not be eligible to participate in the quality
improvement system or when a parent decides that the rated providers
are not suited to their family's needs or preferences. This is
particularly important for geographic areas where an adequate supply of
child care is lacking or when a parent has scheduling, transportation,
or other issues that prevent the use of a preferred provider within the
system.
In a similar manner, we propose adding paragraph (h) at Sec. 98.30
to clarify that Lead Agencies may provide parents with information and
incentives that encourage the selection of high quality child care
without violating parental choice provisions. As discussed below, this
proposed rule would require Lead Agencies to establish a system of
quality indicators and to provide information about the quality of
child care providers to parents receiving subsidies. Accordingly, this
provision would allow Lead Agencies to adopt policies that incentivize
parents to choose high quality providers as determined in a system of
quality indicators. Lead Agencies may provide brochures or other
products that encourage parents to select a high quality provider
without violating parental choice provisions.
Parental Complaints (Section 98.32)
Hotline for parental complaints. Section 658E(c)(2)(C) of the CCDBG
Act requires that a Lead Agency ``maintain a record of substantiated
parental complaints and makes information regarding such parental
complaints available to the public on request and provide a detailed
description of how such record is maintained and is made available.''
Current language at Sec. 98.32 mirrors the statutory requirement. We
propose to add Sec. 98.32(a) to require the Lead Agency to establish
or designate a hotline for parents to submit complaints about child
care providers. Paragraphs (a), (b), and (c) in the current regulations
have been re-designated as paragraphs (b), (c), and (d) but otherwise
remain unchanged.
States vary in how they meet the current requirement to keep a
record of and make public substantiated parental complaints. In the FY
2012-2013 CCDF plans, 10 States reported having a toll-free hotline for
parents to submit child care-related complaints, including 9
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States with dedicated child care hotlines and one State that utilizes
the child abuse and neglect hotline. An additional 16 States list
public toll-free numbers on their Web sites for parents to contact the
child care office. Not all are listed as hotlines, but may still
provide parents with a means for submitting complaints and seeking
additional information.
The Department of Defense (DoD) military child care program also
runs a national parental complaint hotline. The Military Child Care Act
of 1989 (P.L. 101-189) required the creation of a national 24 hour
toll-free hotline that allows parents to submit complaints about
military child care centers anonymously. DoD has found the hotline to
be important tool in engaging parents in child care. In addition,
complaints received through the hotline have helped DoD identify
problematic child care programs. For example, information that was
submitted through the hotline led to an investigation and the closure
of some child care facilities in the early 1990s. (Campbell, N.,
Appelbaum, J., Martinson, K., Martin, E., Be All That We Can Be:
Lessons from the Military for Improving Our Nation's Child Care System,
2000)
Lead Agencies have flexibility to design the hotline to fit the
needs of the families they serve. Lead Agencies may also choose to work
with other agencies to adapt existing hotlines, such as modifying
hotlines used to report child abuse and neglect to include an option
for reporting child care complaints.
We strongly encourage the Lead Agency to widely publicize the child
care hotline number, and to consider requiring child care providers to
publicly post the hotline number in their center or family child care
home to increase parental awareness. Other areas for posting may be the
Web site proposed at Sec. 98.33(a), the child care resource and
referral network and Web site, and consumer education materials,
including the proposed consumer statement for parents receiving subsidy
at Sec. 98.33(c).
Lead Agencies are encouraged to establish a toll-free hotline that
includes multilingual options and has a TTY/TDD option to ensure it is
accessible to those with hearing impairments. It is important that all
parents have access to the hotline, regardless of ability to pay for
the call, English proficiency, or hearing ability. As with the military
child care hotline, we recommend that the hotline be available for 24
hours a day. Allowing parents to submit complaints any time of the day
gives them the flexibility to call when their work schedule allows.
Parents should also have the option to report complaints anonymously.
For some parents, reporting these issues may be difficult, and the
option of anonymity may make them more comfortable with coming forward
with a complaint.
Finally, Lead Agencies should have a complaint response plan in
place that includes time frames for following up on a complaint
depending on the urgency or severity of the parent's concern. This plan
relates to the proposed regulatory change at Sec. 98.41(d)(3) that
Lead Agencies must do an unannounced, on-site monitoring visit in
response to receipt of a complaint pertaining to the health and safety
of children in the care of a provider serving children receiving CCDF
subsidies.
Consumer Education (Section 98.33)
Section 658E(c)(2)(D) of the CCDBG Act requires that Lead Agencies
``collect and disseminate to parents of eligible children and the
general public, consumer education information that will promote
informed child care services.'' Current language at Sec. 98.33(a)
requires that, at a minimum, consumer education information should be
provided about: (1) Full range of providers available; and (2) health
and safety requirements.
Consumer education activities carried out across the country vary
by who provides the information, how the information is presented, and
what information is included. In some States and Territories, consumer
education materials and referrals to providers are offered by the Lead
Agency or by State or local TANF offices. In others, resource and
referral agencies provide information about child care choices and
referrals to all types of child care providers. The way information is
presented to parents includes checklists, brochures, telephone
hotlines, and in-person meetings. In addition to providing materials
and referrals to parents receiving child care assistance, Lead Agencies
engage in a variety of consumer education activities, including public
awareness campaigns, planning or implementing quality rating systems,
and translating outreach and education materials into other languages.
Current regulations do not specify mechanisms for how Lead Agencies
should collect and disseminate consumer education information to the
public or to parents determined eligible for CCDF assistance. In many
States, the process for applying for and receiving a subsidy is
disconnected from consumer education services offered by the Lead
Agency, leaving the parent to find out what child care options are
available to them with little to no information about the quality of
that care. Additionally, it is unclear what information, if any, is
provided to parents regarding the child care provider they choose, such
as licensing or other regulatory requirements met by the provider.
We are proposing several changes to Sec. 98.33 describing consumer
education activities. Since the proposed regulatory changes at this
section are extensive, the first part of this section briefly
summarizes all of the proposed regulatory changes, and then each change
is explained in more detail in the discussion that follows.
Consumer education Web site. We propose to add language to
Sec. 98.33(a) requiring Lead Agencies to collect and disseminate,
through a user-friendly, easy-to-understand Web site and other means
identified by the Lead Agency, consumer education information that will
promote informed child care choices. At Sec. 98.33(a)(1) current
regulations require that consumer education information, at a minimum,
include information about the full range of available providers. We
propose to add new provisions to require that the Lead Agency make
available on a Web site: (i) Provider-specific information about any
health and safety, licensing or regulatory requirements met by the
provider, including the date the provider was last inspected; (ii) any
history of violations of these requirements; and (iii) any compliance
actions taken. We also propose to revise Sec. 98.33(a)(2) to require
that Lead Agencies include on the Web site a description of health and
safety and licensing or regulatory requirements for child care
providers and processes for ensuring that child care providers meet
those requirements. The description must include information about the
background check process for providers, as well as any other
individuals in the child care setting (as applicable), and what
offenses preclude a provider from serving children.
Transparent system of quality indicators. We propose to
add new paragraph Sec. 98.33(b) to require Lead Agencies to collect
and disseminate consumer education through a transparent system of
quality indicators, such as a quality rating and improvement system or
other system established by the Lead Agency, to provide parents with a
way to differentiate between the quality of different child care
providers in their communities using a rating or other descriptive
method. The system must: (1) Include provider-specific information
about the quality of child
[[Page 29461]]
care; (2) Describe the standards used to assess the quality of child
care; (3) Take into account teaching staff qualifications and/or
competencies, learning environment, and curricula and activities; and
(4) Disseminate provider-specific quality information, if available,
through the Web site described in Sec. 98.33(a), or through an
alternate mechanism which the Lead Agency shall describe in the CCDF
Plan, including a description of how the mechanism makes the system of
quality indicators transparent.
Providing consumer education to families receiving
subsidies. Finally, we propose to add a new paragraph Sec. 98.33(c)
requiring that Lead Agencies provide information to parents receiving
subsidies about the child care providers available to them, as
described in paragraphs (a) and (b), and specific information about the
child care provider they choose, including health and safety
requirements met by the provider described at Sec. 98.41(a), licensing
and regulatory requirements met by the provider, any voluntary quality
standards met by the provider, and any history of violations of
licensing or health and safety requirements.
Paragraphs (b) and (c) in the current regulations have been re-
designated as paragraphs (d) and (e) but otherwise remain unchanged.
Consumer education Web site. We propose amending paragraph (a) of
Sec. 98.33 to require Lead Agencies to post provider-specific
information to a user-friendly, easy-to-understand Web site as part of
its consumer education activities. Making available a Web site with
accessible, easy-to-understand basic information about how child care
is regulated and monitored, as well as regulatory requirements met by
individual child care providers can improve transparency and greatly
reduce burden on families. Parents often lack information regarding
specific requirements that individual child care providers may or may
not meet. Some States and Territories currently post lists of licensed
providers online, but not all licensing information is available, such
as history of licensing violations or when the provider was last
inspected or monitored. Limiting access to this information creates a
burden for parents, makes it difficult for them to make informed
decisions about their child's care, and denies parents information
about providers' ability to protect their children's health and safety.
We believe parents choosing a provider should be able to do so with
access to any information that the State may have about that provider,
including information about, the date the provider was last inspected,
licensing violations or compliance actions taken by the State against a
provider. Similarly, if a provider is exempt from State licensing or
regulatory requirements then the parent should be given that
information and provided an explanation about why the provider is not
required to be licensed.
The Web site also should make it easy for parents to know how the
State regulates child care providers and what requirements they must
meet. This must include a description of health and safety and
licensing or regulatory requirements and processes for monitoring
providers. We strongly recommend that the State tell parents how
frequently providers are monitored or maximum amount of time between
inspections. The Web site also must include a plain language
description of the provider background check process including what the
State looks at as part of a comprehensive background check (i.e., use
of fingerprints for checks of Federal and State criminal history, as
well as check of child abuse and neglect and sex offender registries).
There must be information about what types of offenses that could
preclude a provider from serving children, as well as offenses that
would not disqualify a provider. We recommend using accessible terms
when referring to criminal offenses, such as child abuse and violent
crime, since terms like felony and misdemeanors might not have meaning
for parents.
In order for a Web site to be a useful tool for parents, it should
be easy to navigate, searchable, and in plain language. We recommend
that Web sites be comprehensive, including a detailed profile for each
licensed provider, which may include the provider's contact
information, enrollment capacity, years in operation, languages spoken,
etc . . . In addition, parents should be able to use many search terms
when deciding on a provider, including name, type of care, county, zip
code, or school district. All relevant licensing information should
also be available on one Web site. Lead Agencies have flexibility to
determine how to present information regarding child care provider
licensing violations and compliance actions taken. This includes
determining the length of the history to be included for providers,
distinguishing between the severities of different violations, or
posting information about compliance action or fines only after the
provider has exhausted their due process rights or waives their rights.
This proposed change is consistent with current practices in many
States to increase availability of information about licensing process,
standards and violations to parents and the general public. According
to a preliminary analysis of the FY 2012-2013 CCDF Plans, at least 30
States and Territories make all licensing information available to
parents and the public online. Ten States and Territories reported
making at least some licensing information available on a public Web
site or other online tool, such as a provider training registry.
Research suggests that online publishing of licensing violations
and complaints impact both inspector and provider behavior. One study
found that after inspection reports are posted online, there was an
improvement in the quality of care, specifically the classroom
environment and improved management at child care centers serving low-
income children. (Witte, A. & Queralt, M., What Happens When Child Care
Inspections and Complaints Are Made Available on the Internet? NBER
Working Paper No. 10227, 2004) Making provider compliance information
widely available on a dedicated Web site allows all parents to make
informed choices, and for purposes of the CCDF subsidy program, is key
to ensuring that parental choice is meaningful for families receiving
subsidies.
A transparent system of child care quality indicators. We propose
to add new paragraph (b) at Sec. 98.33 to require use of a transparent
system of quality indicators, such as a quality rating and improvement
system or other system established by the Lead Agency, to collect and
disseminate consumer education information. As part of this proposed
change, Lead Agencies would be required to implement a system that
includes: Provider-specific information about the quality of child
care; describes standards used to assess the quality of child care
providers; takes into account teaching staff qualifications and/or
competencies, learning environment, and curricula and activities; and
disseminates provider-specific quality information through the Web site
described above, or alternate mechanism established by the Lead Agency.
This system would act as a basic tool that can be used not only to
assess and collect quality information about specific child care
providers, but also a straightforward way to provide parents with
quality information and promote more informed child care choices. A
system of quality indicators should include indicators which are
appropriate to different types of
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provider settings, including child care centers and family child care
homes. Additionally, quality indicators should be appropriate for
providers serving different age groups of children, including infants
and toddlers, preschool, and school-age children.
In order for a transparent system of quality indicators to be
useful, Lead Agencies must provide parents information that describes
the standards used to assess the quality of child care providers, what
the quality indicators mean, and if any providers are not covered in
the system. In addition, the transparent system of quality indicators
must take into account teaching staff qualifications and/or
competencies, learning environments, and curricula and learning
activities in child care settings. Teaching staff qualifications refer
to specific education or training requirements attained by the teaching
staff, program director, or family child care provider. Staff
competencies reflect actual provider performance, typically measured
with observational tools. Some research suggests that higher levels of
education and credentials are related to better interactions between
providers and the children in their care, leading to higher quality
child care settings, when these training programs are informed by
evidence and well-implemented. (Whitebook, M., Early Education Quality:
Higher Teacher Qualifications for Better Learning Environments--A
Review of the Literature, 2003; U.S. Department of Health and Human
Services, National Institutes of Health, The NICHD Study of Early Child
Care and Youth Development, 2006) Learning environments are the
activities, practices, materials and provisions in the environment to
promote children's optimal learning and development. The elements of a
learning environment play an important role in determining the safety
of a child's environment and the quality of a child's learning
experience. Curricula and learning activities are the plan and
activities used to help meet a child's developmental goals. ACF
recommends curriculum indicators be linked with State early learning
guidelines.
Finally, under proposed Sec. 98.33(b)(3), Lead Agencies must
disseminate the provider-specific quality information to the public,
either through the Web site described at Sec. 98.33(a), or,
alternately, a Lead Agency may use another mechanism, such as
dissemination through local resource and referral agencies or another
approach, that the Lead Agency will describe in its CCDF Plan; the Plan
will include a description of how the mechanism makes the system of
quality indicators transparent.
We strongly encourage Lead Agencies to meet the requirement
proposed in paragraph Sec. 98.33(b) through the implementation of a
Quality Rating and Improvement System (QRIS). QRIS provides a framework
for organizing, guiding, and gauging the progress of early care and
education quality initiatives at the State, Territorial, or Tribal
level. In many cases, QRIS is the foundation of a cross-sector ECE
system. States' leadership in creating and implementing QRIS has
produced a more systemic approach to quality efforts and
accountability. This move to a more systemic approach to improving
child care quality also was reflected in the inclusion of a QRIS in the
application for the Race to the Top- Early Learning Challenge (RTT-ELC)
grant program.
As discussed earlier, more than half of the States have implemented
QRIS as a framework for organizing and guiding the progress of early
care and education quality initiatives and communicating the level of
quality to parents. The rating structure of the QRIS typically uses a
building block design, points, or some combination of the two to
determine the rating earned by a provider. In a building block design,
all of the standards in one level must be met in order to move to the
next higher level. In a points system, points are earned for each
standard and then are added together to determine the level. Each
rating level includes a range of possible scores. These levels are then
usually represented through symbols, such as one star, two stars, or
three stars, providing an easy to understand means for parents to
determine the quality of care available at a certain provider. Later in
this rule we discuss proposed changes to Sec. 98.51(a)(2) which
describe activities to improve the quality of child care. We propose to
add a description of a framework for organizing, guiding, and measuring
progress of quality investments. A QRIS, or other system of quality
improvement, is one key component of this larger framework and can help
improve the ability to evaluate and communicate the quality of child
care programs.
While ACF encourages all States to implement a systemic framework
for evaluating, improving and communicating the level of quality in
child care programs, we are not requiring Lead Agencies to implement a
QRIS in order to meet the requirement to implement a transparent system
of quality indicators. Lead Agencies have the flexibility to meet the
requirement proposed at paragraph Sec. 98.33(b)(3) by implementing,
more limited, alternative systems of quality indicators. However, we
recommend that these be an interim step for Lead Agencies on the path
to developing a full QRIS. Over time, Lead Agencies are encouraged to
work on linking their quality improvement initiatives and strategies,
culminating in a comprehensive QRIS with adequate support for providers
to attain higher levels of quality and transparency for parents and the
community regarding the quality of child care.
Lead Agencies also could meet the new requirement for a transparent
system of quality indicators by providing a profile or report card of
information about the child care provider to parents that could include
compliance with State licensing or health and safety requirements,
information about ratios and group size, average teacher training or
credentials, type of curriculum used, any private accreditations held,
and presence of staff to work with young dual language learners or
children with special needs. We encourage Lead Agencies to incorporate
mandatory licensing requirements into a system of quality indicators,
as a baseline of information for parents to use. For example, one State
currently has a Licensed Plus option that designates providers who have
met certain quality levels beyond that of the State's regular licensing
program. By building on existing licensing structures, Lead Agencies
may have an easier transition into a more sophisticated system that
differentiates between indicators of quality. Lead Agencies should
explain the licensing system to parents, as well as what a provider
must do in order to receive a higher level license, and how violations
of licensing standards are handled.
Another option for designing a transparent system of quality
indicators to meet the new requirement at Sec. 98.33(b), is to rely on
accreditation programs to differentiate between quality of child care
providers. The accreditation system may have different levels or steps
in the process to indicate a progressive change in quality that would
give a more useful picture of quality available to parents than if the
system simply differentiates between accredited and not accredited.
Lead Agencies that choose this type of system should provide
information to parents about which type of accreditation options are
available, what the accreditations mean, and what type of providers are
eligible to participate. One limitation of this approach is that only a
small proportion of child care providers are nationally accredited. To
address this situation, many States
[[Page 29463]]
embed accreditation into a more widely-applicable set of quality
indicators.
In designing a transparent system of quality indicators, we suggest
considering the following key principles: Provide outreach to targeted
audiences; ensure indicators are research-based and incorporate the use
of validated observational tools when feasible and that assessments of
quality include program standards that are developmentally appropriate
for different age groups; incorporate feedback from child care
providers and from parents and families; make linkages between consumer
education and other family-specific issues such as care for children
with special needs; engage community partners; and establish
partnerships that build upon the strengths of resource and referral
programs and public agencies that serve low-income parents.
Under the proposed change, each Lead Agency has the flexibility to
develop a system of quality indicators, such as a QRIS, based on its
specific needs. Lead Agencies may develop a system that is voluntary
for child care providers to participate in or could choose to exempt
certain providers, such as faith-based providers, from its system of
quality indicators. A Lead Agency also could choose to incorporate
licensing as part of the base level of indicators (e.g., some States
automatically incorporate all licensed providers into their QRIS). We
encourage Lead Agencies to establish a system of quality indicators
that is inclusive of all types of providers, including family child
care providers and providers serving school-age children.
We recognize that it takes time to build a comprehensive system
that is inclusive of a large number of providers across a wide
geographic area. However, in order for a system of quality indicators
to be meaningful it should include as many providers as possible so
that parents can benefit from having information about the quality of a
wide range and variety of child care providers. While we are not
mandating a specific approach or participation rate, the public needs
contextual information regarding the extent of participation by
providers in a system of quality indicators. For example, the Quality
Performance Report, which has been implemented as an attachment to the
CCDF Plan, asks States to track and report on the participation of
providers in State QRIS.
Providing consumer education to families receiving subsidies. This
discussion has focused on Lead Agency responsibilities for providing
consumer education to the general public and all parents; however, we
believe those families receiving subsidies deserve particular
attention. We propose adding a new paragraph (c) to Sec. 98.33 to
require Lead Agencies to provide parents determined eligible for CCDF
assistance with information about the child care provider options
available to them, as described at paragraphs (a) and (b), and specific
information on the child care provider they choose, including CCDF
health and safety requirements met by the provider, any licensing and
regulatory requirements met by the provider, any voluntary or State or
locally mandated quality standards met by the provider, and any history
of violations of health and safety, licensing or regulatory
requirements.
Lead Agencies should also provide information necessary for parents
to understand the components of a comprehensive criminal background
check, as well as the types of findings that may preclude a provider
from serving children receiving subsidies. In addition, if the parent
chooses a provider that is legally-exempt from State regulatory
requirements or exempt from CCDF health and safety requirements (e.g.,
relatives or in-home providers at Lead Agency option, as described
later in this proposed rule), the Lead Agency or its designee should
explain the exemption to the parent and the rationale for the
exemption.
When providing this information, which is essentially a consumer
statement for subsidy parents, a Lead Agency may provide that
information using the Web site required by Sec. 98.33(a) or through
the alternative mechanism allowed by Sec. 98.33(b). In such cases, the
Lead Agency should ensure that parents have access to the internet or
provide access on-site in the subsidy office. However, once a parent
receiving a subsidy selects a particular provider, the Lead Agency must
provide the health and safety and quality information about that
specific provider, such as by providing a hard copy report or email
(for parents with internet access and an email address) with a link to
the specific information online.
We strongly encourage Lead Agencies to incorporate child care
consumer education services directly into the intake and eligibility
process for families applying for CCDF assistance to explain the full
range of child care options and meaning of licensing violations and
quality standards. Parents seeking subsidies should have access to
information that the Lead Agency collects regarding the child care
providers in their community, especially information about the quality
of those child care providers. Parents of eligible children often lack
the information necessary to make informed decisions about their child
care arrangement. The child care market often faces the issue of
information asymmetry, where parents may have difficulty accessing
complete information about a particular provider without assistance.
Low-income working families may face additional barriers when trying to
find information about child care providers, such as limited access to
the Internet, limited literacy skills, or limited English proficiency.
Lead Agencies can play an important role in bridging the gap created by
these barriers by providing information for families receiving CCDF
subsidies to ensure the parent fully understands their child care
options and feels comfortable in assessing the quality of providers.
Finally, ACF encourages Lead Agencies to provide parents receiving
CCDF assistance with any updated information on the child care provider
they select (or information about any new provider they may select if
the child care provider changes), including notifying the parent of any
violations incurred by the provider. These updates should be provided
on a periodic basis, such as providing an update at the time of the
family's next eligibility re-determination. We also encourage strong
ties between the CCDF Lead Agency and the licensing agency to ensure
that families are not referred to providers seriously out-of-compliance
with health and safety requirements, and that placement and payment of
subsidy does not continue where children's health and safety are at-
risk.
The goal of all the proposed revisions at Sec. 98.33 is to make
the child care system as transparent as possible for parents and the
public. In order to ensure a robust consumer education system, we are
specifically seeking comment on the new proposals at Sec. 98.33 and
ask for feedback about areas that should be included in the system. We
also ask for State, Tribal, and Territorial experiences with collecting
and sharing child care provider information, including greater detail
on what types of information from provider background checks are shared
with parents seeking child care.
Subpart E--Program Operations (Child Care Services) Lead Agency and
Provider Requirements
Subpart E of the regulations describes Lead Agency and provider
requirements for compliance with applicable State and local regulatory
and health and safety requirements. It also includes
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provisions requiring the Lead Agency to establish a sliding fee scale
that provides for cost sharing for families receiving assistance, to
ensure that payment rates to providers serving children receiving
subsidies ensure equal access to the child care market, and to
establish priorities for child care services. We propose to make
several changes to this subpart specifically regarding health and
safety requirements, procedures for monitoring providers, sliding fee
scales, and equal access provisions.
Compliance With Applicable State and Local Regulatory Requirements
(Section 98.40)
Section 658E(c)(2)(E) of the CCDBG Act requires every Lead Agency
to certify that it has in effect licensing requirements applicable to
child care services within its jurisdiction. Correspondingly, Sec.
98.40 of the regulations implements section 658E(c)(2)(E), and asks
Lead Agencies to provide a description of licensing requirements for
child care services and how they are effectively enforced. We propose
to make one change in this section to add language at paragraph Sec.
98.40(a)(2) requiring the Lead Agency to provide a description of any
exemptions to licensing requirements and a rationale for such
exemptions in the CCDF Plan.
According to the 2011 Child Care Licensing Study (prepared by the
National Child Care Information and Technical Assistance Center and the
National Association for Regulatory Administration), half of the States
have exemptions from licensing for child care centers. The most common
licensing exemptions include: Facilities with the parents are on the
premises (e.g. child care services in shopping malls or health clubs);
facilities with a small number of children in care; facilities
consisting of recreation programs, instructional classes, and/or club
programs; and facilities with a small number of hours per day or week.
Lead Agencies will now be asked in their CCDF Plan, as reflected in the
proposed change at Sec. 98.16(q), to describe their licensing
exemptions and to explain the necessity of those exemptions. Asking
States to provide a rationale can help ensure that exemptions are
issued in a thoughtful, purposeful manner that keeps children safe.
Information about licensing and regulatory exemptions should be made
publicly available on the Lead Agency's Web site, pursuant to Sec.
98.33(a).
Health and Safety Requirements (Section 98.41)
The CCDBG Act also includes a provision at 658E(c)(2)(F) to require
that Lead Agencies establish health and safety requirements applicable
to child care providers serving children supported by CCDF subsidies.
Congress included this additional section, separate from the
certification of State licensing requirements discussed above, to apply
specifically to providers serving subsidized children and identified
three categories required to be addressed as part of health and safety
requirements: (1) Prevention and control of infectious diseases
(including immunization); (2) building and physical premises safety;
and (3) minimum health and safety training appropriate to the provider
setting.
Existing CCDF regulations at Sec. 98.41, implementing section
658E(c)(2)(F), elaborate on only one of these three categories
describing requirements related to immunizations as part of prevention
and control of infectious diseases. The regulations are silent as to
what the language ``building and physical premises safety'' and
``minimum health and safety training'' actually means for providers
serving subsidized children. We believe this has resulted in a lack of
accountability in the use of Federal funds for child care subsidies
despite the fact that the statute clearly intended to establish minimum
standards. The changes described in this section of the proposed rule
would provide further specificity regarding expectations for how Lead
Agencies are to meet these requirements.
