Management Bulletin 23-07

Early Education Division

Subject: Assessment and Reporting of Family Fees for Fiscal Year (FY) 2023–24

Number: 23-07

Date: September 2023

Expires: June 30, 2024

Authority: Assembly Bill 110 (Chapter 4, Statutes of 2023); Assembly Bill 116 (Chapter 41, Statutes of 2023); California Education Code sections 8252–8254

Attention: Executive Directors and Program Directors Operating Full-Day California State Preschool Programs

Purpose

This Management Bulletin (MB) is to notify and provide updated guidance to California State Preschool Program (CSPP) contractors who operate full-day state preschool programs regarding state requirements on the assessment and collection of Family Fees for Fiscal Year (FY) 2023–24 following the enactment of Assembly Bill (AB) 110 (Chapter 4, Statutes of 2023) and AB 116 (Chapter 41, Statutes of 2023).

This MB rescinds and replaces MB 22-07.

Policy

Before October 1, 2023, notwithstanding any other law, family fees must be assessed but must not be collected from families for services provided from July 1 to September 30, 2023. Through September 30, 2023, CSPP contractors providing services through a Family Childcare Home Education Network (FCCHEN) must reimburse providers for the full amount of the childcare certificate without deducting family fees. Effective October 1, 2023, CSPP contractors must collect family fees for families not otherwise exempt from family fees who are enrolled in full-day CSPP using the FY 2023–24 monthly family fee schedule.

Assembly Bill 116 requires that no family fees be charged or assessed for families whose adjusted monthly family income falls below 75 percent of the State Median Income (SMI), and further caps family fees at 1 percent of a family’s monthly income for all other families. As a result, the FY 2023–24 family fee schedule has been revised accordingly. In addition, family fees accrued but not collected prior to October 1, 2023, may be forgiven, and not collected.

Prior to October 1, 2023, CSPP contractors must reassess family fees for families with children in CSPP who are not otherwise exempt from paying fees using the revised family fee schedule. However, contractors can only begin collecting those fees on or after October 1, 2023. Contractors are reminded of the provisions of California Code of Regulations, Title 5 (5 CCR) Section 17734 that contractors must provide written information to families in advance of collecting fees describing the contractor’s policy for assessment, collection, and the consequences for delinquent payment of fees.

Directives for Implementation

Family Fee Requirements Between July 1 and September 30, 2023

Contractors must use the FY 2022–23 family fee schedule to assess family fees for all families between July 1, 2023 and September 30, 2023. Family fees are waived from July 1, 2023 to September 30, 2023, and, pursuant to the directives provided by the California Department of Education (CDE) in an email sent to the Early Education Division (EED) email distribution lists on May 30, 2023, contractors were required to issue a Notice of Action (NOA) to all families indicating this policy. The Notice of Action (NOA) to families at initial certification or recertification during this time must identify the amount of the assessed family fee and note that collection of the assessed family fee will be waived through September 30, 2023.

Family Fee Requirements Beginning October 1, 2023

New Enrollments and Recertifications

For FY 2023–24, contractors are required to calculate and assess the applicable family fee at initial certification and recertification as usual. This requirement is to ensure that contractors report the correct family fee amount(s) and that families are aware of the updated fee that will be applicable starting October 1, 2023. When assessing family fees beginning October 1, 2023, contractors must use the FY 2023–24 Family Fee Schedule that can be accessed at http://www.cde.ca.gov/sp/cd/ci/documents/fy2324famfeeschedule.xlsx (XLSX). Contractors must issue a Notice of Action at initial certification or recertification that includes the amount of the assessed family fee.

Pursuant to 5 CCR Section 17734, families enrolled in full-day CSPP with a certified need of less than 130 hours per month will be assessed a part-time fee, while families enrolled in full-day CSPP with a certified need of 130 hours or more per month will be assessed a full-time fee. When a family has more than one child enrolled in CSPP and/or childcare programs administered by the California Department of Social Services (CDSS), the family fee must be assessed based on the family’s child who is certified for the greatest number of hours.

Families who were initially certified or recertified based on an eligibility criterion other than income, and who are not otherwise exempt from family fees, are still required to be assessed a fee. These families are required to self-certify their income for the purpose of assessing the family fee. When a family’s income exceeds the amounts on the annual family fee schedule, the contractor must assess the highest fee for their family size.

