Child Care: Access to Subsidies and Strategies to Manage Demand Vary Across States
Published: 2016-12-15T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: Child care subsidies help low-income families pay for care, allowing parents to work or attend school or training. Through the CCDF, the federal government provides states funding to assist these families. Federal law sets broad subsidy eligibility requirements and allows states to establish more restrictive policies. Due to limited funds, some eligible families may not be able to get subsidies and may be placed on wait lists.
Congress included a provision in statute for GAO to review participation in the CCDF program across states. GAO examined: (1) what is known about the number and types of families eligible for child care subsidies and the extent to which they receive them; and (2) how states determine which eligible families receive subsidies when subsidy need exceeds supply. GAO used Urban Institute data from 2010-2012 to estimate eligible children (most recent at time of analysis) and U.S. Department of Health and Human Services (HHS) data on subsidy receipt (same years as Urban's data). GAO also held interviews with child care officials from 32 states with wait list policies about subsidy need and management. GAO also interviewed HHS officials and child care stakeholders (selected by reviewing studies and websites, and obtaining suggestions); reviewed federal laws and regulations; and examined state policies in the CCDF Policies Database Book of Tables, an HHS funded project that compiles policies for the 50 states and District of Columbia.
GAO makes no recommendations in this report. HHS noted that the report provides valuable information about access to CCDF subsidies.
section_title: What GAO Found
paragraphs: According to GAO's analysis of nationwide data for an average month in 2011-2012 approximately 8.6 million children under age 13 were estimated to be eligible for subsidies under the Child Care and Development Fund (CCDF) program based on policies in their states, and about 1.5 million received them. When compared with all eligible children, those receiving subsidies tended to be younger (under age 5) and poorer (in families below federal poverty guidelines). (See figure.) Some state-by-state variations existed in these and in other characteristics GAO analyzed, such as race, when comparing children eligible for and receiving subsidies.
According to various officials and stakeholders, the number of families receiving subsidies does not equate to the population of eligible families who are interested in pursuing them or who may need them. They also said that it is difficult to accurately predict the extent to which eligible families are likely to apply for and receive subsidies. For example, some eligible families may not pursue subsidies because they may not know about them or find applying burdensome.
Child care officials GAO interviewed said that they use wait lists and other strategies to manage caseloads when more families want subsidies than their states can serve. Wait lists can be challenging to manage, according to child care officials from 23 of the 32 states that GAO interviewed. Challenges included keeping lists current and accurate. Forty states also prioritize certain families for subsidies, such as recipients of the Temporary Assistance for Needy Families program and children in protective services. States also stop taking applications from all or some types of eligible families and modify eligibility policies to manage caseloads. Child care officials also noted that they leverage other programs and funds to meet the child care needs of low-income working families.

section_title: Letter
paragraphs: Many families struggle to afford child care, particularly those who are low- income. According to Census data, poor families who pay for child care  spend about 30 percent of their monthly income on care, which is well  above the U.S. Department of Health and Human Services (HHS) defined  level of affordable care—10 percent or less of family income. Child care  subsidies help low-income families afford child care so parents can work  or attend school or job training. The federal government provides funding  for subsidies to states through the Child Care and Development Fund  (CCDF) for improving the affordability, availability, and quality of child  care. In fiscal year 2014, federal government expenditures totaled about  $6.3 billion for CCDF subsidies and related services.
Under CCDF, states have substantial flexibility to establish their own  eligibility criteria that determine which low-income working families will be  served. However, limited funds can prevent some states from serving all  applicants who are eligible and, as such, some low-income working  families who could benefit from and want child care subsidies may not be  able to get them. Some families may not qualify for subsidies based on  eligibility policies in their state. Others may not know about the subsidies, may find it difficult to apply for them, or may be wait listed because their  state cannot afford to subsidize all eligible applicants. The Child Care and  Development Block Grant Act of 2014 (CCDBG Act of 2014) included a  provision for GAO to review the extent of participation in the CCDF  program across states. We examined:  1.  What is known about the number and types of families eligible for  child care subsidies and the extent to which they receive them; and  2.  How states determine which eligible families receive subsidies when  subsidy need exceeds supply.
To determine what is known about families eligible for subsidies and the  extent that they receive them, we estimated the number of children  nationwide and state-by-state that: (1) met federal requirements for CCDF  eligibility and (2) were eligible to receive CCDF subsidies based on state  policies. We also compared the characteristics of children eligible for  subsidies to children receiving subsidies. We used data from Urban  Institute’s Transfer Income Model, version 3 (TRIM3) to estimate the  number of children meeting federal requirements and state eligibility  polices. We used HHS’s CCDF summary data tables from administrative  records, as well as HHS’s public use sample data on CCDF recipients, to  gather information on children receiving subsidies. We determined the  statistical significance of comparisons between children eligible for  subsidies and children receiving subsidies at a 95 percent confidence  level. We assessed the reliability of all sources by (1) performing  electronic testing of required data elements, (2) reviewing existing  information about the data and systems that produced them, and (3)  interviewing agency and other officials knowledgeable about the data. We  determined that the data were sufficiently reliable for the purposes of this  report.
To examine how states determine which eligible families receive  subsidies when need exceeds availability, we held interviews with child  care administrators or their designees from 32 states that had wait list  policies about how they assess need for subsidies in their states,  prioritize who they serve, and manage wait lists. Of these 32 states, 19  used wait lists as of early 2015. The remaining 13 states served all  applicants they determined eligible for the program, thus did not use wait  lists. To answer both objectives, we reviewed applicable federal laws and  regulations, and interviewed HHS officials, and contractors who provide  technical assistance on child care subsidy eligibility and access issues.  We also interviewed stakeholders from research and advocacy  organizations, as well as academia. We identified interviewees through  reviewing policy papers and applicable websites, attending webinars, and  asking HHS officials and other interviewees to suggest additional  knowledgeable individuals to contact. We selected a total of seven  stakeholders and government officials to participate in a group discussion  about good wait list practices, which we used to inform our questions for  the group interviews we held with state child care officials described  above.
We also identified and reviewed applicable studies that discussed  eligibility and access issues associated with child care subsidies. We  identified studies through reviewing key online research repositories and  consulting with interviewees. Finally, we primarily used Urban Institute’s  2014 CCDF Policies Database Book of Tables to review state policies.
We conducted our work from May 2015 to December 2016 in accordance  with generally accepted government auditing standards. Those standards  require that we plan and perform the audit to obtain sufficient, appropriate  evidence to 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. Details on our objectives, scope, and methodology  can be found in appendix I.
subsections: section_title: Background
paragraphs: The CCDF is a key federal funding source to states for providing child  care subsidies to low-income parents so they can work, look for jobs, or  participate in education and training activities. States also use CCDF  funds to improve the quality and availability of child care for all families  through activities such as providing training to providers or targeting funds  to increase the supply of limited types of care, such as for infants. HHS’s  Office of Child Care (OCC) administers the CCDF at the federal level and  provides guidance and technical assistance to states on how to operate  their subsidy programs. Federal law includes some broad eligibility  requirements, such as children must generally be under the age of 13 and  reside with families whose income must be at or below 85 percent of state  median income (SMI).