State child care licensing regulations and monitoring and
enforcement policies help provide a baseline of protection for the
health and safety of children in out-of-home care. However, States vary
greatly in the extent to which they require different types of child
care providers to meet licensing and regulatory requirements. According
to the 2011 Child Care Licensing Study (prepared by the National Child
Care Information and Technical Assistance Center and the National
Association for Regulatory Administration), every State licenses child
care centers; however, 3 States do not license small family child care
homes (defined in the study as one adult caring for a group of children
in the provider's residence). Fifteen States require family child care
homes to be licensed when they care for two or more children; 8 States
require homes to be licensed when they care for three or more children;
11 States require homes to be licensed when they care for four or more
children; and 14 States don't require homes to be licensed until they
care for 5 children or more.
Recognizing that these exemptions may leave children unprotected,
the RTT-ELC, administered by the Department of Education, established a
competitive priority for State applicants that implemented a licensing
and inspection system covering all programs that regularly care for two
or more unrelated children for a fee in a provider setting.
There also is considerable variation among States in what they
include in their child care licensing requirements. Some State
licensing standards do not require providers to have pre-service
training, such as in first-aid or CPR, or they do not require providers
to undergo background checks before caring for children.
We believe revisions to this part are especially important because
many child care providers serving children receiving CCDF subsidies
either are not required to be licensed or have been exempted from
licensing requirements by States, meaning that CCDF health and safety
requirements are the primary, and in most cases, the only safeguard in
place to protect those children--along with any other children the
provider may be caring for. Approximately 10 percent of CCDF children
are cared for by non-relatives in unregulated centers and homes.
When States exempt certain types of child care from licensing, the
safety of children is left unmonitored and there can be a lack of
accountability for children receiving CCDF subsidies. All too
frequently, there are reports of child injury or death in child care
homes or facilities not licensed or monitored by the State. A national
study of child fatality rates in child care showed variation in
fatality rates based on the strength of licensing requirements and
suggested that licensing not only raises standards of quality, but
serves as an important mechanism for identifying high-risk facilities
that pose the greatest threat to child safety. (Dreby, J., Wrigley, J.,
Fatalities and the Organization of Child Care in the United States,
1985-2003, American Sociological Review, 2005) Additionally, child
deaths at unlicensed child care homes or facilities have prompted some
State legislatures to take action by passing laws to strengthen
licensing requirements.
Because many child care providers may not fall under the purview of
the State's licensing program, or licensing requirements themselves may
not be rigorous, we believe it is important to provide additional
detail in this section to ensure that all providers serving CCDF-
subsidized children meet
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minimum health and safety standards, whether or not they are licensed
by the State (excepting relative providers and in-home providers that
care for children in the child's home at the option of the Lead Agency,
as discussed later in this proposed rule). Health and safety is the
foundation of quality in child care and health promotion in child care
settings can improve children's development. We believe the proposed
changes will make significant strides in strengthening standards to
ensure the basic safety, health, and well-being of children receiving a
child care subsidy.
Our first proposed change to this section would amend the
regulatory language at 98.41(a)(1)(i) to replace ``States and
Territories'' with ``Lead Agencies'' to be inclusive of Tribes. When
the 1998 Final Rule was issued, Tribes were exempt from this
requirement because minimum tribal health and safety standards had not
yet been developed and released by HHS at that time. However, minimum
tribal standards have subsequently been developed and released, and the
standards address immunization in a manner that is consistent with the
requirements of this section. As a result, there is no longer a
compelling reason to continue to exempt Tribes from this regulatory
requirement.
Building and physical premises safety. Section 658E(c)(2)(F) of the
CCDBG Act requires that Lead Agencies have in effect requirements
designed to protect the health and safety of children that are
applicable to providers serving children receiving subsidies which must
include ``building and physical premises safety.'' However, the CCDBG
Act and current regulations do not specify expectations for this
requirement. We propose to amend Sec. 98.41(a)(2) to describe minimum
requirements for ``building and physical premises safety.'' The
proposed change would specify that this requirement shall include:
i. Comprehensive background checks on child care providers that
include use of fingerprints for State checks of criminal history
records, use of fingerprints for checks of Federal Bureau of
Investigation (FBI) criminal history records, clearance through the
child abuse and neglect registry, if available, and clearance through
sex offender registries, if available;
ii. Compliance with State and local fire, health, and building
codes for child care, which must include ability to evacuate children
in the case of an emergency. Compliance must be determined prior to
child care providers serving children receiving assistance under this
part; and
iii. Emergency preparedness and response planning, including
provisions for evacuation and relocation, shelter-in-place, and family
reunification.
Comprehensive criminal background checks. First, we believe the
proposed change at Sec. 98.41(a)(2)(i), to require comprehensive
background checks, is a basic safeguard essential to minimize
children's risk of abuse and neglect. This proposed change is
consistent with a discussion in the preamble to the 1998 regulations
which stated that, ``ACF considers [criminal background checks] to fall
under the building and physical premises safety standard in the
statute.'' (63 FR 39956) Chief among health and safety standards is
that children are safe in the care of child care providers. Parents
have the right to know that their child care providers and others who
come into contact with children do not have a record of violent
offenses, sex offenses, child abuse or neglect, and have not engaged in
other behaviors that would disqualify them from caring for children. A
GAO report issued in September 2011 found several cases in which
individuals convicted of serious sex offenses had access to children in
child care facilities as employees, because they were not subject to a
criminal history check prior to employment. (GAO-11-757) This change
also is consistent with other program policies such as Head Start,
which requires all prospective Head Start and Early Head Start
employees to receive a criminal background check.
According to a preliminary analysis of the FY 2012-2013 CCDF Plans,
all States and Territories require that child care center staff undergo
at least one type of criminal background check and approximately 40
require a fingerprint check. Fifty States and Territories require
family child providers to have a criminal background check and
approximately 36 require a fingerprint check. For some States and
Territories, these requirements are currently limited to licensed
providers rather than all providers that serve children receiving CCDF
subsidies. Under this proposed rule, we would require that all
providers serving CCDF-subsidized children (with the exception, at Lead
Agency option, of relatives and providers in the child's own home) must
undergo a comprehensive criminal background check that includes: (1)
Use of fingerprints for State checks of criminal history records; (2)
use of fingerprints for checks of Federal Bureau of Investigation (FBI)
criminal history records; (3) clearance through the child abuse and
neglect registry, if available; and (4) clearance through sex offender
registries, if available. ACF recently published an Information
Memorandum (CCDF-ACF-IM-2011-05) that provides further guidance and
information regarding these four components of a comprehensive
background check.
We are specifically seeking comments on whether requirements for a
comprehensive criminal background check should also be applicable to
other individuals in a child care center, such as food service and
office personnel. In addition, we request comment on whether other
individuals in a family child care home that provides services to
children receiving CCDF subsidies should be required to undergo a
background check, and at what age. Forty-three States require some type
of background check of family members 18 years of age or older that
reside in the family child care home. (Leaving Child Care to Chance:
NACCRRA's Ranking of State Standards and Oversight for Small Family
Child Care Homes, National Association of Child Care Resource and
Referral Agencies, 2012)
Pre-inspections and ability to evacuate children. Secondly, we
propose to add Sec. 98.41(a)(2)(ii) requiring compliance with State
and local applicable fire, health, and building codes, as part of the
building and physical premises safety standard, including demonstration
of the ability to evacuate children in the case of an emergency.
Compliance must be determined before a provider serves a child care
receiving a CCDF subsidy and phased in within an appropriate timeframe
for providers currently caring for children. Building codes are
designed to ensure that a building is safe for occupants and regular
fire safety checks by trained officials can ensure that a child care
facility or family child care home meets all applicable requirements as
established by the State or locality.
According to the 2011 Child Care Licensing Study (prepared by the
National Center on Child Care Quality Improvement and the National
Association of Regulatory Administrators), 39 States require fire,
health, and building code inspections, also referred to as
environmental inspections, for child care centers. In addition, many
States conduct separate licensing inspections prior to issuing a
license to a child care center. The study reports that 12 States
require fire, health, and building code inspections for family child
care providers. In addition, of the 42 States that license small family
child care homes, 37 conduct an inspection before issuing a license to
a family child care home.
Child care centers and family child care homes may be governed by
[[Page 29466]]
different fire, health, and building codes depending on the State or
locality. Child care centers are a non-residential setting and serve
more children and there may be more extensive fire, health and building
codes in place for centers as opposed to family child care homes. The
proposed requirement at Sec. 98.41(a)(2)(ii) does not prescribe the
fire, health, or building codes that should be applied to child care
centers or family child care homes. Rather, Lead Agencies have the
flexibility to determine the appropriate codes to apply to different
providers.
We propose that Lead Agencies must take into account if the child
care provider can evacuate children in the case of an emergency when
determining whether a child care center or family child care home meets
the building and physical premises safety standards. To ensure that
children are in safe settings, Lead Agencies need to establish
appropriate group sizes for child care providers that meet the health
and safety needs of young children. Child-staff ratios should also be
set such that providers can demonstrate the capacity to evacuate all of
the children in their care in a timely manner. Currently, all States
that license child care centers have requirements for child-staff
ratios, and all States that license family child care homes have
requirements about the maximum number of children (including infants,
toddlers, preschool, and school-age children) that can be cared for by
one adult provider. (2011 Child Care Licensing Study, National Center
on Child Care Quality Improvement and National Association for
Regulatory Administration, 2011)
One resource for determining the appropriate child-staff ratios and
group sizes is NFPA 101: Life Safety Code from The National Fire
Protection Association (NFPA) which recommends that small family child
care homes with one provider serve no more than two children incapable
of self-preservation. For large family child care homes, the NFPA
recommends that no more than three children younger than two years of
age be cared for where two staff members are caring for up to twelve
children. (National Fire Protection Association. NFPA 101: Life Safety
Code. 2009)
We are specifically seeking comments on the provision at
98.41(a)(2)(ii) requiring that health and safety inspections be
completed prior to serving children receiving child care assistance.
While we feel that requiring child care programs to meet State and
local fire, health, and building codes prior to serving children is a
crucial step in ensuring that the 1.6 million children served by CCDF
are cared for in safe environments from day one, we recognize that this
could create a burden for Lead Agencies, providers, and families.
Additionally, we do not want to create additional barriers to parents
finding care for their children because of delays in the availability
of child care slots. We are also seeking comment about the process for
inspecting programs that may already be serving children when this
Final Rule is published.
Emergency preparedness and response planning. Third, consistent
with the proposed changes at Sec. 98.14, requiring Lead Agencies to
coordinate with agencies responsible for emergency management and
response when preparing the CCDF Plan, we propose adding Sec.
98.41(a)(2)(iii) requiring Lead Agencies to include emergency
preparedness and response planning requirements for child care
providers serving children receiving CCDF subsidies. The importance of
the need to improve emergency preparedness and response in child care
was highlighted in an October 2010 report released by the National
Commission on Children and Disasters (NCCD). The Commission was
appointed by the President and Congress to conduct a comprehensive
review of Federal disaster-related laws, regulations, programs, and
policies to assess their responsiveness to the needs of children and
make recommendations to close critical gaps. The Commission's report
included two primary recommendations for child care: (1) To improve
disaster preparedness capabilities for child care; and (2) to improve
capacity to provide child care services in the immediate aftermath and
recovery from a disaster. (2010 Report to the President and Congress,
National Commission on Children and Disasters, p. 81, October 2010)
Child care also has been recognized by the Federal Emergency Management
Agency (FEMA) as an important part of disaster response (see FEMA
Disaster Assistance Fact Sheet 9580.107, Public Assistance for Child
Care Services, 2013).
This proposed change requires child care providers serving children
supported by CCDF funds to appropriately plan for disasters and
emergencies. Lead Agencies have flexibility to determine specific
guidelines for what child care providers should include in emergency
preparedness and response planning; however, planning must include
provisions for evacuation and relocation, shelter-in-place, and family
reunification. The National Resource Center for Health and Safety in
Child Care and Early Education, funded by the Maternal and Child Health
Bureau in HHS, publishes Caring for Our Children: National Health and
Safety Performance Standards: Guidelines for Out-of-Home Child Care,
2nd Edition. This guidance includes recommended standards for written
evacuation plans and drills, planning for care for children with
special needs, and emergency procedures related to transportation and
emergency contact information for parents. In addition, the National
Association of Child Care Resource and Referral Agencies (NACCRRA) and
Save the Children recently released a publication titled, Protecting
Children in Child Care During Emergencies: Recommended State and
National Standards for Family Child Care Homes and Child Care Centers,
that includes recommended State regulatory and accreditation standards
related to emergency preparedness for family child care homes and child
care centers. Finally, ACF has published guidance for Lead Agencies to
use for developing State-level emergency response plans for child care
and resources for child care providers. These resources are available
on our Web site at: http://www.acf.hhs.gov/programs/occ/resource/child-care-resources-for-disasters-and-emergencies.
Since all three of these building and physical premises safety
requirements would apply to providers serving children receiving CCDF
assistance, upon publication of a Final Rule, we are seeking comment as
to what an appropriate phase-in or timeframe would be for ensuring that
providers not meeting these requirements at that time are brought into
compliance. We do not intend that these requirements cause disruption
in the child care arrangements of children receiving subsidies, but
expect that we would need to establish some reasonable period of time
to ensure child care providers meet the conditions outlined at this
section.
Minimum health and safety training. Adequate training in basic
health and safety is essential to ensuring that the child care
workforce is properly equipped to care for children receiving
subsidies. The current regulations require minimum health and safety
training, but do not define the requirement. Child care providers
should have a firm grasp on essential health and safety areas prior to
working with children so that they are fully prepared to meet the needs
of all subsidy children from the very first professional interaction.
Research has shown that caregivers who receive specialized training are
better able to facilitate a positive learning
[[Page 29467]]
environment and tend to have children who exhibit fewer negative
behaviors. (Fiene, R., 13 Indicators of Quality Child Care: Research
Update, Pennsylvania State University, National Resource Center for
Health and Safety in Child Care, 2002) Given the breadth of health and
safety issues related to young children, we believe it is important to
establish a minimum baseline for pre-service and orientation training
that applies uniformly across all providers serving children receiving
CCDF subsidies. This proposed change will ensure that all child care
providers responsible for the health and safety of children have
received specific and basic training commensurate with their
professional responsibilities.
We propose adding a list of minimum health and safety pre-service
and orientation training, appropriate to the provider setting and ages
of children served, at Sec. 98.41(a)(3) to include the following: (i)
First-aid and Cardiopulmonary Resuscitation (CPR); (ii) medication
administration policies and practices; (iii) poison prevention and
safety; (iv) safe sleep practices including Sudden Infant Death
Syndrome (SIDS) prevention; (v) shaken baby syndrome and abusive head
trauma prevention; (vi) age-appropriate nutrition, feeding, including
support for breastfeeding, and physical activity; (vii) procedures for
preventing the spread of infectious disease, including sanitary methods
and safe handling of foods; (viii) recognition and reporting of
suspected child abuse and neglect; (ix) emergency preparedness planning
and response procedures; (x) management of common childhood illnesses,
including food intolerances and allergies; (xi) transportation and
child passenger safety (if applicable); (xii) caring for children with
special health care needs, mental health needs, and developmental
disabilities in compliance with the Americans with Disabilities Act
(ADA); and (xiii) child development, including knowledge of
developmental stages and milestones of all developmental domains
appropriate for the ages of children receiving services.
The proposed minimum requirements are based on health and safety
training recommendations from Caring for Our Children: National Health
and Safety Performance Standards; Guidelines for Early Care and
Education Programs, 3rd Edition. The proposed list is focused on those
items that we believe represent the most immediate needs related to
basic health and safety for children receiving subsidies. However, Lead
Agencies are encouraged to develop a comprehensive and robust training
program that also covers additional areas related to program design,
worker safety, and child developmental needs, using the Caring for our
Children guidelines as best practices in the field. In addition,
training requirements should be appropriate to the provider setting and
ages of children served. For example, training on SIDS is only
necessary if a program cares for infants. If providers are caring for
children of different ages, training in first-aid and CPR should
include elements which take into account that practices differ for
infants versus school-age children.
We propose to include Sec. 98.41(a)(3)(i), first-aid and CPR, in
the list of health and safety training requirements because studies
show that training in these areas is associated with higher quality of
care. A study of providers in four mid-western States, who had
completed CPR or first-aid training within the past two years, showed
that the training was associated with higher quality scores from the
Family Day Care Rating Scale (FDCRS) and Early Childhood Environment
Rating Scale Revised (ECERS-R) in family child care homes and centers.
(Raikes, H. et al., Child Care Quality and Workforce Characteristics in
Four Midwestern States, Omaha, NE, Gallup Organization, 2003)
It is important that someone who is qualified to respond to common
injuries and life-threatening emergencies be in attendance in a child
care setting at all times. A staff member trained in pediatric first-
aid, including pediatric CPR can reduce the potential for serious
injury. It also important to be trained specifically in first-aid and
CPR for young children because first aid in the child care setting
requires a more child-specific approach and technique than adult-
oriented first-aid generally offers. Training in basic first-aid and
CPR for children also has been shown to reduce the number of accidental
injuries in child care. (Ulione, M.S., Health Promotion and Injury
Prevention in a Child Development Center, Journal of Pediatric Nursing,
1997)
According to the FY 2012-2013 CCDF Plans, approximately 42 State
and Territories have CPR pre-service training requirements for child
care centers and 43 State and Territories have first-aid pre-service
training requirements. For family child care providers, 44 have CPR
pre-service training requirements and 43 have first-aid pre-service
training requirements. (Note, throughout this section we have cited
information from the most recent CCDF Plans which indicate the number
of States and Territories that have pre-service training requirements
in the areas discussed, consistent with the proposed change at Sec.
98.41(a)(3) discussed later in this proposed rule. However, the CCDF
Plan also asks Lead Agencies to indicate whether they have ongoing
training requirements in certain areas, and in nearly all of the areas
cited a higher number of Lead Agencies indicated they require ongoing
training. Ongoing training requires the provider to receive specific
training on some regular established basis, rather than, prior to
provision of services.)
We propose to include Sec. 98.41(a)(3)(ii), medication
administration policies and practices, in the list of health and safety
training requirements. We believe it is important that any child care
provider who administers medication receive standardized training that
educates the provider about the necessary skills and competencies
needed to do so safely. Increasing numbers of children entering child
care take medications (Caring for Our Children, Section 3.6.3).
Medication will only be effective if appropriately administered and can
be extremely dangerous if administered inappropriately. According to
the FY 2012-2013 CCDF Plans, approximately 23 States and Territories
have a medication administration pre-service training requirement for
child care centers. For family child care homes, 15 States and
Territories require pre-service training in medication administration.
We propose to include Sec. 98.41(a)(3)(iii), poison prevention and
safety, in the list of health and safety training requirements, so that
staff can respond appropriately and in a timely manner to exposure to
poisonous or toxic elements. There are over two million human poison
exposures reported to poison centers every year, and children less than
six years of age account for over half of those potential poisonings.
(Caring for Our Children, Section 5.2.9.1) The substances most commonly
involved in poison exposures of children are cosmetics and personal
care products, cleaning substances, and medications. Toxic substances,
when ingested, inhaled, or in contact with skin, may react immediately
or slowly, with serious symptoms occurring much later. It is important
for the caregiver to have the appropriate training to recognize
symptoms, alert the poison center, and undertake the appropriate
response. This precaution is essential to the health and well-being of
staff and children alike.
We currently do not have data in the CCDF Plans regarding the
number of Lead Agencies requiring poison prevention and safety
training.
[[Page 29468]]
However, according to the 2011 Child Care Licensing Study (prepared by
the National Child Care Information and Technical Assistance Center and
the National Association for Regulatory Administration), 46 States
require an inaccessibility of toxic substances policy as part of their
licensing system for child care centers, and 45 have the same
requirement for family child care providers.
We propose to include Sec. 98.41(a)(3)(iv), safe sleep practices
including Sudden Infant Death Syndrome (SIDS) prevention in the list of
health and safety training requirements. Despite the decrease in deaths
attributed to SIDS and the decreased frequency of prone or side infant
sleep position over the past two decades, many child care providers
continue to place infants to sleep in positions or environments that
are not safe and potentially fatal. According to the American
Association of Pediatrics Task Force on Infant Sleep Position and
Sudden Infant Death Syndrome, nearly 20 percent of SIDS deaths occur
while the infant is in the care of a non-parental caregiver, with 60
percent of these occurring in family child care, 20 percent in child
care centers, and 20 percent in relative care. (American Academy of
Pediatrics, Reducing the Risk of SIDS in Child Care training, 2008)
Infants who are cared for by adults other than their parent/
guardian or primary caregiver/teacher are at increased risk for dying
from SIDS. According to Caring for Our Children, recent research and
demonstration projects have revealed that caregivers/teachers are often
unaware of the dangers or risks associated with prone infant sleep
positioning, and many believe that they are using the safest practices
possible, even when they are not. (Caring for Our Children, Section
3.1.4) Training has been shown to lead to an increase in healthy sleep
practices which can help decrease the instance of injury or death in
child care. According to the FY 2012-2013 CCDF Plans, approximately 25
States and Territories have safe sleep and SIDS prevention pre-service
training requirements for child care centers, and 25 States and
Territories have SIDS prevention pre-service training requirements for
family child care homes.
We propose to include Sec. 98.41(a)(3)(v), shaken baby syndrome
and abusive head trauma prevention, in the list of health and safety
training requirements. Over the past several years there has been
increasing recognition of shaken baby syndrome which is the occurrence
of brain injury in young children under three years of age due to
shaking. Even mild shaking can result in serious, permanent brain
damage or death. It is important for child care providers to be
educated about the risks of shaking and supports should be in place to
provide child care providers with healthy coping mechanisms to deal
with frustrations that may arise when working with a challenging child.
Research has suggested that approximately 1,300 U.S. children
experience severe or fatal head trauma from child abuse every year and
that approximately 30 per 100,000 children under age 1 suffered
inflicted brain injuries (www.dontshake.org). It is important that
child care providers are properly trained in healthy practices and how
to prevent trauma from unsafe treatment of children.
We propose to add Sec. 98.41(a)(3)(vi), age-appropriate nutrition,
feeding, including support for breastfeeding, and physical activity, in
the list of health and safety training requirements. Over the past
three decades, childhood obesity rates in America have tripled, and
today, nearly one in three children in America are overweight or obese.
The persistence of childhood obesity can lead to significant health
problems including diabetes, heart disease, high blood pressure,
cancer, and asthma. (Let's Move! Child Care, Learn the Facts, 2010)
Educating caregivers on appropriate nutrition and physical activity is
essential to provide young children with a healthy environment to
prevent long-term negative health implications. According to the FY
2012-2013 CCDF Plans, 19 States and Territories have a nutrition pre-
service training requirement for child care centers, and 15 States and
Territories require pre-service training in this area for family child
care homes.
In May 2010, the White House Task Force on Childhood Obesity
reported that physical activity assists children in obtaining and
improving fine and gross motor skill development, coordination, balance
and control, hand-eye coordination, strength, dexterity, and
flexibility--all of which are necessary for children to reach
developmental milestones. In addition, daily physical activity provides
numerous health benefits including improved fitness and cardiovascular
health, healthy bone development, improved sleep, and improved mood and
sense of well-being. Daily physical activity is an important part of
preventing excessive weight gain and childhood obesity. Early childhood
years, in particular, are crucial for obesity prevention due to the
timing of the development of fat tissue, which typically occurs from
ages 3 to 7. During these preschool years, children's body mass index
(BMI) typically reaches its lowest point and then increases gradually
through adolescence and most of adulthood. However, if this BMI
increase begins before ages 4 to 6, research has suggested that
children face a greater risk of obesity in adulthood. (White House Task
Force on Obesity, Report to the President, 2010)
Nutrition and age-appropriate feeding is important to ensure that
children receive the proper nutritional content to provide for healthy
development. This is of particular importance when working with
families who may be facing nutritional challenges in the home as well.
Eating well is equally important for the healthy development of young
children, and research has shown that public programs can improve the
nutritional quality of the food, as children who receive food through
government-regulated programs (e.g., the U.S. Department of Agriculture
Child and Adult Care Food Program) eat healthier than those bringing
food from home. (White House Task Force, 2010) Age-appropriate feeding
in particular is important to avoid potential health hazard (e.g.
choking and allergies), particularly when introducing solid foods to
young children. Age-appropriate feeding also means encouraging,
providing arrangement for, and supporting breastfeeding in the child
care environment.
We propose to include Sec. 98.41(a)(3)(vii), procedures for
preventing the spread of infectious disease, including sanitary methods
and safe handling of foods, in the list of health and safety training
requirements. Attendance at a child care facility may expose a child to
the risk of acquiring infectious diseases. Staff members face
challenges in terms of enforcing recommended hygiene measures including
hand hygiene, maintenance of proper environmental sanitation, food
safety, and the proper inclusion or exclusion due to illness for both
children and staff. Training in such procedures for preventing and
managing the spread of infectious disease will help mitigate the
effects of an illness in the child care setting and protect children,
staff, and families from unnecessary exposure. According to the FY
2012-2013 CCDF Plans, approximately 22 States and Territories have a
pre-service training requirement on preventing the spread of infectious
disease for its child care centers, and 20 States and Territories pre-
service training in this area for family child care providers.
We propose to include Sec. 98.41(a)(3)(viii), recognition and
[[Page 29469]]
reporting of suspected child abuse and neglect, in the list of health
and safety training requirements. It is important for child care
providers to be trained in child abuse and neglect prevention in order
to be able to recognize the manifestations of child maltreatment. While
child care providers are not expected to diagnose or investigate child
abuse and neglect, it is important that they be aware of common
physical and emotional signs and symptoms of child maltreatment. All
States have laws mandating the reporting of child abuse and neglect to
child protection agencies and/or the police. While the laws about when
and to whom to report may vary by State, child care providers are often
considered mandatory reporters of child abuse and neglect and therefore
responsible for notifying the proper authorities in accordance with
their State's child abuse reporting laws. Child care providers should
use child abuse and neglect training to educate and establish child
abuse and neglect prevention and recognition measures for children,
providers, and parents. According to the FY 2012-2013 CCDF Plans,
approximately 31 States and Territories have a pre-service training
requirement on mandatory reporting of suspected abuse or neglect for
child care centers, and 25 States and Territories require pre-service
training in this area for family child care providers.