Note: Unlike previous years, the 2023–24 Family Fee Schedule goes beyond 100 percent of SMI plus 15 percent. For families enrolling in CSPP through provisions other than income eligibility that have incomes that exceed 115 percent of the SMI, contractors must use the additional rows of the FY 2023–24 Family Fee Schedule spreadsheet or the Family Fee Calculator available at https://www2.cde.ca.gov/familyfee/, to determine the family fee. The CDE has included a column indicating the percent of SMI each row on the spreadsheet corresponds to. Please give careful attention to that column to ensure that the appropriate fee is being charged to the corresponding income amount.

As a reminder, families shall only be assessed one flat monthly family fee when they have more than one child enrolled in either a state preschool program administered by the CDE, or a combination of a CSPP and a childcare program administered by the CDSS. When a contractor has families with children enrolled in both a CSPP administered by the CDE, and a childcare program administered by the CDSS, and those children are enrolled for the same period, the contractor may choose which contract the family fee assessment will be applied to. Section 17737 of 5 CCR also establishes a process in which families can receive credit for fees paid to other service providers when the contractor is unable to fulfill the family’s entire certified need for care.

Family Fee Requirements for Currently Enrolled Families

The changes to the family fee schedule required by AB 116 will result in lower fees for many families already enrolled in CSPP. To ensure that all families are paying fees in line with these changes, all contractors must reassess fees for all families except those who are otherwise exempt, as outlined in the Exceptions to Family Fee Assessment section below, by September 30, 2023. Contractors must use the FY 2023–24 Family Fee Schedule, included in this bulletin, and the income reported by the family at their most recent certification to assess the family’s new fee. If for any reason the new family fee results in a higher family fee than the fee previously assessed for the family at their most recent certification or recertification, the contractor shall not update the family fee until the next recertification.

Pursuant to an email directive sent on May 30, 2023 to the EED email distribution lists, contractors were required to issue a NOA extending the fee waiver until September 30, 2023 for each family enrolled that had a family fee. This MB issues guidance for contractors to reassess family fees for all families that are not otherwise exempt using the 2023–24 Family Fee Schedule. After reassessing the family’s fee:

• If the reassessed family fee is lower than the previous fee, contractors must issue a new NOA indicating the newly assessed fee the family will be responsible to pay beginning October 1, 2023.
• If the family is no longer responsible for paying a family fee, contractors must issue a new NOA indicating the family will not pay any fee beginning October 1, 2023.
• If the reassessed family fee is the same as it was before or is greater than before, contractors shall not update the family fee, and thus should not issue a NOA.
  

Exceptions to Family Fee Assessment

Pursuant to Education Code Section 8253 and 5 CCR 17735, CSPP contractors must not assess or collect fees from families under any of the following circumstances:

a. A child that receives child protective services, or is at-risk thereof may be exempt for up to 12 months if it is required by the services plan;

b. Enrollment in a part-day CSPP;

c. With an income level that, in relation to family size, is less than the first entry in the family fee schedule; or

d. A family that receives California Work Opportunity and Responsibility to Kids (CalWORKs) cash aid.

Families on Delinquent Family Fee Plans

Assembly Bill 116 added subsection (k) to EC Section 8252 which includes language that allows contractors to forgive and not collect any uncollected delinquent fee balance accrued before October 1, 2023; therefore, contractors do not need to collect any previous debts for family fees. Any families with plans to pay delinquent fees accrued prior to October 1, 2023, may no longer be required to make payments in accordance with their plan. The intent of EC Section 8252(k) is to reduce the burden of fees on families; as such and to ensure consistency in implementation, the CDE strongly urges contractors not to collect any uncollected delinquent fee balances.

Contractor Reporting and Reimbursement

The FY 2023–24 Enrollment, Attendance, and Fiscal Reports have been revised to collect information on the amount of family fees waived and the amount of family fees collected. Specifically, the California Preschool Accounting Reporting Information System (CPARIS) Enrollment, Attendance, and Fiscal reports have been revised to include a line for reporting the amount of family fees waived and the amount of family fees collected. All contractors will be required to report the amount of family fees collected and the amount of family fees that were assessed but waived on the appropriate line.

Contractors must report the amount of family fees that were assessed, but waived between July 1, 2023 and September 30, 2023, on the line Waived Family Fees for Certified Children (July – September). Contractors must report the amount of family fees collected between October 1, 2023 and June 30, 2024, on the line Family Fees Collected for Certified Children (October – June). Contractors are reminded that family fees reported on the Family Fees Collected for Certified Children (October – June) line must be based on the amount of fees the contractor expects to collect in the report month, regardless of when the revenue is actually received. Reporting fees according to this directive will ensure the CDE is reimbursing contractors accurately.

