The subsidies services offer providers for off-installation child care are  intended to provide benefits comparable to those that families would  receive for on-installation care. Military Families’ Child Care Costs Are Largely Driven by Policies, Including Subsidy Caps, Which Vary by Service

		For On-Installation Care, Services’ Policies Resulted in Variations in Per-Child Costs

As a result of services’ policies, the per-child monthly cost of on- installation care at a CDC for families within the same income category  varied by as much as $230 in school year 2010, depending on their  service and installation (see fig. For example, the per-child monthly cost for on-installation care for  a family with an annual income of $50,000 could have ranged from $335  to $518 in school year 2010; however, for families in this income category  at most military installations with CDCs, the per-child monthly cost was  within the OSD standard fee range of $335 and $413. For Off-Installation Care, Families in Services with Fixed Subsidy Caps Had Higher Average Costs in School Year 2010 than Families in Other Services

In school year 2010, families using off-installation care in the Air Force  and Navy, which capped the monthly amount of subsidy a family could  receive at $200 per child, had higher average monthly child care costs  than did families in the Army and Marine Corps, which did not have fixed  subsidy caps. As a result, some families in  these services paid more for off-installation care than they would have  paid on installation. In  general, the effects of these subsidy policy changes will vary by family. Limited Awareness of DOD-Subsidized Child Care Programs and Availability of Care Pose Barriers for Military Families

		Even with Outreach Initiatives, DOD Faces Challenges Educating Military Families about Child Care Programs

Although DOD provides information about subsidized child care programs  through a number of sources, DOD officials and military parents cited  limited awareness of these programs as a key barrier to their use. DOD and  the services have taken a number of steps to address these challenges. Officials from DOD and groups  representing military families told us that information on DOD- subsidized child care is more likely to be absorbed if it is provided  when military families need it. Other examples  include the Navy and Air Force’s new programs to market DOD- subsidized child care programs to military families, such as to  reservists who have children and have recently deployed. In addition to learning about DOD-subsidized child care, obtaining  information about applying for this care has also been a challenge  families face, because servicemembers must apply for on-installation  child care at different places than for off-installation child care. DOD  intends to market the system DOD-wide to servicemembers once it is fully  implemented. DOD plans to pilot the system in the  spring of 2012, and to begin full implementation of the system in the late  summer or fall of 2012. Availability of On- Installation Care Is Limited but Increasing, and Eligible Off-Installation Providers Are Scarce

In response to limited availability of on-installation child care and eligible  off-installation providers, DOD and the services are increasing capacity at  on-installation facilities and in the community as part of their commitment  to family readiness. DOD anticipates that construction projects approved in  fiscal years 2008 through 2010 will add over 21,000 additional child care  spaces. Military families that cannot obtain on-installation care due to wait lists  and those that are geographically isolated from an installation may be  eligible for DOD-subsidized off-installation care, but community-based  providers who meet DOD’s quality standards are in short supply. For instance,  differences among the services in families’ costs for off-installation care  could be minimized if all services offered subsidies that made up the full  difference between a family’s private provider rate and what they would  have paid for on-installation care, with no subsidy caps. As DOD increases the number of eligible child  care providers for off-installation programs and moves toward centralizing  access to DOD-subsidized child care programs through its planned  agencywide system for requesting both on- and off-installation care,  outreach will need to keep pace, with particular attention to families who  live off installation. DOD stated that in addition to the recent and planned changes to DOD  and the Army’s fee policies that will likely reduce the differences among  the services, the Air Force also implemented fee policy changes reducing  out-of-pocket expenses for families. GAO staff members who made key  contributions to this report are listed in appendix V.

