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Management Bulletin 20-08a

Early Learning and Care Division

Subject: COVID-19 Guidance Procurement and Audits

Number: 20-08(a)

Date: March 2020

Expires: June 30, 2020, or unless rescinded sooner

Attention: All Executive Officers and Program Directors of California Department of Education Early Learning and Care Programs


This Management Bulletin (MB) is to notify and provide updated guidance to state-subsidized Early Learning and Care Division (ELCD) programs about temporary changes to the requirements related to the procurement of goods or services and changes to contract audit timelines after the enactment of Senate Bill (SB) 117 (Chapter 3, Statutes of 2020).

It is important to note that this is not a permanent change to statute or regulations. These requirements will apply until June 30, 2020, unless nullified or changed by the Legislature, or this MB is rescinded. As needs evolve and more information is available, the California Department of Education (CDE) will issue (updates) additional guidance.

Background and Authority

The California Education Code (EC) and California Code of Regulations, Title 5 (5 CCR), currently sets the standards for the approval processes for purchases requiring a competitive procurement of equipment, goods and services utilizing state and federal funds as follows:

5 CCR Section 18013(s) defines “Reasonable and necessary costs” as expenditures that, in nature and amount, do not exceed what an ordinarily prudent person would incur in the conduct of a competitive business.

5 CCR Section 18033 states that contractors will be reimbursed for actual costs that are reasonable and necessary to the performance of the contract.

5 CCR Section 18040 states that private contractors shall obtain at least three (3) bids or estimates when expenditures for equipment, equipment replacement, and improvements exceed the level specified in the annual child development contract.

Code of Federal Regulations, Title 2 (2 CFR), Section 200.319(c), requires contractors to have written policies and procedures in place and implement policies to ensure that the price of the goods and services is the competitive market price. All procurements must be supported by documentation that verifies compliance with state and federal rules.

2 CFR Section 200.320(a) refers to the acquisition of supplies or services, whereas the aggregate dollar amount does not exceed $10,000, and can be awarded without soliciting competitive quotations if the CDE considers the price to be reasonable.

2 CFR Section 200.320(b) requires that “price or rate quotations be obtained from an adequate number of qualified sources.” This includes purchases from $10,000 to $250,000.

2 CFR 200.33 defines capitalized equipment as tangible personal property (including information technology systems) having a useful life of more than one year and a per-unit acquisition cost which equals or exceeds the lesser of the capitalization level established by the contractor for financial statement purposes, or $5,000.

On March 17, 2020, the Governor signed SB 117 (Chapter 3, Statutes of 2020) which includes provisions to ensure continuity of payments to state-subsidized early learning and care programs, subject to guidance from the State Superintendent of Public Instruction (SSPI).

This new law allows the SSPI to develop directives to modify, as necessary, contractual reporting requirements applicable for Fiscal Year (FY) 2019–20 state-subsidized early learning and care programs impacted by COVID-19. This authority applies to FY 2019–20 and the following programs: Alternative Payment Program (CAPP), Migrant Child Care (CMIG and CMAP), California State Preschool Program (CSPP), General Child Care (CCTR), Family Child Care Home Education Networks (FCCHEN), Care for Children with Severe Disabilities (CHAN), and CalWORKs Stages 2, and 3 (C2AP, and C3AP) programs.

The guidance below responds to this topic.


Effective March 17, 2020, the CDE will waive all preapproval requirements for equipment purchases related to COVID-19 through June 30, 2020. Also, contract audit due dates will be extended three (3) months from the normal due date.


Waiving Preapproval Requirements for Procurement of Equipment

The CDE Pre-approval Process for the purchase of equipment, will be waived under the following conditions, through June 30, 2020:

  • The purchase is related to the COVID-19 declared State of Emergency.
  • The purchase is reasonable, necessary, and allocable to the early learning and care program, and providing the necessary services to eligible children.
  • Contractors must keep all documentation regarding equipment purchases, and abide by their internal control policies and procedures.

