Introduction to
State Contracts

Before building an enrollment and projection plan, it’s important to know & understand what is on your program contract.

Upon being awarded a program contract through the Request for Applications (RFA) process , we see the contract process as on ongoing 3 part cycle that includes

1. Contract & Amendments

2. Continued Funding Application (CFA)

3. Program Narrative Changes (PNC).

This lesson was designed to support programs with understanding what is on their contract, along with the contract process.

Reference

Fiscal Handbook: Enrollment, Attendance, & Fiscal Reporting, & Reimbursement Procedures for Early Education Contracts

Video Description: This video explains the ins and outs of State Preschool contracts funded through the California Department of Education.

Request for Applications

Request for Applications also referred to as RFA is released as funds become available.

Department issues notification to contractors via a Management Bulletin & eligible contractors pursuant to RFA conditions may apply. Contractors apply through an application process for new or additional CSPP funds.

Applicants that are awarded a CSPP contract are required to adhere to all applicable laws & regulations associated with the contract as well as the terms & conditions set forth in the Contract Terms & Conditions (CT&Cs) & Program Requirements applicable to the fiscal year in which the services are provided.

NOTE: Being awarded does not immediately mean that a contractor is given a contract. There is communication that happens between the fiscal analyst & the new contractor before the contract is created – at a minimum, site licenses and verified start dates are needed. Potentially, the award amount is prorated for the first year of operation.

Contracts/Amendments

Once awarded, a contract for new applicants or a contract amendment for existing applicants is issued.

Contract Information

The contract is a legally binding agreement between a child care contractor & the Department in which the contractor agrees to provide child development services according to defined programmatic & fiscal requirements.

Contracts are sent to the e-mail addresses for both the Executive Director & Program Director(s) on file in CDMIS

NEW Contractors must sign and return their initial contract

Contractors who apply & are approved for continued funding through CFA process will not need to sign and return initial program year contract

Once the contract is executed by the Contracts Office, it becomes eligible for payment. No apportionments can be made until a contract is deemed executed by the Contracts Office

Contractor will receive a copy of the fully executed contract

Not all amendments will require a signature. Contract amendments that do not require a signature will be processed as an Allocation Letter which will look similar to a contract amendment, & will include the contract face sheet & any changes in funding, where applicable.

Program Type

Some agencies operate one program type, while others operate many. A separate contract is issued for each program type.

Contracts are not renewed annually; instead, agencies apply for continued funding & a new contract is issued each fiscal year with a different contract number.

The first four characters designate the program type. The first number designates the fiscal year, which is the last digit of the first half of the fiscal year. The last three numbers are the contract sequence number within that program type. 

Maximum Reimbursable Amount

The Maximum Reimbursable Amount, also known as MRA, means the total dollar amount of a contract. This is the most that an agency will be paid for their child services or reimbursable expenses in a given fiscal year.

NOTE: Changes to the MRA during the fiscal year will require an amendment to the contract. 

The MRA is located within the narrative & within the table. In the event the the contract is amended, it will show both the prior encumbrance, amended encumbrance & new maximum reimbursable amount.

Contract Rate (Per-Child Reimbursement)

The Contract Rate is the rate an agency will earn per child per day based on full-time equivalency, known as FTE, for a child who is 4 years and older.

The Contract Rate is located within an excel worksheet. The web link to the worksheet is included within the face sheet. The data within the table shows reimbursement rates by service county.

If contractors operate within multiple service counties, contractors may have multiple contract rates as rates will be specific to the county in which services are provided to certified children. 

Child Days of Enrollment (cde)

A day of enrollment is a day that a child is certified to attend a program per the contractor’s Notice of Action. A day of enrollment will always fall on a day that the agency is open and providing services.

Certified days of enrollment for all children are to be reported on the Enrollment, Attendance, and Fiscal Report and must be reported in the category of each child’s certification (Age, Part-time, Exceptional Needs etc….)

NOTE: Child days of enrollment determine how many children must be enrolled to earn a contract in a typical year. Since cdes are not on the Contract Face Sheet, Fiscal Services developed a Child Days of Enrollment Calculator, which is available on the CDE Fiscal Services Resource page, along with a funded enrollment calculator video tutorial.

Adjustment Factors

In a typical year, since service-level earnings are based on the contract rate multiplied by Adjusted Days of Enrollment, this practice results in different reimbursement levels. 

Beyond time based categories, there are various other reasons an adjustment can be made to the contract rate, such:

• A child’s age

• If they have exceptional needs

• Receiving mental health consultative services within the classroom

Contractors who elect to implement Mental Health Consultation Services to support teaching staff & families by helping to address challenging behaviors in the classroom or family child care home setting, may claim an adjustment factor of 1.1.

This increased adjustment factor applies to all children enrolled in the classroom or family child care home setting where services are provided; therefore children would be reported in the MHCS certified enrollment section of CPARIS, & not in the non-MHCS certified section.

What this might look like in a program:

• Cece, a part-day state preschool child within Tuolumne County, is 4 years old and has a current IEP on file; therefore the contract reimbursement rate of $55.27 would be adjusted by multiplying the rate by 1.4863 to reflect the part-time day reimbursement.

• The preschool program would earn $82.15 for every day Cece is certified to receive services.

