GAO-23-106833, Child Care: Observations on States' Use of COVID-19 Pandemic-Related Funding

PDF source document — GAO-23-106833, Child Care: Observations on States' Use of COVID-19 Pandemic-Related Funding, dated 2023-05-31, issued by Government Accountability Office.

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CHILD CARE
Observations on States'
Use of COVID-19
Pandemic-Related
Funding
Statement of Kathryn A. Larin, Director, Education,
Workforce, and Income Security Issues

Testimony
Before the Committee on Health,
Education, Labor, and Pensions, U.S.
Senate
For Release on Delivery
Expected at 10 a.m. ET
Wednesday, May 31, 2023
GAO-23-106833

United States Government Accountability Office

 United States Government Accountability Office

Highlights of GAO-23-106833, a testimony
before the Committee on Health, Education,
Labor, and Pensions, U.S. Senate

May 31, 2023
CHILD CARE
Observations on States' Use of COVID-19 Pandemic-
Related Funding
What GAO Found
The Child Care and Development Fund (CCDF) is the largest federal child care
program, providing grants to states to improve the affordability, availability, and
quality of child care. For fiscal years 2020 and 2021, CCDF was appropriated
substantially more than fiscal year 2019 CCDF allocations to help states prevent,
prepare for, and respond to the pandemic (see table). Each new funding source
came with its own rules and deadlines for states to obligate and spend funds.
States were also provided additional programmatic flexibilities.
Coronavirus Supplemental Appropriations to the Child Care and Development
Fund (CCDF) in Fiscal Years 2020 and 2021 and Total Spending as of April 2023
Act
Appropriation
to CCDF
(billions)
Estimated
total
spending as
of April 2023
(billions)
Spending
deadline
Coronavirus Aid, Relief,
and Economic Security
(CARES) Act  (2020)
$3.5
$3.3
Sept. 30,
2023
Coronavirus Response
and Relief Supplemental
Appropriations Act, 2021
(CRRSA)
$10.0
$8.0
Sept. 30,
2023
American Rescue Plan
Act of 2021 (ARPA)
child care
stabilization funds
$24.0
$19.9
Sept. 30,
2023
supplemental
CCDF funds
$15.0
$3.3
Sept. 30,
2024
Total
$52.5 billion
$34.5 billion
Source: Pub. L. No. 116-136, div. B, tit. VIII, 134 Stat. 281, 557 (2020); Pub. L. No. 116-260, div. M, 134 Stat. 1182, 1914; and Pub. L.
No. 117-2, §§ 2201, 2202, 135 Stat. 4, 31; Department of Health and Human Services (HHS) documents; and GAO interviews with
HHS officials. I GAO-23-106833
States used supplemental funding and temporary flexibilities in various ways, but
data on the full extent of their use and impact is not yet available. In October
2021, GAO reported that data from its national survey of state CCDF
administrators showed states used the funds and flexibilities in 2020 to, for
example, help essential workers pay for care and pay care providers based on
enrollment, not attendance. According to HHS officials, as of April 2023, states
spent an estimated $34.5 billion of the $52.5 billion in supplemental COVID-19
relief funds. Due to states still having time to expend the funds and lags in data
reporting, a full accounting will likely not be available until 2025 or 2026.
State child care administrators GAO interviewed in the fall of 2022 said they
faced challenges managing supplemental pandemic funding as they adapted to
meet the needs of child care providers and families during the pandemic. They
reported facing remaining uncertainty about the impact of the funds’ expiration on
providers and families who may continue to face long-standing challenges like a
workforce shortage and a lack of child care supply. Several of the administrators
and child care experts GAO interviewed said that provider payment rates often
are not sufficient to cover the high cost of providing quality care, leading to fewer
providers accepting subsidies and fewer places for families to use them. As such,
addressing these and other key challenges would require a sustained effort.
View GAO-23-106833. For more information,
contact Kathryn A. Larin at (202) 512-7215 or
larink@gao.gov.
Why GAO Did This Study
The federal government has long
invested in child care as a key support
for workers to help them become self-
sufficient. Child care subsidies funded
by CCDF help some low-income
families afford child care so parents
can work, attend school, or participate
in job training. Appropriations for child
care through CCDF during the COVID-
19 pandemic totaled more than $52
billion. This represented a concerted
effort to stabilize the sector and to
ensure that low-income families would
continue to have access to affordable
child care. States were also given new
flexibilities in how they administer
CCDF programs. These efforts to
support child care providers and
families are ongoing, as these funds
have not yet expired.
This statement is primarily based on
GAO’s October 2021 and March 2023
reports on CCDF, including child care
during the COVID-19 pandemic. It
addresses (1) how states used federal
COVID-19 relief child care funds and
flexibilities, and (2) past and continuing
challenges states faced spending
these funds.
For our prior work, GAO (1) surveyed
state CCDF administrators in 50 states
and the District of Columbia and asked
about their uses of supplemental child
care funds and flexibilities in 2020, and
(2) interviewed the state child care
administrators in seven selected
states—California, Colorado,
Connecticut, Georgia, Michigan, New
Mexico, and Texas—in September and
October 2022. These states were
selected to represent varying state
program attributes like geographic
region and population size.

