States are responsible for developing licensing criteria and health and safety requirements and conducting enforcement activities to ensure providers comply with them and thereby protect the safety and health of children in child care settings. While the federal government’s role is limited in this area, the states must certify that they have safety and health requirements in place and procedures to ensure providers comply with all applicable requirements to receive federal CCDF funds. The Department of Health and Human Services (HHS) oversees CCDF. In fiscal year 2003, the amount of federal funds appropriated for CCDF was $4.8 billion. The CCDF funds are provided to states through a block grant mechanism which allows states to set priorities, establish policies, and spend funds in ways that will help them achieve state child care goals. The Child Care and Development Block Grant statute that underlies the CCDF requires states to designate a lead agency and to establish state plans that commit to establishing and enforcing licensing requirements and health and safety standards for child care providers. The statute leaves it to the states to decide what requirements are to be applicable to specific categories of providers, but for health and safety it sets out three broad parameters that must apply to all providers receiving federal assistance: physical premises safety, staff training, and control of infectious diseases (including childhood immunizations). To qualify for a subsidy provided with funds from the CCDF, a provider must comply with these and any other applicable state requirements. To be eligible for CCDF subsidies, parents must be working, in training, or attending an educational program and have children less than 13 years of age. States can set income eligibility limits at or below 85 percent of the state median income level. States must use a significant portion of their CCDF funds for families receiving Temporary Assistance for Needy Families (TANF) or families who are at risk for becoming dependent upon public assistance. CCDF has five goals: (1) encouraging maximum flexibility in developing state child care programs; (2) promoting parental choice; (3) encouraging states to provide consumer education information to parents; (4) helping states provide child care to parents trying to become independent of public assistance; and (5) helping states implement health, safety, licensing, and registration standards established in state regulations. However, CCDF does not specify how the states should meet these goals and only requires them to be included as elements within the state child care plan. States can also determine which enforcement activities apply to different types of child care. Types of child care eligible to receive funding under TANF and the block grant are described in table 1. States regulate those providers over which they have authority by setting requirements, including those focusing on health and safety, that such child care providers must meet and by enforcing these requirements. State child care licensing offices are responsible for enforcing such health and safety requirements, and engage in different oversight activities for licensed providers and for regulated nonlicensed providers. Licensed providers are generally subject to standard oversight, which generally includes background checks, inspections, technical assistance and training, and the application of sanctions when providers are found to be out of compliance. Regulated nonlicensed providers receive less intense oversight. Such oversight can include self-certification that health and safety standards have been met, background checks, and sanctions. Providers who are legally exempt by state law from oversight are not regulated by state child care licensing offices. For example, in certain states, child care centers run by religious organizations may be exempt. In addition, under federal regulations, the states are not required to apply health and safety requirements to certain providers who only care for a child to whom they are related. Some states may conduct background checks and inspections of their legally exempt providers. States vary as to which types or subtypes of child care providers fall under each level of oversight. When establishing which providers will be required to obtain licenses, and hence be subject to standard oversight, and which will be required to comply with less intense requirements, states consider a number of factors. For example, states consider whether certain providers are subject to other health and safety regulating authorities, such as school- based programs that must conform to all health and safety requirements required for public schools and are overseen by the state education department. States also consider the staffing resources they would need to carry out the necessary licensing and enforcement activities in light of their budget, how to target resources toward the greatest number of children, and the impact that licensing activities could have on child care availability and parental choice. For example, some providers might pass the costs of conforming with licensing requirements on to parents, which could make such care too expensive for some parents. Currently, states are making choices about the extent to which they license certain providers and about which enforcement activities apply to different types of providers. There are no specified federal requirements for licensing and enforcement activities, so many states rely on recommendations made by professional