Title V MCH Budget & Financial Management

Title V Budget Structure Overview

Title V budget management is shaped by three overlapping financial requirements: the state match ratio, the Maintenance of Effort obligation, and the set-aside rules. Together, these requirements create a complex budgeting environment that demands careful planning, accurate cost allocation, and thorough documentation. Understanding how these requirements interact is essential for any grants manager or fiscal officer responsible for Title V funds.

The Title V budget is reported through TVIS as part of the combined application and annual report. The budget section must demonstrate compliance with all three financial requirements and show how resources are allocated across the six population health domains. For guidance on the TVIS submission process, see the Application & Needs Assessment Guide.

The 3:4 Match Requirement

Title V requires states to match federal funds at a ratio of $3 state or local funds for every $4 in federal funds received. This 3:4 ratio means the state must provide at least 75% of its federal allocation as matching funds. The match is one of the highest in federal block grant programs, reflecting the federal commitment to a genuine partnership rather than a purely federal investment.

Calculating the Required Match

The calculation is straightforward: multiply the federal allocation by 0.75 (or 3/4) to determine the minimum required state match.

Allowable Match Sources

The match must come from non-federal sources. Allowable sources include:

• State general fund appropriations: Direct state legislative appropriations for maternal and child health programs
• State special fund revenues: Dedicated revenue sources such as birth certificate fees, tobacco settlement funds, or other earmarked revenues for MCH
• Local government contributions: County or municipal funds contributed to Title V-supported programs, properly documented and meeting 2 CFR 200 match requirements
• In-kind contributions: Non-cash contributions such as donated space, volunteer professional services, or equipment — must meet 2 CFR 200 valuation and documentation standards

Federal funds from other programs (Medicaid, WIC, CDC grants, etc.) cannot be used as Title V match. This is a critical point for states that co-locate MCH programs with Medicaid-funded activities — the cost allocation system must cleanly separate federal Medicaid dollars from state dollars that count toward the Title V match.

Maintenance of Effort (MOE) Calculations

The MOE requirement is separate from and in addition to the match. While the match ensures that states contribute to the current Title V program, MOE prevents states from using federal Title V dollars to replace existing state investments. The MOE baseline is each state's FY1989 level of state spending on maternal and child health activities.

Key MOE Principles

• Fixed baseline: The FY1989 amount does not adjust for inflation. What matters is the nominal dollar amount, not its purchasing power. This means MOE becomes progressively easier to meet in nominal terms as state budgets grow over time.
• State funds only: Only state and local funds count toward MOE. Federal pass-through dollars from Medicaid, WIC, or other programs are excluded.
• MCH purpose test: Expenditures counted toward MOE must be for maternal and child health purposes. States have some latitude in defining what constitutes MCH spending, but the expenditures must reasonably fall within the scope of Title V's mission.
• Annual reporting: States must document their MOE compliance in the TVIS submission each year, identifying the specific state expenditures that meet or exceed the FY1989 baseline.

MOE vs. Match: Understanding the Difference

The match and MOE are often confused but serve different purposes and are calculated differently:

The 30/30/10 Set-Aside Rules

The set-aside requirements are calculated against the federal Title V allocation only (not the state match). For a state receiving $10 million in federal Title V funds:

Note that the children/adolescent and CSHCN set-asides can overlap. A program serving children with special health care needs can count toward both the 30% CSHCN set-aside and the 30% children/adolescent set-aside if the children served are under age 22. This overlap means that meeting both 30% thresholds does not necessarily require dedicating 60% of the budget to these two categories.

Allowable Costs Under Title V

Title V allowable costs are governed by the general cost principles in 2 CFR 200 Subpart E and the specific Title V statutory requirements and MCHB guidance. To be allowable, a cost must be:

• Necessary and reasonable: The cost must be needed for the proper and efficient performance of the Title V program
• Allocable: The cost must be chargeable to Title V in proportion to the benefit Title V receives
• Consistent with policies: The cost must be treated consistently with other costs of the same type and conform to the state's established policies
• Not a prohibited use: The cost must not fall under Title V's specific prohibitions (abortion services, cash payments to individuals, or most inpatient hospital services)

Common Allowable Cost Categories

Title V funds are commonly used for the following categories of costs:

