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Senate | April 14, 2015 | Committee Room | Joint Appropriations on Health and Human Services

Full MP3 Audio File

[BLANK} committee will come to order.

Thank you members of the committee members of the public and staff.  I want to begin this morning by introducing our pages, from the Senate, we have Seris Triclen [s. P?] and Luke Avens who was sent by Taman[sp?] Will Dan representative Brown, and Ilan HornBerg representative Haig. Thank you all we hope you enjoy your week with us this week At Sergeant at arms today from the Senate we have Steve McCain Mart Aden and Dale Hert and from the house we have Young Bay, Bill Moris and Jim Ram. Thank you all appreciate them. We're going to begin, unless anyone has any opening remarks from the chairs, I'd like to begin today. We're going to begin presentation on childcare subsidy. We also later have CCDF federal re-authorization. We are going to hold so we can get through these presentations when we finish both we'll open the mapped questions to either areas. So we know they do, Deborah if you'd like to begin with your presentations  Thank you. Good morning Chairs and members of the committee. This morning I am going to provide you some overview information on the top of the subsidy program and as Senator Hayne said after this presentation Rock Kins the Director of the Division of child Development and Early we'll provide you with information of the recent reauthorization of the Child Care Development Fund Block Grant, and it's implications for Child Care subsidy program. Just a little bit of overview of the division of child development early education, they have three major programs funded through

their division the Child Care subsidy programs smart start and pre-care the next two sides do a little bit of a program comparison among the three programs, generally there is a lot of questions on the similarities and differences between this programs, so this just gives a high level view of that, for the mission smart start is in general school readiness, Child Care subsidy provides needs based Child Care System and pre-care is also school readiness, the target population for smart start is children from birth to age five for childcare subsidy it's low income family with children under age 12 they can also serve some children over age to 12 that have special needs. Pre-care is at least four year old in general who have not been exposed to child care setting but there are some children that do receive pre-care. Eligibility is different for the three programs, smart start there has be very different activities that they provide, local partnerships have flexibility for some of those activities and their eligibility. Childcare subsidy, and we will talk about this more later, but childcare subsidy income levels vary by age and the families have there have a need for child care subsidy, so there have to have an algebra activity such as employment, high school or post secondary education. For pre-cares eligible to 75% of the state medium income they also serve some children without regard to income such as military families, children with limited English proficiency, IEPs, some health conditions or other educational needs identified by screening. They are very different in how they are funded and administered registered, the smart child program is a non profit organisation at the state local level North Carolina partnership for children is to state level organization, there are public and private partnership they have stayed in private funding and they have local decision makings to address local needs. They are 77 partnership that cover 100 counties. Childcare subsidy is a combination of state and federal funding from [xx] the general fund they are locally administered as the local department social services and in the division of child development early education oversees that at the state level. Pre-care is also administered, is also a state program, state funding plus other sources of funding contributed according to local decision so they can be title[sp?] to one money smart sort provides money for some precad[sp?] program in other areas. It is a standard program, but there is local decision make bout the location of precaid[sp?] classrooms all classrooms must meet state classrooms there are 91 contractors that come for 100 counties. Now we start talking about the child care subsidy program, you heard a couple weeks from Persinar who had put together some of evaluations looked at databases to look at programs and where they are, one database that the Persinar didn't use but is a national database  is the what works for health database, that database is with Dan from the University of Wisconsin, they've gone through and looked at 11 different major studies of the Child Care Subsidy Program, and evaluated those studies to come up with their evaluation of the Childcare Subsidy Program. So how the white works for health databases is that, the expected beneficial outcomes for the Child Care Subsidy Program include increased employment, increased earnings and increased access to Child Care, they give the Child Care Subsidy Program and they are highest rating which is scientifically supported, and what that means is rating, where the program has most worthy to make a difference, the strategies have been tested in many, [xx] studies, with constantly positive results they also asses each strategy on a likely effect on rational, ethnic, social economic, geographic or other disparity based on the characteristics of the program. And they rate the child care subsidy program as likely to decrease disparities. As I said before there was 11 studies that they reviewed and some of the findings of those studies includes strong evidence that the child care subsidy program increases employment earnings for low income families, subsidies also increase childr00:15en room and formal care setting which is high quality that non-family home based care. 00:15 [xx] also increase employment for single mothers especially those with low incomes