organizations in developing their own standards. Professional organizations recommend standards for several critical licensing and enforcement activities, including background checks, monitoring visits, training for licensing staff, and caseload size. Table 2 outlines recommended practices for critical licensing and enforcement activities. In 2003, the median caseload size for inspectors decreased, but most licensing and enforcement activities for licensed providers remained about the same as those in 1999. Almost a quarter of the states maintained caseloads at recommend levels, and fewer states had caseloads levels over 150. Most states conducted compliance inspections at least once a year, which met or exceeded the recommended level for all types of providers. However, most states do not require the amount of training recommended by national professional organizations. Most states continued monitoring exempt providers by distributing information about health and safety requirements and asking these providers to certify that they complied with state requirements, although some states engaged in more intense monitoring practices for these providers. In 2003, almost a quarter of the states maintained caseloads at or below the recommended level of 75 facilities to one inspector, and the number doing so had increased by 1 since 1999. Specifically, in 1999, 11 states were meeting the recommended caseload levels, and that number increased to 11 states and the District of Columbia by 2003. The median number of facilities per inspector decreased during this time, from 118 facilities per inspector to 110 facilities per inspector, but the number of facilities per inspector was still well above the recommended level of 75 in 2003. In 1999, caseloads ranged from 52 in Missouri to 333 in Colorado, while in 2003, caseloads ranged from 35 per inspector in Hawaii to 600 per inspector in Iowa. Although the range was broader in 2003 than in 1999, more states decreased the size of their caseloads than increased them. Between 1999 and 2003, the caseload in 23 states and the District of Columbia decreased while the caseload in 16 states increased. The number of states with particularly high caseloads, over 150, dropped from 17 to 15, between 1999 and 2003. Among the states whose caseloads decreased were several states with the some of the highest caseloads in 1999. For example, Colorado’s caseload went from 333 to 138 as its licensing budget nearly doubled. Figure 1 illustrates the ranges of caseload levels of licensing staff by state in 2003; see appendix II for a comparison of caseload by state in 1999 and 2003 and appendix III for comparisons of licensing budgets and staffing levels by state in 1999 and 2003. While state data showed 12 states maintaining caseloads at recommended levels, states reported that they were visiting facilities as often as recommended, and in 15 states, more often. States may be managing to visit facilities as often as recommended while maintaining caseloads higher than those recommended, in part because the caseload standard itself is not appropriate for some states. Experts note that this standard does not fully account for time-saving technology that might allow some states to operate effectively with larger than recommended caseloads. Further, licensing staff could be making trade-offs not captured in our survey. For example, staff could be maintaining their schedule for monitoring visits at the expense of performing other duties, including processing applications, providing technical assistance, or documenting inspection visits in a timely manner. According to the data reported through state surveys and NCCIC, one less state exempted family child care providers-–sole caregivers who care for children in a private residence other than the child’s—than were exempted from health and safety requirements in 1999. In 1999, 39 states exempted some family child care providers from regulation, and by 2003, 38 states were exempting some of these types of providers. In addition, fewer states required licensure for some types of centers in 2003 than had in 1999, including religious centers, federal centers, and recreation centers. See table 3. Many states set thresholds at which regulation begins according to the number of children served by different types of providers and exempt from regulation those providers falling below these thresholds. For example, states commonly determine which family child care providers will be regulated based on the number of children in care. Specifically, in a given state, providers caring for 7 or more children in their home might be regulated, while providers caring for 4 children in their home might be exempted from regulation. As figure 2 illustrates, these regulatory thresholds have changed very little since 1999. However, 18 states met or exceeded the recommended practice of regulating providers who cared for 2 or more unrelated children in 2003, whereas 13 were doing so in 1999. Although some changes had occurred since 1999, states continued to conduct compliance inspections in accordance with recommended practices of conducting compliance inspections at least once a year. However, the number of states that visited facilities at least twice a year dropped by about half for all types of settings. According to the data reported to us through our survey, 41 states inspected centers at least annually, and 32 states did so for group homes. Similarly, 28 states conducted inspection visits to family child care homes at least once a year. See figure 3 and appendix IV.