Within these broad federal requirements, states have substantial flexibility  in establishing more restrictive eligibility criteria and other child care  subsidy policies and these policies affect how resources for child care  subsidies are allocated in a state. For example, the CCDBG Act requires  states to give priority to very low-income families and children with special  needs for subsidy receipt, but states may define “very low-income” and  “special needs child” and determine how to prioritize these groups.  Some states may establish priority groups to serve such families before  other types of families and other states may use different methods, such  as making it easier for these families to access care by waiving co- payments or paying higher reimbursements to providers for serving such  families. States also may set any maximum family income eligibility limit  at or below 85 percent of SMI for families of the same size. Other policies  that may affect access to child care subsidies include whether income  from all members in a household are counted toward the income limit  states set for CCDF and the amount families have to pay for a portion of  their child care as a condition of receiving a subsidy.
Federal law and regulations establish state reporting requirements for  administering CCDF funds. Under these requirements, states must report  their CCDF expenditures (e.g., direct and non-direct services, quality  improvement activities, administrative expenses). States must also report  data on the number of children served via CCDF subsidies, submitting it  to HHS monthly (or quarterly) as well as annually. HHS uses these data  to estimate the average monthly number of children served via CCDF  subsidies nationally and state-by-state (see table 1).
CCDF is not an entitlement program, which means that states are not  required to serve all eligible families who apply for CCDF subsidies; thus  some eligible families who do apply for subsidies may not receive them.  This can occur when a state does not have sufficient funds to serve all  eligible applicants. Such states may wait list applicants or place limits on  when families can apply for the program or which families receive  subsidies. In early 2015, 30 states reported that they served all eligible  applicants who applied for CCDF subsidies and 21 reported that they wait  listed applicants or stopped taking applications when they could no longer  serve new clients. Families who qualify for, but do not receive, CCDF  subsidies could still receive public assistance with their child care through  other federal or state programs such as Temporary Assistance for Needy  Families (TANF) (accessed directly through the TANF program), Head  Start, the Social Services Block Grant (SSBG), or a state’s pre- kindergarten program.
In November 2014, Congress passed the Child Care and Development  Block Grant Act of 2014. This Act included several new provisions for  the program, including: (1) permitting children to remain in the program  for at least 12 months as long as their family’s income does not exceed  85 percent of SMI; (2) at a state’s option, terminating assistance when a  parent experiences a non-temporary job loss (or cessation of education or  training), but only after continuing assistance for at least 3 months in  order for parents to look for work; and (3) requiring states to implement  a graduated phase-out of assistance if, at re-determination, the family’s  income exceeds state eligibility limits, but is still under 85 percent of  SMI.
section_title: The Estimated Number and Characteristics of Children Eligible for and Receiving Child Care Subsidies Varies Across States
paragraphs: The estimated population eligible for and receiving child care subsidies  varied among states. According to GAO’s analysis, out of the estimated  14.2 million children under age 13 nationwide who met federal work and  income requirements for subsidies in an average month in 2011 and  2012, an estimated 8.6 million were eligible according to the eligibility  policies in their states, and about 1.5 million received them. Children  who received child care subsidies differed across a variety of  characteristics when compared to the eligible population in their state. In  particular, subsidy-recipient children were more often age 2 to 4, in very  low-income families, Black, and in single-headed households than the  overall population of eligible children in their state. The number of  children in families receiving subsidies does not equate to the population  of eligible children in families who are interested in pursuing subsidies or  who need them, which can be difficult to predict.
subsections: section_title: State Policies Influence the Size of the Estimated Population Eligible for Subsidies and Who Receives Them
paragraphs: States have the flexibility to establish specific eligibility policies within  broad federal eligibility requirements, and generally fewer families qualify  for subsidies after state policies are applied and even fewer receive  them. According to our analysis, an estimated 14.2 million children were  in families who met federal CCDF eligibility requirements for child care  subsidies in an average month over calendar years 2011 and 2012.  When state eligibility policies were applied to this population, an  estimated 8.6 million (about 61 percent of the population meeting federal  requirements) were eligible. Moreover, of the 14.2 million children  meeting federal requirements, 1.5 million (11 percent) received them (see  fig. 1).
The extent to which children meeting federal requirements also met the  eligibility policies specific to their states varied widely by state. Figure 1  shows, for example, that in three states (Iowa, Nebraska, and Maryland)  under 40 percent of children meeting federal requirements were  estimated to be eligible based on their state’s policies; and in three others  (Maine, New Mexico, and the District of Columbia), all or nearly all such  children were estimated to be eligible. States such as Kansas, New  Hampshire, and Pennsylvania were closer to the national percentage,  with about 60 percent of children who met federal requirements meeting  their state eligibility policies. The dark portions of the state bars in figure  1 also show that fewer than 25 percent of the estimated children meeting  federal eligibility requirements received subsidies in an average month in  any state. Subsidy receipt ranged from a high of approximately 21  percent of estimated children meeting federal eligibility requirements in  New Mexico to a low of approximately 5 percent in Nevada.
States’ policies include a range of eligibility criteria related to income,  employment, and educational activities, among other criteria, which can  influence the size of the eligible population in each state. It is the  interplay of these various policies that influences the size of the eligible  population in a given state.
Income: Each state sets income limits requiring families to have income  below a certain threshold in order to be eligible for child care subsidies.  Across states, the initial eligibility threshold for a three-person family  ranged from 121 percent of the 2014 federal poverty guidelines to 298  percent of this level. Table 2 shows where states fall within that range.
States that used wait lists to manage demand for subsidies tended to  have higher income limits. Specifically, nearly two-thirds of states that  used wait lists had income limits at or above 175 percent of the poverty  guidelines. For states with the lowest income limits, wait lists were less  common. Specifically, all but one state that limited eligibility to families  with incomes below 150 percent of the federal poverty guidelines served  all eligible families instead of using wait lists as of early 2015.
Employment: Policies related to employment may include whether a  state specifies a minimum number of hours worked or whether searching  for a job is a qualifying activity. For example, based on our analysis of the  CCDF Policies Database Book of Tables, 31 states did not consider  searching for a job to be a qualifying activity for initial eligibility as of  October 2014, while 9 states allowed it for up to a month, and 11 allowed  it for more than a month. For those who qualify based on employment,  some states specify that parents or guardians must work a minimum  number of hours per week or per month. Among the states with such a  requirement, some specified a minimum of 15 hours per week, and others  specified up to 30 hours per week (see table 3).