and those with out a high school education. Single mothers also tend to work more hours, have more standards work schedule, stay in jobs longer, and earn more than mothers who don't receive subsidy. Subsidies also allow employed parents to access childcare centers and center based preschool programs they may not be able to afford. Research also indicate, that subsidies move children from informal non parental care, to more formal phase, and that those can have positive long term effects on children future educational attainment, and labor market participation. This arm slide shows the certified funding for [xx] subsidy for the past three years. A couple of things to note about the certified funding, in state fiscal year 12-13, small [xx] subsidies funding was included in the same budget as, child care substitute funding, so that's why the 12-13 budget is so much higher than the 13-14 beginning of 13-14 those budgets were separated in the budget, and so 13-14 is just showing the child care subsidy funding. The difference between 13-14 and 14-15 is really the removal of a reserve account so there's really no change in actual availability for child care funding, it was a reserve account in the budget that was there that made it look like there was higher funding than there actually was. There've been several recent changes to the child care subsidy program, I'm going to point one that is actually a little bit older, because it doesn't have an effect on programming things we'll talk about later, we're regarding quality, in session 2011, 145, the required DCD to face in a new policy, which basically means that the check receptionist is paid to hire quality singers, three, four and five stars singers and you'll see that has an impact where children are being served in the program, in this last budget bill, there were market rate increases beginning January this year, so we do a market rate study every two years, the market rate is supposed to be 75th % tile and accounted by age and star rating while the market rate study reflects that in most counties in most age settings and in most star ratings the market rates that the state is paying is not at the 75th % tile. This last year is the first time the market rate has been increased since 2007 and this year it was increased 25% of the different between the current market rate and the market rate recommended in the child care market rates study. So what that means if there was a $100 difference between what the market rate study say should be paid and what the state was paying then $25 would be added to that market rate. it's also important to point out that the state pays the market rate or whatever the facility charges the private pay parent, whichever is less it is because the market rate is set at one amount does not mean what the state is paying any particular facility, or home. Other recent legislative changes is the change from 75% per state estate medium income to the Federal poverty level for families and we'll go into more detail on that in the next couple of slides. Step parents and non-parent caretaker relatives income are now accounted and co-payments are no longer pirated for part-time care. This slide goes into more detail on the eligibility for childcare subsidy, currently, effective last October, children aged 0-5 and special needs children are eligible at 200% of Federal Poverty Level. For example, a family of  four must have income of less than $3975 a month or 47, 700 a year. Children aged 6-12 must having come less than 133% of the Federal Poverty level and that equits to $ 2643 a month and 31716 for a family of four children who need child care services to support child world care services continue to receive without regard to income and children receiving first care services who are in the custody the Department of Social Services also received that, regard to income. This next arm slide compares no cure income eligibility to some surrounding state, and the US average you'll see that, the US average is just under 20% of poverty. I'll also show the high, and the low so Kentucky actually is the lowest in the nation at 95% poverty level, and North Cody is the highest at 302% at that level of puppy level,

the [xx] is in red on your arm, she because we've two different income level, so the age is extra 12 is to 133, and 05 is to 200, and the US average is around 179%, it's also important to note that, the most common eligible criteria is 200% of property for about seven or eight states, or 185% of property about the same number of state and then there's a lot of variety among the other state. This chart shows your child care the number of children served from February 2013 to February of 2014, and it shows you the fluctuation that occurs over time in the Child Care Subsidy program. I think it is important to know in October of 2013 I'll need to get you a corrected slide because this is supposed to go though February 15 but in the state fiscal year of 13, 14, in October of 13 there was a federal shut down September and October. That greatly influenced to how counties serve children in child care sepsis. Some counties stop taking applications and so they were under spending, and so at the end of the fiscal year when it re-opened, they started serving people on short term certificates, so that's why it goes all the way up to 80, 000 there. Those are not 80, 000 children that were on for a full certification period, many of those were on short term certificates, and I'll get you an updated list. This actually shows compared over year July through February because that's the information that we have for this year, So you can compare this year to previous years. Starting in 2010-11 through 2014, 15, you can see the average monthly number served, and again 13, 14 is an operation because of the federal shut down, that's why it shows [xx], so low through February, it will bump up for the entire state fiscal year because of what happened in the spring, and then you can see how the waiting list has been affected. Childcare subsidy Program does require counties to look at their waiting list at least yearly or more often if they want to, and they have to update and contact families at least yearly to try to keep their subsidy wedding list accurate. As I mentioned earlier in order to be a eligible for child care subsidy you do have to be participating in a  qualified activity, and those activities include employment, seeking employment, post secondary education or training, the developmental needs of a child, high school education or the combination of the above some of these requirements are federally required with some state flexibility for example the state does have flexibility on how often we do post secondary education or training. This slide shows you the activities that child care subsidies  support and the percentage of each activities that families participate in so you can see overwhelmingly the biggest reason is employment at 82.8% followed by child protective services and child welfare services combined 5.5% then post secondary education and training at 4.3% I will also note that post secondary education is limited to 20 months of enrollment job search are seeking employment is provided to families who are currently receiving subsidy and then lose the job, subsidy is provided for 30 days with a possibility of another 30 day extension if the parent request and the child work or determine it is warranted on individual circumstances. North Carolina has implemented a star ratting system it's been around for a number of years, the system was developed to provide information to parents about the quality of care and child care centers and family child care homes to recognize providers for higher quality care they provide and also acts as a road map for providers to follow as they will strive to improve their quality. Providers may earn one to five stars a ratting of one star means that they have meeting the minimum program requirements our programs earn their star ratting based on two components staff education and program standards, religious sponsored child care programs can continue operate with a notice of compliance and do not receive a star ratting unless they choice to apply to receive a star ratting and many do apply and get a star ratting. So this show you a comparison of where substitute children were served back in January of 2011 to January 2015 so you can see the change over a time in where

