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Management Bulletin 05-12

Early Education and Support Division

Subject: Contract Simplification

Number: 05-12

Date: September 2005

Expires: Until Superseded

Authority: 45 Code of Federal Regulations Sections 98.20 and 98.54 and California Education Code Section 8263

Attention: All General Child Care and Development Contractors and All Alternative Payment Program Contractors


The intent of this Management Bulletin is to inform child care and development contractors of their enrollment and service responsibilities as a result of the implementation of the 2005-06 fiscal year Contract Simplification Plan.


In order to simplify the administration of child care and development services, the California Department of Education examined ways to restructure the contracting system. As a result, commencing with fiscal year 2005-06, multiple contracts of the same type were combined into a single contract with a single reporting requirement. Contractors no longer have two contracts of the same program type, with the exception of those who are temporarily operating a second contract on an interim basis. Examples of fiscal year 2005-06 combined contract codes are:

FAPP + GAPP = CAPP; FCTR + GCTR = CCTR; and GCTR + GCTR = CCTR. The monetary distribution of both state general and federal funds, if applicable, is provided on the second page of each child care and development contract.

Statutory and Regulatory Requirements

The majority of children in general child care and development programs (center-based and family child care home education networks) and voucher programs (alternative payment programs and CalWORKs) meet common state and federal eligibility and need criteria. However, a small percentage of children fit into unique state eligibility and need criteria or unique federal voucher choice criteria. The criteria are as follows:

  1. Only state general funds can be used for services to families whose eligibility and need are based on homelessness, whose need is based primarily on the parent’s incapacity to provide care, or for services to children with exceptional needs over the age of seventeen. Therefore, contracts with only federal funds cannot serve these populations.
  2. In voucher programs, only federal funds can be used to accommodate parental choice of a sectarian program that includes religious instruction or worship. 

To ensure that populations do not exceed the respective funding amounts, contractors must monitor enrollment of state-only criteria children and those voucher families that choose a sectarian program that provides religious instruction or worship.

It is the contractor’s responsibility to contact their Child Development Fiscal Services (CDFS) Analyst if they anticipate that their enrollment may exceed:

  1. A contract’s state general fund dollars by serving children who are eligible under state-only criteria (homelessness, incapacitation of the primary parent, or children with exceptional needs ages eighteen through twenty-one years); or
  2. A voucher program contract’s federal dollars by paying for services by sectarian providers who offer religious instruction or worship.

Your CDFS Analyst will work with you to modify the mix of state general and federal funding in the impacted contract to ensure that you have sufficient funds to meet the service needs of your families.

If you have any questions about the information included in this Management Bulletin, please contact your Early Education and Support Division Field Services Consultant at

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 Education Code 33308.5.

Questions:   Early Education and Support Division | 916-322-6233
Last Reviewed: Friday, July 29, 2016
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