Education: Based on our analysis of the CCDF Policies Database Book  of Tables, most states allow secondary or postsecondary education as  qualifying activities. However, states may have additional requirements,  such as requiring parents to work while pursuing education in order to  qualify for subsidies, placing limits on how long education can be used as  a qualifying activity, or requiring that student-parents maintain a certain  grade average. In some cases, states have established multiple policies  regarding education as a qualifying activity. For example, in Kansas,  postsecondary students must both maintain a GPA of 2.0 and work a  minimum of 15 hours per week to remain eligible for child care  assistance. In Illinois, high school students generally must maintain a C  average and, beginning in the 25th month of participation in the child care  subsidy program, must also work 20 hours or more per week.
section_title: Children Eligible for Subsidies and Those Receiving Them Differ in Terms of Family Income, Family Structure, and Minority Status
paragraphs: According to our analysis, of the 8.6 million children estimated to be  eligible for subsidies in an average month in years 2011-2012, about 1.5  million of them received subsidies. Our analysis of HHS and TRIM3  data shows that children whose families receive child care subsidies have  different levels of family income and other characteristics compared to the  population of children whose families are potentially eligible for subsidies  based on the policies in their states. These differences include lower  levels of family income, younger ages of children, and differences in  family structure and racial composition. According to state child care  officials, a difference such as lower family income may in part reflect state  policies that target limited subsidies to this priority population. According  to stakeholders, a difference such as lower levels of subsidy receipt  among Hispanics may reflect barriers to accessing the program.
Subsidy recipients are substantially poorer than the overall population of  children eligible for subsidies, according to our analysis. Nationwide,  children who lived in families with incomes below 100 percent of the  federal poverty guidelines were over-represented among subsidy  recipients by an estimate of nearly 15 percentage points when compared  to eligible children who lived in families with incomes at this same level.  In contrast, children in families with incomes between 100 percent and  149 percent of the poverty guidelines were under-represented among  subsidy recipients by an estimated 3.4 percentage points when compared  to eligible children of the same income level and children at 150 percent  of the poverty guidelines or greater were under-represented among  subsidy recipients by an estimated 7.7 percentage points (see fig. 2).
Figure 3 shows state-by-state whether subsidy recipients with incomes  below 100 percent of the federal poverty guidelines were over- or under-  represented when compared to children eligible for subsidies in their  states. Statistically significant results were available for 38 out of 50  states that had reliable data. In 35 of these states, subsidy recipients  were poorer when compared to eligible children and, in 3 states, subsidy  recipients tended to have higher incomes than eligible children. The  differences had a wide range. In one state, New Hampshire, an estimated  38 percentage point difference exists because an estimated 55.8 percent  of subsidy recipients were below the poverty guidelines, compared to an  estimated 17.5 percent of eligible children. In another, Indiana, an  estimated 57 percent of subsidy recipients were below the poverty  guidelines, compared to an estimated 76 percent of eligible children,  resulting in a negative estimated 19 percentage point difference.
These differences may reflect, in part, states targeting subsidies to the  lowest income families when states are unable to serve all eligible  families that apply. Several state officials participating in our group  interviews, for example, told us that they target their programs to those  most in need, including those with the lowest income. Moreover, in their  Issue Brief on eligibility and receipt of CCDF subsidies, HHS suggests  that states target subsidies to families with the lowest incomes.
Subsidy recipients tended to be younger than the overall population of  eligible children, according to our analysis. Nationwide, subsidy recipients  age 2 to 4 years old were over-represented by an estimated 17  percentage points when compared to eligible children of the same age.  Subsidy recipients under age 2 were also over-represented, but by an  estimate of less than 2 percentage points. In contrast, older children were  under-represented among subsidy recipients by an estimated 18  percentage points when compared to eligible children of the same age  (see fig. 4).
The national pattern of over-representation of children age 2 to 4 within  subsidy recipients is consistent across all states with reliable data,  according to our analysis. In all 48 states with reliable data, children age 2  to 4 were over-represented in the subsidy population, and in 36 states by  more than an estimated 15 percentage points (see fig. 5). This over- representation may reflect a greater need for non-parental care among  families with children age 2 to 4 because they are not yet in elementary  school, which provides many hours of care each week.
Subsidy recipients tended to live in single-parent households to a greater  extent than the overall population of eligible children, according to our  analysis. Nationwide, subsidy recipients who lived in single-parent  households were over-represented by an estimated 14 percentage points  when compared to eligible children in similar households. In contrast,  subsidy recipients who lived in two parent households were under- represented by an estimated 14 percentage points when compared to  eligible children in similar households. An estimate of nearly 4 percent of  subsidy recipients and eligible children were child-only units (see fig. 6).
The national pattern of over-representation of subsidy recipients in single- parent families is consistent across most states, according to our  analysis. For example, in 33 of the 50 states with reliable data, children in  single-parent families were over-represented among subsidy recipients  when compared to the population of eligible children, in one state they  were under-represented, and in the remaining 16 states the results were  not statistically significant. The differences have a wide range, but exceed  an estimated 20 percentage points in 14 states. At one end of the range,  Wyoming, an estimated 43 percentage point difference exists because an  estimated 99 percent of subsidy recipients lived in single- parent families,  compared to an estimated 56 percent of eligible children (see fig. 7). One  reason single-parent households may be over-represented is that our  analysis showed that such households tended to have lower incomes  than two parent households and, as told to us by some state child care  officials and reported by HHS, states often try to target their subsidy  programs toward families with the lowest incomes.
Nationwide, our analysis showed subsidy recipients were more frequently  Black, and less frequently of other racial or ethnic groups, when  compared to the population of children eligible for subsidies. Black  children were over-represented among subsidy recipients by an  estimated 17 percentage points when compared to eligible Black children.  In contrast, Hispanic children were under-represented to a large degree  among subsidy recipients (an estimated 15 percentage points when  compared to eligible Hispanic children) and White children were slightly  under-represented (an estimated 2 percentage points when compared to  eligible White children) (see fig. 8).
The national pattern of Black children being over-represented among  subsidy recipients was true for most states. Statistically significant results  were available for 31 of the 44 states that had reliable data and in all of  them the proportion of subsidy recipients that were Black was higher than  the proportion of the overall population of eligible children that were  Black. Moreover, in about half of these states (16 of the 31) a difference  of an estimated 15 percentage points or more existed. For example,  Tennessee had an estimated 71 percent of subsidized children who were  Black, compared to an estimated 32 percent of all eligible children, a  difference of an estimated 39 percentage points (see fig. 9).
Nationally, Black children that received subsidies more often lived in  single-parent households and in families with very low income than White  and Hispanic children, according to our analysis of HHS and TRIM3  data. This may partially explain why Blacks are over-represented among  subsidy recipients.
The national pattern of Hispanic children being under-represented among  subsidy recipients was true in many states, according to our analysis.  Statistically significant results were available for 23 out of 44 states that  had reliable data and Hispanic children were under-represented among  subsidy recipients in all but 1 of these 23 states. In 11 of them, the  difference was about an estimated 10 percentage points or higher. In the  1 state where Hispanic children were over-represented among subsidy  recipients, New Mexico, Hispanic children made up an estimated 75  percent of subsidy recipients and an estimated 63 percent of eligible  children (see fig. 10).
