Introduction to State Contracts

Before building an enrollment and projection plan, it’s important to know & understand what is on your program contract.

Upon being awarded a program contract through the Request for Applications (RFA) process , we see the contract process as on ongoing 3 part cycle that includes

1. Contract & Amendments

2. Continued Funding Application (CFA)

3. Program Narrative Changes (PNC)

This lesson was designed to support programs with understanding what is on their contract, along with the contract process.

Reference

Fiscal Handbook: Child Care Fiscal Handbook

Request for Applications

Request for Applications also referred to as RFA is released as funds become available.

Department issues notification to contractors via a Child Care Bulletin. Interested applicants can apply electronically using the online portal that will be made accessible through a link on the Child Care Bulletin.

Applicants that are awarded a CDSS contract are required to adhere to all applicable laws & regulations associated with the contract as well as the terms & conditions set forth in the Contract Terms & Conditions (CT&Cs) & Program Requirements applicable to the fiscal year in which the services are provided.

NOTE: Being awarded does not immediately mean that a contractor is given a contract. There is communication that happens between the fiscal analyst & the new contractor before the contract is created – at a minimum, site licenses and verified start dates are needed. Potentially, the award amount is prorated for the first year of operation.

Contracts/Amendments

Once awarded, a contract for new applicants or a contract amendment for existing applicants is issued.

Contract Information

The contract is a legally binding agreement between a child care contractor & the Department in which the contractor agrees to provide child development services according to defined programmatic & fiscal requirements.

Contracts are sent to the e-mail addresses for both the Executive Director & Program Director on file.

NEW Contractors must sign and return their initial contract

Contractors who apply & are approved for continued funding through CFA process will not need to sign and return initial program year contract

Once the contract is executed by the Contracts Office, it becomes eligible for payment. No apportionments can be made until a contract is deemed executed by the Contracts Office

Contractor will receive a copy of the fully executed contract

Not all amendments will require a signature. Contract amendments that do not require a signature will be processed as an Allocation Letter which will look similar to a contract amendment, & will include the contract face sheet & any changes in funding, where applicable.

Program Type

Some agencies operate one program type, while others operate many. A separate contract is issued for each program type.

Contracts are not renewed annually; instead, agencies apply for continued funding & a new contract is issued each fiscal year with a different contract number.

The first four characters designate the program type. The first number designates the fiscal year, which is the last digit of the first half of the fiscal year. The last three numbers are the contract sequence number within that program type. 

Maximum Reimbursable Amount

The Maximum Reimbursable Amount, also known as MRA, means the total dollar amount of a contract. This is the most that an agency will be paid for their child services or reimbursable expenses in a given fiscal year.

NOTE: Changes to the MRA during the fiscal year will require an amendment to the contract. 

The MRA is located within the narrative & within the table. In the event the the contract is amended, it will show the prior encumbrance, amended encumbrance & new maximum reimbursable amount.

Contract Rate (Per-Child Reimbursement)

The Contract Rate is the service county per child per day reimbursement rate based on full-time equivalency, known as FTE, for a child who is 3 years or older.

NOTE: County Contract Rates are located within Child Care Bulletin 22-32. The data within the table at the end of the bulletin shows reimbursement rates by service county effective July 1, 2022.

If contractors operate within multiple service counties, contractors may have multiple contract rates as rates will be specific to the county in which services are provided to certified children. 

Child Days of Enrollment (cde)

A day of enrollment is a day that a child is certified to attend a program per the contractor’s Notice of Action. A day of enrollment will always fall on a day that the agency is open and providing services.

Certified days of enrollment for all children must be reported in the category of each child’s certification (Age, Time, Exceptional Needs, Dual Language Learner, etc…..)

NOTE: Child days of enrollment determine how many children must be enrolled to earn a contract in a typical year.

Time-Base Categories

Time-base categories are as follows:

• A child enrolled for 30 hours (7/1/23-2/29/24) | 25 hours (3/1/24 +) or more per week is considered full-time

• A child enrolled for less than 30 hours (7/1/23-2/29/24) | 25 hours (3/1/24 +) per week is considered part-time

Once the rate category is determined, the child’s enrollment for all 5 days of the week will be reported the same as either part-time or full-time one each day of the week.

If a child is certified for full-time service & for any individual day is enrolled for more than 10.5 hours, the child must be reported as full-time plus on that day.

What this might look like in a program:

• Phillip is a 4-years-old certified 42.5 hours per week, 8.5 hours per day, placing him in the full-time category.

• Based on the contract rate, the program would earn $54.93 for every day Phillip is certified to receive services.

