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Budget and Caseload Update Policy and Fiscal Committee November 1, 2010

Budget and Caseload Update Policy and Fiscal Committee November 1, 2010. Table of Contents . CCDF Award letter FY10 Supplemental Budget FY11 Caseload Overview FY11 Projected Deficiencies ARRA Spending. CCDF Award Background.

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Budget and Caseload Update Policy and Fiscal Committee November 1, 2010

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  1. Budget and Caseload Update Policy and Fiscal CommitteeNovember 1, 2010

  2. Table of Contents • CCDF Award letter • FY10 Supplemental Budget • FY11 Caseload Overview • FY11 Projected Deficiencies • ARRA Spending

  3. CCDF Award Background • CCDF Award letter is sent to EEC from the Administration for Children and Families (ACF) detailing the amount of federal funds that will be available to the Commonwealth. • CCDF funds are divided into three streams of funding: mandatory, matching, and discretionary. • Each year EEC typically receives $44.9M in mandatory, $31.7M in matching, and $25.2M in discretionary funding. • With a budget of over $500M, EEC has little difficulty in finding expenditures to draw down these federal funds and the $91M we receive from the TANF block grant (which takes the color of CCDF discretionary) and $200M in early education expenditures used by DTA to draw down the TANF block grant. • After all is said and done, slightly more than 92% of EEC’s budget is matched to federal funding.

  4. FFY 2011 CCDF Award Letter • Though the amounts are preliminary and subject to Congressional approval, EEC may see a sizable increase in the discretionary and matching FFY2011 award amounts. • Discretionary funds, which are typically awarded at $25.2M, may increase to $34M. • Matching funds, which are typically awarded at $31.7M, may increase to $45M. This requires the Commonwealth to expend $15M in additional state funds to receive the additional $15M in federal funds. • Both discretionary and matching funds have obligation and liquidation deadlines: • Discretionary: We have one year after the award to obligate the funds and the following year to liquidate them. For example: EEC receives the Federal Fiscal Year 2011 award and has until September 30, 2012 to obligate the award and September 30, 2013 to liquidate the grant award. • Matching: We have until the end of the award year to obligate the funds and the following year to liquidate them. For example: EEC receives the Federal Fiscal Year 2011 award and has until September 30, 2011 to obligate the award and September 30, 2012 to liquidate the grant award.

  5. FFY 2011 CCDF Award Letter • Overall, EEC would have $24M in additional federal funds (assuming the legislature invests the full $15M in state matching funds) in FY2012. • Option 1 (Ideal): The legislature appropriates the full $39M ($24M federal portion and the $15M state match). This would allow EEC to keep access open for children and invest more money in area of quality; • Option 2: The legislature appropriates only some of the $39M. This would mean that it takes months longer for EEC to liquidate the matching and discretionary awards. Typically, EEC liquidates the previous federal fiscal year CCDF grant when December expenditures are drawn. • Option 3: The Legislature does not appropriate any more funds and reduces EEC’s FY12 budget from FY11 levels. This would waste an opportunity to provide quality child care services for the Commonwealth at little or no cost to the state. Also, EEC would have to reduce the amount of child care service expenditures cited by DTA in their efforts to liquidate the TANF block grant. This ultimately may reduce the amount of federal funds that the state receives if DTA can not find enough qualified expenditures to draw the TANF block grant.

  6. FY10 Budget Update • The legislature passed, and the Governor signed into law, Chapter 359 of the Acts of 2010. • This is the final FY2010 supplemental budget. • The $5M PAC for the Income Eligible account is included. • Officially, EEC reverted only $3.6M of the $510M FY10 appropriation, which is .71%.

  7. FY11 Caseload Overview • The Income Eligible account has received a $5M PAC (Chapter 359 of the Acts of 2010). This will enable EEC to maintain care for roughly 770 children in FY11. • Current projections do not indicate a collective deficiency in the caseload accounts. If this changes, however, and a deficiency becomes evident, EEC will have to act to mitigate the deficiency. • Based on the economic climate ANF has warned agencies that there will be limited resources to address deficiencies through a supplemental budget in FY11. • Agencies, therefore, must take actions to prevent deficiencies in their accounts. This may mean that EEC is expected to address any deficiency in the DTA account by transferring funds (under the 3% allowable language) from the Income Eligible account.

  8. Fiscal Year 2011 Supportive Care (3000-3050)

  9. Fiscal Year 2010 DTA Related (3000-4050) Previous month projected a $3.7M deficiency.

  10. Fiscal Year 2010 Income Eligible (3000-4060) PAC was adopted by the legislature, which increased the appropriation from $228.5 million to $233.5 million.

  11. Income Eligible – Voucher Caseload

  12. FY11 Caseload: Waitlist * As of October 28, 2010

  13. ARRA Spending Update

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