children are served by star rating, this is for children who are receiving subsidy only so two things affect where children are served in the star rating of the facilities that the children are in, one is the smart does work with child care subsidy programs to improve their star rating and then also the appropriations act of 2013 prohibited subsidy being paid for one to two star rated facilities unless there is an exemption in a county needed because of lack of availability of the higher quality care. On this chart other includes temporary and provisionally licences and religious sponsored Notice of Compliance certificate. In January of 2011, 84.6% of subsidy children, were in three, four or five star rated facilities. In January 2015, that increased to 96.2%. In January 2011, 57.2% of subsidy children were in four, five star rated facilities, and in January this year it was a 72.6% which is an which is an increase of 15.3% point so you can see by the charge being served in higher quality care. This compares children who do not receive subsidy and where they are in facilities by star rating and children who receive subsidy by star rating. So this chart include both senders[sp?] and form well, just under half of children who do not receive subsidy of five star providers, 37.5% of children receiving subsidy are five star providers. 82.3% 3% of non subsidy children are three in three, four or five star children and 96.2% of children receiving subsidy are in three, four or five stars seniors. So subsidy children overall and high quality care, children who do not receive subsidy are more in likely five star care than children who do receive subsidy. There can be number of reasons for this, child care services and a number are allowed to charge  child care substitute  recipients the difference between what they charge and what the program pays so if the five star center is charging more than what the childcare subsidy can pay, the parent will either have to pay that, or they may use a different child care center if they can't afford that. Remember they are paying 10% of their income towards their co-payment. This charge shows the change in number one to five start child care  homes over the last five years, you can see there have been over a decrease in number of 30% with the biggest decrease of course in one to two star homes four star homes have actually increased over the last five years. There's been a change in child care centers  over the five years also there is been a slight decrease of 4% in the overall, but you can see the five star centers have increased quite a bit, 40% more five stars centers in January 2015 than there were in  January 2011 and the biggest decrease of course are in the one and two star rated areas, and that concludes my report I'm happy to answer any questions or if you want to hear from Rob Kingsburger first Mr Kinsburger will go ahead then we will open up for questions. Thank you thank you we are just getting their presentation [xx] Good morning Mr. Chair, members of committee, pressing the opportunity today to talk to you today about the re-authorization of the child care development block grand fund. The child care development block grand act is the law that authorizes the Child Care Development Fund which is the primary funding source devoted to providing low income family that are working or participating in education and training will help paying for child care and improving the quality of child care for children. In North Carolina we get approximately just over $200 million annually from this fund about 90%of those dollars are spent on subsidized child care

services approximately 7% of those funds are spent on quality activities on top of debt of that and a little bit about 3% for the operation of the program essentially CCDF funds virtually  everything that we do around child care in North Carolina subsidy all of our quality activities their investigations regulation of child care, criminal background checks  are all funded with this black rent fund so this fund was re authorized with person who signed in the law this past November it's the first time in 18 years that there has been a change in the law and there are a lot of new requirements under the law as part of the CCDF reauthorization, the good news is North Carolina is already meeting very very many of those requirements, so I'm going to talk about what the new requirements are, and then also talk about where North Carolina sits relative to those new requirements in some instances we may be seeking a law change, in some instances we may need a change in rule, and in some instances, in a lot of instances just changes in policy we think will get us over the finish line. The other things I pref us before I get into the specifics are in parts of the law are very specific they'll say things like, talk about this in a moment, about regulatory one and once visit per year. Very specific what states have to do, in other areas it's more general, states will ensure you have qualified staff. So how that process works with the federal partners the administration for children and family we will be developing a plan that is due to our federal partners in March which details how we're going to meet all of these requirements. Now, very technically speaking as soon as that law was signed back in November all these things became requirements but the federal government understands states will need time to adopt these new requirements. So they're offering this opportunity to develop a plan for how we're going to get there. Some of these new requirements have specific deadlines in the absence specific deadline that the default that we've heard from our federal partners is that the requirements have to be in place by next September 2016. So we've got a little time to get to where we need to go. So I'll go to my first slide, which is around monitoring and licensing within a regulatory program there is a brand new requirement that requires a pre-licence visit and at least one annual on announce to inspection for all childcare facilities that receive CCDF funds. The good news on this is that we're already do this have been doing this for a number of years because we require our facilities to be one first to a licensed we are already meeting these requirements it's already in law that the centers get an annual visit the family chock your homes we do not have a law, but we are making sure that childcare commission knows about this they are in the process of readopting all of our rules so that hopefully we can get a loop put into place to support this, but in practice we are already visiting all of our facilities that receive CCDF funds at least once a year. Another requirement is that we ensure individuals who are hired as licencing inspectors are qualified and receive training all of our staff have a regulatory staff are required to have a four year degree in childhood education and have worked in childcare as an administrator so we feel confident that we are already meeting this requirement again that's something that can be adjudicated as we put that one in our plan and work with our federal partners. Finally, there's a requirement that regulatory childcare consultants are have a were staffed at a level of sufficient perform inspections on a timely bases as I mentioned we're already meeting this unannounced visits requirement we'll continue to look t that our current case load for regulatory staff as 70 to 80 per consultant the national average is around 55. As I said we're meeting your requirements but based upon the new requirements that's something we'll at least certainly look at as we go through the development of our plan. There's some other minor changes where there are some specific training's that we may need to add for pre-service entering life ensure that we feel we might be able to adopt through policy for the most part with monitoring licencing requirements, we feel we're in pretty good shape under the new CCDF-3 authorization. The next area that is brand new and law is that states are made to make public by electronic means which sort of a fancy  thing your going to have a website to show the results of training inspection report including major substantial to complains number of deaths series and substantial child abuse. We currently already have a very reversed website that has a lot of information about our facilities we post all of our visits violations and all of that website currently we'll have some additional requirements around other specific reporting a number