Minimum Days of Operation

A “Day of Operation” is a day the contractor provides child care & development services for one or more certified children enrolled. The minimum days of operation are determined by the service calendar submitted annually for each program. 

NOTE: If your MDO needs changed, submit a revised calendar, along with a Program Narrative Change form.

Continued Funding Application

After the initial contract period, the contractor’s eligibility for continued funding each subsequent year is contingent upon compliance with all department & statutory requirements along with the completion & submission of a Continued Funding Application.

Each year around fall, the Department issues a Management Bulletin notifying contractors of the release of the Continued Funding Application for contractors who intend to continue services into the next contract year.

Contractors who apply for & are approved for continued funding through the CFA process will be automatically renewed.

NOTE: Failure to respond within the timelines specified in the CFA request shall constitute notification to the Department of the contractor’s intent to discontinue services at the end of the current contract period.

Calendar (MDO) Change

Calendar Minimum Days of Operation (MDO) changes include an increase or decrease to the MDO.

A revised calendar along with supporting documentation to substantiate the requested change must be submitted along with the PNC form as soon as your calendar changes.

Be cautious with calendar changes as this may impact your monthly funds.

On year-end calculations, if the actual days of operation are greater than or equal to 98% of the Minimum Days of Operation, the Maximum Reimbursable Amount will not be affected. 

If actual days of operation are less than 98% of the Minimum Days of Operation, the Maximum Reimbursable Amount will be reduced in proportion to the percentage of contract minimum days of operation that the contractor was not in operation. This could result in a billing if the contractor has been paid more than the reduced Maximum Reimbursable Amount.

If there are date changes to your program calendar but the MDO will remain the same, contractors are not required to submit a PNC however, contractors must email their assigned PQI consultant & include a copy of the revised calendar.

Programmatic Change

Programmatic changes include but are not limited to the opening of a new site or closing of an existing site, changes to the service area, program model changes from full-day to part-day or part-day to full-day.

The contractor must submit the PNC form along with any support documentation to support the request such as a parent survey or needs assessment.

NOTE: A request to change a part-day CSPP to a Full-day CSPP does not coincide with an increase to the MRA.

PNCs submitted at the time of the Continued Funding Application for the upcoming fiscal year will receive an email notification of the approval or denial of their CFA & requested change.

Contractors may experience changes in projected services or needs during the year. When this happens, eligible non-Local Educational Agencies (non-LEAs) that hold both CSPP and CCTR contracts may request an intra-agency transfer between the two contracts. Transfers are limited to the current fiscal year and must be requested during one of the two official transfer windows—January or April of the same contract year.

While CSPP is administered by the California Department of Education (CDE) and CCTR is administered by the California Department of Social Services (CDSS), transfers between the two programs are permitted for qualifying contractors. Regulations require CDE to attempt to arrange intra-agency adjustments between CSPP and CCTR contracts held by the same agency, with the overall goal of ensuring that child care funds are fully utilized.

Contractors submit the transfer request form through CPARIS. For the CCTR portion of the request, contractors must contact their assigned CDSS fiscal analyst by email for instructions because CDSS no longer has access to CPARIS. CDE and CDSS review the request to ensure the proposed transfer aligns with projected service earnings and reimbursable costs. If approved, the contractor will receive an allocation letter reflecting the contract amendment; no signature is required.

Note: If a significant portion of program funds is transferred, the applicable department may request a Program Narrative Change form to document the impact on the program.

What this might look like in practice:

Scranton Community Action Agency projects that it will not fully utilize its CSPP funds but needs additional funding for its CCTR contract, or vice versa. Therefore, the agency may request an intra-agency transfer.

Another funding opportunity is the Voluntary Temporary Transfer (VTT), a one-time process that allows funds to be temporarily transferred from contractors who are under-earning to contractors who are over-earning within similar contract types, such as from one CSPP contract to another. This helps ensure funds are fully utilized and directed to programs with an immediate service need rather than remaining unused.

The VTT is a collaborative process involving CDE contractors, Local Planning Councils (LPCs), department consultants, fiscal analysts, and LPC liaisons. Contractors first identify whether they are under- or over-earning and then submit a signed letter indicating their willingness to release or accept funds. These letters are typically coordinated through the LPC designee or subcommittee, but contractors may also submit them directly to their assigned fiscal analyst.

As with intra-agency transfers, timing is critical. VTT requests are accepted only during the following windows of the contract year:

• November 1 - 15

• May 1 - 15

After submission, the fiscal team reviews all documentation for completeness and accuracy. The Department makes the final decision to approve or deny each request and notifies all parties of the outcome. If approved, the contractor receives a contract amendment through an allocation letter, which does not need to be signed or returned.

NOTE: Transferred funds cannot be placed into a Reserve Account. If an audit later determines that VTT funds were placed into a Reserve Account, the contract’s Maximum Reimbursable Amount (MRA) will be reduced, and the contractor will be invoiced for that amount.

After reviewing the video lesson & sketch pad notes, it’s time to check for understanding by completing a Knowledge Check. Note that Individual Knowledge Checks will conclude with a Certificate.

Start Individual Knowledge Check (ProProfs) >

Access Group Knowledge Check (Kahoot!) >