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DSS DIRECTOR’S CHILD CARE MEETING
Bill Scarlett opened the meeting with a moment of silence. The minutes of the April 9 th meeting were approved with the following clarifications.
Page 2 – last sentence – The information may have been reported but it was misinformation. The Division was not asked by Fiscal Research Staff to submit a spreadsheet indicating how the funding would be allocated based on 25% of state median income.
Page 3 – 3 rd bullet – change cost of care to subsidy payment
Cindy Wheeler and John Pruette from the More at Four Office handed out a More at Four Pre-Kindergarten Program Fact Sheet. They also gave an overview of the program and provided the following website address. For more information, go to Web page www.governor.state.nc.us and look for rectangular link or call at 715-0040 or email at john.pruette@ncmail.net or Carolyn.cobb@ncmail.net
Committee members and attendees asked the following questions about the Program.
Question: What paperwork is required to ensure that the staff in a More at Four Program meet the required staff qualifications?
Response: More at Four providers contract with the local entity that is the grant administrator in that community. The local entity is responsible for the monitoring of staff qualifications on an ongoing basis. More at Four plans to put a tool in place to help document staff credentials. (Note: When the local More at Four Plan is submitted to the state office for review/approval/funding, a review of plan includes site selections (star license status), staff qualifications (including plans to obtain the B-K license and other required credentials), curriculum choice, and class size/ratio. Once the Plan is approved the local contract administrator is responsible for monitoring the each (subcontractor) local site, classroom, and staff progress towards appropriate education licenses and credentials.)
Question: There was concern expressed regarding children being taken out of regular 4 & 5 star classrooms to go into More at Four classrooms due the incentive to parents of not having a parent fee and providers looking for additional funding resources.
Response: The More at Four representatives stressed that unserved eligible children (meet age requirement and at-risk criteria) are first priority and next should be underserved eligible children in 1-3 star classrooms.
That led to discussion of moving current 3 year olds who meet More at Four eligibility criteria (age requirement and at-risk criteria) into More at Four Classrooms the following year instead of terminating services for the eligible 3-year-olds (moving up into the four-year-old classroom). More at Four staff stated that in centers with children under the age of four, up to 50% of the More at Four Pre-K spaces in the More at Four classroom can be used to serve eligible children moving up to the four-year-old classroom. The remaining 50% of slots in that classroom must be reserved for unserved eligible children.
There was a lengthy discussion of providers receiving subsidy funds from DSS in addition to the More at Four payment. Nancy Guy stressed the point that DSS’s are not charged with making determinations about whether a provider is receiving sufficient funding to support a More at Four classroom. She stated that the decisions about funding of More at Four classrooms usually occur at the local level with the provider talking with the More at Four contractor and/or the Smart Start partnership about available funding sources. If the provider has determined that subsidy funds are needed to support the provision of services to children in a More at Four Program, county staff should not request the provider to submit a budget or documentation that the funds are needed as that process should have already occurred at another level. County staff are asked to process the request for subsidy services based on the DCD policies issued and funding availability. Cindy Wheeler stated that in the Subsidy Program the money follows the child while in the More at Four Program, the money stays in the classroom (More at Four funds slots). There was a comment expressing concern about the More at Four Program being dependent on Smart Start and subsidy funding at a time when both funds are subject to reductions.
Expenditure Report – Rob Kindsvatter
Non Smart Start spending coefficient is 95%.
Smart Start spending coefficient is 101%.
The combined coefficient is 96%.
In April, the number of children served increased by 3,057 over the previous month.
Division Report – Nancy Guy
Nancy Guy gave out a handout entitled Legislative Update Regarding Subsidy Issues (see attached). She reviewed several points related to the legislative proposals which could result in the loss of state subsidy funds, a change in the income eligibility guidelines for the Subsidy Program which could mean the loss of services for 8,800 children and the approval of a new subsidy allocation formula. Also, as mandated by legislature, the income guidelines will increase again for October 1, 2003.