of destinies we do collect that information that's not something that we post on the website currently this requirement has to be put into place by November 2017 or earlier. Again, we don't think we'll need any new law or rule changes around this. We'll just need to make some additional enhancements ultimately to our website. The next area is criminal background checks. The new funding reauthorization requires states to have policies and procedures to conduct comprehensive criminal background checks for child care providers and staff. We already do criminal background checks for all child care providers, including any employees who are in child care facilities or in family child care homes, anyone living in the facility, basically the premises anyone who could be unattended with children gets a criminal background check. We do a federal and a state check, and we also check the Responsible Individuals List, which is a DSS database for individuals who have been substantiated with serious neglect or abuse. So, we're already covering a lot of these, there are some additional tweaks we will likely have to make though. One of the new requirements is, if somebody has moved into North Carolina within the past five years we also have to do checks for states that have leaved him within a period. So that will be an additional requirement, there'is also some additional national registry that are specified in the law, that are currently working with the feds to determine if that already covered in spite of FBI check that an addition that has to be have to be done so there are some additional research to be done currently. The current cost for our providers is $26 to do the criminal background check another requirement with the Feds with our fellow partners is that these criminal background checks be do within 45 days of submission I'm [xx] returning on time for no problems kind on the background check is three to five days so we are well exceeding that but I want to make sure for even those that have it here that we are coming in under that 45 days. I don't anticipate having issues with that we do criminal check, background checks every three years. The feds will require every five years and so we are already exceeding that requirement. We may need their is a potential  for the need of each year in this area thou, there are new mandatory disqualifications for certain crimes such as murder, kidnapping done sexual assault, physical assault. While we have all ready review those as part of our process and then cracked us getting approved for childcare this would become automatic disqualification and in fact may help streamline our process of those ones we don't even put through the review process, but we may need to spell this out in legislation as mandatory disqualifications and so we'll continue to keep you informed as we move forward with that process. So I'll move forward now on to, as I mentioned 90% of our funds are served in subsidized, provide subsidized child care services there are some new requirements requirements around subsidy that they want states to assure they adhering to, first priority must be given to children of families with very low incomes including homeless children and children with special needs. We currently serve all of these categories we don't have a specific category for homeless children that's something that we'll need to adopt so we'll be able to track that. They want states to detail how we are going to prioritize these populations. We already have a funding formula that directs funds to support low income working families so we'll be working with our federal partners to describe how that works to the extent to see if that addresses their concerns with assuring we are serving very low income working families with low incomes. The new legislation adds foster parent to the definition of parents we currently do track and serve foster children under a separate code. They also are requiring states to increase partnerships with state and public agencies, travel organizations, faith and community based agencies to increase capacity supply and quality of care, what they are getting at with this is that there are areas of the state where there is not availability or there's difficulty in placing children. They are asking states to look at ways that we can adopt strategies to alleviate that. Finally and this last point punctuates and earlier one that we prioritize investments in geographic areas of specific concern concentrate on poverty. As I mentioned our funding formula already directs funding based upon children under 133% and 200% of federal poverty level. But what we'll be looking at additional options for ways that we can make sure that we're addressing areas of poverty as part of the plan. This next piece is one of the major changes of the

plan requirements for all states in subsidized childcare. There is a new requirement for a minimum 12 month eligibility period of service and that's regardless of income changes up to 85%. 85% of state median income is what the federal cutoff is for eligibility or temporary changes in participation in work, or training or education activities. And what this means is, in practice is that states can have their own income eligibility, and we do, and it's lower than the 85%. But once the child is in care and meet eligibility. They get 12 months of eligibility up and until they go over that 85%  threshold. So that is a change in how we'll have to do business under this new requirement with CCDF. Additionally within that 12 months if a parent loses their employment status are required, did I mentioned we do within 30 days plus an additional 30 days for a parent who loses employment during that period, we offer a minimum of three months here to allow that parent to go and become re employed, so those are new requirements that we'll have to build in. Currently most of our counties, do already do a 12 month eligibility period, that's the length of time of the time they do between re determinations for the most part, historically speaking even though we have had had some counties who have adopted six month re determination and codedly retermination in fact in some years where counties have found themselves in over spending status that's one of the tools they have used to get their spending back in line we're no longer be available under this new requirements so I wanted to make sure it punctuated this because this is a this is a significant change meeting with our federal partners what they can pay to us is they wanted to make it clear that this policy was really around supporting families and employing assuring that they have stability in the employment and for the children who are in the kid they have this ability of continuing to get the era in education throughout this period. There are some additional reporting requirements required for children served as well as those on waiting lists and those denied services we do currently keep a waiting list I believe under new requirement we going to have to do better at that, we have as Debra mentioned the county's basically doing annual look at the waiting list and they are collecting that information on ongoing basis, we're going to be required to have a lot better information about what's happening to those kids as they come get on the waiting as they're served, whats happens to those children while waiting for care, so that's something division will have to work on as part of this new requirements. I mentioned earlier and this is sort of re-puncturing the same point that we must develop and implement strategies to increase supply and quality for children in under served areas, infants and toddlers. Infants and toddlers has always been a challenge for all states that economically difficulty we've lower, child stuff shares, it's more costly, they want to make sure states are putting in their plan ways that we can assure that infants and toddlers have access to care, as well as children with disabilities and children served during non-traditional hours. Finally there's a requirement that we [xx] should not unduewly disrupt parents or guardians just employment, what they encouraging states to do is look at ways that we can remotely do re-determination, whether that would be through the web, or firm, or other uses of technology which don't require parents to necessary come in every year to do my nation as part of our on going processes, finally on child keep subsidy changes Debra did mention of our market rates that is a continuing requirement in this authorization that to set payment rates states must conduct either market rate survey or alternative methodology we are currently already conducting our 2015 marker rate survey based on previous registration and so that currently under way we will have those results next year as we will be able to share that information with this body, so there is stronger language though TCDF requirement that, states are required to start TCDF payment rates and accordance with the results of current market rate survey, or alternative methodology so we'll have to follow up on that as we get our market rate information, coming forward one significant area of change within the block range, and now we're getting into the budget speech with regard to how we manage the fund, and the quality, the spending that we're doing on quality activities, we currently have a requirement for a 4% set aside for quality activities. So out of the entirety of the block grand we set aside 4% must be spent on activities