We propose to include Sec. 98.41(a)(3)(ix), emergency preparedness
planning and response procedures, in the list of health and safety
training requirements. This is consistent with the earlier discussion
in this proposed rule highlighting the importance of emergency
preparedness and response planning for child care providers. These new
requirements would ensure providers are trained on procedures and
practices included in emergency preparedness and response plans. Given
the extreme vulnerability of young children, it is important that
providers be prepared to follow the necessary evacuation, shelter-in-
place or re-location procedures, including emergency response practices
for children with special needs, family reunification, and procedures
related to transportation and accessing emergency contact information
for parents. According to the FY 2012-2013 CCDF Plans, approximately 29
States and Territories have emergency preparedness and response
training requirements for child care centers, and 22 States and
Territories require training in this area for family child care
providers. We note that Lead Agencies have flexibility to determine if
health and safety training proposed in this section should occur pre-
service or as part of orientation. In the case of emergency
preparedness and response, it may be more appropriate for the provider
to receive this training as part of orientation since emergency
procedures are often site-specific.
We propose to include Sec. 98.41(a)(3)(x), management of common
childhood illnesses, including food intolerances and allergies, in the
list of health and safety training requirements. Management of common
childhood illnesses is essential to safeguarding the spread of illness
throughout child care settings. Caregivers/teachers should be
knowledgeable about infectious disease in order to recognize and
properly contain the spread of illness among children, staff, and the
greater community. Since young children are particularly susceptible to
illness, the proper management of the child care environment through
hygiene and sanitation trainings can drastically reduce the spread of
common childhood illnesses. Similarly, proper feeding practices can
prevent health problems for children with food intolerances and
allergies.
We propose to include Sec. 98.41(a)(3)(xi), transportation and
child passenger safety, in the list of health and safety training
requirements. We recognize that not all child care providers provide
transportation services, so we have added ``if applicable.'' For child
care providers that do provide transportation, we believe it is
important that the provider is properly trained in age and size-
appropriate child restraint practices for car safety seats and
seatbelts. Additionally, child passenger safety training should include
awareness of the incidence of death and injury associated with
forgetting or leaving children unattended in a vehicle.
We propose to include Sec. 98.41(a)(3)(xii), caring for children
with special health care needs, mental health needs, and developmental
disabilities, in the list of health and safety training requirements.
In order to provide appropriate services, providers should be trained
on caring for children with special health care needs, mental health
needs, and developmental disabilities in compliance with the American
with Disabilities Act (ADA) (42 U.S.C. 12101, et seq.) and other
relevant Federal laws. (Caring for Our Children, Section 8.2.0.2) This
is important to ensure that all children are included in all activities
possible unless a specific medical contraindication exists. The goal is
to provide fully integrated care to the extent feasible given each
child's limitations. Federal and State laws do not permit
discrimination on the basis of disability per the ADA.
Training to support a developmentally appropriate and inclusive
environment is crucial because studies have found the following
benefits of inclusive child care: Children with special needs develop
increased social skills and self-esteem; families of children with
special needs gain social support and develop more positive attitudes
about their child; children and families without special needs become
more understanding and accepting of differences and disabilities;
caregivers/teachers learn from working with children, families, and
service providers and develop skills in individualizing care for all
children. A basic understanding of developmental disabilities and
special care requirements of any child in care is a fundamental part of
any orientation for new employees. Staff should obtain appropriate
training in order to include children with special needs, such as
children with severe disabilities and children with special health care
needs such as chronic illnesses, into child care settings. These may
include technology-dependent children and children with serious and
severe chronic medical problems.
Finally, we propose to add Sec. 98.41(a)(3)(xiii) child
development, including knowledge of the stages and milestones of all
developmental domains for the ages of children enrolled in the
facility, in the list of health and safety training requirements. In
addition to being integral to professional development, child
development is an essential component for the health and safety of
children, both in and outside the child care setting. From a protection
standpoint, research has shown that improving parental understanding of
child development reduces the incidence of child abuse and neglect
cases. (Daro, D. and McCurdy, K., ``Preventing Child Abuse and neglect:
Programmatic Interventions,'' Child Welfare, 1994); (Reppucci, N.,
Britner, P., and Woodard, J., Preventing Child Abuse and Neglect
Through Parent Education, 1997) Child care providers should be
knowledgeable of the important developmental milestones to support the
healthy development of children in their care, but also so they can be
a resource for parents and provide valuable parent education. Child
abuse is often a result of frustration, which can be exacerbated by an
improper understanding of a child's capabilities. Knowledge of
[[Page 29470]]
developmental stages and milestones minimizes this frustration and
reduces the odds of child abuse and neglect by establishing more
reasonable and appropriate expectations for children.
Child development training is also an important component of health
and safety because it equips child care providers with the information
necessary to recognize any significant developmental delays such as
autism spectrum disorders, motor delays, or other conditions. Early
detection and intervention, access to the appropriate developmental
screenings, and referrals to the appropriate services provides a
safeguard against avoidable developmental delays. According to Caring
for Our Children, 70 percent of children with developmental
disabilities and mental health problems are not identified until school
entry. The report identifies child care professionals as playing an
important role in early detection due to their daily interaction with
children and families and their knowledge in child development
principles and milestones. (Caring for Our Children, Section 2.1.1.4)
Child development training must address all developmental domains,
including social and emotional, physical, and cognitive domains. This
comprehensive training will ensure that providers are able to recognize
and provide appropriate services or referrals in all developmental
areas, such as mental health services for children who are experiencing
trauma or stress.
Pre-service or orientation training. In this proposed rule at Sec.
98.41(a)(3) we also have added language to specify that the health and
safety training requirements described above, proposed in paragraphs
(a)(3)(i)-(xii,) should be met during pre-service or orientation
training. We believe it is important that child care providers be well-
prepared and have a firm grasp on basic health and safety issues prior
to serving children receiving subsidies. Many Lead Agencies have
already established pre-service training requirements for child care
providers serving children receiving subsidies, which generally differ
for child care center staff and family child care homes, as shown in
the discussion above using data from the most recent CCDF Plans. These
requirements may include a minimum number of training hours prior to
employment through participation in workshops, meetings, or one-to-one
consultation, and a minimum number of ongoing hours of training. Lead
Agencies often allow requirements to be satisfied through completion of
a certification course or vocational or occupational education program.
In addition, while the proposed regulatory requirements focus on pre-
service or orientation training, we strongly encourage Lead Agencies to
establish requirements for ongoing training as well. Requiring periodic
training on an ongoing basis will ensure that providers retain their
knowledge and skills over time and are updated on the most current
practices and information to ensure children's health and safety.
We are specifically seeking comment on whether regulatory changes
should include a minimum number of pre-service training hours and
ongoing hours of training in these areas. Caring for our Children
guidelines recommend at least 30 hours of initial pre-service training
for child care staff, at least 30 hours during the first year, and at
least 24 hours per year of continuing education and professional
development thereafter. (Caring for our Children, Section 1.4.1.1 and
1.4.4.1) We also request comment on whether the Final Rule should
specify a format for the training and whether the training requirements
should be linked to measures of accountability, such as continuing
education credits, to ensure that ongoing training requirements lead to
a progression or advancement in a provider's knowledge base.
We recognize that it may not be possible for child care providers
serving subsidized children to meet all the listed minimum health and
safety training requirements prior to the first day of service.
Therefore, we are allowing Lead Agencies to require the training prior
to the provider's start of service (i.e., pre-service) or during the
initial service period (i.e., orientation). We are leaving it to the
Lead Agency's discretion to specifically define ``pre-service'' and
``orientation'', which may include stipulations that the training be
completed within the first weeks or month of providing child care
services to children receiving CCDF assistance. Lead Agencies should
also offer a grace period to providers who are already serving children
receiving CCDF assistance to minimize disruptions to child care
arrangements for children currently enrolled with a provider and
receiving subsidies. A significant number of the proposed training
requirements in this section are already being met by many child care
providers that are subject to Lead Agency licensing or regulatory
requirements. Additionally, many of the areas included in the proposed
new requirements are readily available through on-line trainings, which
should minimize burden on Lead Agencies.
Monitoring. The CCDBG Act at 658E(c)(2)(G) requires Lead Agencies
to certify that procedures are in effect to ensure that child care
providers serving children receiving CCDF subsidies comply with all
applicable State and local health and safety requirements, including
those described at Sec. 98.41(a). Currently, Sec. 98.41(d) of the
regulations incorporates this language but does not provide further
clarification of this requirement. The regulation as written states
that ``Each Lead Agency shall certify that procedures are in effect to
ensure that child care providers of services for which assistance is
provided under this part, within the area served by the Lead Agency,
comply with all applicable State, local, or Tribal health and safety
requirements. . . .'' There is no further definition as to what
procedures are appropriate for the Lead Agency to employ to meet this
certification requirement or specific mention of monitoring as a key
component to ensure child care providers comply with health and safety
requirements.
We propose to amend Sec. 98.41(d) to require that Lead Agencies
procedures must include unannounced on-site monitoring and to add Sec.
98.41(d)(1) to require that all providers serving children receiving
CCDF subsidies must be subject to on-site monitoring, including
unannounced visits. We propose to add Sec. 98.41(d)(2) stating that
the Lead Agency may not solely rely on child care provider self-
certification of compliance with health and safety requirements
included in paragraph (a) without documentation or other verification
that requirements have been met. Finally, we propose to add Sec.
98.41(d)(3) to require that Lead Agency monitoring procedures must
require an unannounced visit in response to receipt of a complaint
pertaining to the health and safety of children in the care of a
provider serving children receiving CCDF subsidies.
These changes would add much needed clarity to the current
regulations, which is especially important given the new proposed
health and safety requirements at Sec. 98.41(a), discussed above. CCDF
requires Lead Agencies to provide assurances that providers caring for
subsidized children, including providers that are not otherwise
regulated or licensed, meet minimum health and safety requirements. We
believe it makes sense also to articulate expectations for how
compliance with those requirements should be monitored.
[[Page 29471]]
There is currently significant variation across States regarding
the nature and intensity of on-site monitoring and unannounced visits,
with a variation in the frequency of monitoring. According to a
preliminary analysis of the 2012-2013 CCDF Plans, all 56 Lead Agencies
currently have some unannounced visit component in place for licensed
centers and 47 of the Lead Agencies currently have unannounced visits
for licensed family child care providers. However, only 13 Lead
Agencies indicate use of unannounced visits for license-exempt CCDF
child care providers. ACF believes the use of unannounced visits more
effectively influences provider behavior because the possibility of an
unannounced visit may compel providers to maintain compliance with
basic requirements.
The proposed change requires that all providers serving children
receiving subsidies be subject to on-site unannounced monitoring. The
Lead Agency may choose to inform providers before monitoring staff
depart for unannounced visits that involve significant travel time,
such as those in rural areas, to avoid staff visits when the provider
or children are not present. A Lead Agency's on-site monitoring
practices must require both regulated and unregulated family child care
homes and centers that provide care to children receiving CCDF
subsidies to be inspected. Further, Lead Agencies may not limit on-site
monitoring solely to licensed or regulated providers if unregulated
providers also are providing services to children receiving CCDF
assistance, and Lead Agencies must conduct unannounced visits. Note
that, pursuant to 98.41(e) and discussed later in this proposed rule,
the Lead Agency may choose to exempt relative and in-home child care
providers from monitoring requirements.
In recognition of resource constraints, we recommend, that Lead
Agencies ensure child care providers caring for children receiving a
subsidy receive an initial on-site monitoring visit and at least one
annual unannounced on-site monitoring visit. We recognize that on-site
monitoring requires adequate licensing and monitoring staff and other
resources. Therefore, we are specifically requesting public comment on
this recommendation and whether it should become a requirement and
welcome input as to alternative monitoring frequencies.
ACF encourages Lead Agencies to consider the use of differential
monitoring as a method for determining the use or frequency of on-site,
unannounced monitoring based on an assessment of the child care
provider's past level of compliance with health and safety requirements
or with information received that could indicate violations. This
allows Lead Agencies to prioritize monitoring of providers that have
previously been found out of compliance or that receive parental
complaints. Lead Agencies should make data-driven decisions, and make
any necessary adjustments to these policies regarding the frequency of
on-site monitoring visits over time based on the latest available data.
For example, if the Lead Agency finds widespread or significant
compliance issues under its existing monitoring protocol, it should
consider increasing the number and frequency of inspections for those
providers.
According to the 2011 Child Care Licensing Study (prepared by the
National Child Care Information and Technical Assistance Center and the
National Association for Regulatory Administration), 26 States use
differential or risk-based monitoring for child care centers and 21
States use this method for family child care homes. If a risk-based
methodology is not feasible, Lead Agencies might consider random
sampling.
Lead Agencies are also encouraged to coordinate with other entities
that already have inspection and on-site monitoring mechanisms in place
such as licensing, QRIS, and Head Start. Another key partner in
ensuring health, safety and quality in child care is the U.S.
Department of Agriculture's Child and Adult Care Food Program (CACFP),
which provides funding to State agencies to reimburse child care
providers for meals and snacks served to participants. The program
requires CACFP agencies to conduct periodic unannounced site visits to
prevent and identify management deficiencies, fraud and abuse under the
program as well as to improve program operations. As an example of
interagency coordination, one State holds monthly meetings with
representation from its licensing division, the CCDF Lead Agency,
CACFP, and other public agencies with child care monitoring
responsibilities. These divisions and agencies identify areas of
overlap in monitoring and coordinate accordingly to leverage combined
resources and minimize duplication of efforts.
Coordinating with other monitoring agencies can be beneficial to
both agencies as they prevent unnecessary duplication of services. To
the extent that other agencies provide an on-site monitoring component
that may satisfy or partially satisfy the new monitoring requirement
under this proposed rule, the Lead Agency is encouraged to pursue this
type of collaboration. It is important that any such collaboration does
not impose additional burden or inappropriate authority on any one
partner or its participating agencies and that any shared costs are
properly allocated between the partnering organizations benefiting.
The regulatory revision at 98.41(d)(2) is being proposed because we
feel that self-certification without documentation or other
verification is an insufficient certification of compliance with health
and safety requirements and represents a significant risk for unsafe
conditions that endanger children, as well as for fraudulent or
improper payments. In some States, child care providers caring for
subsidized children can self-certify that they have met minimum health
and safety standards without additional verification, monitoring or
enforcement of those provisions. According to the FY 2012-2013 CCDF
Plans, 21 States and Territories allow license-exempt family child care
providers to self-certify that they have met the CCDF health and safety
requirements and 6 Lead Agencies allow license-exempt child care
centers to self-certify. Under the proposed rule, Lead Agencies must,
at a minimum, verify any self-certification claims with supporting
documentation. Some examples of documentation include inspection by a
Fire Marshall, a current CPR certificate, certificates demonstrating
completion of training hours, or confirmation of completion of on-line
training.
Finally, the proposed regulation at 98.41(d)(3) provides that Lead
Agency monitoring procedures must require an unannounced visit in
response to receipt of a complaint pertaining to the health and safety
of children in the care of a provider serving children receiving CCDF
subsidies. We believe that it is incumbent upon a Lead Agency to
investigate complaints related to possible health and safety violations
for child care providers serving CCDF children and that it is
reasonable to require that a complaint should automatically trigger an
unannounced visit to the provider.
Finally, we propose at 98.41(d)(4) that Lead Agencies establish
procedures that require child care providers that care for children
receiving CCDF subsidies to report to a designated State, territorial,
or tribal entity any serious injuries or deaths of children occurring
in child care. We strongly recommend that States, Territories, and
Tribes extend this requirement to all child care providers, including
those not serving CCDF children. According to the 2011 Child Care
Licensing Study, 34 States
[[Page 29472]]
require child care centers to report all serious injuries that occur to
children in programs, and 33 States require deaths that occur to
children in programs to be reported. For family child care, 31 States
require reporting of all serious injuries and 25 States require
reporting of child deaths. Therefore, this requirement is in line with
current State practice, and provides an important tool for States in
monitoring the health and safety of child care providers. The
information collected from these providers should be used to inform the
proposed assessment of child injuries and deaths in child care as
required at Sec. 98.16(v)(2).
In-home and relative providers. Regulations at Sec. 98.41(e)
currently allow Lead Agencies to exempt relative caregivers, including
grandparents, great grandparents, siblings (if such providers live in a
separate residence), and aunts or uncles from health and safety and
monitoring requirements described in this section. We propose to add
language at Sec. 98.41(e) to expand the Lead Agency's flexibility to
also exempt in-home child care providers (i.e., an individual who
provides child care services in the child's own home). Accordingly, at
the Lead Agency's option, they may choose to exempt relative-caregivers
and in-home caregivers from some or all of their health and safety
training requirements and monitoring procedures. If the Lead Agency
chooses to exempt either of these categories of providers, the Lead
Agency must provide a description and justification in the CCDF Plan of
requirements, if any, that apply to these providers. We believe this
additional flexibility is important because we recognize that some of
the proposed requirements, such as compliance with building, health,
and fire codes, emergency preparedness and response planning, and
unannounced on-site monitoring may not be appropriate for that type of
care setting. However, we do not intend for in-home providers serving
children receiving subsidies to meet no minimum standards. Lead
Agencies should think carefully about what types of health and safety
requirements should apply to in-home providers such as criminal
background checks and minimum health and safety training, in a similar
manner that is done when considering which of the requirements should
apply to relative caregivers.
Sliding Fee Scales (Section 98.42)
CCDF regulations at Sec. 98.42(c) currently state that ``Lead
Agencies may waive contributions from families whose incomes are at or
below the poverty level for a family of the same size.'' We propose
amending this section so that Lead Agencies can waive contributions
from families ``meeting criteria established by the Lead Agency.'' Lead
Agencies have often requested more flexibility to waive co-payments
beyond just those families at or below the poverty level. This change
would increase flexibility to determine waiver criteria that the Lead
Agency believes will best serve subsidy families. For example, a Lead
Agency could use this flexibility to target particularly vulnerable
populations, such as homeless families or migrant workers, or to better
align services for children dually funded through both CCDF and Head
Start. While we are allowing Lead Agencies to define criteria for
waiving co-payments, the criteria must be described and approved in the
CCDF Plan pursuant to the proposed change at Sec. 98.16(k). Lead
Agencies may not use this revision as an authority to eliminate the co-
payment requirement for all families receiving CCDF assistance. We
continue to expect that Lead Agencies will have co-payment requirements
for a substantial number of families receiving CCDF subsidies.
Finally, we are also proposing to add paragraph Sec. 98.42(d) to
provide that Lead Agencies may not use cost or price of care or subsidy
payment rate as a factor in setting co-payment amounts, but may use
quality of care. This corrects a contradiction between the 1992 and
1998 preamble discussions. The 1992 preamble stated that ``Grantees may
take into account the cost of care in establishing a fee scale,'' (57
FR 34380), while the 1998 preamble states that ``As was stated in the
preamble to the regulations published on August 4, 1992, basing fees on
the cost or category of care is not allowed.'' (63 FR 39960) This
proposed change will correct this discrepancy by clearly stating that
Lead Agencies may not use cost or price of care when setting their co-
pay amounts, which could violate the statutory requirements to preserve
equal access and parental choice.
Equal Access (Section 98.43)
Section 658E(c)(4) of the CCDBG Act requires the CCDF Plan to
provide assurances that payment rates for CCDF subsidies are sufficient
to ensure equal access for eligible children to comparable child care
services that are provided to children whose parents are not eligible
to receive child care assistance. The statute also requires the CCDF
Plan to provide a summary of the facts on which the Lead Agency relied
to determine that payment rates are sufficient to ensure equal access.
The existing regulation at Sec. 98.43(b) requires a Lead Agency to
show that it considered the following three key elements in determining
that its child care program provides equal access for eligible families
to child care services: (1) Choice of the full range of categories and
types of providers; (2) adequate payment rates, based on a local market
rate survey conducted no earlier than two years prior to the effective
date of the current Plan; and (3) affordable copayments. The proposed
rule largely maintains these three key elements at Sec. 98.43(b)(2),
but proposes some revisions regarding payment rates and the market rate
survey.
First, for purposes of clarity, we propose to replace the term
market rate survey with the term valid local market price study in
paragraph Sec. 98.43(b)(2). This is not a substantive change, but
rather a change in terminology that more accurately reflects the scope
and nature of the requirement. As in the past, the purpose of the
market price study is to ensure that payment rates are established
within the context of market conditions so that the rates are
sufficient to provide equal access to child care services in the open
market. We propose to use the term price rather than rate since Sec.
98.43(b)(2) requires the Lead Agency to systematically collect
information about the prices (not rates) charged in the market by child
care providers. Once a Lead Agency gathers and analyzes this price
information, it is used to help determine the rates paid by the Lead
Agency to providers that serve children who receive CCDF. The change in
terminology in the regulatory language more clearly distinguishes
between the initial collection of price data, and the subsequent
analysis and setting of payment rates. We also propose to use the term
study rather than survey since Lead Agencies have the flexibility to
use data collection methodologies other than a survey. For example,
Lead Agencies may use administrative data from resource and referral
agencies or other sources.
We also propose to require that the market price study must be
valid--meaning that it accurately reflects the prices charged for child
care in the local community. If a market price study is not valid, it
will provide misleading results that cannot serve as a sound basis for
establishing payment rates to providers or for measuring the adequacy
of the rates. A recent report funded by ACF using CCDF research dollars
identified components of a valid market price study (Grobe, D., Weber,
R., Davis, E., Kreader, L., and Pratt, C., Study of Market Prices:
Validating Child Care Market Rate Surveys, 2008). Based
[[Page 29473]]
largely on this research, a market price study will be considered valid
if it meets the following benchmarks:
Includes the priced child care market. The study includes
child care providers within the priced market (i.e., providers that
charge parents a price established through an arm's length
transaction). In an arm's length transaction, the parent and the
provider do not have a prior relationship that is likely to affect the
price charged. For this reason, some unregulated, license-exempt
providers, particularly providers who are relatives or friends of the
child's family, are generally not considered part of the priced child
care market and therefore are not included in a market price study.
These providers typically do not have an established price that they
charge the public for services, and the amount that the provider
charges is often affected by the relationship between the family and
the provider. In addition, from a practical standpoint, many Lead
Agencies are unable to identify a comprehensive universe of family,
friend, and neighbor caregivers since these providers frequently are
not included on lists maintained by licensing agencies, resource and
referral agencies, or other sources. In the absence of findings from a
market price study, Lead Agencies often use other facts to establish
payment rates for providers outside of the priced market (e.g., family,
friend, and neighbor providers); for example, many Lead Agencies set
these payment rates as a percentage of the rates for providers in the
priced market.
Provides complete and current data. The study uses data
sources (or combinations of sources) that fully capture the universe of
providers in the priced child care market. The study should use lists
or databases from multiple sources, including licensing, resource and
referral, and the subsidy program, if necessary for completeness. In
addition, the study should reflect up-to-date information for a
specific time period (e.g., all of the prices in the study are
collected within a three month time period). The existing regulation at
Sec. 98.43(b)(2) requires that the market price study be completed no
earlier than two years prior to the effective date of the Plan, thereby
ensuring that the study reflects recent prices. ACF expects a Lead
Agency to use its current market study completed within the past two
years, rather than an older study, when setting its payment rates,
though the Lead Agency retains discretion on where to set payment
levels as compared to the market study findings, provided that it meets
the requirements for providing equal access at Sec. 98.43.
Represents geographic variation. The study includes
providers from all geographic parts of the State, Territory, or Tribal
Service Area. It should also collect and analyze data in a manner that
links prices to local geographic areas. The existing regulation at
Sec. 98.43(b)(2) requires the market price study to be ``local'',
meaning that it should measure differences in local child care markets.
Uses rigorous data collection procedures. The study uses
good data collection procedures, regardless of the method (mail,
telephone, or web-based survey; administrative data). This includes a
response from a high percentage of providers (65 percent or higher is
desirable; below 50 percent is highly suspect).
Analyzes data in a manner that captures market
differences. The study should examine the price per child care slot,
recognizing that all child care facilities should not be weighted
equally because some serve more children than others. This approach
best reflects the experience of families who are searching for child
care. When analyzing data from a sample of providers, as opposed to the
complete universe, the sample should be appropriately weighted so that
the sample slots are treated proportionally to the overall sample
frame. The study should collect and analyze price data separately for
each age group and category of care to reflect market differences.
In addition, we propose regulatory revisions designed to promote
alternative or additional methodologies to market price studies as a
basis for setting rates. Specifically, under new Sec. 98.43(b)(2)(ii)
a Lead Agency may propose an alternative methodology, such as a model
that estimates the cost of providing various levels of quality child
care, in lieu of a market price study. The Lead Agency must receive
advance ACF approval prior to substituting the methodology for a market
price study. We also propose to add new Sec. 98.43(b)(4) which
requires the Lead Agency to provide any additional facts the Lead
Agency considered in determining that its payment rates ensure equal
access, such as information on the cost of providing quality child
care. We encourage Lead Agencies to use the flexibility afforded them
under the CCDF rules to adopt innovative approaches to setting subsidy
payment rates in a way that also is linked to child care quality.
We are concerned that many Lead Agencies currently are setting
payment rate ceilings that are inadequate to ensure equal access. The
preamble to the 1998 Final Rule indicated that payments established at
least at the 75th percentile of the market would be regarded as
providing equal access (63 FR 39959). In order to provide access to the
highest quality care, even higher payment rates may be necessary.
However, the vast majority of States set rate ceilings that are below
the 75th percentile, and in some cases significantly below that
benchmark. This means that families are unable to access a significant
portion of the child care market.
We recognize that Lead Agencies face resource constraints that
limit their ability to increase payment rates, and we are not requiring
an increase in payment rates through this proposed rule; however, we
continue to be concerned about families' ability to access high quality
care when rates are low. Many child care providers report that they are
unable to set published prices that reflect the full cost of providing
quality services because parents would be unable to pay these prices.
(Report of the Build Subsidized Child Care Rate Policy Task Force,
Pennsylvania Build Initiative, 2004) As a result, the published prices
that are reflected in market price studies (and which are used as the
basis for setting CCDF subsidy payment rates) are not always adequate
to cover the providers' full costs, particularly for high quality care.
To address this situation, Lead Agencies could adopt new
methodologies and approaches for setting payment rates. One approach is
to conduct cost studies (in contrast to price studies) that document
the full cost to providers of quality child care. Another method is to
develop models that estimate the cost to providers at various levels of
quality. We considered mandating new rate-setting approaches for all
Lead Agencies through this proposed rule; however, we do not yet have
sufficient State experience using alternative methods to mandate them
at this time.
There is an urgent need for States to explore and document new
rate-setting practices, and our intent is to spur innovation in this
area. Therefore, we would like to solicit public comments on innovative
rate setting approaches and possible new Federal requirements that
would better ensure that subsidy rates provide equal access, as
required by statute. In addition to providing a basis for setting
subsidy payment rates, new methodologies may also help the State
determine what level of financial supports and incentives, such as
grants and bonuses, are necessary to support quality enhancements for
providers (for
[[Page 29474]]
example, the level of support necessary to sustain providers at the top
level of a QRIS or other system of quality indicators).