Letter

Page 1
GAO-23-106833  Child Care
May 31, 2023
Chairman Sanders, Ranking Member Cassidy, and Members of the
Committee:
Thank you for inviting me here today to discuss our work on states’ use of
federal COVID-19 supplemental child care funds. The federal government
has long invested in child care as a key support for workers to help them
become self-sufficient. Child care subsidies help some low-income
families afford child care so parents can work, attend school, or
participate in job training. The Child Care and Development Fund (CCDF)
is the largest federal child care program, providing grants to states to
improve the affordability, availability, and quality of child care.
Appropriations for child care through CCDF during the COVID-19
pandemic totaled more than $52 billion, representing a concerted effort to
stabilize the sector and to ensure that low-income families would continue
to have access to affordable child care. This influx of funds also allowed
states to invest in quality improvements that benefit all children –
including those who do not receive subsidies. States also were given
temporary flexibilities in how they administer CCDF programs.
These efforts to support child care providers and families are ongoing, as
some of these funds do not expire until September 2023 and others
expire in September 2024. My statement today discusses (1) states’ use
of federal COVID-19 relief child care funds and flexibilities, and (2) the
past and continuing challenges states have faced in spending these
funds.
This statement is based primarily on two recent prior reports on CCDF.
For our October 2021 report, we surveyed state CCDF administrators in
50 states and the District of Columbia and asked about their uses of
supplemental child care funds and flexibilities in 2020. For our March
2023 report, we interviewed state child care administrators in seven
selected states in September and October 2022.1 The work upon which
this statement is based was conducted in accordance with generally
accepted government auditing standards. Those standards require that
we plan and perform the audit to obtain sufficient, appropriate evidence to

1For our prior work see GAO, COVID-19: Additional Actions Needed to Improve
Accountability and Program Effectiveness of Federal Response, GAO-22-105051
(Washington D.C.: Oct. 27, 2021); Child Care: Subsidy Eligibility and Use in Fiscal Year
2019 and State Program Changes during the Pandemic, GAO-23-106073 (Washington,
D.C.: Mar. 29, 2023).
Letter

