HHS named the combined set of funds the CCDF. States must spend at least 4 percent of their CCDF funds—of discretionary, mandatory and matching, but not of state MOE funds—for a given fiscal year on activities intended to improve the quality and availability of child care. 3.) Thirty of the 42 responding states reported providing funding to assist child care providers in meeting state licensing standards, such as California’s provision of funding to assist child care providers with health and safety standards and a variety of training requirements. 5.) Few States Have Evaluated the Effectiveness of State Quality Improvement Initiatives

While few states have evaluated the effectiveness of state quality improvement initiatives on children’s development, some studies provide useful findings about them. The research on child care quality does not evaluate initiatives as actually implemented by states, but a few studies, using rigorous methods, show that some of the attributes of child care quality that these initiatives address, such as caregiver qualifications, affect children’s social, emotional and cognitive development. The act identifies expenditures on these two activities as appropriate uses of set-aside funds but does not cite them as examples of child care quality and availability improvement activities. The regulations state that activities to improve the quality of child care may include, but are not limited to, the following: Improving resource and referral programs   Making grants or loans to providers to assist in meeting child care standards Improving compliance with and enforcement of state and local licensing requirements   Providing training and technical assistance to providers in health and safety, nutrition, child abuse detection and prevention, and care of children with special needs Improving salaries and compensation for staff who provide child care services. Mothers and Young Children Move through Welfare Reform. A report prepared for the South Carolina Department of Health and Human Services. Child Care: States Increased Spending on Low-Income Families. Welfare Reform: Implications of Increased Work Participation for Child Care.
What GAO Found

The demand for child care has increased dramatically in the past several decades as the number of mothers who work outside the home has grown. Welfare reform has further increased this demand. To support low-income parents moving into the workforce, welfare reform established the Child Care and Development Fund (CCDF). In fiscal year 2000, states spent $5.3 billion in CCDF funds to subsidize child care for low-income families. Out of concern for the quality of care that the CCDF funds, welfare reform legislation also required states to set aside at least 4 percent of the total grant to improve the quality and availability of child care. Department of Health and Human Services (HHS) regulations provide examples of allowable activities, such as providing child care providers with financial incentives for meeting state and local standards, improving the compensation of child care staff, and offering resource and referral services. However, the regulations do not limit states' use of funds to these activities; rather, the fund's block grant structure allows states considerable flexibility in choosing appropriate quality and availability improvements to pursue. Using primarily the four percent quality set-aside, states reported undertaking a variety of child care quality improvement initiatives, such as training caregivers, raising the compensation of caregivers, referring parents to child care providers, and efforts to enhance the safety of child care facilities. Although few states have evaluated the effects of their quality improvement initiatives on children's development, some studies provide useful findings about them. The research on child care quality does not evaluate initiatives as actually implemented by states, but a few studies, using rigorous methods, show that some of the attributes of child care quality that these initiatives address, such as caregiver qualifications, affect children's social, emotional and cognitive development.