to enhance the quality of care and education. In addition to that 4% the block grand has some hard dollar set-asides that are also dedicated to quality activities, and when you add all these, together they equate to roughly 7 % of the award currently. In 2016 the new quality set aside baseline is going to be 7% and as you can see on the slide, that's going to grow over the next five year period to a 9% minimum for quality activities. Beginning in 2017 in addition to that, there's going to be a new quality set aside of an additional 3% to be spent specifically on quality activities to support infant and toddler care. So taken all together, that will be a total of 12% of the [xx] fund that will have to be dedicated to quality activities so that's certainly going to be an increase in the dedication of these resources closest quality activities so we will have an opportunity over the next five years to develop strategies for how we want to utilize those funds to continue to enhance quality and care across North Carolina. This next slide we really just puncturing the point about he additional 3% for infant and toddler quality set aside as part of the overall block lane plan. So for the quality funding the legislation offers a lot of broad authorities to states for how those dollars can be spent in fact what it says in the legislation that states in one attempt specified areas and then it lists a lot of the areas and then one of the ares is a very general thing any other activity that can be paraphrasing of course but it offers a lot of authority in discretion for how states can use a quality funds they want states to have flexibility of different points on the spectrum that's one of the things I wanted to ensure states have flexibility in using those funds. I'm going to just talk about a few of the areas that they specifically list areas such as professional training requirements activities that will basically move our child care providers professional development along the continuum, we already do investments in this and we have been for years, to teach we provide scholarship for childcare workers to complete coursework in early care and education. The scholarships help pay for the cost of tuition and books for our teachers to go back to school as you know our ridalised is based on program and education requirements, we've asked our teachers to get higher education, we've put investments in that area with these quality dollars So that's one area where we are already aligning with one of the options under quality. Tiered Quality Raining and Improvement Systems, I mentioned a lot of states are at different points, obviously we have a very robust quality rating and improvement system in North Carolina really actually all of the activities we spend in quality, funds tie in someway to our quality rate of the licence system, so this This is another area where we may have additional opportunities to focus some of those dollars. Some additional options for user quality funds are improving the quality of infant and toddler care, improving health safety, cognitive and physical development for infants and toddlers, expanding statewide systems of childcare resource and referral. Facilitating state requirements for inspection, monitoring, training health and safety and licencing standards. We have regulatory staff that are supported with these quality dollars. So we may call it investments in this area as well. That last bullet there was when I was mentioning earlier supporting state and local efforts to develop high-quality programs standards relating to health, mental health, nutrition, physical activity and development. There is a lot that can fit under that category. So again the federal government is warning us we put pen to paper, we'll be reviewing this with our federal partners and we'll go through the approval process with them we're required to consult with our early care advisory council and we will be doing that as part of the plan, additionally we certainly want comments from our partners at the general assembly and fiscal research as we move forward for planning and development skip this on the quality. One of the other things I wanted to make sure that I pointed out, that there are additional and more robust requirements about how states will evaluate, all of the dollars that we'll put forward in quality in terms of what are going to be our outcomes, how are we going to measure it that will all be part of the plan as well. So I mentioned previously there were implementation dates. I'll just quickly go over those raising the minimum quality requirement from 4% to 9%. As I mentioned that's going to happen over a five year period beginning in 2016, the additional 3% quality set aside

