Management Bulletin 25-12
This Management Bulletin notifies and provides guidance to California State Preschool Program contractors of the requirements for reimbursement in Fiscal Year 2025–26.Early Education Division
Subject: Reimbursement Flexibilities (Hold Harmless) for the 2025–26 Program Year
Number: 25-12
Date: December 2025
Expires: June 30, 2026
Authority: California Education Code (EC) 8245.5
Attention: Executive Directors and Program Directors of all California State Preschool Programs
Purpose
This Management Bulletin (MB) notifies and provides guidance to California State Preschool Program (CSPP) contractors of the requirements for reimbursement in Fiscal Year (FY) 2025–26.
The term ‘hold harmless’ is used in this bulletin to describe the reimbursement flexibility provided under EC Section 8245.5, as amended by Senate Bill (SB) 120 (2025). It is not a statutory term.
Policy
Pursuant to EC Section 8245.5(f), beginning July 1, 2025, to June 30, 2026, inclusive, if a program is open and operating in accordance with their approved program calendar and remains open and providing services through the program year, the contract reimbursement amount shall be based on the lesser of either of the following:
- One hundred percent of the contract maximum reimbursable amount.
- Net reimbursable program costs.
Notwithstanding any other law, reimbursement for full-day and part-day California state preschool family childcare home education network (FCCHEN) providers for FY 2025–26 shall be based on the maximum certified hours of care for all families, including families certified for a variable schedule, regardless of attendance. CSPP contractors who provide services through a FCCHEN are to ensure providers obtain all applicable parent signatures on attendance records prior to reimbursement to providers for services rendered.
Directives for Implementation
Program Closures
Contractors must be open and providing services, in accordance with the agency’s approved FY 2025–26 program calendar.
If a CSPP contractor is required to close any site(s), classroom(s), or family childcare home(s) that are affiliated with an approved CSPP FCCHEN due to circumstances beyond the contractor’s control, the CSPP contractor shall follow the guidance for emergency closures in order to be credited for any day(s) of operation and child days of attendance for those closures.
Similarly, those contractors that open by the start date of the contracting agency’s FY 2025–26 approved program calendar and subsequently close for any reason that is not considered an emergency closure will not be reimbursed for any period of time that the program is not physically open and providing in-person services for enrolled children and families.
Contractors who do not open and provide services in accordance with their approved FY 2025–26 program calendar, and who do not have an approved emergency closure plan, are advised to submit a revised FY 2025–26 program calendar and a program narrative change to their assigned California Department of Education (CDE), Early Education Division (EED), Program Quality Implementation (PQI) Office Regional Consultant to ensure that the correct Minimum Days of Operation (MDO) are reflected in their contract. Reimbursement may be limited to days when the program was providing in-person services or for days of closure approved by EED due to circumstances beyond the contractor’s control, consistent with EC Section 8249. If a program is closed for reasons other than an approved emergency closure, the contract may be amended to prorate the Maximum Reimbursable Amount (MRA) to reflect the days of closure, pursuant to Title 5, California Code of Regulations, sections 17727 and 17728.
Reimbursement for Providers Who Serve Children Through CSPP FCCHENs
Pursuant to EC Section 8245.5(d), reimbursement during FY 2025–26 for CSPP FCCHEN providers shall be based on the maximum certified hours of care for all families, including families certified for a variable schedule, regardless of attendance. This shall include when a provider is closed due to circumstances beyond their control and those days of closure have been approved by the CDE.
Background and Authority
SB 140 amended EC Section 8245.5, which required that beginning July 1, 2023, to June 30, 2025, inclusive, if a program is open and operating in accordance with their approved program calendar and remains open and offering services through the program year, the contract reimbursement amount shall be based on the lesser of either of the following:
- One hundred percent of the contract maximum reimbursable amount.
- Net reimbursable program costs.
On June 27, 2025, SB 120 passed and amended EC 8245.5, to extend the hold harmless policy. For the FY 2025–26 program year contract reimbursement shall be based on the lesser of the contract maximum reimbursable amount or the net reimbursable program costs, as long as the program remains open and operates in accordance with their program calendar and provides services through the program year.
Notwithstanding any other law, reimbursement for full-day and part-day California state preschool FCCHEN providers for the 2025–26 FY shall be based on the maximum certified hours of care for all families, including families certified for a variable schedule, regardless of attendance.
Resources
If you have programmatic questions related to this MB, please contact your assigned EED, Program Quality Implementation (PQI) office regional consultant on the CDE EED, PQI Consultant Regional Assignments web page.
If you have fiscal questions about the information in this email, please contact your assigned CDE Early Education Nutrition and Fiscal Services (EENFS) fiscal apportionment analyst on the EENFS Fiscal Analyst web page.