The lower level of subsidy receipt among Hispanics in many states may  reflect differing preferences for child care or barriers to accessing child  care subsidies, or both. Some Hispanic families may be getting their child  care needs met through other means, such as Head Start and universal  pre-school programs. Stakeholders said that families without immigration  documentation may have concerns if they encounter application forms  that request Social Security Numbers or live in states that give priority to  families receiving TANF because this program can require verification of  immigration status. Finally, navigating the complexity of eligibility  requirements may be particularly difficult for families with limited English  proficiency, which we and others have also highlighted in previous  reports.
The national pattern of White children being under-represented among  subsidy recipients was true in some, but not all states. In 26 of the 42  states that had reliable data, Whites were neither over nor under- represented—the differences were not statistically significant. Statistically  significant results were available for 16 out of 42 states that had reliable  data. In 10 of these 16 states, White children were under-represented,  most commonly by more than an estimated 10 percentage points among  subsidy recipients when compared to the eligible children in their states.  In another 6 states, the reverse was true—with White children being over- represented, by more than an estimated 10 percentage points (see fig  11).
section_title: The Number of Families Receiving Subsidies Does Not Fully Reflect the Number of Eligible Families Who May Be Interested in Obtaining Them, Which Can Be Difficult to Predict
paragraphs: The number of children in families receiving subsidies does not equate to  the population of eligible children in families who are interested in  pursuing subsidies or who need them. Various officials and stakeholders  told us it is difficult to accurately predict the extent to which families with  eligible children are likely to apply for and receive subsidies. This is in  part because several factors influence families’ child care decisions that  can make it difficult or unappealing to pursue subsidies and also because  available indicators of need are imprecise.
Factors affecting families’ decisions include information, program policies,  and supply issues, according to stakeholders and officials we spoke with,  in addition to some relevant studies we reviewed.
Information: Lack of awareness of the subsidies could prevent families  from applying, in addition to misinformation about eligibility criteria and  perceptions of limited availability of subsidies.
Program policies and procedures: Some families may be unable or  unwilling to manage the administrative burden associated with applying  for the subsidy, which could include in-person meetings, dealing with  multiple benefit systems such as TANF, and other bureaucratic  procedures. Moreover, a family’s eligibility status may have changed after  a potentially lengthy approval process. In addition, the amount of the co- payment or the low amount of the subsidy may be a deterrent. HHS  officials noted that these types of state policies can affect demand for  child care subsidies because the more challenging it is to receive and  maintain a subsidy, the less likely families are to want one.
Supply issues: The availability of appropriate care options is interrelated  with subsidy demand in that some families may not apply if they know  there are no viable child care options in their area that accept subsidies or  that can care for children with special circumstances (e.g., behavioral or  developmental needs, non-English speakers).
In addition to the complex interplay of factors influencing families’ child  care decisions, there are various indicators officials use to help estimate  how many families are likely to receive subsidies. At a national level, HHS  monitors need for child care subsidies in part by calculating coverage  rates. Coverage rates estimate the extent to which children who may  meet eligibility criteria actually receive subsidies. HHS estimated this rate  at 15 percent of children meeting federal eligibility requirements in fiscal  year 2012 (the most current year available). While HHS’s analyses  provide some information about the need for child care subsidies, they  rely on eligibility estimates and the extent to which eligible families are  actually interested in or would apply for subsidies is unknown.
State child care officials we spoke with said that various other indicators  can demonstrate whether families need child care subsidies, such as  waiting lists, Census data, and surveys. Many state officials— representing 18 of 32 states in our group interviews—said they use their  own program data to help assess need. This could include looking at  funding allocations and the number of applicants, including those placed  on wait lists. In addition, officials representing 10 states told us they used  Census data, officials from 7 states said they conducted needs  assessments, and 6 worked with other programs to determine the extent  of program need. The latter might include sharing data with partner  entities (like child care referral agencies and schools), either formally or  informally.
Based on their assessments and experience, numerous stakeholders,  federal officials, and state officials we spoke with believe unmet need  exists. In particular, officials in 26 out of the 32 states that participated in  our group interviews told us that there are likely more potentially eligible  families than these states can serve. These included officials from 6 of  the 12 states we spoke with where all applicants determined eligible  received subsidies. This is consistent with the observation that there are  an unknown number of potentially eligible families who never apply.
Several officials and stakeholders we spoke with cautioned that some of  the methods used to estimate need are imperfect indicators. For example,  representatives of one large state noted that Census figures and other  demographic data can only provide rough estimates and do not reflect the  full extent of need. Officials in two other states said these types of data do  not include information about key eligibility characteristics or are out of  date. Several state officials and stakeholders we spoke with also  expressed concerns about using wait lists to measure need for child care  subsidies. They noted wait lists can be inaccurate and out of date.  Another drawback to using wait lists to assess demand is that they only  reflect the population of potentially eligible beneficiaries who actually  follow through with their applications, and therefore such lists could  underestimate need. On the other hand, wait lists can artificially inflate  estimates of need in cases where families’ eligibility status changes or  they remain on the wait list even after they have found other child care  arrangements.
While the nuances of family decisions and the lack of comprehensive  indicators can make it difficult for program officials to more accurately  predict subsidy need, the CCDBG Act of 2014 places requirements on  states to do so. It requires states as part of their state plan to develop  strategies to increase the supply of child care services for certain groups,  such as children with disabilities, children in under-served areas, infants  and toddlers, and children who receive care during nontraditional hours.  In its 2015 guidance about how to do this, HHS encourages states to use  data to assess need and identify supply shortages, for example by  assessing where low-income families live and where high-quality child  care providers are located. This would provide information about the  gap between the existing supply of child care and the population that is  likely to need access to this care. The guidance also suggests that states  leverage existing data from market rate surveys, referral agencies, and  other agencies that conduct needs assessments, such as the Maternal  and Infant Early Childhood Home Visitation Program and Head Start.  HHS advises states to consider the unmet needs that are most pressing  in a particular area and, accordingly, create an appropriate strategy for  building supply.
section_title: States Use Wait Lists and Other Methods to Help Determine Which Eligible Families Receive Subsidies
subsections: section_title: Although a Common Method for Managing Caseloads, States Find Wait Lists Challenging to Administer
paragraphs: Wait lists are a common way that states manage their caseloads when  more families qualify for subsidies than states can fund. Of the 33 states  that had wait list policies at the end of 2014, 19 used wait lists at the start  of 2015 and the others did not, according to the National Women’s Law  Center (NWLC). The results of our group interviews showed that states  manage wait lists in a variety of ways. For example:  Number of lists: Of the 19 states that used wait lists in 2015, 10 states  had a single statewide wait list and the remaining 9 states had more than  one list at a sub-state level, according to state child care officials who  participated in our group interviews. With the exception of New York and  California, all wait list states can report the number of children on their  wait lists statewide. State child care officials from states with multiple  wait lists also said that these states can have a mix of statewide and sub- state policies regarding how to develop and manage their lists.