requirements for infants and toddlers for 2017, criminal background checks for all child care providers September 2017, monitoring of  licencing and regulatory requirements for providers serving [xx] children November 19th 2016, posting the information on our website, November 19th also 2017, and anything that does not have a specific date, we have to develop a plan to make sure that we're getting there by September 30th of 2016. So that is some total remarks today and I look forward to any questions that you may have. Thank you. Chairman Apple. Thank you Mr chairman my question goes to page 22 of the child care subsidy report that mishandling made, are actually 22 and 23 where we see in both cases of childcare homes and childcare centers we are loosing slots or position, and I guess my first question is our five star system in any way mandated by the federal whatever we have or is this something that we as the state created and are in charge of? Representative Avla you did something in that the state created and has implemented over the years Rob just said the new ccdf re authorization is now requiring states to do a quality program, so we will have some way to pay for childcare differently based on quality of care of five star system currently meets the new federal requirements for that. Follow up. I guess my question goes to sometimes pensions create what we want and I've looked at this is simple because I went through an issue with my daughter when their son was born and we to find childcare. It's difficult both from availability as we as affordability. And, I guess my question goes back to how we set this up, should we mandate every level, and say by law to be here, you've got to do this, or would be better off if we had the state says this, like for the one it's a minimum, and the minimum has negative connotations in some peoples minds, maybe the basic level and then let market drive the improvement, by people saying I want to make more money I'm going to offer more things, and more ability, and more activities and better value for your dollar, because you're basically will not going to paying, at the one and two level, you've got drop him out of business, and they're people who need, I mean a one level is about better than a none level, and I'm wondering if, we're all in the right track in how we're trying to set up child care in terms of accessibility and affordability for the public. the only thing I can say is that the general Assembly has put in politics to say that the talk in subside program will not pay one of the two star rated facilities unless there's not enough in those camps there's a few children so there are not enough to show on the chart that I showed earlier and there being move to three four and five star centers as regard in over all change definitely has been a decrease in the number of homes and as fight decrease in the number of centers. One issue around the homes is they are the ones that provide the third shift under I'm more able to provide the unusual kinds of care these some families need, one of the issues there could be drive this is also the market rates, well the market rates have increased over the years, the General Assembly and what the state pays is not actually up to the 75% of the market rate and that could certainly happen on the fact on inability of Tokyo in certain Counties. I will say I'm looking at this shows the number of seniors. Do you have information on the number of actual slots and there are actual slots available? In totality now that may vary by county and by aid range and the availability in his fromage in earlier and

he can speak more than this what we hear in deadly [xx] and totally is the hardest to find. Representative [xx] Thank you Mar. Chairman some of the question I just needed a look so that I know much look about this subject. How grand parent deferred when dealing with how they're treated I think that would a better word. Representative Pinotine, prior to do this last budget Bill. Grandparent's income was not counted in determining eligibility effective on January 1st of this year their income is counted. So their income is counted just like anybody else so they're treated based on the age of the child. So age zero to five or special need children at 20% of the property level and age 6 to 12 is 133% of the property levels so their income count is the same as anybody else receiving [xx] on a [xx] you got eligible pre-care eligible [xx] to income, some military families but earlier in the presentation you said military family, how military family is treated they may not be [xx] Representative [xx] regarding quickly first I'd like to say that we would be doing a presentation on [xx] and [xx] later on in this session, right now I think it's scheduled for Thursday. OK. OK. Follow up. On slide 9, you've got requirements, receipts and appropriation. I don't really know what the receipts are, could you explain that? Yes Sir. Receipts are generally the federal funds, and in the case of the Child Care Subsidy Program most of the receipts are the Child Care Development Fund which is a block grant and that's part of what Rob was talking about, but there are also Temporary Assistance for Needy Families block grant funds that are used to pay for Child Care Subsidy also. Follow up. Slide 17. How are fathers treated that have custody of the children? You talk about mothers and all this, but suppose a father has custody of the children? Yes Sir, they're treated the same way. It's the parent included in the home, whether it's one parent or both parents their incomes are counted, and they can receive subsidy just as anybody else. Chairman Tucker. Thank you, Mr. Chair. I guess Debra, this would be in your piece of the presentation. Are you saying that in these numbers by qualification that a family that makes almost $50, 000 a year with four children can receive free child care? Is that what I'm hearing?   I'm assuming you're referring to slide 12? So for children aged zero to five, they have to have less than 200% of poverty. This reflects what the 200% of poverty is, and a family of four could be a one parent and three children, two parents and two children, so it's a family of four, and I'll note that they do have a co-payment that's up to 10% of their income. So if they were to receive, if they were at $3800 a month income, then their co-payment will be $380. Okay, alright let me flip through here quickly. On the, Rob, I guess you were saying earlier that folks can't get there once a year to meet with folks and we're doing it by the web, and doesn't that lead itself to the inability to be able to track whether they're saying is true or not? Yeah, let me specify. We currently do require, our current requirements are that all of our parents come in once a year to complete redetermination. What I was pointing out is the new federal requirements are asking states to look at ways that they could possibly do this to make it less burdensome for parents. Less burdensome to come in once a year to get the subsidy. Is that correct? I'm describing the federal legislative requirements. So we'll have to develop a plan with our federal partners to ensure that that we are looking that. One more follow up Mr. Chair.