Because the market price study is a long-standing practice that can
provide important contextual information for setting rates, we propose
to require advance ACF approval before a Lead Agency replaces its
market price study with an alternative methodology. After enactment of
a Final Rule, ACF will provide additional guidance to Lead Agencies
regarding the process for proposing an alternative methodology to be
used in place of a market price study, and the specific criteria for
ACF approval. To obtain approval, we anticipate that the Lead Agency
will need to demonstrate how the alternative methodology provides a
sound basis for setting payment rates. ACF approval will only be
necessary if the Lead Agency plans to replace the market price study
with an alternative methodology. Approval will not be required if the
Lead Agency plans to implement both a market price survey and an
additional methodology to inform rate-setting.
We also note that ACF has previously issued guidance (Program
Instruction CCDF-ACF-PI-2009-02) that describes conditions under which
Tribal and Territorial Lead Agencies may provide alternative
documentation in lieu of conducting or using a market price study.
Specifically, this includes circumstances where the Lead Agency funds
direct services solely in settings outside the scope of a market price
study. This guidance remains effective, and is not altered by this
proposed rule.
We propose adding a new paragraph Sec. 98.43(c) to clarify that a
Lead Agency shall take into account the quality of child care when
determining payment rates for child care providers. Higher quality care
is often more expensive to provide, whether that is reflected in the
price or not. Therefore, it is important for payment rates to consider
quality in order to ensure that parents receiving CCDF subsidies have
equal access to quality child care. Taken together, revised paragraph
(b) and new paragraph (c) identify the key elements required for equal
access--the full range of providers, affordable copayments, and
adequate payment rates which take into account the quality of child
care.
We recommend that Lead Agencies pay higher subsidy rates for higher
quality care. The taxpaying public rightly expects the government to
pay for results, and research shows that quality is a prerequisite for
supporting children's learning and development through child care. By
paying more for quality, Lead Agencies provide a financial incentive
for providers to increase the quality of care. The higher rates also
help give providers the necessary resources to pay for higher levels of
compensation for child care professionals, as well as other components
of quality care.
When determining the differential rate for higher quality, we
encourage Lead Agencies to make certain that rates are sufficient to
ensure access at the higher levels of quality. At the same time, a Lead
Agency's base rates (i.e., before any quality incentives are included)
must be sufficient for all children to access care that meets a
baseline of quality and health and safety. In addition, higher subsidy
rates alone may not be sufficient to promote quality, particularly for
child care providers that serve only a limited number of children
receiving CCDF assistance. We encourage Lead Agencies to use grants,
contracts, training and scholarship opportunities and other forms of
support to help providers increase their quality. Linking enhanced
subsidy rates to higher quality is an important component of promoting
quality when implemented in conjunction with other ongoing financial
supports, assistance, and incentives. In the FY2012-2013 CCDF Plans, 32
States and Territories indicated that they provide tiered or
differential rates for higher quality.
With regard to paying higher rates for quality, we note that, in
the preamble to the 1998 Final Rule, we reminded Lead Agencies of the
general principle that Federal subsidy funds cannot pay more for
services than is charged to the general public for the same service (63
FR 39959). We would like to clarify, however, that Lead Agencies may
pay amounts above the provider's private pay rate, as a quality bonus
or incentive. Recognizing that private pay rates are often not
sufficient to support high quality, many Lead Agencies have already
implemented tiered reimbursement systems that support quality and
produce the school readiness and success outcomes that children
deserve. Lead Agencies may use CCDF quality dollars to recognize higher
quality care, or to provide incentives to increase the availability of
child care otherwise in short supply in the market. This can be
achieved through provider bonuses or incentives that may be implemented
through tiered or quality reimbursement systems or other mechanisms.
These payments may exceed private pay rates if they are designed to
reimburse providers for additional costs associated with offering
higher quality care or types of care that are not produced in
sufficient amounts by the market (e.g., non-standard hour care, care
for children with special health care needs, etc. . . . ). These
bonuses or incentives may be provided in the form of an hourly, monthly
or other augment to provider reimbursement for the care of an eligible
child.
We also propose to make a technical correction at Sec. 98.43(b)(3)
to clarify the reference to how copayments are affordable as described
at Sec. 98.42. The previous language read in such a way as to suggest
that Sec. 98.42 described affordable copayments in reference to the
sliding fee scale, when in fact it does not. Current paragraphs (c)
through (e) would be re-designated as (d) through (f) but otherwise
would be unchanged.
Subpart F--Use of Child Care and Development Funds
Subpart F of CCDF regulations establishes allowable uses of CCDF
funds related to the provision of child care services, activities to
improve the quality of child care, administrative costs, Matching fund
requirements, restrictions on the use of funds, and cost allocation.
Child Care Services (Section 98.50)
We propose a technical change to Sec. 98.50(a) which states that
the Lead Agency shall spend a substantial portion of the funds
remaining after applying provisions at (c), (d), and (e) of this
section to provide child care services to low-income working families.
Paragraphs (c), (d), and (e), respectively, require the Lead Agency to
spend a minimum of 4 percent on activities to improve the quality of
care, not more than 5 percent for administrative activities, and not
less than 70 percent of the Mandatory and Matching funds to meet the
needs of families receiving Temporary Assistance for Needy Families
(TANF), families transitioning from TANF, and families at-risk of
becoming dependent on TANF. We propose to specify that Sec. 98.50(b)
is describing use of funds for direct child care services. In the past,
we have been asked to interpret whether this section would allow States
to use a substantial portion of funds for activities other than direct
services.
In accordance with the proposed change at Sec. 98.30(a)(1)
discussed earlier, we propose to add language to Sec. 98.50(b)(3) of
the regulations to clarify that child care services shall be provided
using funding methods described at Sec. 98.30 (i.e., using grants or
contracts or certificates), which must include some use of grants or
contracts for the provision of direct services, with
[[Page 29475]]
the extent of such services determined by the Lead Agency after
consideration of the supply shortages described and other factors as
determined by the Lead Agency. As discussed earlier, existing language
at Sec. 98.30 provides that parents must be offered a choice of a
grant or contract ``if such services are available,'' or a certificate.
This proposed change, in conjunction with the proposed change at Sec.
98.30, is intended to promote the use of grants or contracts, along
with certificates, as funding mechanisms for child care services. As
noted earlier, the majority of children (approximately 90 percent)
currently receiving child care subsidies are served through
certificates. We recognize that there may be geographic areas or other
circumstances where grants or contracts may not be a viable option to
offer every parent applying for subsidies; therefore, we allow Lead
Agencies to determine the extent to which grants or contracts are used
based on supply shortages and other relevant factors. However, this
proposed change would require Lead Agencies to employ some use of
grants or contracts to provide child care services.
Grants or contracts should play a role in building the supply and
availability of child care, particularly high quality care, in
underserved areas and for underserved populations. For example,
contracts can be used to fund programs to serve children with special
needs, specific geographic areas, infants and toddlers, and school-age
children. Grants or contracts may also be used to provide wrap-around
services in Head Start and pre-kindergarten and to fund programs that
provide comprehensive services. Another factor a Lead Agency may wish
to consider in the use of grants or contracts might be the ability of
the child care market to sustain high quality child care providers in
certain localities or for specific populations.
Grants or contracts provide greater financial stability for child
care providers by funding a specified number of slots even if
individual children leave the program, whereas certificates are
portable allowing parents to leave a given provider at any time. Child
care providers that receive funding through certificates face a
constant threat of losing funding and children. Without stable funding,
it is difficult for providers to pay for the higher costs associated
with providing high quality child care, most child care providers,
especially those in low-income or rural areas, cannot afford the
qualified staff, equipment, and facilities that are necessary to meet
high quality program standards. With greater financial stability,
providers may be more willing to provide higher cost care, such as for
infants and toddlers, or to locate in low-income or rural communities.
Finally, grants or contracts also can improve accountability and fiscal
integrity by giving the Lead Agency more access to monitor child care
provider's compliance with health and safety requirements and
appropriate billing practices.
Activities To Improve the Quality of Child Care (98.51)
We propose making a technical change at Sec. 98.51(a) by
substituting ``from each fiscal year's allotment'' for ``for a fiscal
year.'' The purpose for this change is to make clearer that the four
percent minimum quality expenditure is calculated based on each fiscal
year's allotment (rather than a fiscal year's expenditure) as Lead
Agencies have multiple years to spend an entire CCDF allotment in
accordance with the liquidation timeframes at Sec. 98.60(d) and (e).
The revision also is consistent with existing language at Sec.
98.52(a) describing the five percent limitation on administrative
costs.
Framework for quality improvement activities. Under Section 658G of
the CCDBG Act and existing regulations at Sec. 98.51(a)(1), Lead
Agencies must use not less than 4 percent of the CCDF funds for
activities that are designed to provide comprehensive consumer
education to parents and the public, activities that increase parental
choice, and activities designed to improve the quality and availability
of child care, including resource and referral services. Lead Agencies
have broad flexibility to determine what may constitute quality
activities as long as those definitions fit within the broad statutory
requirement.
Current regulations at Sec. 98.51(a)(2) describe a list of
potential activities which may be considered allowable in order to meet
this minimum quality expenditure requirement. The current list of
suggested activities includes: (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 Sec. Sec. 98.40 and 98.41; (iii) Improving
the monitoring of compliance with, and enforcement of, applicable
State, local, and tribal requirements pursuant to Sec. Sec. 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) and other activities that are consistent with the intent
of this section.
This list of activities is based on specific activities formerly
contained in the CCDBG Act of 1990 prior to its reauthorization in
1996, which were retained in the 1998 Final Rule. We believe this list
includes worthwhile quality activities, but does not reflect the great
progress that has been made in the last decade toward organizing
quality activities into an intentional, systematic approach to helping
child care programs meet higher standards and child care professionals
advance in their skills and knowledge. Therefore, we propose to delete
the current list of suggested quality improvement activities at Sec.
98.51(a)(2) and insert the activities that follow: (We note that all of
the previously listed activities are incorporated into this new
framework, and the proposed revision should not be interpreted as an
indication that the previously delineated activities are no longer
allowable activities toward meeting the minimum quality expenditure
requirement.)
As proposed, activities to improve the quality of child care
services may include, but are not limited to, implementation of a
systemic framework for organizing, guiding, and measuring progress of
quality improvement activities that includes the following key
components: (i) Activities to ensure the health and safety of children
through licensing and health and safety standards pursuant to
Sec. Sec. 98.40 and 98.41; (ii) Establishment and implementation of
age-appropriate learning and development guidelines for children of all
ages, including infants, toddlers, and school-age children; (iii)
Establishment and implementation of systems of quality improvement to
evaluate, improve and communicate the level of quality of child care
programs that may contain the following elements:
(A) Establishment of program standards to define expectations for
quality and indicators of different levels
[[Page 29476]]
of quality appropriate to the provider setting;
(B) Provision of supports, training and technical assistance to
assist child care programs in meeting child care quality improvement
standards;
(C) Provision of financial incentives and monetary supports to
assist child care programs in meeting child care quality improvement
standards;
(D) Provision of quality assurance and monitoring to measure child
care program quality over time; and
(E) Implementation of strategies for outreach and consumer
education efforts to promote knowledge of child care quality
improvement standards to child care programs and to provide parents,
including parents receiving assistance under this part, with provider-
specific information about the quality of child care provider options
available to them and the child care provider they select consistent
with Sec. 98.33;
(iv) Implementation of professional development systems to ensure a
well-qualified child care workforce that may contain the following
elements:
(A) Establishment of core knowledge and competencies to define what
the workforce should know (content) and be able to do (skills) in their
role working with children and their families;
(B) Establishment of career pathways to define options and a
sequence of qualifications and ongoing professional development
opportunities;
(C) Conducting professional development assessments to build
capacity of higher education systems and other training institutions to
meet the diverse needs of the child care workforce and address the full
range of development and needs of children;
(D) Provision of access to professional development to ensure
practitioners are made aware of, and receive supports and assistance to
utilize professional development opportunities;
(E) Provision of rewards or financial supports to practitioners for
participating in and completing education or training and for increased
compensation;
(v) Implementation of an infrastructure of support to build child
care provider capacity to promote health through wellness, physical
activity and nutrition programs, to serve children with special needs,
dual language learners and other vulnerable children (e.g., children in
the child welfare system and homeless children), to implement family
engagement strategies;
(vi) Assessment and evaluation of the effectiveness of quality
improvement activities; and
(vii) Any other activities consistent with the intent of this
section.
This proposed change envisions a more comprehensive approach aimed
at systems-level change by providing a framework Lead Agencies can use
to determine whether CCDF-funded quality initiatives have actually made
a measurable difference to improve the quality of care. The proposed
change provides a list of suggested quality improvement activities that
Lead Agencies may consider for purposes of meeting the minimum quality
spending requirement. We are not proposing to limit Lead Agencies to
only these activities or requiring that Lead Agencies use quality
dollars for these purposes. However, we believe this framework will
help promote strategic investments that are coordinated and planned to
achieve goals more efficiently.
Nationally, there is an increased call for improvement in child
care quality. The quality of child care across the country is uneven,
and too often the quality is insufficient to promote children's growth
and development. Research has shown that it is possible to improve the
quality of child care, for example by increasing the caregiver to child
ratios and supporting more qualified caregivers by helping them attain
educational credentials and training. (NICHD Early Child Care Research
Network, Child Outcomes When Child Care Center Classes Meet Recommended
Standards for Quality, American Journal of Public Health, 1999) States,
Territories, and Tribes have pioneered new pathways to excellence to
help center and home-based providers move toward continuous quality
improvement. Many Lead Agencies have used CCDF quality funds to build a
strong child care infrastructure that is focused on ensuring child care
providers are supporting children's learning and development to help
them succeed in school and life. In FY 2011, States and Territories
reported spending approximately $1 billion or 12 percent of CCDF
expenditures on quality improvement activities. This exceeds the
statutory quality spending requirement, demonstrating the commitment
Lead Agencies have shown to improving child care quality. These quality
investments reach millions of children not receiving CCDF subsidies
across a wide array of settings in the child care market.
Health and safety and licensing standards. We propose to add new
paragraph at Sec. 98.51(a)(2)(i) to include compliance with health and
safety standards pursuant to Sec. Sec. 98.40 and 98.41 in the list of
quality improvement activities. This consolidates some of the separate
activities already currently listed at Sec. 98.51(a)(2). This activity
is of particular importance given the proposed changes we have
discussed regarding minimum health and safety requirements for child
care providers serving children receiving subsidies. Assisting
providers in meeting these requirements and appropriately monitoring
compliance is a fundamental quality improvement activity, as health and
safety is the foundation of quality. For example, many QRIS tie
eligibility to participate directly to licensing. Many Lead Agencies
also report using CCDF quality funds to support monitoring of
compliance with licensing and regulatory requirements, to support
training for licensing staff, and funding data system automation.
Learning guidelines. We propose to add new paragraph
98.51(a)(2)(ii) to include establishment and implementation of age-
appropriate learning guidelines or standards for children of all ages,
including infants, toddlers, and school-age children in the list of
quality improvement activities. Early learning guidelines (sometimes
called early learning standards) describe what children need to know
and be able to do and their disposition toward learning and can help
Lead Agencies measure and promote the physical, cognitive, and social
and emotional development of children. In the FY 2012-2013 CCDF Plans,
47 States and Territories indicated that they have developed early
learning guidelines for infants and toddlers, 55 for three-to-five year
olds, and 21 States and Territories have developed them for children
five and older. Almost all States and Territories report aligning early
learning guidelines with K-12 content standards or other content
standards, such as the Head Start Child Development and Early Learning
Framework or State or Territory pre-kindergarten expenditures. For
school-aged children, Lead Agencies may use existing standards for K-12
education, or build on them to include other domains of development,
such as social and emotional competencies. This proposed regulatory
change formally encourages Lead Agencies to use CCDF quality funds to
continue their efforts to implement early learning guidelines across
the domains of early learning and development.
Systems of quality improvement. We propose to add new paragraph
98.51(a)(2)(iii) to include implementation of systems of quality
improvement to evaluate, improve and communicate the level of quality
of child care programs in the list of
[[Page 29477]]
suggested quality improvement activities. ACF encourages that the
system contain the following five elements: (1) Program standards to
define expectations for quality and quality indicators indicating
different levels of quality; (2) supports, training and technical
assistance to assist child care programs in meeting child care quality
improvement standards; (3) financial incentives and monetary supports
to assist child care programs in meeting child care quality improvement
standards; (4) quality assurance and monitoring to measure child care
program quality over time; and (5) strategies for outreach and consumer
education efforts to promote knowledge of child care quality
improvement standards to child care programs and to provide parents,
including parents receiving assistance under this part, with
information about the quality of child care provider options available
to them, pursuant to Sec. 98.33.
As discussed earlier, QRIS is one approach that has been gaining
momentum as a key strategy for promoting child care quality and more
informed child care choices throughout the country. Many States have
found QRIS a useful mechanism for providing parents with tools and
information to select high-quality care for their children, to provide
incentives, resources and technical assistance to help programs attain
higher levels of quality, and to improve cross-sector coordination
within the early care and education system. The five content areas
proposed in this section were included in the revisions to the FY 2012-
2013 CCDF Plan and also align with the definition of a ``Tiered Quality
Rating and Improvement System'' included in the Race to the Top Early
Learning Challenge (RTT-ELC). ACF encourages Lead Agencies to implement
QRIS that are applicable to all child care sectors and address the
needs of all children, including children of all ages, families of all
cultural-socio-economic backgrounds, and practitioners. We also
encourage Lead Agencies to incorporate strategies for family engagement
into their QRIS to enhance the capacity of families to support their
children's education and development.
ACF's Child Care Technical Assistance Network has provided key
resources to States and Territories regarding QRIS, including a QRIS
Resource Guide and a QRIS Cost-Estimation Tool. In 2011-2012, ACF's
National Center on Child Care Quality Improvement provided technical
assistance related to QRIS to 32 States, responded to information
requests from CCDF Administrators on QRIS, conducted regional
roundtables to assist and inform State QRIS development, and
participated and partnered in efforts to coordinate and connect QRIS
technical assistance and research at the national level. Additionally,
ACF's Office of Planning, Research and Evaluation (OPRE), released a
Compendium of Quality Rating Systems and Evaluations providing
information, analysis, and resources about quality rating systems for
States and other key stakeholders.
A system of quality improvement, such as a QRIS, should include
program standards that link to the other components of the quality
framework. For example, the program standards should require child care
providers to use curricula and learning activities that are based on
the State's early learning guidelines, and should address the use of
information about children's growth and development to improve
services. The program standards should also address teacher
qualifications and skills consistent with the State's professional
development system.
Professional development systems. We propose to add new paragraph
98.51(a)(2)(iv) to include implementation of professional development
systems in the list of quality improvement activities. We believe these
activities are important to ensure a well-qualified child care
workforce and propose that professional development systems contain the
following five elements: (1) Core knowledge and competencies to define
what the workforce should know (content) and be able to do (skills) in
their role working with children and their families; (2) career
pathways to define options and a sequence of qualifications and ongoing
professional development opportunities; (3) professional development
assessments to build capacity of higher education systems and other
training institutions to meet the diverse needs of the child care
workforce and address the full range of development and needs of
children; (4) access to professional development to ensure
practitioners are made aware of, and receive supports and assistance to
utilize professional development opportunities; and (5) rewards or
financial supports to practitioners for participating in and completing
education or training and for increased compensation. The five
components of a professional development system proposed in this
section were included in the FY 2012-2013 CCDF Plan and also are
reflected in the RTT-ELC focus on creating a strong early childhood
workforce.
Responsive, well-qualified caregivers are the most important factor
in children's development and learning in child care settings. In the
FY 2012-2013 CCDF Plans, the majority of States and Territories
indicated that they have implemented components of a professional
development system, including core knowledge and competencies for
practitioners and career pathways that define a sequence of
qualifications related to professional development and experience.
There are other areas where more progress is needed, such as providing
sustained financial support on a periodic, predictable basis for high
levels of training and education.
Professional development and workforce supports are needed to
increase the stability of a child care workforce that experiences
turnover rates of approximately 30 percent per year, a national average
wage of $10.15 an hour and a decline in the number of teachers with
college degrees. (National Association of Child Care Resource and
Referral Agencies, Child Care Workforce, 2012) In May 2012, the Bureau
of Labor Statistics data estimated there were 624,520 child care
workers in the US. These numbers, however, only include professionals
in licensed facilities. According to a study by the Center for the
Child Care Workforce and Human Services Policy Center, there are an
estimated 2.3 million paid child care providers working in varied
settings including public and private, for-profit and nonprofit, faith-
based, community-based, school-based, home-based, and employer-
sponsored providers. Approximately 35 percent of child care workers are
self-employed, with the majority of these workers serving as family
child care providers. Of these 2.3 million paid child care providers,
nearly half care for toddlers aged 19 through 36 months. (Estimating
the Size and Components of the U.S. Child Care Workforce and Caregiving
Population, Center for the Child Care Workforce and Human Services
Policy Center, May 2002) There is little data available about the
informal sector of child care, although it makes up a large number of
child care providers in the U.S.
Because the professional development needs of child care providers
can vary based on the ages of the children in a provider's care, Lead
Agencies should ensure their professional development systems are
applicable to all providers, including school-age practitioners,
infant-toddler care providers, and family child care. For example, core
knowledge and competencies and available trainings should be specific
to
[[Page 29478]]
the needs of child care providers whether they work with infants and
toddlers, preschool-age, or school-age children. Additionally, States
may want to create credentials tailored to specific categories of
practitioners, such as a school-age professional or youth development
credential, or an infant and toddler credential.
All sectors of the early care and education field require a well-
qualified workforce with opportunities for growth from entry level
through master teacher, including the many additional roles in the
child care system (e.g., consultants, technical assistance providers,
trainers, and higher education faculty). Lack of access to professional
development that leads to progressively higher levels of competency is
a barrier to providing access to high-quality early childhood education
for all children.
Infrastructure of support to build child care provider capacity. We
propose to add new paragraph 98.51(a)(2)(v), to include implementation
of an infrastructure of support to build child care provider capacity
to deliver comprehensive services that meet the needs of children and
families, including: promoting health and wellness; serving children
with special needs, dual language learners and other vulnerable
children (e.g., children in the child welfare system and homeless
children); and implementing family engagement strategies. We believe it
is important to dedicate resources towards building community-wide
infrastructure for early care and afterschool programs to increase
quality and provide comprehensive services. This infrastructure could
include: coordinating referrals to health and social services;
providing relevant training and professional development; supplying
curricula, materials and resources; collecting and disseminating
relevant data on the well-being of children and families to guide
services; and including families and a broad range of community
representatives in planning and leadership efforts.
Many States and localities have invested in infrastructure for
early care and afterschool programs to increase their quality and
provide comprehensive services. For example, one State contracts with
programs that provide high quality early education and care services
for homeless children. In addition to providing children a stable,
nurturing and stimulating environment that meets the individual
developmental, behavioral, and emotional needs, these programs offer
services to parents like on-site GED classes, job skills training, and
counseling and advocacy services.
Another example is a community-based organization that built a
comprehensive system aimed at ensuring children are ready to succeed in
school and helping families achieve economic success. The program
collaborates with the local school district to provide education to
three- and four-year olds with special needs. It also partners with
family and children's services to provide family support, parent
education, case management crisis intervention, and family counseling
services. Lastly, it works with the local university to provide
healthcare to enrolled children, their parents, and their siblings.
Family engagement is also an example of an approach for involving
families in decisions about their children, services, and communities.
It includes a wide array of activities, such as direct relationships
with child care and other service providers, mutual support shared
among parents, advocacy by parents on behalf of their families,
decision-making and advisory roles in agencies, and leadership in the
community. Lead Agencies should consider use of CCDF quality funds to
encourage partnerships between child care providers and public,
private, and grassroots organizations to implement parent and family
engagement strategies. Local and community networks and infrastructure
are strongest when built with input from engaged parents and other
residents.
The Strengthening Families framework, developed by the Center for
the Study of Social Policy, is a widely-used approach that gives child
care and early education programs common-sense strategies to support
vulnerable families. Many States and communities have employed the
framework to anchor efforts to build comprehensive early childhood
systems at State and local levels. The approach focuses on science-
based parenting skills, children's life skills, and family life skills
specifically designed to build protective factors that prevent abuse
and neglect and promote family strength. Many States have incorporated
the core concepts of Strengthening Families into child care staff
training and professional development, as well as into quality
standards for QRIS.
Assessment and evaluation of quality improvement activities. We
propose to add new paragraph 98.51(a)(2)(vi) to include assessment and
evaluation of the effectiveness of quality improvement activities in
the list of suggested quality improvement activities. Lead Agencies are
encouraged to evaluate and assess the success of their quality
investments. A good evaluation design can provide information critical
to improving a quality initiative at many points in the process, and
increase the odds of its ultimate success. The importance of these
activities is highlighted in a September 2002 GAO report that looks at
evaluations of State quality initiatives. This report notes that the
descriptive information collected from State-sponsored studies can
provide reliable information required to address program design issues,
as well as to assess program implementation, which can then be useful
in planning more rigorous evaluations of program impacts. (GAO-02-897)
Lead Agencies with a QRIS or that plan to implement a QRIS are
encouraged to use a QRIS validation study to assess whether rating
components and summary ratings can be relied on as accurate indicators
of quality. Validation is important because it promotes increased
credibility and support for QRIS, as well as efficient use of limited
quality improvement resources. Factors that Lead Agencies should
consider when designing a QRIS validation study include the strength of
evidence required to address research questions and program improvement
inputs needed to inform program management, stage of QRIS development,
available funding; and timeframe in which research questions must be
answered. Similar to implementation of QRIS, States should also
consider using CCDF quality funds to test the effectiveness or validate
the different elements of their professional development system.
Paragraph Sec. 98.51(a)(2)(vii), as re-designated, would continue
to allow any activites consistent with the intent of this section.
Paragraphs (b) and (c) of this section would remain unchanged.
We propose to add a new paragraph at Sec. 98.51(d) to clarify that
activities to improve the quality of child care are not restricted to
children meeting eligibility requirements under Sec. 98.20 or to the
child care providers serving children receiving subsidies. Children or
providers benefiting from Lead Agency quality improvement activities
and investments are not required to meet applicable CCDF eligibility
requirements at Sec. 98.20. Thus, CCDF quality funds may be used to
enhance the quality and increase the supply of child care for all
families, including those who receive no direct assistance.