Eligibility determination: Some states require full eligibility  determinations prior to placing children on wait lists for subsidies and  other states do not have such a requirement. Child care officials in 5 of  the 19 states that used wait lists in 2015 told us, for example, that their  states require full eligibility determinations prior to wait listing children,  whereas officials in 11 other states said that they either rely solely on self- reported information or partial eligibility screenings prior to wait listing  children.
Periodic review: States also varied in whether and how often they  require agencies to review their wait lists. Many states require reviews at  set intervals to ensure that those on the list continue to be eligible for and  want subsidies, and others do not require these reviews. According to  state child care officials, reviews tend to consist of sending letters to  families asking if they want to remain on the list. Of the 19 wait list states  that participated in our group interviews, officials from 13 mentioned that  their states require periodic reviews of wait lists and 6 others said that  periodic reviews are either not required or left to the discretion of the local  entities administering the subsidy programs in their states.
HHS officials and state child care officials knowledgeable about wait lists  told us that wait lists can be a valuable tool for managing caseloads and  expenditures. Child care officials from 14 states that participated in our  group interviews mentioned, for example, that one benefit of wait lists is  that they track children eligible or likely to be eligible for a subsidy and  who is next in line to receive one. Such tracking is important because  these policies can be complex and, according to HHS guidance and a  child care subsidy stakeholder, states often prioritize the types of children  eligible for subsidies to ensure that they serve those most in need. Two  officials told us, for example, that their wait lists help manage caseloads  by ensuring that families with higher priorities for service (such as those  most in need) are served before families with lower priorities. Child care  officials in 10 states also mentioned that these lists provide insight into  where additional funds may be needed in their states. Two officials  mentioned, for example, that their lists help them determine whether  funds should be reallocated from one county to another.
Few families on wait lists may end up receiving subsidies, according to  state child care officials and other child care stakeholders knowledgeable  about wait lists. This may occur when wait listed families experience  changes in circumstances that cause them to either no longer want  subsidies or make them ineligible. State officials from 15 wait list states  who participated in our group interviews characterized the number of wait  listed families that eventually received subsidies as small or they  estimated that no more than 50 percent of wait listed families received  subsidies. One official told us that historically about 17 to 20 percent of  families on her state’s wait list apply for subsidies in response to  notifications they receive that funds are available. At the other end of the  range, one state official said that most wait listed families in her state  eventually receive subsidies and she attributed this to her state  adequately funding child care subsidies.
Wait lists can be challenging to administer. Because few families placed  on wait lists may receive subsidies, it can be difficult to manage wait lists  in a way that is not overly resource- and time-intensive for the agency  administering the subsidy program nor overly burdensome for families  who want to remain on the list to be able to do so. State child care  officials from 23 of the 32 states that participated in our group interviews,  for example, reported various challenges, such as being able to easily  contact wait listed families and ensuring that they continued to want and  qualify for subsidies. In its technical assistance on wait lists, HHS echoes  similar views, saying that wait lists become inefficient when they take  significant resources to establish and maintain. Specific challenges  include:  Keeping wait lists current and accurate: Two challenges that HHS  officials, stakeholders, and state officials participating in our group  interviews mentioned were ensuring that families on the wait list: (1) could  be easily contacted and (2) continued to qualify for and want child care  subsidies. According to child care officials in 11 states, for example,  without accurate information it is difficult to contact families to see if they  want to remain on the list or want a subsidy should one become available.  One state official estimated for example, that her state gets a roughly 50  percent response rate to letters sent to wait listed families during periodic  reviews, excluding letters that are returned as undeliverable. According to  HHS officials knowledgeable about subsidies, maintaining accurate  contact information for wait listed families can be difficult because low- income families tend to frequently move. Child care officials in 13 states  also told us that families often remain on the wait list despite no longer  wanting subsidies or becoming ineligible for them. According to 6 state  officials, families may no longer want subsidies because they made  alternative child care arrangements once they were wait listed. Several  state officials also said that families may become ineligible for subsidies  while wait listed because their children become too old for subsidies;  parents stop working; or the family’s income grows to exceed the state’s  limit. One state child care official told us that it takes a lot of time and  money to find a single family on his state’s wait list who will take a child  care subsidy slot that opens up. He said that sometimes as many as 50 to  100 letters have to go out to wait listed families to get a single, affirmative  response.
Multiple wait lists in a state: HHS officials and stakeholders  knowledgeable about wait lists told us that states with wait lists  maintained at the sub-state level can face some unique challenges. For  example, such individuals said if there are sub-state lists, families in these  states can place their names on more than one list, and this duplication  makes it difficult to efficiently manage the lists. Resources may be wasted  when more than one agency in a state attempts to contact the same  family to see if they want to remain on their lists. Also, when local lists are  rolled up to the state level, it may be difficult to eliminate the duplicate  entries and thereby get an accurate count of the number of families  statewide that are waiting for subsidies. Some state child care officials  echoed the view that decentralized wait lists pose unique challenges. One  official said that it is difficult to ensure that all counties collect the same  information on families who they place on their wait lists. Two other state  officials mentioned that families may experience different wait times  across counties and that their states try to counterbalance this by moving  funds from one county to another.
Insufficient technology to manage wait lists: Officials from seven  states mentioned that limited technology hindered their ability to efficiently  manage wait lists. One state official whose state maintains sub-state lists  said that in most cases these lists are on paper and that her state could  benefit from more centralized lists. Another state official said that,  although her state has a web-based wait list system, various wait list  management tasks still must be done manually because this new system  does not always integrate well with their older system used to determine  eligibility. The CCDBG Act of 2014 and the CCDF regulations require  both HHS and states to develop websites that, among other things, must  contain localized lists of eligible child care providers such that parents can  enter a ZIP code and obtain information on the availability of specific  providers in their area. An HHS official suggested that, as states develop  data for these websites, they may want to consider greater use of  technology to help manage wait lists.
Although whether and how to use wait lists is at the discretion of state  child care subsidy programs, HHS does provide states with technical  assistance on how to develop and manage their lists, when requested. In  an effort to promote efficiently-run lists, HHS’s written technical guidance  encourages states to develop wait list management strategies that  minimize the use of staffing resources. Strategies include conducting  partial eligibility reviews for at least some families placed on the wait list  as opposed to full eligibility determinations, periodically reviewing wait  lists by contacting families to validate an ongoing need for subsidies, and  requiring families to report address changes to maintain wait list eligibility.  Officials from most of the 19 wait list states that participated in our group  interviews said that they use at least one of these strategies.