• Personnel: Salaries and fringe benefits for staff performing Title V functions — MCH directors, program managers, epidemiologists, nurses, health educators, care coordinators
• Contractual services: Contracts with local health departments, community organizations, consultants, and other entities for Title V program implementation
• Supplies and materials: Educational materials, screening equipment, data collection tools, and other programmatic supplies
• Travel: Staff travel for program implementation, technical assistance, training, and federal meetings
• Training and professional development: Workforce development for MCH staff, including conferences, certifications, and continuing education
• Data systems: Data collection, analysis, and reporting infrastructure supporting Title V performance measures

Indirect Cost Considerations

Indirect costs (also called facilities and administrative costs or overhead) are allowable under Title V, subject to the state's federally negotiated indirect cost rate agreement. However, indirect costs charged to Title V are included in the 10% administrative cost cap calculation, which means high indirect cost rates can quickly consume the available administrative budget.

States should carefully model the impact of indirect cost charges on their administrative cost cap compliance. If your state's indirect cost rate is high, you may need to allocate indirect costs across multiple funding sources or negotiate with your central finance office about how Title V's 10% cap interacts with the statewide cost allocation plan.

Sub-Recipient Budgeting

States that pass Title V funds to local health departments or other sub-recipients must build sub-recipient budgeting into their overall Title V financial management system. Key considerations include:

• Set-aside tracking: Sub-recipient expenditures must be categorized to support the state's overall set-aside compliance. If a sub-recipient operates a CSHCN care coordination program, those expenditures count toward the state's 30% CSHCN set-aside.
• Sub-recipient monitoring: Per 2 CFR 200, the state must monitor sub-recipients for fiscal compliance, including allowability of costs, proper documentation, and timely expenditure of funds.
• Budget modification processes: Establish clear procedures for sub-recipients to request budget modifications, and track the impact of modifications on state-level set-aside compliance.
• Local match contributions: If sub-recipients contribute local funds as match, those contributions must be documented and verified per 2 CFR 200 standards.

Coordinating Title V with Medicaid Administrative Claiming

Many state MCH programs participate in Medicaid administrative claiming, where MCH staff performing Medicaid-related activities (outreach, enrollment assistance, care coordination for Medicaid-eligible populations) generate Medicaid administrative match. This creates a financial intersection between Title V and Medicaid that requires careful management.

• Time study requirements: Staff funded by Title V who also perform Medicaid-reimbursable activities must participate in time studies or random moment sampling to allocate their time between Title V and Medicaid. The Title V-funded portion cannot also be claimed for Medicaid reimbursement.
• No double-dipping: The same cost cannot be charged to both Title V and Medicaid. Cost allocation systems must cleanly separate the two funding streams.
• Revenue from Medicaid claiming: Medicaid administrative revenue generated by Title V staff is federal revenue and cannot be counted as state match for Title V.

SPRANS and CISS Competitive Supplements

In addition to the formula block grant, MCHB operates competitive grant programs that supplement Title V. These programs are funded from the portion of the Title V appropriation that MCHB retains before the state formula allocation:

• SPRANS (Special Projects of Regional and National Significance): Competitive grants for research, training, genetic disease testing/counseling, hemophilia treatment centers, and other MCH priorities. SPRANS grants are awarded to universities, states, and organizations through competitive application processes on Grants.gov.
• CISS (Community Integrated Service Systems): Grants supporting integrated systems of care for MCH populations, particularly CSHCN. CISS grants focus on system-building and coordination rather than direct service delivery.

If your state receives SPRANS or CISS grants in addition to the Title V block grant, these are managed as separate awards with their own reporting requirements through DGIS (not TVIS). Budget management must track these funds separately from the block grant, though programmatically they may support the same MCH goals.

Financial Reporting Through TVIS

The TVIS budget section requires states to report expenditures by:

• Population domain: How much was spent on each of the six population health domains, demonstrating set-aside compliance
• Service type: Direct services, enabling services, population-based services, and infrastructure-building activities
• Funding source: Federal Title V dollars, state match, and other state/local funds
• Administrative vs. program costs: Clear delineation showing compliance with the 10% administrative cost cap

States also submit federal financial reports (SF-425) through the HRSA Electronic Handbooks (EHBs) system. The SF-425 captures total expenditures, unliquidated obligations, and unobligated balances. For Single Audit purposes, Title V is a major program that auditors must test if the state expends more than $750,000 in Title V funds during the fiscal year.