We propose to add a new paragraph at Sec. 98.51(e) to codify
longstanding ACF policy that targeted funds for quality improvement and
other activities that
[[Page 29479]]
may be included in appropriations law may not count towards meeting the
4 percent minimum quality requirement, unless so specified by Congress.
Since FY 2000, Congress has included language in annual appropriations
legislation for CCDF discretionary funds requiring States and
Territories to spend portions of their CCDF Discretionary Funds on
specified activities, including: child care resource and referral and
school-aged child care activities (this requirement also applies to
Tribes); improving the quality of infant and toddler child care; and
additional quality expansion activities intended to be in addition to
the 4 percent requirement.
We propose to add a new paragraph at Sec. 98.51(f) to require that
Lead Agencies must include in the Plan a description of performance
goals associated with expenditure of funds on activities to improve the
quality of care and report annually on whether goals have been met,
pursuant to quality performance report described at Sec. 98.16(v). The
CCDF Plan is a prospective document, but in many cases, Lead Agencies
are primarily describing the child care system that is currently
operating in the State or Territory. In keeping with our commitment to
CCDF Lead Agency flexibility, we asked Lead Agencies to set goals for
themselves for each upcoming biennium in the FY 2012-2013 Plans. We
also asked Lead Agencies to tell us what performance measures they use
to track progress on child care quality. This information will be a
resource as we update national performance measures on child care
quality. These self-reported goals and measures will guide ACF
technical assistance and serve as the basis for reporting under the new
CCDF Quality Performance Report.
Administrative Costs (Section 98.52)
Section 658E(c)(3) of the CCDF Act and regulations at Sec. 98.52
prohibit Lead Agencies from spending more than 5 percent of CCDF funds
for administrative activities, such as salaries and related costs of
administrative staff and travel costs. Section 98.52 (b) specifically
provides that this limitation applies only to States and Territories
(Note that a 15 percent limitation applies to Tribes under Sec.
98.83(g)). We propose to add a provision at Sec. 98.52(d) to formally
add a list of activities which should not be counted towards the 5
percent limitation on administrative activities. These include: (1)
Establishment and maintenance of computerized child care information
systems; (2) Establishing and operating a certificate program; (3)
Eligibility determination; (4) Preparation/participation in judicial
hearings; (5) Child care placement; (6) Recruitment, licensing,
inspection of child care providers; (7) Training for Lead Agency or
sub-recipient staff on billing and claims processes associated with the
subsidy program; (8) Reviews and supervision of child care placements;
(9) Activities associated with payment rate setting; (10) Resource and
referral services; and (11) Training for child care staff. These
activities were included in the preamble to the 1998 Final Rule, which
stated that the Conference Agreement (H.R. Rep. 104-175 at 411) of
PRWORA specified that these activities should not be considered
administrative costs. (63 FR 39962) We propose to incorporate this list
into the regulation itself for clarity and easy reference.
Administrative costs and sub-recipients. Current CCDF regulations
at Sec. 98.52(a) provides a listing of activities that may constitute
administrative costs and defines administrative costs to include
administrative services performed by grantees or sub-grantees or under
agreements with third-parties. However, we have received questions from
CCDF Lead Agencies to clarify whether activities performed through sub-
recipients or contractors are subject to the 5 percent administrative
cost limitation. Our interpretation is that sub-recipients (contractors
or sub-grantees) that receive funds from the Lead Agency are not
individually bound by this requirement. However, the Lead Agency
continues to be responsible for ensuring that the program complies with
all Federal requirements and is required to oversee the expenditures of
funds by sub-recipients. As such, while we do not as a technical matter
separately apply the administrative cap to funds provided to each sub-
recipient, the Lead Agency continues to be responsible for ensuring
that the total amount of CCDF funds expended on administrative
activities--regardless of whether it is expended by the Lead Agency
directly or via sub-grant, contract, or other mechanism does not exceed
the administrative cost limitation. Therefore, we propose to add Sec.
98.52(e) to clarify 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 as
described at Sec. 98.52(a) shall be counted towards the administrative
cost limit.
Determining whether a particular service or activity provided by a
sub-recipient under a contract, sub-grant, or other mechanisms would
count as an administrative activity towards the 5 percent
administrative cost limitation depends on the function or nature of the
contract/sub-grant/mechanism. If a Lead Agency provides a contract or
sub-grant for direct services, the entire cost of the contract could
potentially be counted as direct services if there is no countable
administrative component. On the other hand, if the entire sub-grant or
contract was administrative in nature (e.g., for payroll services for
employees), then the entire cost of the contract would count towards
the administrative cost cap. If a sub-grant/contract includes a mix of
administrative and programmatic activities, the Lead Agency would need
to develop a method for attributing an appropriate share of the sub-
grant/contract costs to administrative costs.
Restrictions on Use of Funds (Section 98.54)
Current CCDF regulations at Sec. 98.54(b)(1) stipulate that for
States and local agencies, no funds shall be expanded 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. This rule does not apply to
Tribal Lead Agencies, which may request approval to use CCDF funds for
construction and major renovation of child care facilities (Sec.
98.84).
Under current regulations at Sec. 98.2 major renovation is defined
as (1) structural changes to the foundation, roof, floor, exterior, or
load-bearing walls of a facility, or the extension of a facility to
increase its floor area; or (2) extensive alternation of a facility
such as to significantly change its function and purpose, even if such
renovation does not include any structural change. We propose to modify
Sec. 98.54(b) to include the following language: Improvements or
upgrades to a facility that are not specified under the definitions of
construction or major renovation at Sec. 98.2 may be considered minor
remodeling and are, therefore, allowable. The preamble to the 1998
Final Rule included a discussion regarding minor remodeling and stated
that, ``. . . rather than create a separate definition for minor
remodeling State Lead Agencies may assume that an improvement or
upgrade to a facility which is not specified under the definition of
major renovation adopted by this rule may, by default, be
[[Page 29480]]
considered a minor renovation and, therefore is allowable under the
Act.'' (63 FR 39940) This proposed change formally incorporates this
policy into regulatory language.
Subpart G--Financial Management
The focus of Subpart G is to ensure proper financial management of
the CCDF program, both at the Federal level by HHS and the Lead Agency
level. The proposed changes to this section include increasing the
amount of CCDF funds the Secretary may set-aside for technical
assistance, incorporating targeted funds that have been included in
appropriations language, but are not in the current regulations, and
inclusion of the details of required financial reporting by Lead
Agencies. Lastly, we propose clarifications regarding obligations and
reallotment of matching funds.
Availability of Funds (Section 98.60)
Technical assistance. Sections 658(a)(3) and (b)(1) of the CCDBG
Act authorize the Secretary to provide technical assistance to help
States carry out the requirements of these rules, as well as requiring
the Secretary to ``review and monitor State compliance'' with the
statute and the Plan approved by HHS. Under current regulation at Sec.
98.60(b)(1), the Secretary may withhold one quarter of one percent of a
fiscal year's appropriation for technical assistance. We propose
amending paragraph (b) to allow the Secretary to withhold up to
[frac12] of 1 percent of CCDF funds for technical assistance.
The increased set-aside for technical assistance and monitoring
will allow ACF to invest in efforts to improve program integrity by
providing increased technical assistance to States on reducing waste,
fraud, and abuse and improving the quality of care. This training and
technical assistance involves assessing Lead Agency needs, identifying
innovations in child care administration, and promoting the
dissemination and replication of solutions to the challenges that Lead
Agencies and local child care programs face. The support provided by
ACF and our technical assistance providers helps States, Territories,
Tribes and local communities build integrated child care systems that
enable parents to work and promote the health and development of
children. We believe increasing the set-aside for technical assistance
is necessary for ACF to meet its responsibility to support Lead
Agencies as they begin to improve health and safety standards,
implement a transparent system of quality indicators, and invest in
improving access to high quality child care.
Currently, ACF funds the Child Care Technical Assistance Network
(CCTAN) to provide training and technical assistance to CCDF Lead
Agencies. The CCTAN includes the National Center on Child Care Quality
Improvement, the National Center on Child Care Professional Development
Systems and Workforce Initiatives, and the National Center on Child
Care Subsidy Innovation and Accountability. In addition to these
Centers, a National Center on Tribal Child Care Implementation and
Innovation, a National Center on Child Care Data and Technology, and a
Network of State Child Care Systems Specialists provide TA that meets
the individual needs of States, Territories, and Tribes. The CCTAN
supports CCDF grantees in their efforts to improve the quality of early
care and education and school-age care and helps the States,
Territories, and Tribes reach their CCDF Plan goals. The new resources
made available under this proposed rule would build on these efforts
and allow increased assistance to Lead Agencies administering CCDF.
Over the past several years there has been a heightened focus on
program integrity in child care, Head Start and other ACF programs.
Recent investigations into CCDF programs have brought the program
integrity of several States into question. For example, a GAO
investigation found that five test States included in the GAO
investigation ``lacked controls over child care assistance application
and billing processes for unregulated child care providers, leaving the
program vulnerable to fraud and abuse.'' (GAO-10-1062) We believe it is
necessary to increase the resources available for technical assistance
in order to strengthen program integrity by ensuring that CCDF dollars
are used to provide child care to eligible families and to make
investments in improving the quality of child care programs, and are
not lost to fraud or improper payments. See the discussion in Subpart J
for more information on monitoring and oversight.
Obligations. We propose to add a paragraph at Sec. 98.60(d)(7) to
clarify that the transfer of funds from a Lead Agency to a non-
governmental third party or sub-recipient counts as an obligation, even
when these funds will be used for issuing child care certificates. Some
Lead Agencies contract with local units of government or non-
governmental third parties, such as Child Care Resource and Referral
Agencies (CCR&Rs), to administer their CCDF programs. The functions
included in these contracts could include eligibility determination,
subsidy authorization, and provider payments. The contracting of some
of these duties to a third party has led to many policy questions as to
whether CCDF funds that are used by non-governmental third parties to
administer certificate programs are considered obligated at the time
the sub-grant or contract is executed between the Lead Agency and the
third party pursuant to current regulation at Sec. 98.60(d)(5), or
rather at the time the voucher or certificate is issued to a family
pursuant to current regulation at Sec. 98.60(d)(6).
The preamble to the August 4, 1992 CCDBG Regulations (57 FR 34395)
helps clarify the intent of Sec. 98.60(d). It states, ``The
requirement that State and Territorial grantees obligate their funds
[within obligation timeframes] applies only to the State or Territorial
grantee. The requirement does not extend to the Grantee's sub-grantees
or contractors unless State or local laws or procedures require
obligation in the same fiscal year.'' It follows that, in the absence
of State or local laws or procedure to the contrary, Sec. 98.60(d)(6)
would not apply when the issuance of a voucher or certificate is
administered by a non-governmental third party because the funds used
to issue the vouchers or certificates would have already been obligated
by the Lead Agency. Based on this language, we have interpreted the
obligation to take place at the time of contract execution between the
Lead Agency and the third party. The addition of proposed paragraph
(d)(7) simply codifies current ACF policy, and does not change existing
obligation and liquidation requirements. Note that a local office of
the Lead Agency, and certain other entities specified in regulation at
Sec. 98.60(d)(5) are not considered third parties.
Finally, we propose to make a technical change at Sec. 98.60(h) to
eliminate a reference to [Sec. 98.51(a)(2)(ii)] of the regulation
which would otherwise becomes obsolete since this proposed rule
proposes to delete it. This technical change does not change the
meaning or the substance of paragraph (h), which specifies that
repayment of loans made to child care providers as part of a quality
improvement activity may be made in cash or in services provided in-
kind.
Allotments From Discretionary Funds (Section 98.61)
Targeted funds. We propose to add paragraph Sec. 98.61(f) to
reference funds targeted through annual appropriations law. Since FY
2000, annual appropriations law has required the use
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of specified amounts of CCDF funds for targeted purposes (i.e.,
quality, infant and toddler quality, school-age care and resource and
referral). This proposed addition is for clarification so that the
regulations will provide a complete picture of CCDF funding parameters.
New paragraph (f) provides that Lead Agencies shall expend any funds
set-aside for targeted activities as directed in appropriations law.
Audits and Financial Reporting (Section 98.65)
We propose revising Sec. 98.65(g), which currently provides that
the Secretary shall require financial reports as necessary, to specify
that States must submit quarterly expenditure reports for each fiscal
year. Currently, States and Territories file quarterly expenditure
reports (ACF-696); however, the current regulations do not describe
this reporting in detail. Under proposed paragraph (h), States and
Territories will be required to include the following information on
expenditures of CCDF grant funds, including Discretionary (which
includes any reallotted funds and funds transferred from the TANF block
grant), Mandatory, and Matching funds; and State Matching and
Maintenance-of-Effort (MOE) funds: (1) Child care administration; (2)
Quality activities excluding targeted funds; (3) Targeted funds
identified in appropriations law; (4) Direct services; (5) Non-direct
services including: a. Systems, b. Certificate program cost/eligibility
determination, c. All other non-direct services; and (6) Such other
information as specified by the Secretary.
We propose adding greater specificity to the regulation in light of
the important role expenditure data play in ensuring compliance with
the four percent quality expenditure requirement at Sec. 98.51(a),
administrative cost cap at Sec. 98.52(a), and obligation and
liquidation deadlines at Sec. 98.60(d). Additionally, expenditure data
provide us with important details about how Lead Agencies are spending
both their Federal and State CCDF funds, including what proportion of
funds are being spent on direct services to families or how much has
been invested in quality activities. These reporting requirements do
not create an additional burden on Lead Agencies because we are simply
updating the regulations to reflect current expenditure reporting
processes.
Tribal financial reporting. We propose to add paragraph (i) at
Sec. 98.65 requiring Tribal Lead Agencies to submit annual expenditure
reports to the Secretary (ACF-696T). As with State and Territorial
grantees, these expenditure reports help us to ensure that tribal
grantees comply with obligation and liquidation deadlines at Sec.
98.60(e), the fifteen percent administrative cap at Sec. 98.83(g), and
the four percent quality expenditure requirement at Sec. 98.51(a).
This reporting requirement is current practice and does not create an
additional reporting burden on tribal grantees.
Program Integrity. We propose to add a new section Sec. 98.68
Program Integrity--to include requirements that Lead Agencies have
effective procedures and practices that ensure integrity and
accountability in the CCDF program. These proposed changes formalize
changes made to the CCDF Plan which require Lead Agencies to report in
these areas. The Plan now includes questions on internal controls,
monitoring sub-recipients, identifying fraud and errors, methods of
investigation and collection of identified fraud, and sanctions for
clients and providers who engage in fraud. ACF has been working with
State, Territorial and Tribal CCDF Lead Agencies to strengthen program
integrity to ensure that funds are maximized to benefit eligible
children and families. For example, ACF issued a Program Instruction
(CCDF-ACF-PI-2010-06) that provides stronger policy guidance on
preventing waste, fraud, and abuse and has worked with States to
conduct case record reviews to reduce administrative errors. The
requirements proposed in this section build on these efforts and are
designed to reduce errors in payment and minimize waste, fraud and
abuse to ensure that funds are being used for allowable program
purposes and for eligible beneficiaries.
At Sec. 98.68(a) we propose to require Lead Agency internal
controls to include processes to ensure sound fiscal management,
processes to identify areas of risk, and regular evaluation of internal
control activities. Examples of internal controls include practices
that identify and prevent errors associated with recipient eligibility
and provider payment such as: checks and balances that ensure accuracy
and adherence to procedures; automated checks for red flags or warning
signs; and established protocols and procedures to ensure consistency
and accountability. The Grantee Internal Control Self Assessment
Instrument is available as a resource for assisting Lead Agencies in
assessing how well their policies and procedures meet the CCDF
regulatory requirements for supporting program integrity and financial
accountability.
At Sec. 98.68(b) we propose to require Lead Agencies to have
processes in place to identify fraud and other program violations
associated with recipient eligibility and provider payment. These
processes may include, but are not limited to, record matching and
database linkages, review of attendance and billing records, quality
control or quality assurance reviews, and staff training on monitoring
and audit processes. Lead Agencies may wish to use unique identifiers
to crosscheck information provided by parents and providers across
State and national data systems. For example, income reported on the
application for child care assistance may be checked with State
quarterly wage databases or other benefit programs (i.e., SNAP, TANF,
or Medicaid). Many such data systems can be structured to automatically
flag potential improper payments. States should also provide training
to caseworkers responsible for eligibility determination and
redetermination and make efforts to simplify forms.
At Sec. 98.68(c) we propose to require Lead Agencies to have
procedures in place for documenting and verifying that children meet
eligibility criteria at the time of eligibility determination. Lead
Agencies are responsible for ensuring that all children served in CCDF
are eligible at the time of eligibility determination or re-
determination and receiving care from eligible child care providers.
Lead Agencies should, at a minimum, verify and maintain documentation
of the child's age, family income, and require proof that parents are
engaged in eligible activities. Income documentation may include pay
stubs, tax records, child support enforcement documentation, alimony
court records, government benefit letters, and receipts for self-
employed applicants. Documentation of participation in eligible
activities may include school registration records, class schedules, or
job training forms. Lead Agencies are encouraged to use automated
verification systems and electronic recordkeeping practices to reduce
paperwork. In addition, Lead Agencies may use client information
collected and verified by other State programs (e.g., through the use
of consolidated application forms) to streamline the eligibility
determination process for CCDF. This new amendment would require Lead
Agencies to institute procedures that ensure eligibility is
appropriately verified and to monitor State, local, and non-
governmental agencies directly engaged in eligibility determination and
would provide additional safeguards to ensure that
[[Page 29482]]
children receiving child care subsidies are eligible pursuant to
requirements found at Sec. 98.20.
At Sec. 98.68(d) we propose to require Lead Agencies to have
processes in place to investigate and recover fraudulent payments and
to impose sanctions on clients or providers in response to fraud. This
new provision complements the existing requirement at Sec. 98.60(h)(1)
that requires Lead Agencies to recover child care payments that are
made as the result of fraud; these payments must be recovered from the
party responsible for committing the fraud. The proposed new provisions
ensure that Lead Agencies have the necessary processes in place to
identify fraud and program violations so that recovery can be pursued
and so that the Lead Agency can better design practices and procedures
that prevent fraud from occurring in the first place. Lead Agencies are
encouraged to use automated payment systems for child care providers,
such as direct deposit, in order to minimize the risk of fraud. We also
recommend that each Lead Agency include staff dedicated to program
integrity efforts and that these staff should partner with law
enforcement as appropriate to address fraud.
Program integrity efforts can help ensure that limited program
dollars are going to low-income eligible families for which assistance
is intended; however, it is important to ensure that these efforts do
not inadvertently impair access for eligible families. The
Administration has emphasized that efforts to reduce improper payments
and fraud must be undertaken with consideration for impacts on eligible
families seeking benefits. In November 2009, the President issued
Executive Order 13520, which underscored the importance of reducing
improper payments in Federal programs while protecting access to
programs by their intended beneficiaries (74 FR 62201). It states,
``The purpose of this order is to reduce improper payments by
intensifying efforts to eliminate payment error, waste, fraud, and
abuse in the major programs administered by the Federal Government,
while continuing to ensure that Federal programs serve and provide
access to their intended beneficiaries.''
It is important to have a strategic and intentional planning
process to formalize mechanisms to promote program integrity and
financial accountability while balancing quality and access for
eligible families. Efforts to promote program integrity and financial
accountability should not compromise child care access for eligible
children and families. A foundation for accountability should be
policies and procedures that help low-income parents' access child care
assistance to support their work and training and promote children's
success in school. Once a Lead Agency has established policies and
procedures, steps should be taken to implement the program with
fidelity and to include a variety of checks to detect areas both where
there may be vulnerability to error or fraud and areas in which the
system is failing to serve families well. Lead Agencies also can
promote program integrity by clearly communicating specific policies to
staff, parents, and providers. When policies are easily understood by
the public and clearly communicated, parents and providers can better
understand reporting requirements and deadlines.
Subpart H--Program Reporting Requirements
Content of Reports (Section 98.71)
Section 98.71 describes administrative data elements that Lead
Agencies are required to report to ACF, including basic demographic
data on the children served, the reason they are in care, and the
general type of care (center-based, family child care home, regulated
vs. unregulated provider). While this data provides useful contextual
information on the population of children and families receiving CCDF
subsidies, it does not include information on the quality of care for
subsidized children, which is a gap in our ability to track our goals
to serve more low-income children in high quality care.
We propose to add new Sec. 98.71(a)(15) to require State and
Territorial Lead Agencies to submit an indicator of the quality of the
child care provider as part of the quarterly family case-level
administrative data report. This data will allow ACF and Lead Agencies
to describe the quality of child care for each child receiving a child
care subsidy and is consistent with revisions proposed at Sec. 98.33
related to consumer education that would require Lead Agencies to
implement a system of transparent quality indicators to provide parents
with a way to differentiate the quality of child care providers. Many
States pay higher subsidy rates for quality care, and therefore already
track some information on the quality of care for at least a portion of
child care providers in the subsidy system. This information may
include the provider's level under a QRIS, accreditation status,
compliance with State pre-kindergarten standards, compliance with Head
Start performance standards, or compliance with other State-defined
measures of child care quality.
However, States vary greatly in the extent to which they use this
quality data to improve management of their CCDF program, track quality
improvement initiatives, and target financial incentives and technical
assistance. In addition, none of this data is available at the national
level. The limited and dated information that we have from research
studies in selected States suggests that the quality of care in too
many instances is mediocre or poor. Greater attention needs to be paid
to quality of care that children receive, particularly low-income
children in the subsidy system, to ensure that their care is promoting
their learning and development to support success in school and life.
To address this situation, ACF has separately revised the CCDF
quarterly family case-level administrative data report (ACF-801) in
order to add data elements related to the quality of care for children
receiving CCDF subsidies (76 FR 44934). The revisions at Sec. 98.71
reflect this change to the ACF-801 form. In our revisions to the form,
we have allowed for a range of potential responses in recognition of
State flexibility and variation in implementing CCDF, and a phased-in
implementation period to allow States the necessary time to modify
systems and implement the reporting. Current paragraph (a)(15) would be
re-designated as paragraph (a)(16) but otherwise is unchanged.
Subpart I--Indian Tribes
This subpart addresses requirements and procedures for Indian
Tribes and Tribal organizations applying for or receiving CCDF funds.
CCDF currently provides funding to approximately 260 Tribes and Tribal
organizations that, either directly or through consortia arrangements,
administer child care programs for over 500 federally-recognized Indian
Tribes. Tribes and Tribal organizations receive 2 percent of CCDF
funds, equaling over $100 million. With few exceptions, Tribal CCDF
grantees are located in rural and economically challenged areas. In
these communities, the CCDF program plays a crucial role in offering
child care options to parents as they move toward economic self-
sufficiency, and in promoting learning and development for children. In
many cases, Tribal child care programs also emphasize traditional
culture and language.
Tribal Consultation. ACF is committed to consulting with Tribal
leadership on the provisions of this proposed rule. The requirements in
this
[[Page 29483]]
rule were informed by past consultations and meetings with Tribal
representatives on related topics, such as the recent revisions to the
CCDF Tribal Plan, which addressed many of the same issues as this
proposed rule--including health and safety, quality improvement, and
program integrity. ACF has not yet formally consulted with Tribal
leaders on the specific provisions of this proposed rule, but will
consult with Tribes through appropriate venues during the public
comment period. The consultations will be conducted in accordance with
ACF's newly-revised Tribal Consultation Policy (76 FR 55678). Advance
notice regarding these consultations will be disseminated to Tribes.
Furthermore, we encourage Tribes to submit written comments during the
public comment period.
In light of unique tribal circumstances, this proposed rule
continues to balance flexibility for Tribes with the need to ensure
accountability and quality child care for children. In Subpart I, the
proposed rule maintains all existing provisions at Sec. 98.80 (General
Procedures and Requirements), Sec. 98.81 (Application and Plan
Procedures) and Sec. 98.82 (Coordination). It proposes three changes
to Sec. 98.83 (Requirements for Tribal Programs). Below we discuss
broader contextual issues, including how provisions located outside of
Subpart I apply to Tribes, before moving to a discussion of the
proposed changes to Sec. 98.83.
First, we would note that Tribes continue to have the option to
consolidate their CCDF funds under a plan authorized by the Indian
Employment, Training and Related Services Demonstration Act of 1992
(Pub. L. 102-477). This law permits tribal governments to integrate a
number of their Federally-funded employment, training, and related
services programs into a single, coordinated comprehensive program. ACF
does publish annual program instructions providing directions for
Tribes wishing to consolidate CCDF funds under an Indian Employment,
Training and Related Services plan. The Department of the Interior has
lead responsibility for administration of Public Law 102-477 programs.
Subpart I continues to specify the extent to which general
regulatory requirements apply to Tribes. In accordance with Sec.
98.80(a), a Tribe shall be subject to all regulatory requirements in
Parts 98 and 99, unless specifically exempted. We propose to add a new
exemption for Tribes, from the requirements at Sec. 98.50(b)(3)
regarding funding mechanisms (which is discussed further below).
However, Tribal Lead Agencies are generally subject to the new and
revised provisions in this proposed rule--including, but not limited
to, changes regarding: a child's eligibility for services at Sec.
98.20, consumer education at Sec. 98.33; health and safety
requirements at Sec. 98.41; and new program integrity provisions at
Sec. 98.68. We have included further discussion below regarding how a
number of these specific provisions would apply to Tribes and Tribal
organizations.
Health and safety standards. Tribes would be required to meet
proposed revisions to Sec. 98.41 which provide greater specificity
regarding CCDF health and safety requirements. (In addition, as
discussed below, we are proposing that Tribes be subject to
immunization requirements that currently apply only to States and
Territories; see discussion below).
The CCDBG Act, as amended by PRWORA, required HHS to develop
minimum child care standards for Indian Tribes and Tribal Organizations
receiving funds under the CCDF. These health and safety standards were
first published in 2000 after three years of consultation with Tribes,
Tribal organizations, and Tribal child care programs, and the standards
were updated and reissued in 2005. The HHS minimum standards are
voluntary guidelines that represent the baseline from which all
programs should operate to ensure that children are cared for in
healthy and safe environments and that their basic needs are being met.
Tribes may comply with the proposed new requirements at Sec. 98.41
by adopting and implementing components of the minimum tribal standards
issued by HHS, or by developing and implementing their own tribal child
care standards. Many Tribes already exceed the minimum tribal standards
issued by HHS, and some Tribes have used the minimum standards as the
starting point for developing their own more specific tribal standards.