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GAO-23-106833  Child Care
provide a reasonable basis for our findings and conclusions based on our
audit objectives. We believe that the evidence obtained provides a
reasonable basis for our findings and conclusions based on our audit
objectives.
CCDF is the primary source of federal funding to help low-income families
pay for child care. The Department of Health and Human Services (HHS)
Office of Child Care administers the CCDF at the federal level and
provides guidance and technical assistance to states on how to operate
their subsidy programs. Under CCDF, states have substantial flexibility to
establish their own eligibility criteria that determine which low-income
working families will receive subsidies to help them pay for child care. On
average, 1.43 million of the estimated 8.7 million children eligible for child
care subsidies in their states received them from CCDF funds in a given
month in fiscal year 2019.2 The gap between the number of low-income
working families whose children could benefit from child care subsidies,
and the number who actually receive subsidies, is long-standing.
As we reported in March 2023, nearly all state child care administrators
and child care experts we interviewed in 2022 said that the pandemic
placed unprecedented strain on child care providers and working
families.3 Child care providers faced temporary and permanent closures.
According to one report, nearly 16,000 child care centers and licensed
family child care programs closed permanently between December 2019
and March 2021.4 Many child care workers left the sector for higher
paying jobs, leading to worker shortages as demand for child care started
to increase. Providers were also tasked with updating their policies and
programs to reflect constantly changing health and safety requirements
and paying for personal protective equipment once they were able to re-
open. Meanwhile, parents who lost their jobs as businesses suspended
their operations or closed needed child care support while they searched
for new jobs or sought educational activities to enhance their employment

2A total of 2 million children were served on average each month through all federal and
state funding streams.
3We interviewed the state child care administrators in September and October 2022 in
seven selected states: California, Colorado, Connecticut, Georgia, Michigan, New Mexico,
and Texas. See GAO-23-106073.
4Child Care Aware of America, Demanding Change: Repairing our Child Care System
(Arlington, Va.: February 2022).
Background

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GAO-23-106833  Child Care
prospects. Finding and paying for child care became more of a struggle
for these parents.
Data from mid-2022 shows the child care sector recovering, although at
this point it is not yet known whether employment has returned to pre-
pandemic levels. Employment in the child care industry dropped 35
percent in April 2020 compared to early 2020, according to a recent HHS
analysis.5 After this initial decline, employment steadily increased and
reached 92 percent of February 2020 levels by November 2022. As a
result, on average, child care providers had more than 1.5 fewer
employees in June 2022 than in January 2020, with impacts for both
providers and families.
In 2020 and 2021, Congress appropriated more than $52 billion in
Coronavirus Aid, Relief, and Economic Security (CARES) Act and other
COVID-19 supplemental funds for CCDF to help states prevent, prepare
for, and respond to the COVID-19 pandemic (see table 1). This was a
large-scale increase in CCDF funds; in fiscal year 2019, CCDF
allocations were $8.1 billion.6
Each supplemental funding source had specific spending rules and
deadlines for states to obligate and spend funds. States were also
provided flexibilities in how they could use their CCDF funds. For
example, according to HHS, states were allowed to waive family co-
payments for all families using child care subsidies, which is generally not
allowable.7

5G. Crouse, R. Ghertner, N. and Chien, The Impact of the COVID-19 Pandemic on the
Child Care Industry and Workforce (Office of the Assistant Secretary for Planning and
Evaluation, Department of Health and Human Services, January 2023).
6Additional sources of federal funding for child care subsidies include Temporary
Assistance for Needy Families and the Social Services Block Grant. The federal
government and states spent an estimated total of $11.1 billion to subsidize child care
through these programs in fiscal year 2019, according to HHS.
7Waiving co-payments for all families generally is not allowable under CCDF, but was
allowed temporarily for states with a CCDF waiver or using Coronavirus Response and
Relief Supplemental Appropriations Act, 2021 funds, according to HHS officials. See
https://www.acf.hhs.gov/sites/default/files/documents/occ/summary_of_waiver_approvals.
pdf for additional information on approved waivers.

