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What States Need to Know About Child Care Stabilization Grants

Like so many segments of the economy, the child care industry has been dramatically affected by the COVID-19 pandemic. The American Rescue Plan appropriated funding to this critical field through three funding streams, federally funded by the U.S. Department of Health and Human Services, Administration for Children and Families (ACF), Office of Child Care: 

  • Nearly $24 billion for child care stabilization grants, available until September 30, 2023. 
  • Nearly $15 billion for CCDF Supplemental Discretionary Funds, available until September 30, 2024. 
  • $3.55 billion in Mandatory and Matching funding for CCDF, a permanent annual appropriation. 

Given the widespread effects of the pandemic in this industry, it’s clear that this money is sorely needed to stabilize and nurture child care businesses that might otherwise cease to exist. As the ACF Information Memorandum Overview of the Need puts it: 

“There is no doubt that childcare providers are critical to the recovery and continued wellbeing of families and the economy, and that, without immediate financial relief, childcare providers will continue to close and accumulate debt, further reducing the already limited supply of childcare. This outcome would be catastrophic for families, businesses, and our economy.” 

Now that the federal government has made the funds available, the next action belongs to the states. And while the funds are theoretically available years from now, important deadlines are already pending. The first key deadline for states to communicate with ACF about their child care stabilization grant plans is only weeks away. 

By December 11, 2021, states must notify ACF of their initial plans: “A state, territory, or tribe must notify ACF if it is unable to obligate 50 percent of the CCDF stabilization funds it received under the ARP Act by December 11, 2021. Lead agencies still have until September 30, 2022, to obligate their funds, but OCC strongly encourages lead agencies to obligate at least half of funds by December 11, 2021.” 

Many states have already submitted their plans, while others have yet to do so. States in both categories may also be in the process of determining how they will establish and enforce eligibility requirements for their grant program to child care providers—as well as how they will disburse the funds and audit their use, both required by the federal government program around funds use. 

Child care providers can put their funds to a variety of uses: 

  • Personnel costs, employee benefits, premium pay, costs for recruitment and retention 
  • Rent, mortgage obligation, utilities, insurance and facility maintenance or improvements 
  • PPE, sanitization supplies and professional development related to health and safety 
  • Updates to equipment to respond to COVID-19 
  • Goods and services necessary to maintain or resume services 
  • Mental health supports for children and employees 

States in need of assistance with the complex process of administering this program have a potential trusted partner in Conduent. Our Child Care Stabilization Grant Processing solution is modular, allowing states to choose the level of assistance needed and wanted, nesting our solution neatly into what the state is handling internally or contracting to other providers. 

For example, a state might work with Conduent to provide one or more of the following: 

  • Website 
  • Service Delivery 
  • Dashboard 

An example of what a website might look like is shown below. 

Conduent is already performing payment distribution for child care stabilization funds in three states, providing valuable insight into the particular business rules around this work and reducing risk for those who choose to work with Conduent in this area. 

Also, the additional CCDF funds made available in the American Rescue Plan is expected to increase the number of scholarship applications to be processed by states. If current staff workload makes it hard for your state to take on this additional volume, Conduent can help. 

Every state’s needs, characteristics and environments are different. Reach out to us to discuss how we can help your program navigate the initial and ongoing administration of these much-needed funds for child care providers. Click here to email me and start the conversation.