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Child Care and Development Contract Changes

Letter Head: Tom Torlakson, State Superintendent of Public Instruction, California Department of Education

August 17, 2012

Dear Executive Directors, Child Care and Development Programs:


The purpose of this letter is to inform contractors of changes to Child Care and Development contracts and reporting procedures beginning July 1, 2012. Please share this letter with your agency staff.


California State Preschool Program (CSPP) contracts underwent several changes between Fiscal Year (FY) 2011–12 and FY 2012–13. Original FY 2012–13 contract terms were based on the funding levels proposed in the Governor’s May Revise and were amended to reflect the final appropriation enacted in the 2012 Budget Act.

In addition, changes were made to the funding composition for those CSPP contracts with Preschool Family Literacy Program Cost Accounts (PCAs) 24818 and 24905. These two PCAs no longer exist in CSPP contracts, as the funding for these PCAs have been collapsed into the part-day Preschool PCA 23038 and/or the General Child Care PCA 23254. However, Preschool Family Literacy Support (CPKS) contracts continue to be funded at $2,500 per classroom.

Lastly, a fund shift was performed between part-day Preschool and General Child Care funding within CSPP contracts. This shift was performed pursuant to the final Budget Act and affected the ratio of PCA 23038 and 23254 funds within some CSPP contracts. This shift did not have any effect on total contract MRA.

Additional CSPP/CCTR Transfer Period

In response to these changes, contractors will be provided with an additional period during FY 2012–13 to request a transfer of funds between their CSPP and General Child Care (CCTR) contracts. This period will be September 1–15, 2012. The opportunities to request a transfer of funds during the January period (January 1–15, 2013) and May period (May 1–15, 2013) will remain.

Contractors will follow the procedures used during FY 2011–12 and submit requests for any of the three transfer periods to their Child Development Division (CDD) Field Services Consultant. As with CSPP/CCTR transfers in previous years, part-day Preschool funds (PCA 23038) cannot be transferred into a CCTR contract, so contractors must be aware of the funding structure in their agreements prior to submitting a transfer request. CDD may also require a Program Narrative Change form. The Program Narrative Change form should describe any changes to the number of sites operated by the contractor, any changes to the age groupings of children served by the contractor, and/or any significant changes in the provision of full-day versus part-day services.

CDFS has created four standardized letters that agencies can use for their transfer requests. These letters can be found on the CDE Web site at for the following transfer periods.

September 1–15, 2012

There is one letter for this period: to request a transfer of funds for the current year only. This is a new transfer period added for FY 2012–13 in response to the number of changes impacting current year contracts.

January 1–15, 2013

There are two letters for this period: one for requesting a transfer for the current year and one for requesting a transfer for the following 2013–14 year. These letters are distinguishable by both the title of the letter and the subject within the letter. Please note this is the only opportunity to request a transfer of funds for the following 2013–14 year.

May 1–15, 2013

There is one letter for this period: to request a transfer of funds for the current year only. CDFS will not accept any requests to transfer funds for the following 2013–14 year during this period.

For further information or instructions on completing these letters, please see the instructions document located in the same section as the transfer letter or contact your assigned fiscal analyst.

The Program Narrative Change form (CD-3704A) can be found on the CDE Web site at For further information or instructions on completing this form, please contact your CDD Field Services Consultant.

Family Fees for Part-Day CSPP

Prior to the passage of Chapter 38, Statutes of 2012 (Senate Bill 1016), families receiving part-day services in a CSPP were exempt from family fees pursuant to California Education Code (EC), sections 8235(g) and 8263(h)(1). Senate Bill 1016 added EC, Section 8239(e) and amended EC, sections 8263(g) and (h) requiring agencies to assess family fees for families receiving part-day CSPP services. Effective July 1, 2012, families enrolled in a part-day CSPP program will be subject to a family fee based on the most current family fee schedule (please refer to Management Bulletin 12-06 for additional information).

Agencies must report fees for both certified and noncertified children in the revenue section on page three of form CDFS 8501. Family fees for certified children should be reported as Restricted Income on the line “Family Fees for Certified Children” and fees for noncertified children should be reported as Unrestricted Income on the line “Fees for Noncertified Children”.


Beginning in FY 2012–13, contractors will be required to report all revenue and expenses for Facilities Renovation and Repair Projects (CRPM) contracts, including revenue and expenses from nonsubsidized enrollment portions of the project (CCR, Title 5 Section 18068).

Contractors receiving CRPM funding are required to comply with the funding calculations described in the Facilities Renovation and Repair (FRR) Application, including the proration of costs for subsidized and nonsubsidized enrollment. The proration of costs is determined by the percentages of subsidized and nonsubsidized enrollment provided by the contractor on Form 5 of the FRR Application and subsequently approved by the Child Development Division.

A new form, CDFS 9529 CRPM, has been created to include a line item to report revenue for the nonsubsidized enrollment portion of the project. This is located in Section I – Revenue, under Restricted Income titled, “Prorated Portion for Nonsubsidized Enrollment.” Contractors will be required to use the new form beginning in FY 2012–13, for CRPM contracts originally awarded in FY 2010–11.

When reviewing CRPM0 reports, Child Development Fiscal Services (CDFS) will also review the approved Form 5s to ensure contractors are reporting revenue for the cost of the project that is commensurate with the percentage of nonsubsidized enrollment. The CDE will bill contractors for any unauthorized expenditures or expenditures that do not comply with the cost proration calculations. For additional reporting information see the FY 2012–13 California Department of Education Attendance and Fiscal Reporting and Reimbursement Procedures for Child Development Contracts (the Greenbook). The 2012–13 Greenbook will be posted in the near future and can be found on the CDE Web site at


Senate Bill 70 (Chapter 7, Statutes of 2011), as amended by Assembly Bill 114 (Chapter 43, Statutes of 2011), added EC Section 8263.2 requiring that expenditures for the CalWORKs Stage 3 program do not exceed the amount appropriated in the Budget Act. Stage 3 contractors are requested to contact the CDE when it appears that funding is not sufficient, however, an augmentation is not guaranteed. It is the responsibility of the contractor to ensure that expenditures do not exceed the contracted MRA.


EC Section 8275.5 allows for a voluntary and temporary transfer of funds between over-earning contractors and under-earning contractors with like contract types (i.e. CCTR to CCTR) in order to fully utilize child care and development funding. Contractors will self-identify as an over or under-earner and submit a transfer request that includes an amount of contract funding they expect to be able to temporarily release or accept. Local Planning Council (LPC) designees or an LPC subcommittee group is charged with facilitating the transfer of funds between contractors and submitting requests to the CDE.

The first opportunity to request a voluntary/temporary transfer of funds will be between November 1 and November 15, 2012; the final opportunity will be between May 1 and May 15, 2013. For more information on voluntary/temporary transfers of funds, please visit the CDE Web site at or the 2012–13 Greenbook section titled, “Voluntary/Temporary Transfer of Funds.”


Please be aware that some analyst caseload assignments have changed. Most agencies will continue to report to the same CDFS analyst. Please refer to the CDE Web site at for your fiscal analyst.


Contractors are requested to always use the most current CDFS report forms. Effective immediately, please recycle any report forms that you may have made copies of, and use only the forms located on the CDE Web site at

If you have any questions about a specific contract or need clarification about any topic covered in this letter, please contact your assigned CDFS analyst.


Phyllis A. Savage, Staff Services Manager III
Child Development and Nutrition Fiscal Services
Fiscal and Administrative Services Division


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