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GAO-23-106833  Child Care
Table 1: Coronavirus Supplemental Appropriations to the Child Care and Development Fund (CCDF) in Fiscal Years 2020 and
2021
Act

Appropriation to
CCDF
(in USD)
Obligation
deadline
Spending deadline
Coronavirus Aid, Relief, and Economic Security
(CARES) Act (2020)
3.5 billion
Sept. 30, 2022
Sept. 30, 2023
Coronavirus Response and Relief Supplemental
Appropriations Act, 2021 (CRRSA)a
10.0 billion
Sept. 30, 2022
Sept. 30, 2023
American Rescue Plan Act of 2021 (ARPA)
child care
stabilization
funds
24.0 billion
Sept. 30, 2022
Sept. 30, 2023
supplemental
CCDF funds
15.0 billion
Sept. 30, 2023
Sept. 30, 2024
Total
52.5 billion

Source: Pub. L. No. 116-136, div. B, tit. VIII, 134 Stat. 281, 557 (2020); Pub. L. No. 116-260, div. M, 134 Stat. 1182, 1914; and Pub. L. No. 117-2, §§ 2201, 2202, 135 Stat. 4, 31; Department of Health and
Human Services documents. I GAO-23-106833
aCRRSA is Division M of the Consolidated Appropriations Act, 2021.

As we reported in October 2021, states reported using a variety of
strategies to support child care providers and families in 2020, including
helping essential workers pay for care and paying child care providers
based on enrollment rather than attendance, according to states’
response to our national survey.8 In a more recent study, HHS officials

8We surveyed state CCDF administrators in 50 states and the District of Columbia and
asked about their uses of supplemental child care funds and flexibilities in 2020. Our
survey was administered between January and March 2021 and asked states to report on
four points in time: March 31, June 30, September 30, and December 31, 2020. All but
one state responded to our survey. For additional information, see GAO-22-105051.
States Used COVID-
19 Child Care Funds
and Flexibilities in
Different Ways, but
Complete Data Are
Not Yet Available
States Used Available
Flexibilities When
Spending COVID-19
Supplemental Child Care
Funds

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GAO-23-106833  Child Care
reported states’ use of similar strategies.9 When asked about how they
used CCDF CARES Act funds or planned to use Coronavirus Response
and Relief Supplemental Appropriations Act (CRRSA) funds, states most
commonly noted that they provided assistance to child care providers
experiencing temporary closures or decreased enrollment and to child
care providers not previously receiving CCDF funding (see table 2). More
than half of states used funds to provide child care assistance to essential
workers regardless of income. Based on preliminary data, HHS has noted
that compared to 2019, the average monthly number of children served in
2020 with CCDF funded subsidies increased modestly.10 HHS officials
attribute the fiscal year 2020 increase in the number of children who
received subsidies to states’ use of CARES Act funding and flexibilities to
serve the children of essential workers who were not previously eligible,
among other reasons.

9The HHS Office of Planning, Research and Evaluation issued a report in July 2022 that
provided information about how states changed their CCDF policies in response to the
COVID-19 pandemic from the declaration of the public health emergency on January 31,
2020 to March 1, 2021. The information was based on administrative data from states and
territories. According to this report, for some portion of the pandemic’s first year, 35 states
waived co-payments for all families and 18 waived income eligibility thresholds for
essential workers, changes that HHS officials we interviewed said were possible only
because of the supplemental funds and the flexibility provided to states. For more
information, see Department of Health and Human Services, Appendix to the 2020 CCDF
Policies Database Book of Tables: Child Care Subsidy Policies in Response to the
COVID-19 Pandemic From January 2020 to March 2021, OPRE Report 2022-152
(Washington, D.C.: July 2022).
10The most recent CCDF eligibility data are from fiscal year 2019. While fiscal year 2020
eligibility data are not yet available, HHS published preliminary 2020 subsidy receipt data
in May 2022 that showed an increase in the average number of children provided
subsidies funded only through CCDF to an estimated 1.49 million children in an average
month.

