Early Learning and Care Division
Subject: Reporting Restricted and Unrestricted Income for Child Development Contractors
Number: 08-08 Amended
Date: May 2009
Expires: Until Rescinded
Authority: California Code of Regulations, Title 5, sections 18068(a)(4) and (a)(5)
Attention: Executive Directors and Program Directors of Child Care and Development Programs
Purpose
The purpose of this Management Bulletin is to notify the California Department of Education (CDE), Early Learning and Care Division (ELCD) contractors of amended guidelines for reporting fiscal activity.
Background
Over three years ago, the CDE began a collaborative effort to clarify reporting requirements for local agencies that were providing full-day, full-year preschool services by braiding more than one funding source. The CDE worked with Head Start Region IX staff, First 5 State Commission staff, and various representatives of local CDE/ELCD contractors on this effort. Subsequently, the CDE released a draft matrix of program requirements for each of these funding sources as well as a draft document instructing CDE/ELCD contractors on the rules for fiscal reporting.
CDE staff became aware that the current fiscal reporting requirements for restricted and unrestricted income and related expenditures might cause confusion when agencies were administering multiple funding sources. The CDE received substantial input from the field, and worked closely with the California Child Development Administrators Association to determine if it would be necessary to revise the way that restricted and unrestricted supplemental revenue and related expenditures were reported. The CDE determined that such a revision would be beneficial to ensure that CDE/ELCD contractors would not be penalized due to errors in reporting this type of income.
Definitions
Restricted and unrestricted supplemental revenue includes:
- Head Start funds
- First 5 enhancement funds
- Other enhancement funds
- Donations from individuals
- Foundation grants
- Corporate grants
- Other funds intended to pay for projects or benefits beyond the basic child development services for certified and non-certified children
The following income items are not considered either restricted or unrestricted supplemental revenue:
- CDE apportionment funds
- Reimbursement through Child Nutrition Program(s)
- County Maintenance of Effort (if applicable)
- Other revenue such as field trip fees, etc.
- Transfers from an agency’s Reserve Fund
- Family fees collected for certified children
- Interest earned on CDE contract funds
- Family fees or other funds used for non-certified children
Regulatory Requirement
On April 17, 2007, California Code of Regulations, Title 5, sections 18068 (a)(4) and (a)(5) were amended to clarify how restricted and unrestricted income are reported. Below is the amended language:
Section 18068 - Attendance and Expenditure Reports
- Contractors shall submit reports containing the following information for each contract to the CDE at intervals specified in the annual child development contract:
- Amount and sources of all revenues other than advanced contract funds for the current reporting period and the year to date; restricted and unrestricted income shall be reported as follows:
- Restricted income expended during the contract period shall be reported as “restricted”; restricted income that is not expended during the contract period remains restricted and shall be considered “deferred revenue.”
- All unrestricted income shall be reported as “unrestricted.”
- Total expenditures related to the program operation for the current reporting period and the year to date, including all expenses for specific purposes as designated by restricted income and all non-reimbursable expenses.
- Amount and sources of all revenues other than advanced contract funds for the current reporting period and the year to date; restricted and unrestricted income shall be reported as follows:
Implementation
Child Development Fiscal Services (CDFS) has revised the CDFS attendance and fiscal report forms for the fiscal year (FY) 2008-09 by the addition of a second page to the fiscal section of the reports. Agencies are required to use the new page to report restricted and unrestricted supplemental revenue that is spent on reimbursable and non-reimbursable costs to enhance the program beyond the basic child development services for both certified and non-certified children. All restricted and unrestricted supplemental revenue is to be reported on the fiscal report in the fiscal year the funds are used. Please refer to the CDFS 9500 report with instructions (pages 3-4) which will be posted on the CDE Reporting Forms Web site at http://www.cde.ca.gov/fg/aa/cd/. All CDFS reports will be revised and made available on the CDFS Web site for agencies reporting during the FY 2008-09.
Revenue and expenses reported on this second page to the fiscal section are for informational purposes and will not enter into calculations of agency reimbursable earnings.
Training and Technical Assistance
In order to assist CDE/ELCD contractors, CDFS provided training prior to the start of the FY 2008-09. For technical assistance during the year, agencies should contact their fiscal analyst. You can access the CDFS Web site at http://www.cde.ca.gov/fg/aa/cd/ for the fiscal analyst assigned to your county.
This Management Bulletin is mandatory only to the extent that it cites a specific statutory and/or regulatory requirement. Any portion of this Management Bulletin that is not supported by a specific statutory and/or regulatory requirement is not prescriptive pursuant to California Education Code Section 33308.5.