Double about to page 16 on childcare subsidy or free childcare you tell me that if someone sick in a ob that they can get childcare continue get childcare just because they are looking for job for a period of three months three. Senator Tacker the current policy say to you have already be receiving childcare subsidy. So if you are currently employed and you lose employment, the policy is that you get 30 days for job search before you would lose your child care of subsidy and it can be extended another 30 days at the [xx] and at the local child care subsidy [xx] pre-determined that it's warranted so that they could receive up to 60 days of child care subsidy. They still would have a co-payment if the had income, for example if they had and income child support as a security they may still have a co-payment for that. The three months you are referring to is under the child care development fund re-authorization, the Central Government is now making it a requirement that it be for three months. I have to ask Rob to clarify if that's for anybody coming in after someone who has already receiving. I believe it's for anyone who's receiving but I don't want to Speak of the call I'll make sure that we get that clarification. Mr. Chair just accountability is key, we spend a lot of money in Syria, and you hear the stories about people who get free childcare and continue to get it, and are not seeking higher education or employment on those kind of things that are, certainly hope that we watch our federal and state dollars because this is a big number, I think we spend about $3 billion plus on the smart start and I still have yet to see the culture on impact of what their pre-care is doing,  so I just don't know how we are going to continue to afford to do that thank you Mr Chair. Senator Payne. Thank you Mr Chair along the same line of questioning that senator Tucker just went through. How do the parents or the parent get their child to the facility each day? and pick them up that afternoon but yet can't spend a few minutes to come in and do re authorization inquiry. Well, thank you for the question, that's certainly something we'll have to ensure we develop in the plan relative to what the requirements will be for the parents, as I mentioned we currently require parents to come in once a  year to do the determination or that something will have to express with our federal partners how we continue with that process Representative Dobson, sorry chairman Dobson. Thank you Mr. Chair on the reauthorization increases the minimum quality I'm not sure the page number, but reauthorization increases the minimum quality spending requirement to 9% phased in over five years and then the chart there says the current minimum is 4% if we are increasing, if we amend it to increase that from 4% to 9% does that mean as a direct effect on that we may or may not be reducing subsidy money if we are we having has been more to increase that to 9%? Thank you for the question, yes indeed that something will have to look at very carefully there is several moving parts to this though that will have to focus on over the next five years. In the reauthorization over the five year period the law authorizes now I'd say authorizes because the congress still have to appropriate the funding and they don't necessarily have to appropriate what matters the authorization, but over that five year period of the federal level there is a 16% increase in funding over that five year period within the loss so to the extend that funding increases over that period that could potentially off-set the additional money that goes into quality, all of that would have to play out and would have to track that as we move forward, but  yes  if there were only level funding and we're putting more funding into quality and 90% of our dollars are in subsidy, 3% in admand, with level funding what's certainly, impact the availability for subsidies services to oaks. Thank you Mr. Chairman, that I won't follow up if I may, and that's my fear I guess I would hope that they would give us the funds to make up

that difference but if not if someone in your office could give me maybe the difference of what that call, it's not based on what our expectations might be down the light, what more we may need to come up with to at least meet where we are currenlty at that with our subsidies that makes sense. Thank you we can certainly do that, we can lay out both scenarios we can lay out with flat funding, and lay out if we see the increases that are proposed in the authorization now one additional caviar with that is we only have federal numbers we know it's increasing by 16%, the authorization, we don't know yet what this North Carolina share of that is. I will say this though historically speaking even in years where there as been flat level funding year over year, North Carolina typically tends to get additional resources we're a growing state the federal government has their own funding formula. So, as I mentioned there is a lot of moving parts with this, but we can layout sort of every possible scenario we may be looking at over the next several years. Thank you, thank you Mr. Chairman senator Robins. Thank you Mr chair and that was their earlier question was one of mine cause I was concerned as well about decreasing available funds for subsidies, the other should then to follow up on pages 14, and 15 usage duely have to report of federal government but for those children on the monthly waiting left, two questions. One do you know where the children are, are they in homes just waiting to go into daycare, are they in some facility somewhere and they are just waiting on subsidies or do we do any tracking at all right now? We have limited information on children on Child Care waiting we do some categorization of that, we're happy to share that with you. I will say the primary reason for children on the Child Care waiting list is afford availability, the fast majority of our account is spending 100% of their dollars infact some of them are spending a little more than that, but the new legislation will require us to do a lot of better job around exactly what you're asking about, and what's happening to these kids, when they go on the waiting list, once they get on how long on staying on the waiting list, and what ultimate is happening with those children, so that's something we'll be developing as part of our overall plan. One problem Mr. Chair and then in terms of the enrollment process with the children on the waiting list, what's the priority for enrollment, with those on the waiting list by 200% of federal poverty, I mean how do you do that? Currently children are eligible as, 85 years old are also eligible under 200% of the federal poverty level, and school aged children under 133% of federal poverty level and then we serve children in protective services and child welfare services without regard to incomes, counties are able to individually establish their own priorities for how these children are set and they do. As Debra showed in her presentation, the vast majority of the kids that we serve are in the categories of employment so the vast, that's certainly a priority where most of our counties are serving children.   I do have one Follow up Mr. Chair. What about children under Child Protective Services, wouldn't that be automatically a major priority? Absolutely the vast majority of our counties put those kids at the very front of the line, and those kids are served without regard to income. We have not heard of specific instances of children needing child protective services not being able to get care, all counties are doing a good job with that. Senator McKissik. Couple of questions and here's the first there will be deal also with these kids on the weight list. To what extent can we establish criteria taking into account what the federal requirements are, that will broaden the capacity to get some of these kids off the weight list and get more of them served since we know this is an effective program, and and to what extent are other states doing things differently perhaps in terms of criteria that would decrease the weight list but it may also micro target some that really need the help, broadening it to get into some people that may be more main stream or outside our traditional income requirements. Absolute, that is an area again where we'll need to address our focus I mentioned as part of the re-authorization they want us to look at how we are serving under served areas, how we specifically addressing  low

