Management Bulletin 20-20

Early Learning and Care Division

Subject: Non-COVID-19 Emergency Closure Requests for Fiscal Year 2020-21

Number: 20-20

Date: November 2020

Expires: June 30, 2021 or until rescinded

Authority: California Education Code Section 8271

Attention: Executive Directors and Program Directors of all Early Learning and Care Programs

Purpose

This Management Bulletin (MB) is to notify and provide guidance to state-subsidized early learning and care contractors about non-COVID-19 emergency closure requests for Fiscal Year (FY) 2020-21.

This MB supersedes and rescinds MB 10-09.

Background

The Education Omnibus Budget Trailer Bill, Senate Bill (SB) 820, added Education Code (EC) Section 8209(f) which specifically addresses reimbursement for contracting agencies that close due to a public health order related to COVID-19. However, there still exists the possibility that contracting agencies may be unable to operate for other reasons beyond their control, as set forth in EC Section 8271.

The EC Section 8271 states that agencies that are unable to operate due to circumstances beyond their control, including but not limited to: fires, floods, or earthquakes; shall not be penalized for incurred program expenses, nor in subsequent annual budget allocations.

The California Department of Education (CDE), Early Learning and Care Division (ELCD) contracts with agencies to deliver early learning and care services in two major delivery modes:

1. Direct Service Contractors - General Child Care and Development Programs (CCTR), California State Preschool Program (CSPP), Family Childcare Home Education Networks (CFCC), Migrant Child Care and Development Programs (CMIG), Severely Disabled Program (CHAN)
2. Alternative Payment Programs – Alternative Payment Program (CAPP), CalWORKS Stage 2 (C2AP), CalWORKS Stage 3 (C3AP) Migrant Alternative Payment (CMAP)

Reimbursement for each of these contracts is determined differently based on the specific contract type, as defined in the California Code of Regulations, Title 5 (5 CCR) and the annual Funding Terms and Conditions (FT&Cs).

Specifically, 5 CCR Section 18054(a) requires that CCTR, CSPP, CMIG and CHAN contracts, whether center-based or operated through family child care homes, are reimbursed on the lesser of:

1. The contract’s Maximum Reimbursable Amount (MRA)
2. Net reimbursable program costs, or
3. The product of the adjusted child days of enrollment for certified children, times the contract rate per child day of enrollment, times the actual percentage of attendance plus five (5) percent, but in no case to exceed 100 percent of enrollment.

Note: Number 3, above, was removed from FY 20-21 reimbursement calculations pursuant to SB 820 under certain conditions.

Additionally, 5 CCR Section 18055 states that if the contractor fails to operate at least 98 percent of the minimum days of operation (MDO) required in its contract, ceases operation, or the contract is terminated prior to the end of the contract period, the Maximum Reimbursable Amount (MRA) shall be reduced in proportion to the percentage of the contract minimum days of operation that the contractor did not operate.

Annual FT&Cs Section V.(L) requires that CFCC contractors are reimbursed based on the lesser of:

1. The contract’s MRA, or
2. The amount earned, which is defined as net reimbursable program costs, of which at least 70 percent must be payments for direct services, not more than thirty 30 percent may be for support services and administrative costs together, and no more than 15 percent may be for administrative costs alone.

Annual FT&Cs Section V.(L) requires that CAPP, CMAP, C2AP, and C3AP contracts are reimbursed on the lessor of:

1. The contract’s MRA, or
2. The amount earned, which are reimbursable expenditures of:
   1. Direct payments to providers, which consist of the rate charged by the provider in accordance with applicable statutory and regulatory provision (not to exceed the Regional Market Rate Ceiling), and which include family fees for certified children and interest earned on advanced contract funds; and
   2. Actual administrative and support costs related to early learning and care services provided, which combined cannot exceed 17.5 percent of the total contract amount, and no more than 15 percent may be for administrative costs alone.

Pursuant to 5 CCR 18076.2(b)(2) and (d)(3), providers that are reimbursed using the regional market rate (RMR), including family child care home networks operating under a CFCC contract may be reimbursed for up to 10 days without being open for operation. Otherwise, such providers are not to be reimbursed when “not open to provide services.”

Senate Bill (SB) 820 added EC Section 8209(f) to specifically address reimbursement for contracting agencies that close in FY 2020-21 due to issues related to COVID-19. However, there still exists the possibility that contracting agencies may be unable to operate for other reasons beyond their control, as set forth in EC Section 8271.

As a reminder, contractors must report non-COVID-19 emergency closures to their Regional Child Care Licensing Office if the contractor is a licensed child care facility under the jurisdiction of Community Care Licensing in accordance with 22 CCR 101212(d).

Policy

Direct service contractors that close all sites/classrooms for a contract due to a non-COVID-19 related emergency, such as fire, flood, earthquake or other non-COVID-19 related emergency, may request a closure credit for any reduction in days of operation due to the non-COVID-19 related emergency.

Alternative payment contractors may work with their assigned ELCD Program Quality Implementation (PQI) Regional consultant to determine if there has been an impact to contract earnings due to a non-COVID-19 emergency event.

Directive

Direct Service Contractors

The CCTR, CSPP, CMIG and CHAN contractors that close all of their sites/classrooms due to a non-COVID-19 emergency must submit a Non-COVID-19 Emergency Closure Request Form, which can be found at https://www.cde.ca.gov/sp/cd/ci/documents/noncovidreq2021.pdf, in order to receive credit for any reduced days of operation associated with the emergency closure. If the request is approved, the contractor will receive an approval form indicating a day(s) of operation credit during the non-COVID-19 emergency closure. The contractor must keep the approved form for auditing purposes and report the associated credits on their Child Development and Nutrition Fiscal Services (CDNFS) fiscal and attendance report(s).

A CFCC contractor that experiences a reduction in provider reimbursements due to a non-COVID-19 emergency closure that subsequently results in a demonstrative reduction of administrative and support reimbursement may contact their assigned PQI Regional consultant to determine if there has been an impact to contract earnings due to a non-COVID-19 emergency event.

Note: While SB 820 provided authority for contractors to reimburse Family Child Care Home Education Network (FCCHEN) providers for closures due to a local or state public health order related to COVID-19 specific to early learning and childcare, no such authority exists for reimbursing FCCHEN providers for non-COVID-19 related emergency closures.

Alternative Payment Contractors

Alternative payment programs who believe their administrative and support reimbursement may be affected by the non-COVID emergency closure may contact their assigned PQI Regional consultant to determine if there will be an impact to the year-end contract earnings due to this non-COVID emergency event.

Note: While SB 820 provided authority for contractors to reimburse alternative payment providers for closures due to a local or state public health order related to COVID-19 and specific to early learning and childcare, no such authority exists for reimbursing alternative payment providers for non-COVID-19 related emergency closures.

Resources

The ELCD has developed a COVD-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 https://www.cde.ca.gov/sp/cd/re/elcdcovid19.asp.

To be informed of the updated information, please sign up for ELCD's email list at https://www.cde.ca.gov/sp/cd/ci/progspeclist.asp.

If you have any questions regarding the information in this MB, please contact your assigned ELCD, Program Quality Implementation Office Regional Consultant via the ELCD Consultant Regional Assignments web page at https://www.cde.ca.gov/sp/cd/ci/assignments.asp or by phone at 916-322-6233.

If you have any fiscal questions about the information in this MB, please contact your assigned Child Development Nutrition and Fiscal Services analyst at https://www.cde.ca.gov/fg/aa/cd/faad.asp or by phone at 916-323-6196.

________________________________
Stephen Propheter, Director
Early Learning and Care Division