What Is the Child Care and Development Fund?
The Child Care and Development Fund (CCDF) is the primary federal funding mechanism for child care subsidies in the United States. Cataloged under CFDA 93.575 (discretionary) and 93.596 (mandatory and matching), CCDF provides approximately $12.3 billion annually to states, territories, and tribal organizations to subsidize child care for low-income families and to improve the overall quality of child care for all children. The program is administered by the Office of Child Care (OCC) within the Administration for Children and Families (ACF) at the U.S. Department of Health and Human Services (HHS).
CCDF is authorized by the Child Care and Development Block Grant (CCDBG) Act, most recently reauthorized in 2014 (P.L. 113-186), and Section 418 of the Social Security Act. The 2014 reauthorization was transformative — the first comprehensive update since 1996 — and introduced sweeping health and safety requirements, 12-month eligibility mandates, graduated phase-out provisions, and substantially increased quality spending floors. These changes fundamentally altered the compliance landscape for every state lead agency and child care provider receiving CCDF funds.
How CCDF Funding Flows
Unlike competitive federal grants where organizations apply through Grants.gov and are scored against other applicants, CCDF operates as a formula-based allocation. Understanding the three distinct funding streams is essential for any administrator managing CCDF funds:
- Mandatory funds (~$3.5 billion): Allocated to states by formula based on the state's share of children under age 13. No state match is required for mandatory funds. These are the base allocation that every state receives automatically.
- Matching funds (~$2.9 billion): Available to states that maintain a maintenance-of-effort (MOE) commitment and provide state matching funds at the Federal Medical Assistance Percentage (FMAP) rate. States must spend at their MOE level before drawing matching funds.
- Discretionary funds (~$5.9 billion): The largest component, allocated by formula based on the number of children under age 5, number of children receiving free or reduced-price school meals, and per capita income. Discretionary funds do not require a state match but are subject to all CCDF quality spending and administrative cost requirements.
- Tribal set-aside (~2%): Approximately 2% of the total CCDF appropriation is reserved for federally recognized tribes, tribal consortia, and tribal organizations. Tribal grantees apply directly to ACF and are not subject to state lead agency administration.
The State Lead Agency Model
Each state designates a single lead agency responsible for administering CCDF within its borders. The lead agency may be a department of human services, education, early childhood, or workforce development — the organizational home varies by state. The lead agency is responsible for:
- Developing and submitting the 3-year CCDF State Plan to ACF, describing how the state will administer the program, establish eligibility, set provider payment rates, and ensure health and safety compliance
- Establishing family eligibility criteria, including income thresholds (up to 85% of State Median Income), age limits, and work or training activity requirements
- Setting provider payment rates based on market rate surveys or alternative cost methodologies and ensuring equal access for subsidized families
- Implementing and enforcing health and safety standards across all provider types, conducting inspections, and administering background checks
- Submitting required federal reports including ACF-801, ACF-800, ACF-696, and annual quality progress reports
The 2014 CCDBG Act: A Compliance Transformation
The CCDBG Act of 2014 represented the most significant reform of federal child care policy in nearly two decades. For administrators who joined the field before 2014, the compliance landscape has changed dramatically. For those who entered after, these requirements may seem like they have always existed — but understanding their legislative origin helps explain the ongoing implementation challenges many states face.
The major changes fall into several categories:
- 12 health and safety categories: All providers serving children receiving CCDF subsidies must meet standards in 12 specific categories, including prevention and control of infectious diseases, administration of medication, building and physical premises safety, and emergency preparedness. This applies to both licensed and license-exempt providers.
- Comprehensive background checks: All child care staff must undergo background checks that include a search of the state criminal repository, state sex offender registry, National Crime Information Center (NCIC), FBI fingerprint check, and state child abuse and neglect registry. This multi-component check must be completed before an individual can provide unsupervised care.
- 12-month eligibility: Once a family is determined eligible, the state must provide 12 months of assistance regardless of temporary changes in income (as long as income does not exceed 85% SMI) or temporary interruptions in work or training activities.
- Quality spending floors: A minimum of 9% of total CCDF spending on quality activities, with at least 3% dedicated to improving the quality of infant and toddler care specifically.
- Consumer education: States must operate a consumer-friendly website with information on provider licensing, quality ratings, inspection results, and health and safety compliance — enabling parents to make informed choices about child care.
Who This Guide Is For
This CCDF Program Guide is written for the practitioners and administrators who manage child care subsidy programs and quality initiatives day to day:
- State lead agency directors and staff responsible for CCDF administration, policy development, and federal reporting
- Tribal child care program administrators managing direct tribal CCDF grants from ACF
- Child care resource and referral agencies that administer components of the CCDF program under contract with state lead agencies
- Fiscal officers and grants managers handling CCDF budgets, match requirements, and financial reporting
- Quality improvement and QRIS coordinators responsible for meeting quality spending requirements and implementing quality initiatives
What This Guide Covers
Each section of this guide addresses a specific aspect of CCDF management. Whether you are a new state lead agency administrator learning the program or a veteran grants manager preparing for an ACF monitoring review, these pages provide the detailed reference information you need.