The minimum Tribal standards issued by HHS are generally consistent
with the proposed revisions at Sec. 98.41, but we will be reviewing
the standards to ensure that they adequately address all aspects of the
proposed rule. We welcome comments that provide recommendations on any
necessary updates to the minimum standards.
Consumer education. Tribes would also be subject to proposed new
requirements at Sec. 98.33 related to consumer education, with the
exception of the requirement for a Web site at Sec. 98.33(a), see
further discussion below. These new provisions require Lead Agencies to
collect and disseminate information on the quality of child care
providers, using information from a transparent system of child care
provider quality standards, such as a QRIS. We recognize that many
Tribes lack the resources necessary to implement their own
comprehensive quality standards or QRIS. However, Tribal Lead Agencies
may encourage child care providers in their service areas to
participate in State quality initiatives, such as QRIS, to the extent
that such systems are available and culturally relevant to Tribes.
Tribes may also satisfy the requirements at revised Sec. 98.33 by
tracking and disseminating other information related to quality of
providers, such as: compliance with health and safety requirements;
training that the provider has completed; the group size and adult-
child ratio for the provider; whether the provider is accredited; or
whether the provider meets certain quality standards. We also encourage
Tribes to explore innovative new models for tracking and disseminating
quality information as a consumer education strategy, and we look
forward to providing technical assistance to support these efforts.
Please see further discussion below regarding the applicability of new
quality provisions at Sec. 98.51 to Tribes.
Increased Lead Agency flexibility. Provisions in this proposed rule
that are designed to increase Lead Agency flexibility (e.g., waiving
family copayments at Sec. 98.43; allowing higher standards of CCDF
providers at Sec. 98.30(g)) all apply to Tribes and will increase the
ability of Tribal Lead Agencies to design programs that meet the unique
needs of tribal communities. In addition, with two exceptions (related
to immunization requirements and quality expenditures, which are
discussed further below), the proposed rule would maintain all existing
tribal exemptions from CCDF requirements. These existing provisions
exempt Tribes from a number of CCDF requirements that apply to State
Lead Agencies, in recognition of the unique social and economic
circumstances of many tribal communities. For example, as is the case
with the existing rule, Tribes continue to be subject to a 15 percent
administrative cost limit, rather than the five percent limit that
applies to States. Similarly, Tribes may use either State median income
or Tribal median income when determining a child's eligibility.
Requirements for Tribal Programs (Section 98.83)
We propose four changes to section 98.83. First, we propose to
exempt
[[Page 29484]]
Tribes from the requirement for a Web site at Sec. 98.33(a). Under the
proposed rule, this provision would require Lead Agencies to establish
a user-friendly, easy-to-understand Web site to disseminate consumer
education information about the full range of available providers and
provider-specific information about health and safety requirements;
including history of violation of requirements and any compliance
actions taken. Where appropriate, we encourage Tribes to implement Web
sites for consumer education, but we are exempting Tribes from the
mandate in recognition of the unique circumstances of tribal programs.
For example, in cases where tribal child care providers are licensed by
the State, information about compliance with health and safety
requirements should already be available on the State's Web site.
Furthermore, in some instances, the small number of child care
providers in the Tribe's service area may not warrant the development
and maintenance of a Web site. Although we are exempting Tribes from
the Web site requirement, Tribes will still be required to meet other
provisions of Sec. 98.33(a), (b) and (c)--specifically to disseminate
consumer education information on the full range of available
providers, including provider-specific information about health and
safety, a transparent system of quality indicators, and specific
information about the provider selected by a parent receiving a CCDF
subsidy. Tribes will have flexibility for determining the most
effective approaches for providing this information.
Second, we propose to exempt Tribes from the requirement at Sec.
98.50(b)(3). As revised by this proposed rule, that provision would
require direct services to be provided using funding methods provided
for in Sec. 98.30 (i.e., grant or contract, certificate), which must
include some use of grants or contracts, with the extent of such
services determined by the Lead Agency after consideration of the
supply of high quality care, the needs of underserved populations, and
the circumstances of local communities. This would require Lead
Agencies to employ some use of grants or contracts to provide child
care services. We are exempting Tribes from this requirement because we
recognize that some Tribes, particularly those receiving smaller CCDF
grant awards, may lack the resources necessary to provide services
through a grant or contract. In addition, we recognize that many Tribes
directly administer their own tribally-operated child care facilities,
rather than purchasing slots through a grant or contract. These
tribally-operated centers can accomplish many of the same goals as the
use of grants and contracts (i.e., building supply, strengthening
quality). For home-based care, grants or contracts with family child
care providers or networks of family child care providers can be an
effective approach to increase quality and supply in rural areas,
including tribal service areas. The provision of services by Tribal
Lead Agencies through certificates is already separately addressed at
Sec. 98.83(f), and is discussed in this preamble further below.
In addition, consistent with this proposed rule's overall focus on
promoting high quality care that supports children's learning and
development, we propose two changes in Sec. 98.83 in order to
strengthen health and safety requirements and quality initiatives for
Indian children. First, we propose to revise Sec. 98.83(d) to remove
reference to Sec. 98.41(a)(1)(i) and thereby extend coverage of CCDF
health and safety requirements related to immunization so that the
requirements would apply to Tribes, whereas previously Tribes were
exempt. Second, we propose to revise Sec. 98.83(f) so that all Tribes
would be required to spend a minimum of 4 percent of CCDF expenditures
on quality improvement activities; previously this requirement only
applied to larger Tribes.
Immunization requirement. Under Sec. 98.83(d) of the existing
regulation, Tribes are currently exempt from the requirement at Sec.
98.41(a)(1)(i) to assure that children receiving services under CCDF
are age-appropriately immunized. The preamble to the 1998 Final Rule
(63 FR 39953) indicated that Tribes were not subject to this regulatory
requirement due to the anticipated development of tribal health and
safety standards. The minimum tribal health and safety standards,
required by section 658E(c)(2)(E)(ii) of the CCDBG Act, had not yet
been developed and released by HHS at the time that the 1998 final rule
was issued. Since HHS planned to consider immunization requirements as
part of the consultation and development of the minimum tribal
standards, it was premature at that time to address immunization
requirements for Tribes through regulation.
However, the minimum tribal standards have subsequently been
developed and released, and the standards address immunization in a
manner that is consistent with the requirements at Sec.
98.41(a)(1)(i). As a result, there is no longer a compelling reason to
continue to exempt Tribes from this regulatory requirement. We believe
that many Tribes have already moved forward with implementing
immunization requirements for children receiving CCDF assistance. By
extending the requirement to Tribes, we will ensure that Indian
children receiving CCDF assistance are age-appropriately immunized as
part of efforts to prevent and control infectious diseases.
As with States and Territories, Tribal Lead Agencies will have
flexibility to determine the method to implement the immunization
requirement. For example, they may require parents to provide proof of
immunization as part of CCDF eligibility determinations, or they may
require child care providers to maintain proof of immunization for
children enrolled in their care. As indicated in the regulation, Lead
Agencies have the option to exempt the following groups: (1) Children
who are cared for by relatives; (2) children who receive care in their
own homes; (3) children whose parents object on religious grounds; and
(4) children whose medical condition requires that immunizations not be
given. In determining which immunizations will be required, Tribal Lead
Agencies have the flexibility to apply its own immunization
recommendations or standards. Many Tribes may choose to adopt
recommendations from the Indian Health Service or the State's public
health agency.
Quality improvement activities. The existing rule at Sec. 98.83(f)
currently exempts smaller Tribes and tribal organizations (with total
CCDF allocations less than an amount established by the Secretary) from
the 4 percent quality requirement at Sec. 98.51(a) and the requirement
to operate a certificate program at Sec. Sec. 98.15(a)(2) and 98.30(a)
and (d). We propose to amend Sec. 98.83(f) by deleting paragraph (3)
so that smaller Tribes would continue to be exempt from operating a
certificate program, but all Tribes regardless of size would now be
required to spend at least 4 percent on quality improvement activities.
As discussed elsewhere in this preamble, a primary goal of this
proposed rule is to promote high quality child care to support
children's learning and development. Since comprehensive CCDF
regulations were last issued in 1998, policymakers and administrators
have increasingly focused on promoting school-readiness and positive
child outcomes through systemic efforts to improve the quality of child
care. We want to ensure that Indian children and Tribes benefit from
these quality improvement efforts. Therefore, we plan to require that
all Tribes meet the 4
[[Page 29485]]
percent quality requirement, which already applies to larger Tribes,
States, and Territories under the existing statute and regulation.
Approximately 50 Tribal Lead Agencies currently receive over $500,000
and are therefore already subject to the 4 percent quality requirement.
This rule proposes to require that the remaining Tribes (over 200
Tribal Lead Agencies) meet the 4 percent quality requirement as well.
Since the quality requirement is applied as a percentage of the
Tribe's CCDF expenditures, the amount required will be relatively
small, and therefore not burdensome, for Tribes receiving smaller CCDF
grant awards. There are a wide range of quality improvement activities
that Tribes have the flexibility to implement, and the scope of these
efforts can be adjusted based on the resources available so that even
smaller Tribal Lead Agencies can effectively promote the quality of
child care. We will provide technical assistance to help Tribes
identify current activities that may count towards meeting the 4
percent quality requirement, as well as appropriate new opportunities
to spend at least 4 percent on quality.
The proposed revisions to Sec. 98.51 (Activities to Improve the
Quality of Child Care), discussed earlier in this preamble, provide a
systemic framework for organizing, guiding, and measuring progress of
quality improvement activities. We recognize that this systemic
framework may be more relevant for States, than for many Tribes, since
the framework is based on the innovative work occurring in States
related to quality improvement, such as the development of a QRIS. Such
large-scale, comprehensive systemic initiatives may not always be
appropriate for Tribes, given the unique circumstances of tribal
communities. However, Tribes may implement selected components of the
quality framework at Sec. 98.51--such as training for child care
providers or grants to improve health and safety.
While proposed revisions to Sec. 98.51 lay out a new quality
vision and framework, the revisions in no way restrict Tribes' ability
to spend CCDF quality dollars on a wide range of quality improvement
activities. Under existing Sec. 98.51(a)(1), Tribes continue to have
the flexibility to use quality dollars for activities that include, but
are not limited to: activities designed to provide comprehensive
consumer education to parents and the public; activities that increase
parental choice; and activities designed to improve the quality and
availability of child care. As is currently the case, these activities
could include: resource and referral activities, consumer education,
grants or loans to assist providers, training and technical assistance
for providers, improving salaries and compensation of practitioners,
monitoring or enforcement of health and safety standards, and other
activities to improve the quality of child care. While Tribes have
broad flexibility, to the degree possible Tribes should plan
strategically and systemically when implementing their quality
initiatives in order to maximize the effectiveness of those efforts.
In addition, we encourage strong Tribal-State partnerships that
promote Tribal participation in States' systemic initiatives, as well
as State support for Tribal initiatives. For example, Tribes and States
can work together to ensure that quality initiatives in the State are
culturally relevant and appropriate for Tribes, and to encourage Tribal
child care providers to participate in State initiatives such as QRIS
and professional development systems. Under existing Sec. 98.82(a),
Tribes must coordinate to the maximum extent feasible with the State
CCDF Lead Agencies. At the same time, Sec. 98.12(c) requires State
CCDF Lead Agencies to coordinate, to the maximum extent feasible, with
any Indian Tribes in the State receiving CCDF funds.
Certificate program. Under revised Sec. 98.83(f) in the proposed
rule, Tribes receiving smaller CCDF grants would continue to be exempt
from operating a certificate program. We recognize that small Tribal
grantees may not have sufficient resources or infrastructure to
effectively operate a certificate program. In addition, many smaller
Tribes are located in less-populated, rural communities that frequently
lack the well-developed child care market and supply of providers that
is necessary for a robust certificate program.
The dollar threshold for determining which Tribes are exempt from
operating a certificate program is established by the Secretary. The
threshold is not included in regulation, and therefore revising the
threshold does not require a regulatory change. However, we would like
to inform Tribes of our intent to update the threshold--which has been
set at $500,000 since 1998. We are planning to increase the threshold
to $700,000 starting with grants awarded in FY 2015. This change will
recalibrate the threshold to a level that is comparable to the original
threshold, after adjusting for inflation. It will expand the number of
Tribes that are exempt from operating a certificate program, thereby
ensuring that only Tribes of sufficient size are required to meet the
certificate requirement. With this change, Tribal Lead Agencies with
total CCDF allocations less than $700,000 in a fiscal year will be
exempt from the requirement to operate a certificate program. Tribal
Lead Agencies with allocations equal to or greater than $700,000 will
be required to operate a certificate program.
Base amount. Similarly, although a regulatory change is not
required, we are planning to update the base amount of funding that
each Tribal Lead Agency receives as part of its Discretionary Fund
award per the current Sec. 98.61(c)(1)(i). For grants awarded starting
in FY 2015, we are planning to increase the base amount from $20,000 to
$30,000 in order to account for inflation that has eroded the value of
the base amount since it was originally established in 1998. As
referenced at the existing Sec. 98.83(e), the base amount of any
tribal grant is not subject to the administrative costs limitation at
Sec. 98.83(g) or the quality expenditure requirement at Sec.
98.51(a). The base amount for each Tribal grant may be used for any
activity consistent with the purposes of CCDF, including the
administrative costs of implementing a child care program.
Subpart J--Monitoring, Non-Compliance, and Complaints
We propose no changes at Subpart J.
Subpart K--Error Rate Reporting
On September 5, 2007, ACF published a final rule that added subpart
K to the CCDF regulations. This subpart, which was effective October 1,
2007, established requirements for the reporting of error rates in the
expenditure of CCDF grant funds by the 50 States, the District of
Columbia and Puerto Rico. The error reports were designed to implement
provisions of the Improper Payments Information Act of 2002 (IPIA; Pub.
L. 107-300). In July 2010, the President signed into law the Improper
Payments Elimination and Recovery Act (IPERA) (Pub. L. 111-204) which
amended the IPIA of 2002 and provided a renewed focus on government-
wide efforts to control improper payments. In recent years, ACF has
provided technical assistance and guidance to CCDF Lead Agencies to
assist their efforts in preventing and controlling improper payments.
These program integrity efforts help ensure that limited program
dollars are going to low-income eligible families for which assistance
is intended.
This proposed rule retains the error reporting requirements at
subpart K, but proposes two changes which are discussed below. In
addition to the
[[Page 29486]]
regulatory requirements at subpart K, details regarding the error rate
reporting requirements are contained in forms and instructions that are
established through the Office of Management and Budget's (OMB)
information collection process. As part of the renewal process for
these forms and instructions, ACF recently revised the methodology in
the forms and instructions to measure improper payments rather than
improper authorizations for payment recognizing that an improper
authorization does not always lead to an improper payment.
Error Rate Reports and Content of Error Rate Reports (Sections 98.100
and 98.102)
Estimated annual amount of improper payments. As provided below, in
this proposed rule, we propose to delete existing Sec. 98.102(a)(5),
thereby eliminating one of the data elements currently required as part
of the error rate report submitted by Lead Agencies. With this change,
Lead Agencies would no longer be required to submit the estimated
annual amount of improper payments. We propose a corresponding deletion
at Sec. 98.100(b), which also describes the content of the error
reports.
It is no longer necessary to require Lead Agencies to report the
estimated annual amount of improper payments. ACF can use other
existing sources of data (i.e., CCDF outlay data) along with the
percentage of improper payments reported by Lead Agencies for the
representative samples, in order to estimate the annual amount of
improper payments for the program as a whole. The resulting standard
methodology will eliminate inconsistencies resulting from separate Lead
Agency estimates. This proposed change will also reduce the reporting
burden currently imposed on the 50 States, DC, and Puerto Rico. A
number of Lead Agencies have experienced challenges in reporting this
information in the past. ACF plans to revise the error rate forms and
instructions, through the information collection approval process, to
eliminate this data element once the final rule is published.
Corrective action plan. We propose to add paragraph Sec. 98.102(c)
to require that any Lead Agency 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. This is a conforming
change to match new requirements for corrective action plans that were
contained in the recent revisions to the forms and instructions. The
corrective action plan must be submitted within 60-days of the deadline
for submission of the Lead Agency's standard error rate report required
by Sec. 98.102(c). The corrective action plan must include:
identification of a senior accountable official, milestones that
clearly identify actions to be taken to reduce improper payments and
the individual responsible for completing each action, a timeline for
completing each action within one year of ACF approval of the plan and
for reducing improper payments below the threshold established by the
Secretary, and targets for future improper payment rates. Subsequent
progress reports must be submitted as requested by the Assistant
Secretary. Failure to carry out actions described in the approved
corrective action plan will be grounds for a penalty or sanction under
Sec. 98.92.
This proposed new requirement will strengthen CCDF program
integrity and accountability. Existing CCDF regulations at Sec.
98.102(a)(6) and (8) currently require all 50 States, DC and Puerto
Rico to report error rate targets for the next reporting cycle and to
describe actions that will be taken to correct causes of improper
payments. However, the information reported by Lead Agencies sometimes
lacks detail or specificity, is only reported on a three-year cycle,
and does not include status updates about the Lead Agency's progress in
implementing corrective action. More specific and timely requirements
are necessary for Lead Agencies with high improper payment rates.
Therefore, we propose that any Lead Agency exceeding a threshold of
improper payments be required to submit a formal, comprehensive
corrective action plan with a detailed description and timeline of
action steps of how it will meet targets for improvement. The
corrective action plan should also address any relevant findings from
annual audits required by existing regulation at Sec. 98.65(a), OMB
Circular A-133, and the Single Audit Act. The Lead Agency would also be
required to submit subsequent reports, on at least an annual basis,
describing progress in implementing corrective action. These new
requirements will ensure that Lead Agencies engage in a strategic and
thoughtful planning process for reducing improper payments, take action
in a timely fashion, and provide information on action steps that is
transparent and available to the public.
The proposed rule indicates that the improper payment threshold,
which triggers the requirement for a corrective action plan, will be
established by the Secretary. Although the proposed rule provides
flexibility to adjust the threshold in the future, the initial
threshold will be an improper payment rate of 10 percent or higher. In
other words, if a Lead Agency indicates that its improper payment rate
reported in accordance with Sec. 98.102(a)(3) equals or exceeds 10
percent, the Lead Agency will be subject to corrective action under
proposed Sec. 98.102(b). This 10 percent threshold is consistent with
the IPERA which indicates that an improper payment rate of less than 10
percent for a Federal program is necessary for compliance. Under IPERA,
ACF must submit a corrective action plan if the national improper
payment rate for CCDF exceeds 10 percent. Since CCDF is administered by
State and Territory Lead Agencies and the error rate review process is
executed by States, the only effective way for ACF to achieve and
maintain an improper payment rate below the 10 percent threshold is to
hold Lead Agencies accountable.
V. Paperwork Reduction Act
A number of sections in this proposed rule refer to collections of
information. These collections of information are subject to review by
the Office of Management and Budget (OMB) under the Paperwork Reduction
Act of 1995 (the PRA) (44 U.S.C. 3501-3520). In several instances, the
collections of information for the relevant sections of this proposed
rule have been approved previously under a series of OMB control
numbers as indicated in the following table. The proposed rule does not
modify these currently-approved collections.
----------------------------------------------------------------------------------------------------------------
Relevant section in OMB control
CCDF title/code the proposed rule number Expiration date
----------------------------------------------------------------------------------------------------------------
ACF-700 (CCDF Annual Report for Sec. 98.71........ 0980-0241 12/31/2013
Tribal Lead Agencies).
ACF-800 (Annual Aggregate Data Sec. 98.71........ 0970-0150 06/30/2015
Reporting).
ACF-801 (Monthly Case-Level Sec. 98.71........ 0970-0167 04/30/2015
Data Reporting).
[[Page 29487]]
ACF-696 (Financial Reporting- Sec. 98.65........ 0970-0163 05/31/2016 (renewal is under review at
States). OMB)
ACF-696-T (Financial Reporting- Sec. 98.65........ 0970-0195 05/31/2016 (renewal is under review at
Tribal Organizations). OMB)
ACF-403, ACF-404, ACF-405 (CCDF Sec. Sec. 98.100 0970-0323 09/30/2015
Error Rate Reporting). and 98.102.
CCDF-ACF -PI-2013-01 (Tribal Sec. 98.84........ 0970-0160 03/31/2016
Application for Construction
Funds).
----------------------------------------------------------------------------------------------------------------
In other instances, the proposed rule seeks to modify several
currently-approved information collections. HHS will publish Federal
Register notices soliciting public comment on specific revisions to
those information collections and will make available the proposed
forms and instructions for review. To assist the public in reviewing
the relevant provisions of the proposed rule, below is a summary of the
status of these collections.
ACF-118 CCDF State Plan. The rule, at 45 CFR Sec. Sec. 98.14,
98.16, 98.18, and 98.43, proposes to modify this existing information
collection approved under OMB control number 0970-0114. The proposed
rule adds several new requirements which States and Territories will be
required to report in the biennial CCDF Plans, including provisions
related to health and safety requirements, consumer education, and
eligibility policies. As described earlier in the preamble, provisions
included in a Final Rule will be incorporated into the review of FY
2016-2017 CCDF Plans that become effective October 1, 2015. HHS plans
to publish separate Federal Register notices seeking public comment on
this proposed information collection and the annual burden estimate.
ACF-118-A CCDF Tribal Plan. The rule, at 45 CFR 98.14, 98.16,
98.18, 98.43, 98.81, and 98.83, proposes to modify this existing
information collection approved under OMB control number 0970-0198. The
proposed rule adds several new requirements that Tribes and Tribal
organizations will be required to report in the biennial CCDF Plans,
including provisions related to health and safety requirements,
consumer education, and eligibility policies. Provisions included in a
Final Rule will be incorporated into the review of FY 2016-2017 CCDF
Plans that become effective October 1, 2015. HHS plans to publish
separate Federal Register notices seeking public comment on this
proposed information collection and the annual burden estimate.
The table below provides annual burden estimates for existing
information collections that are modified by this proposed rule. These
estimates reflect the total burden of each information collection,
including the changes made by this proposed rule.
Annual Burden Estimates
----------------------------------------------------------------------------------------------------------------
Number of Average
Instrument Number of responses per burden hours Total burden
respondents respondent per response hours
----------------------------------------------------------------------------------------------------------------
ACF-118 CCDF State Plan......................... 56 0.5 163.5 4,578
ACF-118-A CCDF Tribal Plan...................... 257 0.5 121 15,549
----------------------------------------------------------------------------------------------------------------
Finally, the proposed rule contains two new information collection
requirements, and the table below provides an annual burden hour
estimate for these collections. First, Sec. 98.33 requires Lead
Agencies to post provider-specific information to a user-friendly, easy
to understand Web site as part of its consumer education activities
(described earlier in this preamble). This Web site will provide
information to parents about the degree to which specific child care
providers meet State health and safety requirements and quality
indicators. This requirement applies to the 50 States, District of
Columbia, and five Territories that receive CCDF grants. States will
have significant flexibility regarding how to implement this provision
and each State will determine its own tailored approach based on
existing practices, available resources, and other circumstances.
In estimating the burden estimate, we considered the fact that many
States already have existing Web sites. Even in States without an
existing Web site, much of the information will be readily available
from licensing agencies, quality rating and improvement systems, and
other sources. The burden hour estimate below reflects an average
estimate, recognizing that there will be significant State variation.
The estimate is annualized to encompass initial data entry as well as
updates to the Web site over time. The total estimated dollar cost for
all Lead Agencies is $2,000,000.
Second, Sec. 98.41 requires Lead Agencies to establish procedures
that require child care providers that care for children receiving CCDF
subsidies to report to a designated State, territorial, or tribal
entity any serious injuries or deaths of children occurring in child
care. This is necessary for States to be able to examine the
circumstances leading to serious injury or death of children in child
care, and, if necessary, make adjustments to health and safety
requirements and enforcement of those requirements in order to prevent
any future tragedies
The requirement would potentially apply to the approximately
500,000 child care providers who serve children receiving CCDF
subsidies, but only a portion of these providers would need to report,
since our burden estimate assumes that no report is required in the
absence of serious injury or death. Using currently available aggregate
data on child deaths and injuries, we estimated the average number of
provider respondents would be approximately 10,000 annually.
In estimating the burden, we considered that more than half the
States already have reporting requirements in place as part of their
licensing procedures for child care providers. States, Territories and
Tribes have flexibility in specifying the
[[Page 29488]]
particular reporting requirements, such as timeframes and which serious
injuries must be reported. While the reporting procedures will vary by
jurisdiction, we anticipate that most providers will need to complete a
form or otherwise provide written information.
Annual Burden Estimates
----------------------------------------------------------------------------------------------------------------
Number of Average
Instrument Number of respondents responses per burden hours Total burden
Respondent per response hours
----------------------------------------------------------------------------------------------------------------
Consumer Education Web site...... 56 States/Territories........ 1 260 14,560
Reporting of Serious Injuries and 10,000 child care providers.. 1 1 10,000
Death.
----------------------------------------------------------------------------------------------------------------
We will consider public comments regarding information collection
in the following areas: (1) Evaluating whether the proposed collection
is necessary for the proper performance of the CCDF program, including
whether the information will have practical utility; (2) evaluating the
accuracy of the estimated burden of the proposed collection; (3)
enhancing the quality, usefulness, and clarity of the information to be
collected; and (4) minimizing the burden of the collection of
information, including the use of appropriate technology.
Written comments regarding information collection should be sent to
ACF, and to the Office of Management and Budget, Office of Information
and Regulatory Affairs (Attention: Desk Officer for the Administration
for Children and Families) by email to: [email protected],
or by fax to (202) 395-7285.
VI. Regulatory Flexibility Act
The Secretary certifies that, under 5 U.S.C. 605(b), as enacted by
the Regulatory Flexibility Act (Pub. L. 96-354), this proposed rule
will not result in a significant economic impact on a substantial
number of small entities. This proposed rule is intended to ensure
accountability for Federal funds consistent with the purposes of the
CCDBG Act and regulations and is not duplicative of other requirements.
