ACF Receives Early Alert Memorandum Report from Office of Inspector General

On July 11, 2013, Stuart Wright, Deputy Inspector General for Evaluation and Inspections sent an early alert memorandum to George Sheldon, Acting Secretary, Administration for Children and Families (ACF), outlining results of data collection for an evaluation entitled, “Child Care and Development Fund:  Monitoring of Licensed Child Care Providers.”  The evaluation, scheduled to be released in the fall of 2013, solicited information from states and the results were alarming to the Office of the Inspector General (OIG). On May 20, 2013 ACF issues a Notice of Proposed Rulemaking (NPRM) that included regulations to strengthen health and safety requirements for and oversight of Child Care and Development Fund (CCDF) providers. The data identified that a number of states 1) exempt CCDF subsidy-receiving providers from licensing requirements, (2) did not require certain health and safety requirements for license-exempt providers, and (3) have no monitoring in place for license-exempt providers.  The early alert memorandum was to give ACF the information to bring state into compliance with existing federal regulations.

The license-exempt providers include day care providers that are:  religious programs, public schools, on federal property, temporary/short duration or parents located on the premises.  However, these providers are receiving CCDF money and required by statute, health, and safety standards regardless of licensing status. While states have great flexibility in how the state’s child care program funded under CCDF runs, certain federal regulations must be maintained if the program is going to fund child care slots with federal funds.

The variance of how states treat license-exempt providers is very broad. However, providers are still required to adhere to federal health and safety requirements in order to receive CCDF payments.   With regulations forthcoming that will make health and safety requirements more stringent, tightening up of current practices is a critical issue.  Many of the health and safety issues go unnoticed by states due to the lack of monitoring and oversight of child care providers, particularly family-based providers.  States allow many license-exempt providers to self-report compliance with issues such as background checks and various health and safety concerns. 

The OIG recommends that ACF assure that states have federal health and safety requirements in place for license-exempt providers and that states ensure compliance with these requirements before they authorize CCDF vouchers.   For additional information, see .