Facts In Action

In February 2001, the General Accounting Office released its report on child care spending on low-income families. The study focused on 3 issues:

• child care expenditures by states under the Child Care Development Fund (CCDF) and Transitional Aid for Needy Families (TANF) block grants (funding streams created under the welfare reform law passed in 1996);

• the types of care selected by families who receive subsidies with these funds and the mechanisms by which states provide child care subsidies to eligible families; and

• states' priorities in providing child care subsidies to low-income families and their views about the adequacy of the current levels of funding for child care.

The study analyzed the expenditures of all 50 states, with more detailed data on seven states where site visits were completed (CA, CT, MA, MI, OR, TX, WI). Some of the trends identified include:

• Child care spending under CCDF and TANF increased from $4.1 to $6.9 billion between FY 1997 and '99.

• Nationwide, more than half of the children whose child care was subsidized with CCDF funds were cared for in centers, however there was variation among states in regard to types of care (in four of the locations where site visits were completed, the number of children in center-based care ranged only between 19 and 37% of children receiving care via CCDF funding).

• Over half of all states gave TANF and former TANF recipients transitioning to work first or second priority for receiving child care subsidies

• State officials expressed concern about not being able to subsidize care for non-TANF families due to insufficient funding.

• State flexibility in setting income standards has a profound effect on whether a state is able to serve all those that are eligible (maximum CCDF federal eligibility level is 85% of state median income, but states can choose a lower percentage).

Source:
Child Care: States Increased Spending on Low-Income Families, GAO-01-293, United States General Accounting Office, February 2001.

For more information:
contact the GAO Document Distribution Center at (202) 512-6000, or go on-line at www.gao.gov.

Facts in Action, August 2001