The primary impact of this proposed rule is on State, Tribe, and
Territorial grantees since the proposed changes articulate a set of
expectations for how grantees are to satisfy certain requirements in
the CCDBG Act. To a lesser extent the proposed rule could affect
individuals and small businesses, particularly family child care
providers, however the number of entities affected should be limited
and the economic impact has not been determined to be significant. We
have proposed changes to better balance the dual purposes of the
program by adding provisions which would ensure that healthy,
successful child development is a consideration when establishing
policies for the CCDF program (e.g., preserving continuity in child
care arrangements), and to ensure that child care providers caring for
children receiving subsidies meet basic standards for ensuring the
safety of children and have minimum training in health and safety.
These include requirements for comprehensive criminal background checks
and health and safety training in areas such as first-aid and CPR that
may impact child care providers caring for children receiving CCDF
subsidies. Some child care providers, particularly family child care
providers that do not already meet these requirements, may incur some
burden. However, we do not believe these new requirements will have a
significant economic impact on a substantial number of small entities
since we expect Lead Agencies to use CCDF funds to assist child care
providers in meeting the requirements. For example, as indicated at
proposed Sec. 98.51(a)(2)(i), Lead Agencies may use quality funds to
support activities that ensure the health and safety of children.
VII. Regulatory Impact Analysis
Executive Orders 12866 and 13563 direct agencies to assess all
costs and benefits of available regulatory alternatives and, if
regulation is necessary, to select regulatory approaches that maximize
net benefits (including potential economic, environmental, public
health and safety effects, distributive impacts and equity). Executive
Order 13563 emphasizes the importance of quantifying both costs and
benefits, of reducing costs, of harmonizing rules, and of promoting
flexibility. This proposed rule meets the criteria for a significant
regulatory action under E.O. 12866 and thus has been reviewed by OMB.
For the reasons set forth below, ACF does not believe the impact of
this proposed regulatory action would be economically significant and
that the total cost would fall well below the $100 million threshold.
Need for the proposed rule. The impetus for this proposed rule is
based on the need to reform and update the CCDF program, which has not
undergone a significant regulatory review or revision in more than 15
years. Since then, there has been a growing body of research on early
childhood development underscoring the importance of children's
earliest experiences and impacts on their later success. Given that
CCDF is a program that provides Federal financial assistance to pay for
child care for low-income children, it is absolutely essential that
policy and program priorities be informed by this research. It is no
longer sufficient to consider the quality of care arrangements for
children receiving CCDF assistance as an afterthought to the function
of the program as a work support for low-income parents. The CCDF
program must necessarily be concerned with ensuring that child care
providers caring for children meet minimum requirements for maintaining
healthy and safe environments and work to improve the quality of those
environments to the greatest extent possible. Many States, Territories,
and Tribes administering CCDF have long since recognized this dual-
purpose framework and have used their flexibility within the block
grant program to adopt practices and policies that reflect these goals.
However, implementation of the CCDF program across the country varies
greatly. Lack of substantive Federal regulatory guidance in areas such
as health and safety, quality, and eligibility policy jeopardizes
accountability in the sense that all families receiving CCDF
assistance, regardless of what State, Territory or Tribe they may
reside in, should have basic assurances about the quality of services
they receive. This proposed rule seeks to establish concrete
expectations in these areas to better balance the dual purposes of the
CCDF program and fully leverage its two-generational impact.
[[Page 29489]]
Benefits of the proposed rule. CCDF provides financial assistance
to make child care more affordable so that parents can work or attend
job training or educational programs. As stated throughout this
proposed rule, we envision the program as also providing children in
those families access to high quality care to ensure their healthy,
safe development. In FY 2011, the CCDF program provided assistance to
nearly 1.6 million children in nearly 1 million families. In addition,
approximately 500,000 child care providers provided services to
children receiving CCDF subsidies. The changes in this proposed rule
are almost wholly directed towards improving the lives of the children
and families we serve and improving health and safety and quality of
child care providers caring for those children. In short, the changes
in this proposed rule have three primary beneficiaries--low-income
working parents, low-income children, and child care providers serving
these families.
We have included several changes in this proposed rule that we
believe will improve the continuity of services and stability of child
care arrangements for families receiving CCDF. The benefits of these
changes are not easily quantified, but can have a profound effect on
the lives of the low-income parents and children we serve. For example,
we anticipate that changes in the proposed rule will mean that a parent
can retain their subsidy after experiencing job loss in order to search
for new employment. In some States, parents enter into downward spirals
when they lose their jobs and potentially lose their child care,
jeopardizing the stability of care arrangements and stifling any
positive impacts the arrangements may have had on their children's
development. In other States, when parents lose their jobs, they
maintain their subsidies and child care while they search for new jobs,
leading to less stress on their families and preserving their
children's relationships with their caregivers. We know that about half
of the States already allow for a certain period of job search for
parents that lose employment. Therefore, the benefits of this
particular policy change will primarily be directed towards the CCDF
families and children in the remaining States that have yet to adopt
this practice.
Several of the changes in this proposed rule benefit child care
providers and the children they serve. To the extent that the proposed
rule causes a child care provider to receive training in basic areas of
health and safety where they might not otherwise have been compelled
to, this proposed rule will have spillover effects that reach not only
the CCDF child in that providers' care, but all the children cared for
by that provider. We believe the new health and safety requirements are
a benefit to public health and safety because they are aimed at
practices that ultimately are intended to reduce the incidence of
injury and death for children in child care. For example, if a child
care provider receives certification in CPR or is knowledgeable in
poison prevention and safety then they are in a better position to
respond to or prevent an emergency if a child is in danger. If a child
care provider is trained in SIDS prevention then children in their care
are less likely to be at risk. We believe that improving accountability
for Federal dollars means paying for safe, healthy child care and
ensuring children are cared for by providers with a minimum of health
and safety training. The requirement for child care providers to have a
core body of knowledge will also place more providers on a career
pathway, increasing their opportunities to develop professional
knowledge necessary for advancement.
Finally, changes in this proposed rule related to quality
improvement and consumer education activities also will benefit not
only CCDF families, but also the general public. For example, if a
child care provider receives a grant funded by CCDF to implement a new
curriculum as part of a quality improvement activity, then that
investment will benefit all the children in that provider's care. In
addition, one of the changes in this proposed rule would require States
to post provider-specific information on a Web site with information
about health and safety and licensing or regulatory requirements met by
the provider, including the history of licensing violations and date of
last inspection. We believe making this information readily available
and transparent to parents will promote more informed child care
choices. In all of these ways we believe that changes in this proposed
rule will not only directly benefit CCDF parents, children and
providers, but also have a valuable public benefit with the possibility
of impacting many families far beyond the immediate reach of the CCDF
program.
Costs of the proposed rule. At the beginning of this proposed rule,
we explain that one of the reasons for revising the CCDF regulations is
to better reflect State and local practices to improve the quality of
child care and the tremendous strides that have been made in
implementation of evidence-based policies. As such, in many of the
areas where changes are proposed there are a significant number of
States and Territories that have already implemented these policies,
and we have been purposeful throughout to note these numbers. The cost
of implementing the changes in this proposed rule will vary depending
on a State's specific situation. We conducted an analysis of State and
Territory responses in the FY 2012-2013 CCDF Plans covering five of the
key policy areas where we anticipate there could be cost implications.
[Note: The analysis of CCDF Plans throughout this proposed rule
includes a total of 56 State and Territorial CCDF Plans, including
American Samoa, Guam, Northern Marianas Islands, Puerto Rico, and the
Virgin Islands.]
Parental complaint hotline. The proposed rule includes a new
requirement at Sec. 98.32(a) that Lead Agencies must establish or
designate a hotline for parents to submit complaints about child care
providers. In the FY 2012-2013 CCDF plans, 10 States reported having a
toll-free hotline for parents to submit child care-related complaints.
An additional 16 States list public toll-free numbers on their Web
sites for parents to contact the child care office. Establishing or
designating a hotline may lead to additional costs for States, such as
those associated with establishing a new hotline system or staff time
used to answer the hotline. However, Lead Agencies have flexibility in
implementing the proposed hotline and may work with other agencies in
the State to adapt existing hotlines, such as those used to report
child abuse and neglect.
Consumer Education. The proposed rule includes two new requirements
that may increase costs as part of the statutory requirement that Lead
Agencies collect and disseminate consumer education information about
child care. The first of these requirements is that Lead Agencies must
post provider-specific information on a Web site. The second is that
Lead Agencies must implement a transparent system of quality
indicators.
We propose amending paragraph (a) of Sec. 98.33 to require Lead
Agencies to post provider-specific information to a user-friendly, easy
to understand Web site as part of its consumer education activities.
The proposed change would require Lead Agencies to list available child
care providers on a Web site with provider-specific information about
any health and safety, licensing or regulatory requirements met by the
provider, any history of violations of these requirements, and any
compliance actions taken, as well as information about the quality of
the provider, if available, as identified through a
[[Page 29490]]
transparent system of quality indicators. The Web site must also
include a description of health and safety, licensing or regulatory
requirements for child care providers within the Lead Agency's
jurisdiction and processes for ensuring providers meet those
requirements, including the background check process for providers and
any other individuals in the child care setting, and offenses that may
preclude a provider from serving children. Lead Agencies have
flexibility to determine how to improve transparency to the public
regarding child care provider licensing violations and compliance
actions taken. Making provider compliance information widely available
on a dedicated Web site allows parents to make informed choices, and
for purposes of the CCDF subsidy program, is key to ensuring that
parental choice is meaningful.
Creating and maintaining a Web site with provider-specific
information may come with new costs for Lead Agencies. However, as the
majority of States already have these Web sites in place, we do not
expect this requirement to create a significant financial burden.
According to a preliminary analysis of the FY 2012-2013 CCDF Plans, at
least 30 States and Territories make all licensing information
available to parents and the public online. Ten States and Territories
reported making at least some licensing information available on a
public Web site or other online tool. Therefore, this proposed change
is consistent with current practices in many States and will not create
new costs for them.
At new paragraph Sec. 98.33(b) we propose to require Lead Agencies
to collect and disseminate consumer education through a transparent
system of quality indicators. The system must include provider-specific
information about the quality of child care providers; (2) describe the
standards used to assess the quality of child care; (3) take into
account teaching staff qualifications, learning environment, curricula
and activities; and (4) disseminate provider-specific quality
information through a Web site or other alternate mechanism. Each Lead
Agency has the flexibility to develop a system of quality indicators
based on its specific needs. The costs associated with implementing a
transparent system of quality indicators will depend on what consumer
education activities the Lead Agency currently has in place. According
to the FY 2012-2013 CCDF Plans, more than half the States have
implemented quality rating and improvement systems (QRIS) and
additional States have a QRIS in one or more localities that has not
been implemented statewide. Therefore, additional costs would be
associated with expanding the QRIS or creating a means of disseminating
quality information to parents and the public in an easy-to-understand
manner.
Background Checks. We propose to amend Sec. 98.41(a)(2)(i) of the
regulations to include comprehensive background checks on child care
providers serving children receiving CCDF subsidies (excepting relative
and in-home providers at the State's discretion), including use of
fingerprints for State checks of criminal history records, use of
fingerprints for checks of FBI criminal history records, clearance
through the child abuse and neglect registry, if available, and
clearance through the sex offender registry. According to the FY 2012-
2013 CCDF Plans, all States and Territories have some infrastructure in
place to conduct criminal background checks on child care providers.
However, States vary in the extent to which they require different
types of providers to receive background checks and many do not require
the use of fingerprints for background checks.
For example, 53 States and Territories already require that child
care center staff undergo at least one type of criminal background
check, however only 40 States and Territories conduct FBI checks that
include fingerprints. Similarly, 50 States and Territories require
family child care providers to have a criminal background check and 36
require an FBI background check that includes fingerprints. The
majority of States and Territories already have requirements in place
for checks of child abuse and neglect registries and over half have a
sex offender registry requirement in place. While some States may have
to revise their background check policies or expand the requirement to
be inclusive of additional providers, all States are already in partial
compliance with the proposed provision.
Additionally, the Lead Agency can work with other State or local
organizations that may already have the necessary equipment and
resources to carry out the comprehensive background checks as a way of
reducing administrative burden and associated costs. Many State
agencies have already purchased Livescan technology that significantly
decreases delays and administrative burdens associated with
fingerprint-based checks. The cost of conducting criminal background
checks will vary from State to State, but an FBI background check
should only cost between $18 and $24. States currently have several
methods for allocating the expense of background checks. Lead Agencies
may use CCDF funds to pay for comprehensive background checks, and can
potentially obtain funds from other Federal sources such as the
National Criminal History Improvement Program (NCHIP) and the Adam
Walsh Implementation Grants. Lead Agencies may also require that
providers assume responsibility for background check fees as a cost of
doing business. In some States, the child care facility pays for staff
members' background checks. Almost half of the States currently require
individuals to pay for their own background checks. Since the cost of
the background check requirement is not borne solely by the State, the
cost of implementing this provision will be diffused throughout the
field. While this may represent an additional burden for some child
care providers, current practice indicates that background check
expenses are already considered a reasonable cost of doing business
within the field of child care. In addition, States can implement
systems to facilitate making background check verifications portable,
reducing the cost to providers in an industry with traditionally high
turnover.
Pre-inspections for compliance with fire, health and building
codes. The proposed rule adds a new requirement at Sec.
98.41(a)(2)(ii) requiring States to ensure providers are in compliance
with State and local applicable fire, health, and building codes, prior
to serving children receiving CCDF subsidies. According to the 2011
Child Care Licensing Study (prepared by the National Center on Child
Care Quality Improvement and the National Association of Regulatory
Administrators), 39 States require fire, health, and building code
(also called environmental) inspections for child care centers. Many
States also conduct separate licensing inspections prior to issuing a
license to a child care center. For family child care providers, 12
states require fire, health, and building code inspections. Further, of
the 42 states that license family child care homes, 37 conduct an
inspection before issuing a license to a family child care home. Since
fire, health, and building codes vary across States, the financial
impact of this new requirement will also vary. States already have
systems in place to conduct these inspections, and enforcement of the
applicable codes may already be happening at the local level. Further,
we are seeking public comment on an appropriate phase-in and timeframe
for this provision, as well
[[Page 29491]]
as the requirement for comprehensive criminal background checks.
Health and safety training. We propose adding a list of minimum
health and safety pre-service or orientation training for providers
serving children receiving CCDF assistance. A preliminary analysis of
the 2012-23 CCDF Plans shows that many States have a number of these
trainings already in place for their licensed providers. Thirty-eight
States already require pre-service CPR training for child care centers
and 43 require it for family child care providers. Forty States already
require pre-service first-aid training for centers and 43 require it
for family child care providers. Most of the other trainings are
offered to licensed center and family child care providers in
approximately half of the States. However, since this only captures the
current training data for licensed providers, the new requirements will
most likely require an expansion of the trainings offered to license-
exempt CCDF providers. This is important because many child care
providers serving children receiving CCDF subsidies either are not
required to be licensed or have been exempted from licensing
requirements by States. Approximately 10 percent of CCDF children are
cared for by non-relatives in unregulated centers and homes. In these
cases, CCDF health and safety requirements are the primary, and in most
cases, the only safeguard in place to protect children in this type of
care.
We recognize that it may not be possible for child care providers
serving subsidized children to meet all the listed minimum health and
safety training requirements prior to the first day of service.
Therefore, we are allowing Lead Agencies to require the training prior
to the provider's start of service (i.e., pre-service) or during the
initial service period (i.e., orientation). We are leaving it to the
Lead Agency's discretion to specifically define ``pre-service'' and
``orientation,'' which may include stipulations that the training be
completed within the first weeks or month of providing child care
services to children receiving CCDF assistance. Lead Agencies should
also offer a grace period to providers who are already serving children
receiving CCDF assistance to minimize disruptions to child care
arrangements for children currently enrolled with a provider and
receiving subsidies. Additionally, many of the areas included in the
proposed new requirements are readily available through on-line
trainings, which should minimize burden on Lead Agencies.
Monitoring. We propose to amend 98.41(d) to require that Lead
Agencies include unannounced on-site monitoring as part of their
procedures to ensure providers serving children receiving CCDF
assistance meet health and safety requirements. All providers serving
children receiving CCDF subsidies must be subject to unannounced on-
site monitoring. Further, Lead Agencies may not solely rely on self-
certification of compliance with health and safety requirements and
must include unannounced visits. The proposed change would allow Lead
Agencies to retain the flexibility to determine the frequency and
components of unannounced on-site monitoring visits. However, we are
seeking comment on the recommendation that States conduct an initial
on-site monitoring visit and at least one annual unannounced visit.
There is currently significant variation across States regarding
the nature and intensity of on-site monitoring. According to the FY
2012-2013 CCDF Plans, States and Territories report using both
announced and unannounced routine visits as a way to enforce licensing
requirements with different policies applicable to child care centers
versus family child care homes. Almost all Lead Agencies have an on-
site monitoring component in place for licensed center and family child
care providers, but 28 do not monitor unlicensed providers. Therefore,
about half of the Lead Agencies will need to expand their on-site
monitoring practices to include unlicensed providers caring for
children receiving CCDF subsidies.
The new requirement may create additional costs for Lead Agencies
because it could potentially expand the number of child care providers
subject to unannounced on-site monitoring. These costs may include the
need for additional monitoring staff or funding of contracts to carry
out monitoring visits, new training for staff to ensure knowledge of
new health and safety requirements, or additional tools and supplies
necessary to carry out effective monitoring visits. However, because
all States have an infrastructure for on-site monitoring visits through
their licensing systems, we do not believe this requirement will create
a significant financial burden for the majority of States. In FY 2011,
there were approximately 500,000 providers caring for children
receiving CCDF subsidies. Of these, approximately 180,000 were relative
providers and approximately 39,000 in-home providers providing care in
the child's home. The proposed rule allows Lead Agencies the option to
exempt both relative and in-home providers from the health and safety
and monitoring requirements. The remaining 205,000 child care providers
must be subject to health and safety and monitoring requirements and
about two-thirds of these providers are reported as licensed or
regulated by the State and thus would potentially already be subject to
monitoring. Therefore, we estimate approximately 90,000 providers (that
are not relatives or in-home providers) caring for children receiving
CCDF subsidies are currently unlicensed and would now be subject to
monitoring. This number is potentially larger to the extent that States
choose to apply monitoring and health and safety requirements to
relative and in-home providers. This total is a national total and the
distribution varies by State.
VIII. Unfunded Mandates Reform Act of 1995
Section 202 of the Unfunded Mandates Reform Act of 1995 requires
that a covered agency prepare a written statement before promulgating a
rule that includes any Federal mandate that may result in the
expenditure by State, local, and Tribal governments, in the aggregate,
or by the private sector, of $100 million or more in any one year. If
an agency must prepare a budgetary impact statement, section 205
requires that it select the most cost-effective and least burdensome
alternative that achieves the objectives of the rule consistent with
the statutory requirements. Section 203 requires a plan for informing
and advising any small government that may be significantly or uniquely
impacted. The Department has determined that this proposed rule would
not impose a mandate that will result in the expenditure by State,
local, and Tribal governments, in the aggregate, or by the private
sector, of more than $100 million in any one year.
IX. Congressional Review
This regulation is not a major rule as defined in 5 U.S.C. Chapter
8.
X. Executive Order 13132
Executive Order 13132, Federalism, requires that Federal agencies
consult with State and local government officials in the development of
regulatory policies with federalism implications. This proposed rule
will not have substantial direct effect on the States, on the
relationship between the Federal Government and the States, or on the
distribution of power and responsibilities among the various levels of
government. This proposed rule does not preempt State law. In large
part, the changes included in the proposed rule are based upon
practices
[[Page 29492]]
already implemented by many States. Therefore, in accordance with
section 6 of Executive Order 13132, it is determined that this proposed
rule does not have sufficient federalism implications to warrant the
preparation of a federalism summary impact statement.
XI. Treasury and General Government Appropriations Act of 1999
Section 654 of the Treasury and General Government Appropriations
Act of 1999 (Pub. L.105-277) requires Federal agencies to issue a
Family Policymaking Assessment for any rule that may affect family
well-being. This proposed rule would not have any impact on the
autonomy or integrity of the family as an institution. Accordingly, HHS
has concluded that it is not necessary to prepare a Family Policymaking
Assessment.
List of Subjects in 45 CFR Part 98
Child Care, Grant programs-social programs.
For the reasons set forth in the preamble, we propose to amend part
98 of 45 CFR as follows:
PART 98--CHILD CARE AND DEVELOPMENT FUND
0
1. The authority citation for part 98 continues to read:
Authority: 42 U.S.C. 618, 9858, et seq.
0
2. Amend Sec. 98.1 by revising paragraph (b) to read as follows:
Sec. 98.1 Goals and purposes.
* * * * *
(b) The purpose of the CCDF is to increase the availability,
affordability, and quality of child care services. The program offers
Federal funding to States, Territories, Indian Tribes, and tribal
organizations in order to:
(1) Provide low-income families with the financial resources to
find and afford high quality child care for their children and serve
children in safe, healthy, nurturing child care settings that are
highly effective in promoting learning, child development, school
readiness and success;
(2) Enhance the quality and increase the supply of child care and
before- and after-school care services for all families, including
those who receive no direct assistance under the CCDF, to support
children's learning, development, and success in school;
(3) Provide parents with a broad range of options in addressing
their child care needs by expanding high quality choices available to
parents across a range of child care settings and providing parents
with information about the quality of child care programs;
(4) Minimize disruptions to children's development and learning by
promoting continuity of care;
(5) Ensure program integrity and accountability in the CCDF
program;
(6) Strengthen the role of the family and engage families in their
children's development, education, and health;
(7) Improve the quality of, and coordination among Federal, State,
and local child care programs, before- and after-school programs, and
early childhood development programs to support early learning, school
readiness, youth development and academic success; and
(8) Increase the availability of early childhood development and
before- and after-school care services.
* * * * *
0
3. Amend Sec. 98.2 by revising the definition for Categories of care,
the introductory text of paragraph (1) in the definition of Eligible
child care provider, and the definition of Family child care provider
and removing the definition of Group home child care provider.
The revisions read as follows:
Sec. 98.2 Definitions.
* * * * *
Categories of care means center-based child care, family child care
and in-home care;
* * * * *
Eligible child care provider means:
(1) A center-based child care provider, a family child care
provider, an in-home child care provider, or other provider of child
care services for compensation that--
* * * * *
Family child care provider means one or more individual(s) who
provide child care services for fewer than 24 hours per day per child,
as the sole caregiver(s), in a private residence other than the child's
residence, unless care in excess of 24 hours is due to the nature of
the parent(s)' work;
* * * * *
0
4. Amend Sec. 98.10 by revising paragraphs (d) and (e) and adding
paragraph (f) to read as follows:
Sec. 98.10 Lead Agency responsibilities.
* * * * *
(d) Hold at least one public hearing in accordance with Sec.
98.14(c);
(e) Coordinate CCDF services pursuant to Sec. 98.12; and
(f) Implement practices and procedures to ensure program integrity
and accountability pursuant to Sec. 98.68.
0
5. Amend Sec. 98.11 by adding a sentence to the end of paragraph
(a)(3) to read as follows:
Sec. 98.11 Administration under contracts and agreements.
(a) * * *
(3) * * * The contents of the written agreement may vary based on
the role the entity is asked to assume or the type of project
undertaken, but must include, at a minimum, tasks to be performed, a
schedule for completing tasks, a budget which itemizes categorical
expenditures consistent with CCDF requirements at Sec. 98.65(h), and
indicators or measures to assess performance.
* * * * *
0
6. Amend Sec. 98.14 by revising paragraphs (a)(1)(C) and adding
paragraphs (a)(1)(E), (F), (G), (H), and (I), and (d) to read as
follows:
Sec. 98.14 Plan process.
* * * * *
(a)(1) * * *
(C) Public education (including agencies responsible for pre-
kindergarten services, if applicable, and educational services provided
under Part B and C of the Individuals with Disabilities Education Act
(20 U.S.C. 1400));
* * * * *
(E) Child care licensing;
(F) Head Start collaboration;
(G) State Advisory Council on Early Childhood Education and Care
authorized by the Head Start Act (42 U.S.C. 9831 et seq.) (if
applicable);
(H) Statewide afterschool network or other coordinating entity for
out-of-school time care (if applicable); and
(I) Emergency management and response.
* * * * *
(d) Make the Plan and any Plan amendments publicly available.
0
7. Amend Sec. 98.16 by
0
a. Redesignating paragraph (r) as paragraph (w), paragraphs (g) through
(q) as (i) through (s), and paragraphs (b) through (f) as (c) through
(g);
0
b. Adding new paragraphs (b) and (h);
0
c. Revising newly redesignated paragraphs (g)(6), (i)(1), (i)(5), (j),
(k), (l),(n), (o), and (q); and
0
d. Adding new paragraphs (t), (u), and (v).
The additions and revisions read as follows:
Sec. 98.16 Plan provisions.
* * * * *
(b) A description of processes the Lead Agency will use to monitor
administrative and implementation responsibilities undertaken by
agencies other than the Lead Agency including
[[Page 29493]]
descriptions of written agreements, monitoring and auditing procedures,
and indicators or measures to assess performance pursuant to Sec.
98.11(a)(3);
* * * * *
(g) * * *
(6) Working (which must include some period of job search);
* * * * *
(h) A description of policies to promote continuity of care for
children and stability for families receiving services for which
assistance is provided under this part, including:
(1) Policies that take into account developmental needs of children
when authorizing child care services pursuant to Sec. 98.20(d);
(2) Timely eligibility determination and processing of
applications; and
(3) Policies that promote employment and income advancement for
parents.
(i) * * *
(1) A description of such services and activities, including how
the Lead Agency will address supply shortages through the use of grants
or contracts. The description should identify any shortages in the
supply of high quality child care providers, including for specific
localities and populations, list the data sources used to identify
shortages, and explain how grants or contracts for direct services will
be used to address such shortages;
* * * * *
(5) Any additional eligibility criteria, priority rules,
definitions, and policies, including any requirements for families to
report changes in circumstances that may impact eligibility,
established pursuant to Sec. 98.20(b) and (c);
(j) A description of the activities to provide comprehensive
consumer education, which must include a transparent system of quality
indicators, pursuant to Sec. 98.33(b), that provides parents with
provider-specific information about the quality of child care providers
in their communities; to increase parental choice; and to improve the
quality and availability of child care, pursuant to Sec. 98.51;
(k) A description of the sliding fee scale(s) (including any
factors other than income and family size used in establishing the fee
scale(s)) that provide(s) for cost sharing by the families that receive
child care services for which assistance is provided under the CCDF and
how co-payments are affordable for families, pursuant to Sec. 98.42.