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Table 2: State Uses or Planned Uses of CCDF CARES Act and Coronavirus Response and Relief Supplemental Appropriations
Act (CRRSA) Funds, March through December 2020
Uses of CARES Act and CRRSA funds
Number of states
that reported using
CARES Act funds
Number of states that planned
to use CRRSA funds
Provide assistance to child care providers experiencing temporary
closures or decreased enrollment due to COVID-19
46
46
Provide assistance to child care providers not receiving Child Care and
Development Fund funding as of March 1, 2020
42
42
Provide child care assistance to essential workers regardless of income
29
15
Pay two child care providers for the same child for the same time perioda
24
11
Support child care resource and referral agencies
14
19
Support family child care network(s) as a means to increase supply of
home-based child care providers
8
13
Source: GAO survey of state Child Care and Development Fund (CCDF) administrators, 2021. I GAO-23-106833
Notes: We surveyed state CCDF administrators in 50 states and the District of Columbia and asked
about their uses of supplemental child care funds and flexibilities in 2020. The CRRSA was enacted
in December 2020, a few weeks before our survey was deployed. The American Rescue Plan Act of
2021, which also appropriated supplemental funding for CCDF, was enacted in March 2021, after our
survey had been sent to state child care administrators. Our 2021 survey asked states to report on
four points in time: March 31, June 30, September 30, and December 31, 2020. All but one state
responded to our survey. CRRSA is Division M of the Consolidated Appropriations Act, 2021.
aOffice of Child Care guidance states that CARES and CRRSA funds can be used to pay two
providers for the same child should one of the providers be temporarily closed due to COVID-19.

When asked about flexibilities they used, states most commonly opted to
pay providers based on more generous absence day policies (see fig.
1).11 In its preliminary fiscal year 2020 data, HHS officials attributed
states’ increase in the average monthly CCDF subsidy amount to child
care providers, in part, to this more generous policy.12 As we recently
reported in March 2023, state child care administrators we interviewed in
2022 also said that paying subsidies to providers based on enrollment
kept some providers from closing during periods of fluctuating or low
attendance. One state administrator said this change incentivized
additional providers to join the state subsidy program, as subsidies
became a reliable source of income for child care providers during volatile

11More generous absence day policies were used during the pandemic to allow providers
to continue receiving CCDF payments if their programs closed or children were absent, as
a way to help support child care businesses during times of low attendance.
12In fiscal year 2019, providers were paid $504 per month, on average nationally, for each
child in their care who received a subsidy, according to HHS data. HHS’s preliminary fiscal
year 2020 data reflect an increase to $556 per month, on average nationally for each
child.

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GAO-23-106833  Child Care
times. We also found that 32 states waived or reduced family co-
payments at the start of the pandemic, but over time fewer states
continued this flexibility. For example, only 22 still had this change in
effect in December 2020.
Figure 1: Federal Child Care Flexibilities States Most Commonly Used during
COVID-19, March through December 2020

Note: This figure shows federal child care flexibilities implemented due to COVID-19 by at least 50
percent of states. All but one state responded to our survey.

We have previously reported on states’ use of the supplemental CCDF
funds early in the pandemic, but data on the full extent of their use and
impact is not yet available because states have not spent or obligated all
the funding.13 HHS added questions related to states’ use of COVID-19
supplemental child care funding to the CCDF forms states are required to

13GAO-22-105051.
Data about Supplemental
CCDF Use and Effects
after March 2021 Are Not
Yet Available

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submit to HHS. Specifically, states submit CCDF financial reports
reflecting their uses of the funds to HHS by 30 days after the end of each
quarter. In addition, HHS receives information from states on their use of
American Rescue Plan Act of 2021 (ARPA) child care stabilization funds
on a new reporting form specific to that funding stream. HHS’s Office of
Child Care also conducts regular interviews with states to track their
progress in spending COVID-19 supplemental child care funding,
according to HHS officials.  States continue to submit reports on their
spending at the end of each year as funds are spent.
As of April 2023, HHS reported that states have spent $34.5 billion of the
$52.5 billion in COVID-19 supplemental child care funds (see table 3).
While recent annual obligation data are not yet available, HHS officials
report that all state child care administrators stated that they met the
September 30, 2022 obligation deadline for CARES, CRRSA, and ARPA
stabilization funds.
Table 3: Coronavirus Supplemental Appropriations to the Child Care and Development Fund (CCDF) in Fiscal Years 2020 and
2021 and Total Spending as of April 2023
Act
Appropriation to
CCDF
(in USD)
Estimated total
spending as of April
2023 (in USD)b
Spending deadline
Coronavirus Aid, Relief, and Economic
Security (CARES) Act (2020)
3.5 billion
3.3 billion
Sept. 30, 2023
Coronavirus Response and Relief
Supplemental Appropriations Act, 2021
(CRRSA)a
10.0 billion
8.0 billion
Sept. 30, 2023
American Rescue Plan Act of 2021 (ARPA)  child care
stabilization
funds
24.0 billion
$19.9 billion
Sept. 30, 2023
supplemental
CCDF funds
15.0 billion
$3.3 billion
Sept. 30, 2024
Total
52.5 billion
34.5 billion