Appendix I: Objectives, Scope, and Methodology

	Objectives

Our review focused on the following questions: (1) What are the out-of- pocket child care costs paid by military families who use Department of  Defense (DOD) subsidized child care? (2) What are the barriers, if any, to  obtaining DOD-subsidized care, and what has DOD done in response? Sample of Family Files

To determine the out-of-pocket costs for families using DOD-subsidized  off-installation care, we analyzed these costs for a random probability  sample of 338 families from all four services in school year 2010. Specifically, we collected and analyzed data from family files maintained  by the contractor that administers DOD’s off-installation child care  subsidies, the National Association of Child Care Resource and Referral  Agencies (NACCRRA). We found the data  we assessed to be sufficiently reliable for the purposes of reporting the  range of on-installation fees per child by service in school years 2010 and  2011, and out-of-pocket costs for families using DOD-subsidized off- installation child care in school year 2010.
Why GAO Did This Study

About a million military servicemembers serve the United States while raising a family, and many need reliable, affordable child care. Paying for high-quality child care can be challenging for these families, so the Department of Defense (DOD) offsets costs by subsidizing on-installation child care centers and offering subsidies for approved off-installation care providers. Deployments related to the wars in Iraq and Afghanistan increased the demand for child care. The extent of military families out-of-pocket child care costs for those using subsidized care are not known, and families may face barriers to obtaining DOD-subsidized care. GAO was mandated to examine: (1) the out-of-pocket child care costs paid by military families who use DOD-subsidized care; and (2) the barriers, if any, to obtaining DOD-subsidized care, and what has DOD done in response.
To address these objectives, GAO reviewed DOD policies and guidance; interviewed officials from DOD, its contractor that administers DODs off-installation child care subsidies, and organizations that support military families; reviewed DOD fee data for school year 2009-2010 (school year 2010) and school year 2010-2011 (school year 2011); and analyzed child care costs for a random probability sample of 338 families using off-installation care in school year 2010. GAO conducted nongeneralizable discussion groups with military parents at two large military installations.
GAO is not making recommendations in this report.DOD generally agreed with the reports findings and also provided additional information on several specific points in the report.

What GAO Found

Out-of-pocket costs for military families who use DOD-subsidized child care are largely driven by policies that vary by service. DOD establishes income-based fee ranges for on-installation child care, but each service sets its own fees and discounts within these parameters. As a result, in school year 2010 the per-child costs that families from the same income categories paid for on-installation care varied by service and installation. For example, the monthly per-child cost for a family with an income of $50,000 could have ranged from $335 to $518. Families costs for off-installation child care through private providers are also affected by policy differences among the services. All services offer subsidies for off-installation care that are intended to make families costs comparable to those for on-installation care. In an effort to offer benefits to more families, some services use a fixed cap to limit the subsidy amount. In school year 2010, the Air Force and Navy capped their subsidies at $200 per child per month, and families in these services had higher average monthly costs for off-installation care than Army and Marine Corps families, and also had higher costs than what they would have paid for on-installation care. For example, on average, Navy families using off-installation care paid $87 more per month than they would have paid for on-installation care, while Army families paid $63 less. Other factors, such as the number of children in care, also contributed to families costs for off-installation care. DOD and the services recent policy changes reduced differences among and within services in families costs for on-installation care, and DOD plans to further reduce these differences in the next 3 to 5 years. While the effects of these policy changes on individual families costs for off-installation care vary by family, families in services with fixed subsidy caps will likely continue to have higher average costs than families in services that do not.
Military families face two main barriers to obtaining DOD-subsidized child care: lack of awareness and insufficient availability. According to DOD officials and based on GAOs group discussions, some families remain unaware of subsidized child care, particularly off-installation care, despite DODs efforts to provide information at pre-deployment briefings, and through other outreach efforts. Families who are geographically isolated from an installation, such as reservists and recruiters, may be less likely to be aware of subsidized care. The individual services have taken steps to increase awareness of DOD-subsidized child care, such as establishing positions for professionals who educate families about child care options. However, even families who are informed about DOD-subsidized child care may face barriers obtaining it due to a lack of available space at on-installation centers and a scarcity of eligible child care providers off installation. The shortage of on-installation child care spaces resulted, in part, from heavy deployment demands, and DOD has responded by approving construction projects that it anticipates will provide over 21,000 new child care spaces using fiscal year 2008 through 2010 funding. DOD and the services have initiatives under way to increase the availability of eligible off-installation providers. In addition, DOD is developing an agencywide system that will provide servicemembers a central place to request both on-installation and off-installation child care. DOD plans to pilot the system in the spring of 2012 and intends to market it DOD-wide to servicemembers once it is fully implemented. The agency is in the process of contracting for the development of a marketing plan.