Ohio Exceeded the 5-Percent Limit for Claiming Child Care Development Fund Administrative Expenditures

Federal regulations limit the amount of Child Care and Development Fund (CCDF) funds that a State agency may claim for administrative expenditures to 5 percent of the total amount of discretionary, mandatory, and matching funds expended in a fiscal year (FY).

From FY 2007 through FY 2011, the Ohio Department of Job and Family Services (State agency) exceeded the 5-percent limit for claiming CCDF administrative expenditures by a total of $3.2 million (Federal share). Of the $41.5 million ($38.4 million Federal share) that the State agency classified as quality activities expenditures on its ACF-696 reports, $32.5 million

($30.1 million Federal share) was allowable. However, the State agency misclassified the remaining $9 million ($8.3 million Federal share) as quality activities expenditures when they should have been classified as administrative expenditures. The State agency's review of cost pool allocations did not identify the improper classification of administrative expenditures.

The State agency indicated that it would take corrective action to address these errors after we brought them to its attention. Although the State agency misclassified administrative expenditures totaling $8.3 million (Federal share), only $3.2 million (Federal share) of that amount exceeded the 5-percent limit for administrative expenditures and was unallowable.

We recommended that the State agency (1) refund $3.2 million in cost pool expenditures that exceeded the 5-percent CCDF administrative limit and (2) take corrective actions to ensure that cost pool expenditures are properly claimed on the ACF-696 report. The State agency concurred with our recommendations and stated that it has instituted new procedures to ensure that the cost pool expenditures are properly claimed on the ACF-696 report.