• Toby is a 3-years-old certified 56 hours per week, 8 hours per day Monday through Wednesday & 12 hours Thursday & Friday, placing him in the full-time category.

• Based on the contract rate, the preschool program would earn $54.93 for every day Phillip is certified to receive services.

• Thursdays & Fridays, the program will earn $64.82 since Toby is enrolled for more than 10.5 hours per day on those days.

• Cece is a 2-years-old certified for 24 hours per week, 6 hours per day Monday & Tuesday & 4 hours a day Wednesday through Friday, placing her in a part-time category.

• Based on the contract rate, the program would earn $54.38 for every day Cece is certified to receive services.

Adjustment Factors

In a typical year, since service-level earnings are based on the contract rate multiplied by Adjusted Days of Enrollment, this practice results in different reimbursement levels. 

NOTE: Contract rates & adjustment factors may vary from county to county, & program to program.

Even though enrollment levels will not count towards earning your contract this fiscal year, an agency needs to still report based on the Adjusted Days of Enrollment, per Title 5 regulations

Beyond time based categories, there are various other reasons an adjustment can be made to the contract rate, such a child’s age, if they have exceptional needs, dual language learner, at-risk, severely disabled or mental health consultative services within CCTR programs.

Contractors who elect to implement Mental Health Consultation Services to support teaching staff & families by helping to address challenging behaviors in the classroom or family child care home setting, may claim an adjustment factor of 1.1.

This increased adjustment factor applies to all children enrolled in the classroom or family child care home setting where services are provided; therefore children would be reported in the MHCS certified enrollment section of CDPR, & not in the non-MHCS certified section.

What this might look like in a program:

• Ryan, a 4 year old child, is certified for 24.5 hours per week placing him in the part-time category.

• Ryan has a current IEP on file; therefore the contract reimbursement rate of $54.93 would be adjusted by multiplying the rate by .847 to reflect the part-time day reimbursement.

• The program would earn $46.53 for every day Ryan is certified to receive services.

Minimum Days of Operation

A “Day of Operation” is a day the contractor provides child care & development services for one or more certified children enrolled. The minimum days of operation are determined by the service calendar submitted annually for each program. 

NOTE: If your MDO needs changed, submit a revised Program Calendar, along with a Program Narrative Change form.

Continued Funding Application

After the initial contract period, the contractor’s eligibility for continued funding each subsequent year is contingent upon compliance with all department & statutory requirements along with the completion & submission of a Continued Funding Application (CFA).

Each year around November, the Department issues a Child Care Bulletin notifying contractors of the release of the Continued Funding Application for contractors who intend to continue services into the next contract year.

Contractors who apply for & are approved for continued funding through the CFA process will be automatically renewed.

NOTE: Failure to respond within the timelines specified in the CFA request shall constitute notification to the Department of the contractor’s intent to discontinue services at the end of the current contract period.

Program Narrative Change(s)

As part of the Continued Funding Application & as contract changes arise, contractors must submit a Program Narrative Change (PNC) form along with support documentation to the Department for approval.

Calendar (MDO) Change

Calendar Minimum Days of Operation (MDO) changes include an increase or decrease to the MDO.

A revised calendar along with supporting documentation to substantiate the requested change must be submitted along with the Program Narrative Change form (PNC) & must be completed within the fiscal year preferably by May 1st.

Be cautious with calendar changes as this may impact your monthly funds.

On year-end calculations, if the actual days of operation are greater than or equal to 98% of the Minimum Days of Operation, the Maximum Reimbursable Amount will not be affected. 

If actual days of operation are less than 98% of the Minimum Days of Operation, the Maximum Reimbursable Amount will be reduced in proportion to the percentage of contract minimum days of operation that the contractor was not in operation. This could result in a billing if the contractor has been paid more than the reduced Maximum Reimbursable Amount.

If there are date changes to your program calendar but the MDO will remain the same, contractors are not required to submit a PNC however, contractors must email their assigned PQI consultant & include a copy of the revised calendar.

Programmatic Change

Programmatic changes include but are not limited to the opening of a new site or closing of an existing site, changes to the service area, or changes to a program model such as changing from operating General Child Care in a center to operating through a family child care home education network model.

The contractor must submit the PNC form along with any support documentation to support the request such as a parent survey or needs assessment.

PNCs submitted at the time of the Continued Funding Application for the upcoming fiscal year will receive an email notification of the approval or denial of their CFA & requested change.

After reviewing the video lesson & sketch pad notes, it’s time to check for understanding by completing a Knowledge Check. Note that Individual Knowledge Checks will conclude with a Certificate.

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