The CCDBG Act of 2014 also might influence use of state wait lists over  the next few years. Officials from 15 states that participated in our group  interviews said, for example, that they might need to establish new wait  lists, their existing wait lists may increase, or families may remain on the  lists for longer periods of time. Several also mentioned that whether their  use of wait lists was impacted depended upon how certain provisions in  this law affect their state and whether subsidy funding increases. For  example, some state officials told us new requirements, such as families  receiving subsidies for a minimum of 12 months, may result in families  being subsidized for longer time periods. If funding for subsidies  remains flat, this may result in these states not being able to serve as  many newly qualified applicants and therefore wait lists might expand.  Other provisions that state officials cited as potentially increasing the use  or size of wait lists included those pertaining to improving the quality of  child care and gradual phase-out of subsidies for families once their  income exceeds their state’s limits to receive subsidies.
section_title: Other Caseload Management Techniques Include Priority Groups and Methods That Can Limit Applications
paragraphs: According to HHS written technical assistance and state child care  officials and child care stakeholders, other caseload management  techniques include prioritizing serving some types of families over other  types of families, limiting applications by freezing intake, or changing  eligibility policies so that fewer families qualify for subsidies.
Prioritizing certain eligible families over others: Based on our analysis  of the CCDF Policies Database Book of Tables, most states (40 out of 51)  develop priority policies that specify which eligible families they will serve  before other types of eligible families. Common priority groups included:
Families receiving TANF (37 states, including 18 wait list states);  children in protective services (28 states, including 14 wait list states);  children with special needs (26 states, including 12 wait list states);  and  children in families with very low incomes (23 states, including 10 wait  list states).
As long as states provide subsidies to all families who they determine to  be eligible, priority groups do not result in some families going unserved.  However, in the 19 wait list states, priority groups influence which families  get subsidies in their states because not all families determined eligible  get served. Priorities can take two forms—guaranteeing a subsidy to all  eligible applicants that meet the criteria of the prioritized group or  providing these families subsidies before other types of applicants only if  funds are available. When children are guaranteed subsidies, they are  exempt from wait lists. When children are prioritized over other children  without a guarantee, they are placed higher up on wait lists than children  with a lesser or no priority. Policies in wait list states tended to guarantee  subsidies for TANF recipients and mostly prioritized other groups for  subsidies without a guarantee.
Freezing intake: Freezing intake occurs when a state or locality stops  taking applications for subsidies for either the entire program (a full  program freeze) or for specific priority groups or income levels (a partial  program freeze). In its annual reports on CCDF policies, the NWLC  reported that three states froze intake in 2013, two in 2014, and three in  2015. In all of these cases, the states instituted partial program freezes,  funding subsidies for some families (for example, families in priority  groups) and froze intake for other applicants. States or localities also may  freeze intake in conjunction with wait lists, for example freezing intake for  some priority groups and maintaining wait lists for others.
In its written technical assistance, HHS describes the pros and cons of  managing programs by instituting partial program freezes, full program  freezes, or managing the program according to wait listed priority groups.  According to this technical assistance, partial freezes (which close the  program to some priority groups) may be more effective than full freezes  (which close the program to everyone), because it can be easier to  manage the flow of cases and manage funds. This technical assistance  also says it may be preferable to maintain wait lists when closing the  program to certain priority groups as opposed to simply instituting a  program freeze for these groups. This is because wait lists allow states to  determine which priority groups to reopen and to make informed  decisions about the number of families to select from the list. An official  from one state who participated in our group interviews told us, however,  that her state now freezes intake instead of using wait lists when funds  run low because they found that wait lists were too burdensome to  administer. She said that it was difficult to find families on the wait list to  receive subsidies once funding became available because it was difficult  to ensure an accurate list that consisted of families who continued to want  or qualify for subsidies.
Modifying eligibility policies: According to child care stakeholders and  state child care officials, states may modify their eligibility policies to  manage the size of their subsidy caseloads. Modifications in eligibility  policies can be statewide or at the sub-state level. Child care officials mentioned this case management strategy in states that used waiting lists  (5 out of 19 states) and in states that served all eligible applicants (7 out  of 12 states). Officials said that modifications can decrease caseloads,  ensure that the program serves the neediest children, or increase  caseloads. State officials reported modifying policies such as income  limits, co-payment amounts that parents pay to providers, and  requirements related to employment or education. Officials from a few  states also told us their states typically do not modify eligibility policies to  manage caseloads because these policies are based in statute and it is  difficult to go through the legislative process to change them.
section_title: States Leverage Other Programs and Funds to Help Meet Subsidy Need
paragraphs: Child care officials from 22 states described ways in which their states  leverage funds and other programs to meet the child care needs of low- income working families. Programs and funds mentioned included Head  Start, Early Head Start, state funded pre-kindergarten, TANF, Social  Services Block Grant (SSBG), and various state or county run programs.  Two officials, for example, said that that their states’ pre-kindergarten  programs help meet the child care needs of 4-year-olds with low-income  working parents. One of these officials specifically mentioned that fewer  4-year-olds receive subsidies because of the pre-kindergarten program  and the other official said that, in her state, parents of 4-year-olds that  apply for subsidies are referred to the pre-kindergarten program. Another  official, however, described his child care subsidy program as the last  resort for low-income working families. This official explained that by the  time families apply to his program, they have already been turned down  or the other programs also have wait lists. Officials from 13 states  mentioned additional programs their states or localities leverage to help  meet the child care needs of low-income families. For example, one  official mentioned that his state tries to reduce the number of families with  school-aged children that receive child care subsidies by referring them to  after school programs. Officials from 3 states mentioned that some of  their counties have local funding for assistance with child care expenses  and officials in 2 of these states specifically mentioned that these funds  were county responses to CCDF waiting lists.
section_title: Agency Comments and Our Evaluation
paragraphs: We provided a draft of this report to the Department of Health and Human  Services (HHS). The agency noted that the report provides valuable  information to states and federal officials about access to subsidies, and  breaks new ground by analyzing state-by-state data on families eligible  for and those that actually receive Child Care and Development Fund  (CCDF) services. HHS also expressed concerns about the overall funding  level for CCDF and its impact on state decisions as to which eligible  families to serve as well as the amount of the subsidy to provide. The  agency also provided technical comments, which we incorporated as  appropriate.
We are sending copies of this report to appropriate congressional  committees, the Secretary of Health and Human Services, and other  interested parties. In addition, the report will be available at no charge on  the GAO website at http://www.gao.gov.
