To: Executive Directors, Child Care and Development Programs
All original contracts and any remaining contract amendment(s), with the exception of CalWORKs Stage 2 and Stage 3 amendments, for FY 2011–12 must be signed and returned to the Contracts Office by June 30, 2012, in order to be valid. Child Development Fiscal Services (CDFS) cannot make payments for amendments that have not been signed and returned.
Year-end attendance and fiscal reports are due in the CDFS office by July 20, 2012. Postmarks do not qualify as receipt dates. A delinquent report results in withholding any remaining apportionments due for FY 2011–12. Additionally, apportionments for FY 2012–13, beyond the initial payment, will be withheld until the agency has complied with this contract requirement.
Support contracts such as Child Care Initiative, Repair and Renovation, or Local Planning Council contracts also require a year-end fiscal report (form CDFS 9529) by the July 20, 2012 deadline if the contract period ends June 30, 2012 (refer to the face sheet of your contract(s) for the contract end date). If the contract is for multiple years, please ensure that expenditures made in prior years are included on the Expenditures Incurred in Prior Years line of this report.
The Reserve Account Activity Report for FY 2011–12, which is due by July 20, 2012, requires support documentation in the form of a copy of the contractor’s general ledger report page(s) that reflects the cash balances maintained in the Child Development Reserve Account. Please ensure the beginning balance for FY 2011–12 reported on the Reserve Account Activity Report matches the prior year’s ending balance per the FY 2010–11 Reserve Account Status Report supplied by CDFS. Additionally, expenditures from the Reserve Account must match income reported on appropriate service contract reports. Incorrect or missing Reserve Account Activity Reports, as well as missing support documentation, will constitute a delinquent report, resulting in the withholding of advance apportionments for the next fiscal year as well as any payments due for the current year. Please contact your fiscal analyst if you have any questions. Form CDFS 9530-A is available online at http://www.cde.ca.gov/fg/aa/cd/cdfsforms11.asp.
Alternative Payment (AP) and CalWORKs contractors should note that while the Reserve Account Activity Report is available online, it cannot be filed online but must be mailed to and received by CDFS by July 20, 2012. If you have any questions, please contact your fiscal analyst.
Year-end reports must be received by the deadline of July 20, 2012, to avoid being delinquent; however, revisions to year-end reports may be submitted later under limited circumstances. Please refer to the Child Development Attendance and Fiscal Reporting and Reimbursement Procedures handbook (referred to as the Greenbook) regarding the due dates for revised reports for various programs. The Greenbook is available online at http://www.cde.ca.gov/fg/aa/cd/.
Assembly Bill 1610 (Chapter 724, Statutes of 2010) amended Education Code, Section 8450, to re-instate a five percent cap on Child Development center-based reserve accounts. The five percent cap is calculated as five percent of the total contract maximum reimbursable amounts (MRAs) contributing to the center-based reserve account. Transfers to reserve accounts at year-end will only be allowable up to the five percent cap. Upon close-out of FY 2011–12, center-based contractors with a reserve will be billed for any funds in excess of the five percent cap.
Senate Bill 70 (Chapter 7, Statutes of 2011), as amended by Assembly Bill 114 (Chapter 43, Statutes of 2011), added Education Code (EC) Section 8263.2 requiring that expenditures for the CalWORKs Stage 3 program do not exceed the amounts appropriated. Upon close-out of FY 2011–12 contracts, CalWORKs Stage 3 contractors must ensure that expenditures do not exceed their MRA.
Agencies will be invoiced for any over-advanced CalWORKs contract funds, based on their June year-end report. This invoice will be sent to the agency pre-audit in order to facilitate the disencumbrance of unearned CalWORKs contract funds prior to receipt of the audit. Agencies that need to revise their June reports may do so by September 30, 2012. An invoice that becomes ninety days delinquent will result in a withholding of all future apportionments.
Pursuant to EC section 8222.1, CDE shall reallocate funds as necessary to reimburse AP programs (excluding CalWORKs) for actual and allowable costs incurred for additional services. An AP contractor may apply for reimbursement of up to three percent of their contract amount, or for a greater amount subject to the discretion of the Department, based on availability of funds. Applications may be submitted as early as May 1, but no later than September 30, 2012. The CDE will approve or deny applications submitted pursuant to the above EC section, and will not consider applications received after September 30 of the current calendar year for additional costs incurred during the FY 2011–12.The CDE will distribute reimbursement funds for each approved application within 90 days of the receipt of this application, if it was filed between May 1 and July 20 of the current calendar year. Applications received after July 20, 2012, are not subject to the 90 day requirement for distribution of funds. If requests for reimbursement pursuant to this section exceed available funds, the CDE will assign priority for reimbursement according to the order in which it receives the applications. Funds received by an AP contractor pursuant to this section that are not substantiated by the program’s annual audit or a year-end report must be returned to the CDE. Billings for contingency funds are not subject to the appeal process.
Visit the Web site for CDE’s Audits and Investigations Division (A&I) at http://www.cde.ca.gov/fg/au/pm/ and view links to the new Audited Attendance and Fiscal Reports (AUD forms) and Instructions for FY 2011–12. Audits submitted with obsolete AUD forms may be rejected.
The AUD forms for FY 2010–11 will remain on the A&I Web site for an additional year.
The following audit requirements of the CDE Audit Guide, referenced by section number, are important to discuss with your certified public accountant and your affected staff:
Following are examples of costs disallowed in audits of CDE child development programs. When costs are disallowed by CPAs or the A&I, the CDE will not reimburse those costs. Each example is followed by a bracketed citation to identify the applicable requirement in the contract Funding Terms and Conditions (FT&C). Reference the FT&C for the Child Development programs at http://www.cde.ca.gov/fg/aa/cd/index.asp.
For additional information, contact the CDE Audits & Investigations Division at 916-322-2288.
Please be aware that some analyst caseload assignments have changed. Most agencies will continue to report to the same CDFS analyst. Please refer to http://www.cde.ca.gov/fg/aa/cd/ for your fiscal analyst.
Contractors are requested to always use the most current CDFS report forms. Report forms are located at http://www.cde.ca.gov/fg/aa/cd/.
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.
Original signed by Phyllis SavagePhyllis A. Savage, Staff Services Manager III