Source: Pub. L. No. 116-136, div. B, tit. VIII, 134 Stat. 281, 557 (2020); Pub. L. No. 116-260, div. M, 134 Stat. 1182, 1914; and Pub. L. No. 117-2, §§ 2201, 2202, 135 Stat. 4, 31; Department of Health and
Human Services (HHS) documents; and GAO interviews with HHS officials. I GAO-23-106833
aCRRSA is Division M of the Consolidated Appropriations Act, 2021.
bTotals are estimated as they are subject to change during the fiscal year.

According to HHS officials, states report quarterly financial data that
include expenditures and other financial information by each COVID-19
supplemental funding source. HHS does not aggregate or publish these
data on a quarterly basis and instead publishes these data on an annual

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basis, which officials said provides a more reliable accounting. According
to HHS, states make significant adjustments to their reports during the
year, including changing which funding source is claimed for certain
obligations, where allowable and appropriate, leaving quarterly reports
potentially misleading or inaccurate. HHS reported that a significant lag in
finalizing and publishing data exists due to the process of reviewing
submissions, following-up with states on missing or inconsistent data, and
aggregating, clearing, and publishing the results. The agency has
published comprehensive fiscal year 2020 financial data and anticipates
publishing fiscal year 2021 data in the fall of 2023, which will include
obligation and liquidation amounts for each source of COVID-19
supplemental child care funding as of September 30, 2021. As a result, a
full accounting of how supplemental COVID-19 funds were spent will
likely be available in 2025 or 2026.
Similarly, data on the number of children eligible for and the number who
received child care subsidies is typically available years after the end of
the fiscal year. The most recent HHS information about the number of
children eligible for and the number who received child care subsidies is
from fiscal year 2019, prior to the appropriation of supplemental funds.
HHS produces eligibility estimates using a microsimulation model that
takes time to update every year, resulting in a 2-year lag.14 Therefore, a
fuller picture on the use and impact of pandemic-related child care
spending may not emerge until 2026.

14There generally is a 2-year time lag between the collection of Census data that HHS
uses to create its eligibility estimates and when it releases these data, according to HHS
officials. HHS produces the eligibility estimates using the Transfer Income Model (TRIM),
a microsimulation model developed and maintained by the Urban Institute under a
contract with HHS. This model is based on the Annual Social and Economic Supplement
of the Current Population Survey. TRIM compares family income and work status data,
among other factors, from the Current Population Survey against CCDF requirements in
order to generate estimates of the number of children and families eligible for subsidies.
The baseline TRIM microsimulation takes time to produce in part because it analyzes
changes in subsidy eligibility requirements in each state, as well as changes in
requirements for other transfer programs and income imputations, among other factors.
HHS has not finalized fiscal year 2020 subsidy receipt data, but preliminary data are
available.