This shall also include a description of the criteria established by
the Lead Agency, if any, for waiving contributions for families;
(l) A description of the health and safety requirements, applicable
to all providers of child care services for which assistance is
provided under the CCDF, in effect pursuant to Sec. 98.41, which must
include a description of unannounced, on-site monitoring and other
enforcement procedures in effect to ensure that providers of child care
services for which assistance is provided under the CCDF comply with
all applicable health and safety requirements pursuant to Sec.
98.41(d);
* * * * *
(n) Payment rates and a summary of the facts, including a biennial
valid local market price study or alternate approved methodology,
relied upon to determine that the rates provided are sufficient to
ensure equal access pursuant to Sec. 98.43, which must include a
description of how the quality of providers of child care services for
which assistance is provided under this part is taken into account when
determining payment rates;
(o) A detailed description of the hotline established or designated
by the State for receiving parental complaints, of how the State
maintains a record of substantiated parental complaints and how it
makes information regarding those complaints available to the public on
request, pursuant to Sec. 98.32;
* * * * *
(q) A detailed description of licensing requirements applicable to
child care services provided, any exemptions to those requirements and
a rationale for such exemptions, and a description of how such
licensing requirements are effectively enforced, pursuant to Sec.
98.40;
* * * * *
(t) A description of payment practices for child care services for
which assistance is provided under this part, including timely
reimbursement for services, how payment practices support providers'
provision of high quality child care services, and practices to promote
the participation of child care providers in the subsidy system;
(u) A description of processes in place to investigate and recover
fraudulent payments and to impose sanctions on clients or providers in
response to fraud pursuant to Sec. 98.68(d);
(v) An annual quality performance report by the States and
Territories to the Secretary, which must be made publicly available,
and include:
(1) A description of progress related to meeting performance goals
through activities to improve the quality of child care pursuant to
Sec. 98.51(f); and
(2) A report describing any changes to State regulations,
enforcement mechanisms, or other State policies addressing health and
safety based on an annual review and assessment of serious injuries or
deaths of children occurring in child care (including both regulated
and unregulated child care centers and family child care homes).
* * * * *
0
8. Amend Sec. 98.18 by designating paragraph (b) and paragraph (b)(1)
and adding paragraph (b)(2) to read as follows:
Sec. 98.18 Approval and disapproval of Plans and Plan amendments.
* * * * *
(b) * * *
(2) Lead Agencies must provide advance, written notice to affected
parties (i.e., parents and child care providers) of substantial changes
in the program that adversely affect income eligibility, payment rates,
and/or sliding fee scales.
* * * * *
0
9. Amend Sec. 98.20 by:
0
a. Revising paragraphs (a)(2), (a)(3)(ii) introductory text and
(a)(3)(ii)(A);
0
b. Redesignating paragraph (b) as paragraph (c);
0
c. Adding a new paragraph (b); and
0
d. Adding paragraph (d)
The revisions and additions read as follows:
Sec. 98.20 A child's eligibility for child care services.
(a) * * *
(2) Reside with a family whose income does not exceed 85 percent of
the State's median income (SMI) for a family of the same size. The SMI
used to determine the eligibility threshold level must be based on the
most recent SMI data that is published by the Bureau of the Census; and
(3) * * *
(ii) Receive, or need to receive, protective services, which may
include specific populations of vulnerable children as identified by
the Lead Agency, and reside with a parent or parents (as defined in
Sec. 98.2) other than the parent(s) described in paragraph (a)(3)(i)
of this section.
(A) At grantee option, the requirements in paragraph (a)(2) of this
section and in Sec. 98.42 may be waived for families eligible for
child care pursuant to this paragraph, if determined to be necessary on
a case-by-case basis.
* * * * *
(b) A Lead Agency shall re-determine a child's eligibility for
child care services no sooner than 12 months following the initial
determination or most recent re-determination, subject to the
following:
(1) During the period of time between re-determinations a Lead
Agency, at its option, may consider a child to be
[[Page 29494]]
eligible pursuant to some or all of the eligibility requirements
specified in paragraph (a) of this section, if the child met all of the
requirements in paragraph (a) on the date of the most recent
eligibility determination or re-determination.
(2) The Lead Agency shall specify in the Plan any requirements for
families to report changes in circumstances that may impact eligibility
between re-determinations.
* * * * *
(d) 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(s).
0
10. Amend Sec. 98.30 by:
0
a. Revising paragraph (a)(1);
0
b. Removing paragraph (e)(1)(ii) and redesignating paragraphs
(e)(1)(iii) and (iv) as paragraphs (e)(1)(ii) and (iii);
0
c. Adding paragraphs (g) and (h).
The revisions and additions read as follows:
Sec. 98.30 Parental choice.
(a) * * *
(1) To enroll such child with an eligible child care provider that
has a grant or contract for the provision of such services, in
accordance with Sec. 98.50; or
* * * * *
(g) As long as provisions at paragraph (f) of this section are met,
parental choice provisions shall not be construed as prohibiting a Lead
Agency from establishing policies that require providers of child care
services for which assistance is provided under this part to meet
higher standards of quality as identified in a quality improvement
system or other transparent system of quality indicators pursuant to
Sec. 98.33.
(h) Parental choice provisions shall not be construed as
prohibiting a Lead Agency from providing parents with information and
incentives that encourage the selection of high quality child care.
0
11. Amend Sec. 98.32 by redesignating paragraphs (a) through (c) as
paragraphs (b) through (d) and adding a new paragraph (a) to read as
follows:
Sec. 98.32 Parental complaints.
* * * * *
(a) Establish or designate a hotline for parents to submit
complaints about child care providers;
* * * * *
0
12. Amend Sec. 98.33 by:
0
a. Revising paragraph (a);
0
b. Redesignating paragraphs (b) and (c) as paragraphs (d) and (e);
0
c. Adding new paragraphs (b) and (c); and
0
d. In newly redesignated paragraph (e) removing ``paragraph (b)'' and
adding in its place ``paragraph (d)''.
The revision and additions read as follows:
Sec. 98.33 Consumer education.
* * * * *
(a) Certify that it will collect and disseminate to parents and the
general public, through a user-friendly, easy-to-understand Web site
and other means identified by the Lead Agency, consumer education
information that will promote informed child care choices including, at
a minimum, information about:
(1) The full range of available providers, including:
(i) Provider-specific information about any health and safety,
licensing or regulatory requirements met by the provider, including the
date the provider was last inspected;
(ii) Any history of violations of these requirements; and
(iii) Any compliance actions taken.
(2) A description of health and safety requirements and licensing
or regulatory requirements for child care providers and processes for
ensuring that child care providers meet those requirements. The
description must include information about the background check process
for providers, and any other individuals in the child care setting (if
applicable), and what offenses may preclude a provider from serving
children.
(b) As part of its consumer education activities, implement a
transparent system of quality indicators appropriate to the provider
setting, such as those reflected in a quality rating and improvement
system or other system established by the Lead Agency, to provide
parents with a way to differentiate the quality of child care providers
available to them in their communities through a rating or other
descriptive method. The system must:
(1) Include provider-specific information about the quality of
child care;
(2) Describe the standards used to assess the quality of child care
providers;
(3) Take into account teaching staff qualifications and/or
competencies, learning environment, curricula and activities; and
(4) Disseminate provider-specific quality information, if
available, through the Web site described in paragraph (a) of this
section, or through an alternate mechanism which the Lead Agency shall
describe in the CCDF Plan, which shall include a description of how the
mechanism makes the system of quality indicators transparent.
(c) For families that receive assistance under this part, provide
information about the child care options available to them as described
in paragraphs (a) and (b) of this section, and specific information
about the child care provider selected by the parent, including health
and safety requirements met by the provider described at 98.41(a), any
licensing or regulatory requirements met by the provider, any voluntary
quality standards met by the provider pursuant to paragraph (b) of this
section, and any history of violations of health and safety, licensing
or regulatory requirements.
* * * * *
0
13. Amend 98.40 by redesignating paragraph (a)(2) as (a)(3) and adding
new paragraph (a)(2) to read as follows:
Sec. 98.40 Compliance with applicable State and local regulatory
requirements.
(a) * * *
(2) Any exemptions to licensing requirements and a rationale for
such exemptions;
* * * * *
0
14. Amend Sec. 98.41 by revising paragraphs (a)(1)(i), (a)(2), (a)(3),
(d), and (e) to read as follows:
Sec. 98.41 Health and safety requirements.
(a) * * *
(1) * * *
(i) As part of their health and safety provisions in this area,
Lead Agencies shall assure that children receiving services under the
CCDF are age-appropriately immunized. Those health and safety
provisions shall incorporate (by reference or otherwise) the latest
recommendation for childhood immunizations of the respective State or
territorial public health agency.
* * * * *
(2) Building and physical premises safety, which shall at a minimum
include the following:
(i) Comprehensive background checks on child care providers that
include use of fingerprints for State checks of criminal history
records, use of fingerprints for checks of Federal Bureau of
Investigation (FBI) criminal history records, clearance through the
child abuse and neglect registry (if available) and clearance through
sex offender registries (if available);
(ii) Compliance with applicable State and local fire, health and
building codes, which must include ability to evacuate children in the
case of an emergency. Compliance must be determined prior to child care
providers
[[Page 29495]]
serving children receiving assistance under this part; and
(iii) Emergency preparedness and response planning including
provisions for evacuation and relocation, shelter-in-place, and family
reunification; and
(3) Minimum health and safety training appropriate to the provider
setting and age of children served, which shall, at a minimum, include
pre-service or orientation training in the following areas:
(i) First-aid and Cardiopulmonary Resuscitation (CPR);
(ii) Medication administration policies and practices;
(iii) Poison prevention and safety;
(iv) Safe sleep practices including Sudden Infant Death Syndrome
(SIDS) prevention;
(v) Shaken baby syndrome and abusive head trauma prevention;
(vi) Age-appropriate nutrition, feeding, including support for
breastfeeding, and physical activity;
(vii) Procedures for preventing the spread of infectious disease,
including sanitary methods and safe handling of foods;
(viii) Recognition and reporting of suspected child abuse and
neglect;
(ix) Emergency preparedness planning and response procedures;
(x) Management of common childhood illnesses, including food
intolerances and allergies;
(xi) Transportation and child passenger safety (if applicable);
(xii) Caring for children with special health care needs, mental
health needs, and developmental disabilities in compliance with the
Americans with Disabilities (ADA) Act; and
(xiii) Child development, including knowledge of stages and
milestones of all developmental domains appropriate for the ages of
children receiving services.
* * * * *
(d) Each Lead Agency shall certify that procedures are in effect to
ensure that child care providers of services for which assistance is
provided under this part, within the area served by the Lead Agency,
comply with all applicable State, local, or tribal health and safety
requirements, including those described in paragraph (a) of this
section. The Lead Agency's procedures:
(1) Must include unannounced on-site monitoring. All child care
providers of services for which assistance is provided under this part
must be subject to on-site monitoring, including unannounced visits;
(2) May not solely rely on child care provider self certification
of compliance with health and safety requirements included in paragraph
(a) of this section without documentation or other verification that
requirements have been met;
(3) Must require an unannounced visit in response to the receipt of
a complaint pertaining to the health and safety of children in the care
of a provider of services for which assistance is provided under this
part; and
(4) Must require child care providers of services for which
assistance is provided under this part to report to a designated State,
territorial, or tribal entity any serious injuries or deaths of
children occurring in child care.
(e) For the purposes of this section only, the term ``child care
providers,'' at the option of the Lead Agency, may not include in-home
child care providers, pursuant to Sec. 98.2, and grandparents, great
grandparents, siblings (if such providers live in a separate
residence), aunts or uncles, pursuant to Sec. 98.2. If the Lead Agency
chooses not to include these providers, the Lead Agency shall provide a
description and justification in the CCDF Plan, pursuant to Sec.
98.16(l), of requirements, if any, that apply to these providers.
0
15. Amend Sec. 98.42 by revising paragraph (c) and adding paragraph
(d) to read as follows:
Sec. 98.42 Sliding fee scales.
* * * * *
(c) Lead Agencies may waive contributions from families meeting
criteria established by the Lead Agency.
(d) Lead Agencies may not use cost of care or subsidy payment rate
as a factor in setting co-payment amounts.
0
16. Amend Sec. 98.43 by:
0
a. Revising paragraphs (b)(1) through (3);
0
b. Redesignating paragraphs (c), (d), and (e) as paragraphs (d), (e)
and (f); and;
0
c. Adding new paragraphs (b)(4) and (c),
The revisions and additions read as follows:
Sec. 98.43 Equal access.
* * * * *
(b) * * *
(1) How a choice of the full range providers, e.g. center, family,
and in-home care, is made available;
(2) How payment rates are adequate based on either:
(i) a valid, local market price study conducted no earlier than two
years prior to the effective date of the currently approved plan; or
(ii) an alternative methodology, such as a cost estimation model,
that has been proposed by the Lead Agency and approved in advance by
the Assistant Secretary;
(3) How copayments based on a sliding fee scale, as stipulated at
Sec. 98.42, are affordable; and
(4) Any additional facts the Lead Agency considered in determining
that its payment rates ensure equal access, such as information on the
cost of providing quality child care.
(c) The Lead Agency shall take into account the quality of child
care when determining payment rates.
* * * * *
0
17. Amend Sec. 98.50 by revising paragraphs (a) and (b)(3) to read as
follows:
Sec. 98.50 Child care services.
(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 direct child care services to
low-income working families.
(b) * * *
(3) Using funding methods provided for in Sec. 98.30, which must
include some use of grants or contracts for the provision of direct
services, with the extent of such services determined by the Lead
Agency after consideration of supply shortages described in the Plan
pursuant to Sec. 98.16(i)(1) and other factors as determined by the
Lead Agency; and
* * * * *
0
18. Amend Sec. 98.51 by revising paragraphs (a) introductory text and
(a)(2) and adding paragraphs (d), (e), and (f) to read as follows:
Sec. 98.51 Activities to improve the quality of child care.
(a) No less than four percent of the aggregate funds expended by
the Lead Agency from each fiscal year's allotment, and including the
amounts expended in the State pursuant to Sec. 98.53(b), shall be
expended for quality activities.
* * * * *
(2) Activities to improve the quality of child care services may
include, but are not limited to, implementation of a systemic framework
for organizing, guiding, and measuring progress of quality improvement
activities which includes the following key components:
(i) Activities to ensure the health and safety of children through
licensing and health and safety standards pursuant to Sec. Sec. 98.40
and 98.41;
(ii) Establishment and implementation of age-appropriate learning
and development guidelines for children of all ages, including infants,
toddlers, and school-age children;
(iii) Implementation of systems of quality improvement to evaluate,
[[Page 29496]]
improve and communicate the level of quality of child care programs
that may contain the following elements:
(A) Establishment of program standards that define expectations for
quality and indicators of different levels of quality appropriate to
the provider setting;
(B) Provision of supports, training and technical assistance to
assist child care programs in meeting child care quality improvement
standards;
(C) Provision of financial incentives and monetary supports to
assist child care programs in meeting child care quality improvement
standards;
(D) Provision of quality assurance and monitoring to measure child
care program quality over time; and
(E) Implementation of strategies for outreach and consumer
education efforts to promote knowledge of child care quality
improvement standards to child care programs and to provide parents,
including parents receiving assistance under this part, with provider-
specific information about the quality of child care provider options
available to them, pursuant to Sec. 98.33(b).
(iv) Implementation of professional development systems to ensure a
well-qualified child care workforce that may contain the following
elements:
(A) Establishment of core knowledge and competencies to define what
the workforce should know (content) and be able to do (skills) in their
role working with children and their families.
(B) Establishment of career pathways to define options and a
sequence of qualifications and ongoing professional development
opportunities;
(C) Conducting professional development assessments to build
capacity of higher education systems and other training institutions to
meet the diverse needs of the child care workforce and address the full
range of development and needs of children;
(D) Provision of access to professional development to ensure
practitioners are made aware of, and receive supports and assistance to
utilize professional development opportunities; and
(E) Provision of rewards or financial supports to practitioners for
participating in and completing education or training and for increased
compensation;
(v) Implementation of an infrastructure of support to build child
care provider capacity to promote health through wellness, physical
activity and nutrition programs, to serve children with special needs,
dual language learners, and other vulnerable children (e.g., children
in the child welfare system and homeless children), to implement family
engagement strategies;
(vi) Assessment and evaluation of the effectiveness of quality
improvement activities; and
(vii) Any other activities consistent with the intent of this
section.
* * * * *
(d) Activities to improve the quality of child care services are
not restricted to activities affecting children meeting eligibility
requirements under Sec. 98.20 or to child care providers of services
for which assistance is provided under this part.
(e) Unless expressly authorized by law, targeted funds for quality
improvement and other activities that may be included in appropriations
law may not count towards meeting the four percent minimum requirement
in paragraph (a) of this section.
(f) The Lead Agency must include in the Plan a description of
performance goals associated with expenditure of funds on activities to
improve the quality of child care pursuant to the quality performance
report described at Sec. 98.16(v).
0
19. Amend Sec. 98.52 by adding paragraphs (d) and (e) to read as
follows:
Sec. 98.52 Administrative costs.
* * * * *
(d) The following activities do not count towards the five percent
limitation on administrative expenditures in paragraph (a) of this
section:
(1) Establishment and maintenance of computerized child care
information systems;
(2) Establishing and operating a certificate program;
(3) Eligibility determination;
(4) Preparation/participation in judicial hearings;
(5) Child care placement;
(6) Recruitment, licensing, inspection of child care providers;
(7) Training for Lead Agency or sub-recipient staff on billing and
claims processes associated with the subsidy program;
(8) Reviews and supervision of child care placements;
(9) Activities associated with payment rate setting;
(10) Resource and referral services; and
(11) Training for child care staff.
(e) 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 as described at Sec.
98.52(a) shall be counted towards the five percent limit.
0
20. Revise Sec. 98.54(b)(1) to read as follows:
Sec. 98.54 Restrictions on the use of funds.
* * * * *
(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. Improvements or upgrades to
a facility which are not specified under the definitions of
construction or major renovation at Sec. 98.2 may be considered minor
remodeling and are, therefore, allowable.
* * * * *
0
21. Amend Sec. 98.60 by revising paragraph (b)(1), redesignating
(d)(7) as paragraph (d)(8), and adding a new paragraph (d)(7), and
revising paragraph (h) to read as follows:
Sec. 98.60 Availability of funds.
* * * * *
(b) * * *
(1) May withhold up to one half of one percent of the CCDF funds
made available for a fiscal year for the provision of technical
assistance; and
* * * * *
(d) * * *
(7) In instances where third party agencies issue child care
certificates, the obligation of funds occurs upon entering into
agreement through a subgrant or contract with such agency, rather than
when the third party issues certificates to a family.
* * * * *
(h) Repayment of loans made to child care providers as part of
quality improvement activities pursuant to Sec. 98.51, may be made in
cash or in services provided in-kind. Payment provided in-kind shall be
based on fair market value. All loans shall be fully repaid.
* * * * *
0
22. In Sec. 98.61, add paragraph (f) to read as follows:
Sec. 98.61 Allotments from the Discretionary Fund.
* * * * *
(f) Lead Agencies shall expend any funds that may be set-aside for
targeted activities pursuant to annual appropriations law as directed
by the Secretary.
0
23. Amend Sec. 98.65 by revising paragraph (g) and adding paragraphs
(h) and (i) to read as follows:
[[Page 29497]]
Sec. 98.65 Audits and financial reporting.
* * * * *
(g) The Secretary shall require financial reports as necessary.
Lead Agencies shall submit financial reports to the Department in a
manner specified by the Secretary quarterly for each fiscal year until
funds are expended.
(h) At a minimum, a State or territorial Lead Agency's quarterly
report shall include the following information on expenditures under
CCDF grant funds, including Discretionary (which includes realloted
funding and any funds transferred from the TANF block grant),
Mandatory, and Matching funds (which includes redistributed funding);
and State Matching and Maintenance-of-Effort (MOE) funds:
(1) Child care administration;
(2) Quality activities excluding targeted funds;
(3) Targeted funds identified in appropriations law;
(4) Direct services;
(5) Non-direct services, including:
(i) Systems,
(ii) Certificate program cost/eligibility determination;
(iii) All other non-direct services; and
(6) Such other information as specified by the Secretary;
(i) Tribal Lead Agencies shall submit financial reports annually.
0
24. Add Sec. 98.68 to subpart G to read as follows:
Sec. 98.68 Program integrity.
(a) Lead Agencies are required to have effective internal controls
in place to ensure integrity and accountability in the CCDF program.
These shall include:
(1) Processes to ensure sound fiscal management;
(2) Processes to identify areas of risk; and
(3) Regular evaluation of internal control activities.
(b) Lead Agencies are required to have processes in place to
identify fraud or other program violations which may include, but are
not limited to the following:
(1) Record matching and database linkages;
(2) Review of attendance and billing records;
(3) Quality control or quality assurance reviews; and
(4) Staff training on monitoring and audit processes.
(c) Lead Agencies must have procedures in place for documenting and
verifying that children receiving assistance under this part meet
eligibility criteria at the time of eligibility determination.
(d) Lead Agencies are required to have processes in place to
investigate and recover fraudulent payments and to impose sanctions on
clients or providers in response to fraud.
0
25. Amend Sec. 98.71 by redesignating paragraph (a)(15) as paragraph
(a)(16) and adding a new paragraph (a)(15) to read as follows:
Sec. 98.71 Content of reports.
(a) * * *
(15) Indicator of the quality of the child care provider pursuant
to Sec. 98.33(b); and
* * * * *
0
26. Amend Sec. 98.81 by revising paragraph (b)(6) to read as follows:
Sec. 98.81 Application and Plan procedures.
* * * * *
(b) * * *
(6) The Plan is not subject to requirements in Sec. 98.16(g)(8),
(i)(1), or (i)(4).
0
27. Amend Sec. 98.83 by revising paragraphs (d), (f)(1), and (f)(2)
and removing paragraph (f)(3) to read as follows:
Sec. 98.83 Requirements for tribal programs.
* * * * *
(d) Tribal Lead Agencies shall not be subject to the requirements
at Sec. Sec. 98.33(a), limited to the Web site requirement, 98.44(a),
98.50(b)(3), 98.50(e), 98.52(a), 98.53, and 98.63.
* * * * *
(f) * * *
(1) The assurance at Sec. 98.15(a)(2); and
(2) The requirement for certificates at Sec. 98.30(a) and (d).
* * * * *
0
28. Amend Sec. 98.100 by revising the second sentence in paragraph (b)
to read as follows:
Sec. 98.100 Error Rate Report.
* * * * *
(b) * * * States, the District of Columbia and Puerto Rico must use
this report to calculate their error rates, which is defined as the
percentage of cases with an error (expressed as the total number of
cases with an error compared to the total number of cases); the
percentage of cases with an improper payment (expressed as the total
number of cases with an improper payment compared to the total number
of cases); the percentage of improper payments (expressed as the total
amount of improper payments in the sample compared to the total dollar
amount of payments made in the sample); and the average amount of
improper payment. * * *
* * * * *
0
29. Amend Sec. 98.102 by:
0
a. Removing paragraph (a)(5);
0
b. Redesignating paragraphs (a)(6) through (10) as (a)(5) through (9);
and
0
c. Adding paragraph (c).
The addition reads as follows:
Sec. 98.102 Content of Error Rate Reports
* * * * *
(c) Any Lead Agency with an improper payment rate that exceeds a
threshold established by the Secretary must submit to the Assistant
Secretary for approval a comprehensive corrective action plan, as well
as subsequent reports describing progress in implementing the plan.
(1) The corrective action plan must be submitted within 60 days of
the deadline for submitting the Lead Agency's standard error rate
report required by Sec. 98.102(b).
(2) The corrective action plan must include the following:
(i) Identification of a senior accountable official;
(ii) Milestones that clearly identify actions to be taken to reduce
improper payments and the individual responsible for completing each
action;
(iii) A timeline for completing each action within 1 year of the
Assistant Secretary's approval of the plan, and for reducing the
improper payment rate below the threshold established by the Secretary;
and
(iv) Targets for future improper payment rates.
(3) Subsequent progress reports must be submitted as requested by
the Assistant Secretary.
(4) Failure to carry out actions described in the approved
corrective action plan will be grounds for a penalty or sanction under
Sec. 98.92.
* * * * *
Sec. Sec. 98.16, 98.20, 98.30, 98.50, 98.51, 98.53, 98.81, and
98.102 [Amended]
0
30. In the table below, for each section indicated in the left column,
remove the cross-reference indicated in the middle column from wherever
it appears in the section, and add the cross-reference indicated in the
right column:
[[Page 29498]]
Redesignation Table
------------------------------------------------------------------------
Add, in its place,
Amended sections Remove cross- new cross-reference
reference citations citations
------------------------------------------------------------------------
Sec. 98.16(r), as Sec. 98.33(b)..... Sec. 98.33(d).
redesignated.
Sec. 98.20(a)(3)((ii)(B).. Sec. 98.16(f)(7).. Sec. 98.16(g)(7).
Sec. 98.20(c), as Sec. 98.16(g)(5).. Sec. 98.16(i)(5).
redesignated.
Sec. 98.30(e)(1)(iii), as Sec. 98.16(g)(2).. Sec. 98.16(i)(2).
redesignated.
Sec. 98.50(f)............. Sec. 98.16(g)(4).. Sec. 98.16(i)(4).
Sec. 98.51(b)............. Sec. 98.16(h)..... Sec. 98.16(j).
Sec. 98.53(f)............. Sec. 98.16(c)(2).. Sec. 98.16(d)(2).
Sec. 98.53(h)(2).......... Sec. 98.16(q)..... Sec. 98.16(s).
Sec. 98.81(b)(5).......... Sec. 98.16(g)(2).. Sec. 98.16(i)(2).
Sec. 98.81(b)(5).......... Sec. 98.16(k)..... Sec. 98.16(m).
Sec. 98.102(b)(2)......... Sec. 98.102(a)(1) Sec. 98.102(a)(1)
through (5). through 4.
------------------------------------------------------------------------
(Catalog of Federal Domestic Assistance Program Number 93.575, Child
Care and Development Block Grant; 93.596, Child Care Mandatory and
Matching Funds)
Dated: January 12, 2012.
George H. Sheldon,
Acting Assistant Secretary for Children and Families.
Approved: January 19, 2012.
Kathleen Sebelius,
Secretary.
Note: This document was received by the Office of the Federal
Register on May 13, 2013.
[FR Doc. 2013-11673 Filed 5-16-13; 11:15 am]
BILLING CODE 4184-01-P