Note: If a contractor needs to purchase equipment not related to the COVID-19 declared State of Emergency, the contractor must adhere to all applicable laws and regulations related to the Pre-Approval Requirements as cited in the Funding Terms and Conditions (FT&Cs).

Reminder: The current FT&Cs do not require preapproval for supply purchases.

Obtaining Bids for Supply and Equipment Purchases

The requirement for obtaining bids has not changed per the FT&Cs.

As a reminder, the FT&Cs state,” if three (3) bids or estimates cannot be obtained, the contractor shall provide adequate documentation of the reason(s) why three (3) bids or estimates could not be obtained (e.g. an emergency situation, or the item is only available from a single source).”

For supply and equipment purchases up to $250,000 directly related to the COVID-19 declared state of emergency, contractors must retain adequate documentation regarding the emergency purchases. Adequate documentation includes:

  • Explanation of why the situation warranted the emergency purchase and the consequences of making the purchase through normal procurement processes
  • A description of the goods and price
  • The names and quotes of suppliers contacted
  • The methods of obtaining the price or rate quotations (e.g., it can be in writing, orally, vendor price list on website, or generated via online search engine).

Contractors must keep all documentation regarding equipment purchases and abide by their internal control policies and procedures.

All contractors are ultimately responsible for ensuring that all costs are reasonable, necessary and allocable to the child development program, and providing the necessary services to eligible children.

Note: If a contractor needs to purchase equipment not related to the COVID-19 declared State of Emergency, the contractor must adhere to all applicable law and regulations to the Obtaining Bids as cited in the FT&C.

The CDE will continue to monitor the state declared “State of Emergency” related to COVID-19, and will issue further guidance on reporting requirements where necessary.

Audit Extension for Contractors and Subcontractors

Non-Local Education Agency (LEA) contractors and subcontractors that have not yet submitted their audits as of the date of this MB that have fiscal year-ends through June 30, 2020, may delay the completion and submission of the audit, as required under EC 8448 and 5 CCR Section 18071, to three (3) months beyond the normal due date. This extension is in lieu of extensions delineated in 5 CCR Section 18073(b), and does not require contractors and subcontractors to seek approval for the extension by the CDE; however, contractors should maintain documentation of the reason for the delayed filing. LEA contractors and subcontractors should adhere to the guidance provided by the State Controller’s Office.

CDE Reporting Forms

The Child Development and Nutrition Fiscal Services (CDNFS) report forms will remain unchanged. All revenue and expenses related to the program that are reimbursable by the contract should be reported on the first fiscal page of the Attendance and Fiscal report. If you have any questions related to the reporting of revenue and/or expenses, please contact your assigned CDNFS Fiscal Analyst. The CDE Fiscal Apportionment Analyst Directory web page can be found at

Other Relevant Information

The CDE Early Learning and Care Division has developed a COVID-19 guidance and resource page that includes answers to frequently asked questions, all management bulletins issued to implement pertinent legislation, and other relevant resources at

To be informed of the updated information, please sign up for Early Learning and Care Division's email list at

The California Department of Social Services (CDSS) Community Care Licensing Division has developed Provider Information Notice (PIN) 20-04-CCP, which provides a statewide waiver for operation of child care facilities, including licensees, registered TrustLine providers, and temporary employer sponsored child care, along with guidance for the implementation of prevention, containment, and mitigation measures for COVID-19. This PIN can be found on the CDSS website at

For more information about federal and state guidance and response to COVID-19, please refer to the Centers for Disease Control and Prevention’s website at, the California Department of Public Health’s website at, and the California COVID-19 Response website at

If you have any questions regarding the information in this MB, please contact your assigned ELCD Regional Consultant. A list of ELCD Regional consultants can be found at or by phone at 916-322-6233.
Stephen Propheter, Director
Early Learning and Care Division

Questions:   Early Learning and Care Division | 916-322-6223
Last Reviewed: Thursday, January 18, 2024
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