Allowable Expenses

Understand what expenses are allowable with the grant ~

From the  Federal ARPA Guidance (begins on page 18): For the purposes of the ARP Act child care stabilization program, operating expenses are defined as the categories described in the sections below. Child care providers may use stabilization subgrants to cover the following expenses:

Personnel costs

Wages and benefits for child care program personnel, including increases in
compensation for any staff in a child care center or family child care providers
and their employees; health, dental, and vision insurance; scholarships; paid sick
or family leave; and retirement contributions. Raising the wages of child care
staff is a central part of stabilizing the industry, and lead agencies are strongly
encouraged to prioritize this use of funds. Other examples of allowable
personnel costs include ongoing professional development or training, premium
or hazard pay, staff bonuses, and employee transportation costs to or from work.

Rent, utilities, facilities maintenance, and insurance

Rent (including rent under a lease agreement) or payment on any mortgage
obligation, utilities, facility maintenance or improvements, or insurance. It also
may include late fees or charges related to late payment. Lead agencies may
define facility maintenance and improvements to include minor renovations that
do not meet the definition of major renovation at 45 CFR 98.2. Subgrant funds
may not be used for construction or major renovations. Allowable facility
maintenance and improvements may include, but are not limited to, building or
upgrading playgrounds, renovating bathrooms, installing railing, ramps, or
automatic doors to make the facility more accessible, and removing non-load
bearing walls to create additional space for social distancing. Lead agencies
should strive to include renovations needed to comply with safety guidance in the context of developmentally appropriate practice and a welcoming
environment for children and families. In addition, maintenance and minor
renovations to address COVID-19 concerns are appropriate. Lead agencies are
encouraged to support child care providers in making any facilities
improvements that make child care programs inclusive and accessible to
children with disabilities and family members with disabilities.

Personal protective equipment, cleaning, and other health and safety practices

Personal protective equipment (PPE), cleaning and sanitization supplies and
services, or training and professional development related to health and safety
practices. Uses of funds under this category are not limited to those designed
specifically in response to the COVID-19 public health emergency and may
include equipment, supplies, services, and training that support meeting state and
local health and safety guidelines, including those related to the prevention and
control of infection diseases, prevention of sudden infant death syndrome and
use of safe sleep practices, administration of medication (consistent with
standards for parental consent), prevention and response to emergencies due to
food and allergic reactions, building and physical premises safety, prevention of
shaken baby syndrome and abusive head trauma and child maltreatment,
response planning for emergencies from a natural disaster or a man-caused
event, handling and storage of hazardous materials and the appropriate disposal
of biocontaminants, appropriate precautions in transporting children, pediatric
first-aid and CPR, and recognition and reporting of child abuse and neglect.

Equipment and Supplies

This category includes purchases of or updates to equipment and supplies to
respond to the COVID-19 public health emergency. So long as the equipment
and supplies are in response to the COVID-19 public health emergency, they
may include indoor and outdoor equipment and supplies that facilitate business
practices consistent with safety protocols and developmentally appropriate
practice, as well as business items needed to respond to new challenges, such as
business software and upgrades. This also includes technological upgrades that
programs can use to collect data and report to lead agencies.

Goods and services

This category includes any material good or service necessary for the operation
of a child care program. We encourage lead agencies to treat this term broadly,
in accordance with the breadth of the language used in the statute, so that child
care providers can flexibly meet their individual needs. Examples of goods that
might be necessary to maintain or resume child care services include food and
equipment and materials to facilitate play, learning, eating, diapering and
toileting, or safe sleep. Examples of services that are allowable include business
automation training and support services, shared services, child care
management services, food services, and transportation.
The category also covers fees associated with licensing and costs associated
with meeting licensing requirements.

Mental health services

Providers may use these funds to support the mental health of children and
employees. Infant and early childhood mental health consultation (IECMHC),
an evidence-based, prevention-based strategy that teams mental health
professionals with people who work with young children and their families to
improve their social, emotional, and behavioral health and development in the
settings where children learn and grow, is one example of an allowable mental
health support. To ensure mental health supports are delivered efficiently and
effectively, lead agencies are encouraged to offer providers avenues to use funds
for IECMHC in as streamlined a manner possible. This may involve allowing
providers to “opt in” to direct a portion of funds for IECMHC through a state administered IECMHC network, or to “opt in” to regionally or locally coordinated IECMCH services that the state arranges or encourages with regional health and human services entities.
The wellbeing of caregivers is also important to stabilizing the child care sector
because the mental health and wellbeing of staff impacts training, recruitment,
and retention as well as the level of care provided to children. Mental health
consultations for staff and other types of mental health supports to staff are also
allowable.

Paying for past expenses

Prior to the passage of the ARP Act, child care providers incurred substantial
financial losses in order to keep providing these essential services to their
communities throughout the pandemic, and there were not sufficient resources
available over the past year to support the child care sector. Prolonged and
short-term closures, reduced hours, tuition adjustments, low enrollment, extra
expenses related to sanitation and safety, and accommodations for new safety
and staffing protocols have placed many child providers on very precarious
financial footing for which prospective stabilization grants will not compensate.
Assisting child care providers with these past financial losses will help ensure
their future viability and are an essential component to stabilizing the
availability of child care for our families and our communities as we recover
from this pandemic.