In instances where a family has children enrolled in both a CSPP program administered by the CDE, and a childcare program administered by the CDSS, the contractor must report the assessed family fee to the contract which has the child enrolled for the longest period. When families have children enrolled in both a CSPP program administered by the CDE, and a childcare program administered by the CDSS, with the same number of hours, the contractor has the discretion on where to report the assessed fee (i.e., to either the CDE or the CDSS contract). However, to ensure consistency from one report month to the next, contractors must have written policies or procedures on how they determine for which program they report the family fee.

Assembly Bill 110 provides additional funding authority to ensure contractors have sufficient funds to cover the cost of family fee waivers between July 1, 2023, and September 30, 2023. The Early Education and Nutrition Fiscal Services (EENFS) office will utilize family fee waiver data submitted in the FY 2023–24 first quarter Enrollment, Attendance, and Fiscal Reports as a basis for this allocation. It is imperative that contractors submit their first quarter report by the October 20, 2023, deadline to ensure that an accurate allocation is provided. If the first quarter report is not submitted by October 20, 2023, a contractor may not receive an allocation to cover the cost of any family fee waivers.

Additionally, AB 102 allocated funding to support lost revenue due to the family fee changes effective October 1, 2023. The CDE is in the process of determining the allocation methodology for these funds and will provide more information in the forthcoming EENFS FY 2023–24 California State Preschool Contract Changes letter, expected to be released late fall 2023. The CDE will notify contractors when this letter becomes available through EED’s email distribution list.

Background

The EC Section 8213 requires the Department of Finance to update the State Median Income (SMI) annually.

The EC Sections 8252–8254 refer to the state requirements for establishing a family fee schedule, the assessment of those fees, and the applicable exemptions as set by state budget and federal law.

The EC Section 8252(d) states that fees may only be assessed at initial certification and recertification.

The EC Sections 8252(a) and (b) require the State Superintendent of Public Instruction to use the family fee schedule developed in conjunction with the CDSS, for families receiving preschool services and/or childcare and development services, pursuant to the Welfare and Institutions Code (WIC) Section 10290. Pursuant to EC Sections 8332 (b) and (d), the family fee schedule is subject to the approval of the Department of Finance and designed based on the most current SMI, adjusted for family size.

The 5 CCR, Sections 17734(b) and (i), further require that the family fee schedule differentiate between full-time fees and part-time fees and that families be assessed a flat monthly fee. Assessment of the monthly fee is based on the following factors:

• Hours of certified need, as documented on the application for services
• The family’s adjusted monthly income
• Family size
  

The 5 CCR, sections 17733 through 17740, set forth family fee requirements for full-day CSPP.

AB 110 added subsection (j) to EC Section 8252 to extend the waiver on the collection of family fees from July 1, 2023, through September 30, 2023, and requires contractors to reimburse subsidized childcare providers for the full amount of the certificate or voucher without deducting family fees during this extended period.

AB 116 amended Welfare and Institutions Code (WIC) Section 10290(e) and changed the maximum family fee from 10 percent to 1 percent of a family’s monthly income for families receiving CSPP services and provides that families with an adjusted monthly income below 75 percent of the State Median Income are not assessed a family fee.

AB 116 also added subsection (k) to EC Section 8252 to provide that family fees accrued but uncollected prior to October 1, 2023, may be forgiven and not collected.

On May 30, 2023, the CDE released an email directive notifying contractors to issue a NOA extending the fee waiver until September 30, 2023, for each family enrolled that has a family fee assessed.

Resources

To be informed of updated information, please sign up for the EED's email distribution list at https://www.cde.ca.gov/sp/cd/ci/emailindex.asp.

Contacting your Program Quality Implementation (PQI) Office Regional Consultant or your EENFS Fiscal Analyst:

If you have any programmatic questions regarding the information in this MB, please contact your assigned EED, Program Quality Implementation Office regional consultant. The EED Consultant Regional Assignments Directory can be accessed at
https://www.cde.ca.gov/sp/cd/ci/assignments.asp.

If you have any fiscal questions about the information in this MB, please contact your assigned EENFS fiscal analyst. The Fiscal Analyst Directory can be accessed at https://www.cde.ca.gov/fg/aa/cd/faad.asp.

This MB is mandatory only to the extent that it cites a specific statutory or regulatory requirement. Any portion of this MB that is not supported by a specific statutory and/or regulatory requirement and is not prescriptive, pursuant to California EC 33308.5.