income working families, how we addressing homeless populations, so those are all areas where we'll need to develop specifics in our plan. For how we intend to address that one area where we already do this is, we have a requirement for special needs all of our counties when they get their allocation, have a requirement that you must spend at least this many dollars on special needs children, that may be an area where we can adopt a policy to support a particular population in the, I'm sorry with respect to other states I'll have to follow up on that, if you'll give me the opportunity we can get you some additional detail on that. Good, that would be a pretty good, here's something that I'll be pretty curious about because if we could make raw targets in certain populations we really want to serve and [xx] to get others in my mind that would probably be a good policy to embrace, thank you. Representative Insko[sp?]. Thank you, Mr. Chairman and I also have I think I have three questions, my first one actually has to do with the first two pages, the major program and then the program comparisons especially the issue of subsidy, I guess I cannot understand why this was established originally to sole provide childcare superior cannot go back to work but we know so much more now about throughout childhood development and her critically is for success to our lives that it looks to me like you could also put school readiness under childcare subsidy and that helps tied in into the evidence based, we know that this programs work that they pay off in long term care improvements. For the success in society, for reducing crime, for increasing the income of the families, so that this early childhood development is actually part of that same continuum and I know smart start, starts at birth too but in the end there are five star senders are there. We do the star rating not because the parents are going back to work but because it helps us identify the quality of care that the children get, and that one of my questions has to do with the purpose of child care subsidy with regard to how we administer it, is a purpose to allow the child? health care centers that do better, is there for families of a low income families to attend those higher expense the better the child care centers that cost more to allow our low income families to attend those centers that's why we have child care subsidies? Yes representative Enscar[sp?] one of the requirements under the federal CCDF and this has been a requirement that they want to assure that states provide the same access to care for subsidized children that's available and population for very reasons that you stated to support low income working families but also to support the development of the education for the young children so we put policies around that we have two reimbursement rates subsidy and we pay those rates. Additionally, all of the, as I mentioned earlier all of the quality activities that we spend also support the childcare centers and the ability to maintain and keep those four and five star licences, one of the things I do want to point out is even when we met [xx] investments. When we invest in a teacher and increase their capacity to teach or increase the program quality all children who whether they have subsidized to a private benefit from those activities. Then I just want you answer the question where do you people go to get the re-authorization do they go into the center and fill out a form or do they go where they get re-authorization? The re-authorization is at the local DSS office or Local Purchasing Agency. We have a few DSS's who actually contract that work out, but they're going to the local their local eligibility to termination office. So this county office, department of social services then I have some concerns about the number of centers also, we've lost centers and we still have waiting list, for children who need subsidy, our do you know why we are loosing centers? Where are those children going whose

parents are working do we know anything about those children? what I would say about these centers is the overall number of centers has not actually decreased that much if you look at the chart on number 23 in January 2014 we had 4732, in January 15 we have 4761, so that is a loss of 4% where you're this large percentage swings is within the center population, we've had a huge shift towards five star care, you can see we have an increase of 40% and the relate directly to the drop on the other care this are not necessarily so is are closing but facilities that have actually move along the continuum to higher quality care. On the family chart care homes we certainly have lost a number of facilities and one of the things, one of the reasons for that is we did during the economic downturn, I have a lot of family childcare homes during that period, I don't have anything to say that certainly cause of but We did see a lot of large fume like choke your homes close during the recession period some of that may have a lot of people who were are working on necessarily needing care during that period and there has been some period of loss over that time within our family childcare homes. And we do have a house committee coming in at 10 so we conclude representative Abra. Quickly Mr. Kenser, in the monitoring of licensing and regulatory the requirement for the pre-licenser visit in at least one annual unannouced, how is that sitting in with current staffing? I know you'll say we do a good job currently of the aspect, what do we look for here is there anything we need to watch for? I think at this point with our current staffing we're already meeting this requirements, we're already be able to do the pre-licensing, we're already able to do the unannounced visit. My only sought of caution with that is we go through all of these other new requirements as part of the CCDF plan. We want to take another look at that and assure that we're staffed appropriately to make sure that we're meeting all of the requirements. One quick follow up, what is a quality activity? Representative Abeler, what I I can do as I will share with you the legislative language which specifically lies out the areas where dollars can be spent. I can also share with you exactly where we do spent our college were I was currently with chocolate development funds. It's very purposely, broadly worded to allow states to adopt quality activities that will, different states or different points along the spectrum with regard to where they are in quality care, different states have different needs so they have purposely left this language open for states to develop there own plans. Now having said that, that will be part of the plan that the federal government wants to review and approve. I'm completely open ended but there's a lot of flexibility for states. Thank you. Thank you members of the committee, members of the public having exhausted the agenda of the meeting we stand adjourned.