She also passed out a handout entitled Proposed Guidelines for Subsidy Reversions and Reallocation for the 2003-2004 State Fiscal Year (see attached). Nancy reviewed the guidelines and Rob Kindsvatter explained the analysis that was done to arrive at the proposed spending coefficients, which would be used to determine if a county qualified for a reallocation. Denise Hill asked how many large counties were in the research that the analysis was drawn. Rob stated that he knew Mecklenburg County was one of the counties included in the analysis. It was pointed out that all subsidy funds allocated to a county DSS were included when looking at a combined spending coefficient. This means that funds that the county must spend as Smart Start bonuses, incentives, etc are included when calculating the combined coefficient. Staff from Mecklenburg and Guilford County asked if the expenditures for bonuses and enhancements could be separated out from regular subsidy expenditures and Division staff agreed to look into it. The committee chair asked that committee members and attendees take the proposal back to their office and share with other staff for review , then bring comments back to the next committee meeting. Nancy reported that the Division would also be sharing the proposal with the Fiscal Committee at their afternoon meeting. Nancy would like to have all remaining comments in the next few weeks so as to be able to move forward with including the final guidelines in the letters that are sent to counties with their initial allocation amount. Nancy explained that the Division’s goal in developing these guidelines was to encourage the management of subsidy funds in such a way as to avoid high levels of overspending when there is no guarantee of receiving a reallocation which can then result in the termination of services to families.
A question was asked about how the allocation of federal carry forward funds would be impacted by the guidelines. Nancy explained that the intent was not to use the carry forward funds as part of the funding available for reallocations as described in the proposed guidelines but to use it to adjust initial allocations for SFY 03-04 based on the need for more funding when comparing a county’s allocation for 03-04 to their current spending level. Nancy reported that so far about 12 counties have requested over $18 million in additional funds, which is more than the anticipated carry forward funds. She also explained that in light of the fact that it appears a new subsidy allocation formula will be passed for SFY 2003-2004 the Division was planning to issue new allocation estimates to counties. Once those estimates have been determined, DCD staff will compare the estimates to the county’s end of year (SFY 02-03) spending level to determine the amount of federal carry forward funding needed to prevent the termination of services to families. Bill Scarlett stated that DCD previously indicated that the new formula would not be implemented until the reallocation process for State Fiscal Year 2003-2004 or the initial allocation for State Fiscal Year 2004-2005. Nancy Guy and other committee members thought that it was the intention of the Subsidy Allocation Committee that the new formula would be implemented when approved. She further explained that in recent years the budget was not approved until late in the year after initial annual allocation amounts had already been issued to counties. The Allocation Advisory Committee recognized that this might occur but wanted the new formula to be used to distribute funds that became available once it was approved. Nancy further explained that since we know prior to issuing initial allocations that it is likely that we will have a new formula, the Division plans to use the proposed formula to prepare revised allocation estimates for counties. She stated that after the subsidy payments for May services are processed in June, the Division will determine allocation estimates based on the proposed allocation formula and will adjust for the differences in the Senate and House budgets as described below:
• The number of children in a county whose families earn up to 75% of median income or less
• The number of children in a county whose families earn up to 200% of Federal Poverty Level Income or less
Once these estimates are prepared for each county, the Division will then plug in final subsidy expenditures for the 02-03 year. Priority will still be given to counties that have differences in the allocation estimates and current spending. Within a few weeks counties should have a new funding allocation estimate to replace the one sent in February. Nancy reminded everyone that the 20 th is the close out date.
Fran Thigpen asked about the status of the market rate survey. Rob Kindsvatter reported that the collection of survey data had been completed and that the analysis phase was beginning. The first results of the initial analysis should be available within a few weeks. Rob reported that there was a high response rate with over a 90% response in most counties and at least a 75% response in all.
Nancy Guy indicated that a new committee has been formed by the Division called the DCD Subsidy Advisory Committee. The new committee includes child care providers, representatives of Smart Start partnerships, child care resource and referral staff, advocates and a representative of the Director’s Association. Nancy referenced a list of issues identified by the Committee on the board that were identified during their first meeting on June 10 th . She will bring any issues that impact subsidy policies to this committee for discussion.
The committee then adjourned.
Legislative Update Regarding Subsidy Issues
Proposed Guidelines for Subsidy Reversions and Reallocations for FY 2003-04