If you or your staff have any questions concerning this report, please  contact me at (202) 512-7215 or brownbarnesc@gao.gov. Contact points  for our Offices of Congressional Relations and Public Affairs may be  found on the last page of this report. GAO staff who made key  contributions to this report are listed in appendix III.
section_title: Appendix I: Objectives, Scope, and Methodology
paragraphs: Our review focused on: (1) what is known about the number and types of  families eligible for child care subsidies and the extent to which they  receive them; and (2) how states determine which eligible families receive  subsidies when subsidy need exceeds supply. We used a variety of  methods to address these objectives, including analyzing data from  Urban Institute’s Transfer Income Model, version 3 (TRIM3) on subsidy  eligibility, the U.S. Department of Health and Human Services’ (HHS)  summary tables of administrative data on subsidy receipt (HHS  administrative data), and HHS public use sample data on Child Care and  Development Fund (CCDF) recipients (HHS sample data). We  interviewed HHS officials, researchers in the child care subsidy field, and  other knowledgeable stakeholders, in addition to holding group interviews  with child care officials from 32 states. We also identified and reviewed  applicable studies as needed that discussed eligibility and access issues  associated with child care subsidies. We identified these studies by  consulting with interviewees and reviewing key online research websites  and repositories. Finally, we reviewed relevant federal laws, such as the  Child Care and Development Block Grant Act of 2014, and summaries of  state CCDF policies.
We conducted our work from May 2015 to December 2016 in accordance  with generally accepted government auditing standards. Those standards  require that we plan and perform the audit to obtain sufficient, appropriate  evidence to 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. Further details on our key methodologies are  discussed below.
subsections: section_title: TRIM3 Microsimulation Model
paragraphs: To determine what is known about families eligible for subsidies, we used  data from TRIM3 to estimate the number of children nationwide and state- by-state that: (1) met federal requirements for CCDF eligibility and (2)  were eligible to receive CCDF subsidies based on state policies. We then  compared the characteristics of children eligible for subsidies to children  receiving subsidies, using TRIM3 and HHS data (described below).
TRIM3 is developed and maintained by staff at the Urban Institute with  funding primarily from HHS. The TRIM3 model simulates major  governmental tax, transfer, and health programs using federal data from  the Current Population Survey containing detailed information on the  demographic characteristics and economic circumstances of U.S.  households. TRIM3 models eligibility for CCDF-funded subsidies on a  monthly basis. In other words, each family is checked for eligibility in each  month of the simulation year, and a family might be found eligible for  CCDF-funded subsidies in some months of the year but not the entire  year. The eligibility policies in the simulation reflect the variations in  eligibility policies across states.
To identify the number of children estimated to be eligible for child care  subsidies, we examined TRIM3 data on children who met federal  requirements and who also met state eligibility policies. In addition, to  understand more about the characteristics of children estimated to be  eligible for subsidies according to their state policies, we analyzed the  following variables: age; race; Hispanic ethnicity; whether the head of  household is single, not single, or the child is in a child-only unit; and  family income-to-poverty ratios. To improve the reliability of our estimates,  we used multiple calendar years of TRIM3 data to generate subsidy  eligibility estimates for an average month. For our estimates of the  number of children meeting federal requirements and estimates of  children eligible under state policies, we used data from calendar years  2011 and 2012, which was the most recent at the time of our analysis.  We obtained these data from the HHS publication, “ASPE Issue Brief:  Estimates of Child Care Eligibility and Receipt for Fiscal Year 2012.” A  relatively small number of children (216,000 out of 8.9 million in 2012) are  defined as eligible under state policies in this brief, but are not considered  eligible under federal parameters. This can occur because some children  are considered child-only units under state policies, making them eligible,  but are not considered child-only units under federal parameters, and  because some states define the assistance unit differently than the  federal requirements. In addition, estimates of children eligible under  federal parameters do not consider state-allowable income disregards  when determining whether a child’s family income is below 85 percent of  state median income; in some states, income disregards can therefore lead to a slightly higher estimate of children eligible under state policies  than children eligible under federal parameters. This was the case in the  District of Columbia and New Mexico. For these two states, we subtracted  a small number of children (170) from the estimated number of state  eligible children so we could use the percentage formula to estimate the  margin of error of the percentage of children meeting federal parameters  that are eligible under state rules. For our state-by-state estimates of the  age and race and ethnicity of children eligible under state policies, we  used data from calendar years 2010 through 2012 because the additional  year increased the reliability of estimates for subgroups within states. We  obtained these data from the Urban Institute’s publicly available TRIM3  baseline microdata files. Due to TRIM3 data limitations with 2010 data,  however, we could only use 2011 and 2012 data for head of household  and income-to-poverty ratios. For estimated percentages, we excluded  from our analysis any estimates where the margin of error exceeded 15  percentage points. For count estimates, we excluded from our analysis  any estimates where the relative margin of error exceeded 15 percent. In  addition, we assessed the reliability of TRIM3 by (1) performing electronic  testing of required data elements, (2) reviewing publicly available  information about the data and systems that produced them, (3) reviewing  additional information about the Child Care Module provided by HHS and  the Urban Institute, (4) interviewing staff at the Urban Institute who  developed and maintain the TRIM3 microsimulation, and (5) interviewing  HHS agency officials knowledgeable about the data. We determined that  none of the data limitations or modeling assumptions affected or  compromised the analysis for this report and the data are considered to  be sufficiently reliable for our purposes.
section_title: HHS Administrative Data
paragraphs: We used HHS administrative data to gather information on children  receiving subsidies. Data on subsidy recipients are derived from  mandatory state reports that include case-level data (specifically, the  ACF-801 that states submit monthly to HHS). State ACF-801 reports are  based on information families provide to caseworkers, who then input the  data into existing state information technology systems. Using the ACF- 801 reports, HHS provided us with summary tables of state-by-state data  on the number and characteristics of children and families receiving  subsidies in an average month (HHS administrative data). To conduct  further analyses using different categories and combinations than the full  administrative data offered, we also obtained sample case-level data  through the Research Connections Public Use Sample Data Sets (HHS  sample data). For states that submitted full population data in their ACF- 801 reports, a random sample of families is selected for each month and  only the children of those families are included in the child Public Use  Sample Data Set. For the states that submitted sample data in their ACF- 801 reports, all families and all children were included in the Public Use  Sample Data Sets.
To analyze the HHS subsidy receipt data, we selected variables that  characterized the subsidy population and could be readily compared to  data from TRIM3 microsimulation: children’s age, children’s race and  Hispanic ethnicity, whether the head of household is single, and the  family income-to-poverty ratio. We used the HHS administrative data to  analyze age, and we used the HHS sample to analyze the remainder of  the characteristics. For age and race and ethnicity, we combined the  totals from fiscal years 2010, 2011, and 2012 in order to be comparable  with our TRIM3 analysis. Due to data limitations in TRIM3, we could only  analyze 2011 and 2012 for the income-to-poverty ratio and head of  household analyses, so we used HHS sample data from fiscal years 2011  and 2012 for these characteristics as well. For each characteristic, we did  not report state-level results for any states where the data on that  characteristic were missing or invalid for 15 percent or more of the  children. We also did not report any state-level estimates (from the HHS  sample data) where the margin of error (for percentage estimates)  exceeded 15 percentage points, or where the relative margin of error (for  count estimates) exceeded 15 percent. Finally, we excluded territories  from all HHS administrative data because TRIM3 only includes data on  the 50 states and the District of Columbia. The territories removed from  national analyses were: American Samoa, Guam, Northern Mariana  Islands, Puerto Rico, and Virgin Islands. When reporting national totals,  we included all states and the District of Columbia.