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As the public health emergency unfolded, states were tasked with quickly
deciding how to assist vulnerable families and child care providers,
sometimes before guidance on the use of federal funds was available.
State child care administrators we interviewed in 2022 said that they
faced both short-term and ongoing challenges as they adapted their
subsidy programs to meet the time-sensitive needs of families and child
care providers during different phases of the pandemic. They specifically
cited challenges to managing the influx of funding and making decisions
that reflected its time-limited nature. State administrators are still in the
process of spending these funds, but noted they are facing uncertainty
about how the pandemic funds’ expiration will affect both child care
providers and families.
•
Managing influx of funding. While child care administrators we
interviewed in 2022 said that they were grateful for the additional
financial support for their subsidy program, all seven expressed
challenges related to managing and distributing a large influx of
funding during a compressed time frame to address families’ and
providers’ real-time needs. For example, one state administrator
discussed the challenge of quickly designing and implementing
changes to the state program’s IT system to account for changes
made to their payment processes.
•
Time-limited nature of funding. Amid this stress, state child care
administrators tried to make sustainable choices and think
strategically about how to use the funds. All seven state
administrators we interviewed expressed concerns about the time-
limited and one-time nature of the financial support they received
during the pandemic. As a result, in some instances, states decided to
use funds for one-time purposes rather than to address long-standing
challenges. For example, one administrator explained that the state
opted to pay one-time signing or retention bonuses rather than to
raise wages to address long-standing child care worker recruitment
and retention challenges.
•
Remaining uncertainty for states, families, and providers. State
administrators said uncertainty about future funding levels was a
concern. In particular, several state child care administrators
expressed concern about reverting to restrictive, pre-pandemic
income eligibility limits for families and lower rates of payment to
providers that do not reflect providers’ true cost of delivering quality
care. Three state administrators said they were concerned that
without additional action they may need to expel families from the
program when COVID-19 relief funds expire.
State Child Care
Administrators Cited
Challenges Spending
COVID-19 Funding
and Reported Facing
Continued
Uncertainty

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As we reported in March 2023, child care providers and low-income
families have faced long-standing challenges. A pre-pandemic 2018
analysis found that more than half of Americans—51 percent—lived in
neighborhoods classified as child care deserts, areas with more than
three young children for every licensed child care slot.15 Even when high-
quality child care is available, many families struggle to pay for the cost of
this care, with some who receive subsidies paying more than 7 percent of
their income, HHS’s benchmark for what may be considered affordable,
on co-payments.16 At the same time, several of the state child care
administrators and experts we interviewed said that provider payment
rates often are not sufficient to cover the high cost of providing quality
care, leading to fewer providers accepting subsidies and fewer places for
families to use them. As such, addressing these and other key challenges
would require a sustained effort.
We currently have work underway examining whether and how states
used pandemic child care funding to implement potential long-term
strategies to help families and child care providers. As part of this work,
we plan to further examine challenges states faced spending these funds.
We plan to issue a report on the results of this work in early 2024.
Chairman Sanders, Ranking Member Cassidy, and Members of the
Committee, this completes my prepared statement. I would be pleased to
respond to any questions that you may have at this time.
If you or your staff have any questions about this testimony, please
contact Kathryn A. Larin, Director, Education, Workforce, and Income
Security Issues at (202) 512-7215 or larink@gao.gov. Contact points for
our Offices of Congressional Relations and Public Affairs may be found
on the last page of this statement. GAO staff who made key contributions
to this testimony include Danielle Giese (Assistant Director), Jessica
Mausner (Analyst in Charge), MacKenzie Cooper, Lauren Mosteller, and
Kelly Snow. In addition, key support was provided by Sherri Doughty,

15R. Malik, K. Hamm, et al., America’s Child Care Deserts in 2018, (Washington, D.C.:
Center for American Progress, December 2018).
16Child Care and Development Fund Program, 81 Fed. Reg. 67,438, 67,515 (Sept. 30,
2016). In fiscal year 2019, in five states, families on average paid more than 7 percent of
their income on their co-payment when using a child care subsidy, according to HHS data.
When excluding families with $0 co-payments, families in 14 states, on average, paid
more than 7 percent of their income on their co-payment

GAO Contact and
Staff
Acknowledgments

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Holly Dye, Monika Gomez, Kristen Jones, James Rebbe, Ronni
Schwartz, and Amber Sinclair.

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