We also reported HHS’s estimates of the extent to which children who  may meet eligibility criteria actually received subsidies for fiscal year 2012  nationwide, known as a coverage rate. Coverage rates specifically  measure children eligible based on federal CCDF requirements in  comparison to those receiving or estimated to receive subsidies from the  major federal funding sources that subsidize the cost of child care for low- income working families—CCDF, two sources of Temporary Assistance  for Needy Families (TANF) funds spent directly on child care, and Social  Services Block Grant (SSBG). For this reason, HHS officials told us they  did not believe data on SSBG, TANF funds spent directly on child care,  and TANF maintenance of effort to be reliable on a state-by-state level,  and therefore they only estimate coverage rates on a national level.
HHS allows states to report the total number of children they subsidize  using any funds on the ACF-801 because states may not have the ability  to identify children served only by CCDF. In these cases, HHS must  estimate the number served by CCDF using a state-reported pooling  factor, which is the percentage of funds spent on child care subsidies  from CCDF. HHS uses the pooling factor to weight the state-reported  data to determine the number of children and families served solely by  CCDF. The department multiplies a state’s pooling factor by the total  number served to develop adjusted counts of those served by CCDF.
We assessed the reliability of HHS administrative data by (1) performing  electronic testing of required data elements, (2) reviewing existing  information about the data and systems that produced them, and (3)  interviewing agency and other officials knowledgeable about the data. We  determined that the administrative data used to estimate participation and  coverage rates were sufficiently reliable for the purposes of this report.
section_title: Variable Recodes and Restrictions
paragraphs: For our analysis of race and ethnicity in both TRIM3 and HHS data, we  constructed the following mutually exclusive categories: White, non- Hispanic; Black, non-Hispanic; Other or multi-racial, non-Hispanic; and  Hispanic. In our state-level analysis, we present information on non- Hispanic White children, non-Hispanic Black children, and Hispanic  children.
For our analysis of family income-to-poverty status, we constructed a  variable in the HHS sample data that compared monthly family income to  the HHS poverty guidelines for the appropriate year. For our estimates of  income-to-poverty status among eligible children, we used a variable from  the TRIM3 Child Care module with monthly family income as a  percentage of poverty. We did not include children in child-only units in  the analysis of family income-to-poverty status, because any family  income associated with those children would not affect their eligibility, and  we did not include children whose family income exceeded four times the  poverty guideline as we determined that these values were likely to be  errors. We determined statistical significance for all comparisons between  subsidy recipients and eligible children at a 95 percent confidence level.
section_title: CCDF Policies Database
paragraphs: To review state CCDF policies and how they may vary across states, we  used data from Urban Institute’s CCDF Policies Database, which is a  cross-state, cross-time database of CCDF policy information funded by  HHS. Urban Institute publishes selected policies for all states annually in  its Book of Tables, and we primarily relied upon the 2014 Book of  Tables. The information contained in this database was collected  primarily from caseworker manuals, which are documents that  caseworkers use as they work with families and providers. The tables  created from the database were reviewed by almost all state  administrators and verified for accuracy, with two states not providing  verification. As noted in various places in this report, in a few states, child  care policies vary across sub-areas within a state. In those cases, the  Urban Institute’s tables show information for the most populous area.  Although some caseworker manuals may include policies derived from  state legal requirements, GAO did not examine state statutes and  regulations nor did we independently verify the information in the Urban  Institute’s tables.
section_title: Group Interviews
paragraphs: To understand how states manage demand for child care subsidies, we  held interviews with child care administrators or their designees  (collectively referred to as state child care officials in the report) from 32  states that had wait list policies in 2014 about how they assess need for  subsidies in their states, prioritize who they serve, and manage wait lists  (see table 4). Of these 32 states, 19 had active wait lists as of early 2015.  The remaining 13 states served all applicants they determined eligible for  the program. The results of these interviews are not generalizable to all  states.
We used two sources to compile a list of states with a wait list policy and  to identify whether a state had families on the wait list in the most recent  year.
To identify states with a wait list policy in place as of October 1, 2014,  we used the CCDF Book of Tables. This table was released in  October 2015 and was the most current data compilation available.
To identify whether states had families on a wait list, we used the  National Women’s Law Center survey results for 2015. The results of  the survey were current as of February 2015. These data represent  the most current available compilation of states’ wait lists at the time  we began our outreach.
We held five group interviews—three with states that had families on the  wait list and two with states that served all eligible applicants. Group  interview participation ranged from three to seven states per session.  Limiting the number of states per session helped ensure that all states  would have a chance to share their experiences during the discussion. In  addition, eight states were unable to participate during the scheduled  group interview times. In order to obtain the most complete information  possible, we held individual interviews with each of these states. Five  were states that served all eligible applicants and three had an active wait  list.
section_title: Other Interviews
paragraphs: To gather information and perspectives on child care eligibility and access  issues, we conducted interviews with a variety of stakeholders.
We assembled a group of stakeholders knowledgeable about wait  lists and access to child care. We selected seven stakeholders from  research and advocacy organizations, as well as the government,  based on referrals from the HHS entrance conference and other  interviews, as well as a review of relevant literature. The selected  stakeholders had authored reports on child care subsidies or had  experience managing related programs. Our discussion with these  individuals focused on good wait list practices, which we used to  inform our questions for the group interviews we held with state child  care officials.
We conducted individual interviews with stakeholders from research  and advocacy organizations, as well as academia, to discuss access  issues and data sources. We identified these stakeholders through  reviewing policy papers and applicable websites, attending webinars,  and asking interviewees to suggest other knowledgeable stakeholders  to contact.
We met with federal officials who administer the CCDF and  contractors who provide technical assistance on eligibility and access  issues.
section_title: Appendix II: Comments from the Department of Health and Human Services
section_title: Appendix III: GAO Contact and Staff Acknowledgments
subsections: section_title: GAO Contact
paragraphs: Cindy Brown Barnes, (202) 512-7215 or brownbarnesc@gao.gov.
section_title: Staff Acknowledgments
paragraphs: In addition to the contact named above, Janet Mascia (Assistant  Director), Nancy Cosentino (Analyst-in-Charge), Rhiannon Patterson,  Amy Moran Lowe, Nyree Ryder Tee, and Eric Anderson made significant  contributions to this report. Also contributing to this report were James  Rebbe, Mimi Nguyen, Jean L. McSween, Karen O’Conor, Anna Maria  Ortiz, Kate van Gelder, Jessica Orr, Rachael Chamberlin, Kelly Snow,  and Chris Schmitt.