Title of Regulation: 22VAC40-661. Child Care Program (amending 22VAC40-661-10, 22VAC40-661-30, 22VAC40-661-40, 22VAC40-661-57, 22VAC40-661-60, 22VAC40-661-70, 22VAC40-661-80; adding 22VAC40-661-100).

Statutory Authority: § 63.2-217 of the Code of Virginia; 45 CFR 98.11.

Public Hearing Information:

December 10, 2013 - 6 p.m. - Department of Social Services, Central Regional Office, 1604 Santa Rosa Road, Richmond Room, Henrico, VA 23229

Public Comment Deadline: January 17, 2014.

Agency Contact: Mary Ward, Subsidy Program Manager, Department of Social Services, 801 East Main Street, Richmond, VA 23219, telephone (804) 726-7638, FAX (804) 726-7655, or email mary.ward@dss.virginia.gov.

Basis: Section 63.2-217 of the Code of Virginia authorizes the State Board of Social Services to adopt regulations necessary or desirable to carry out the purpose of Title 63.2 (§ 63.2-100 et seq.) of the Code of Virginia. Other authority for the program implemented through this regulation are §§ 63.2-319, 63.2-510, 63.2-611, and 63.2-616 of the Code of Virginia.

Applicable federal laws are the Child Care and Development Block Grant of 1990 as amended by the Personal Responsibility and Work Opportunity Reconciliation Act of 1996 (Public Law 104-193) and the Balanced Budget Act of 1997 (Public Law 105-33), as implemented in regulation at 45 CFR Parts 98 and 99. Additional federal authority comes from the Food Stamp Act of 1977, as amended.

Purpose: Currently, no statewide automation exists to support the Child Care Subsidy Program. In addition, program guidance currently allows some options for local department administration. These two factors have resulted in a number of variations in local program operations across the state. The proposed amendments will enable the department to initiate the changes necessary to develop a statewide automated program and manage child care providers across the state. An automated program will insure consistent application of program guidance regardless of the locality in which a client lives. State management of child care providers will assure both parents and providers of consistent application of policy and procedures regardless of the locality in which they live and do business. State management will provide a single point of contact for child care providers.

The regulation is essential to protect the health, safety, and welfare of citizens by providing financial assistance for eligible families to help pay the cost of child care so a parent or person who has assumed responsibility for a child can work or attend child care programs.

Substance: The following changes are proposed:

1. Require that all vendors sign and comply with the terms of their vendor agreements including payment processes, holiday schedules, absence policy, and attendance tracking. This change is necessary for vendors to be eligible to participate in the Child Care Subsidy Program and receive payment for their services, and to assure consistent statewide procedures.

2. Require that, to participate in the Child Care Subsidy Program, vendors must have a working telephone on site wherever care is provided. This change is necessary for both the health and safety of children and for participation in a new, centralized payment process for vendors.

3. Cap subsidy payments for care of children with special needs to bring consistency to such payments and to permit programmatic oversight of costs.

4. Allow payment of one annual registration fee to be paid to a child care provider for a child eligible for subsidized child care if the provider charges such a fee to the public. A limitation on payment of registration fees will result in more funding available to assist eligible families.

5. Eliminate payment of activity fees charged by providers, which will result in more funding available to assist eligible families.

6. Require that applicants for child care be at least 18 years of age to ensure that the contractual obligation of parents to pay a portion of their child care costs can be enforced.

7. Require that all applicants and recipients cooperate with the Division of Child Support Enforcement (DCSE) as a condition of eligibility for the Child Care Subsidy Program, which will result in additional support and services for families.

8. Require that an appellant repay the amount of all child care payments made on behalf of the family during an appeal process if the action of the local department of social services is upheld by a hearing officer.

9. Require that applications for child care assistance be processed within 30 days. This change from 45 days to 30 days will result in more timely eligibility determination for assistance.

10. Limit receipt of child care assistance to 72 months per family. This change will bring consistency to the program statewide since time limitation on receipt of benefits had previously been an option for local departments. A 72-month lifetime limit for receipt of child care assistance will allow the program to serve more families.

11. Initiate an administrative disqualification hearing process to review allegations of intentional program violations made against a client when the Commonwealth's Attorney has determined that the case does not meet the criteria for prosecution.

12. Require that overpayments made as a result of a local department of social services' error be repaid to the Department of Social Services with local funds.

Issues: The proposed amendments will provide the following advantages to families, local departments of social services, child care providers, and the department:

1. Statewide automation will result in a more efficient and effective Child Care Subsidy Program, thereby providing more expedient receipt of services to families.

2. Statewide automation will insure uniform application of policy and procedures across the state, which will decrease errors.

3. State oversight and management of child care providers will assure families that child care providers have complied with all state requirements for program participation.

4. State oversight will allow providers a single point of contact.

5. Payments to child care providers will be processed more frequently.

6. A cap on the amount a child care provider can charge for the care of children with special needs, limiting payment of registration fees, and eliminating payment of other fees charged by child care providers will result in program savings that can be used to assist more families.

7. The recovery of payments made for services during an appeal process when a local department's decision is upheld will result in the ability to serve more families.

8. A shortened application processing time will result in more timely receipt of assistance to eligible families.

9. Limiting receipt of child care assistance to 72 months for non-TANF families will allow more families to be served.

10. Use of the administrative disqualification hearing process rather than a lengthy and costly court process will result in program savings.

11. The requirement that local departments repay the state with local-only funding when a local department error is discovered will result in Child Care and Development Fund savings and increased program integrity.

Issues that could be considered disadvantages to families are:

1. The requirement that applicants be at least 18 years of age, which could affect less than 1.0% of applicants.

2. A 72-month limitation, which could affect approximately 12% of families in the fee program.

3. Appellants will be required to repay the amount of all payments made during the appeal process when a local department's decision is upheld.

4. A cap on the amount that a provider can charge for care of children with special needs could decrease the number of child care providers willing to accept the approved rate.

5. A requirement to cooperate with DCSE as a condition of eligibility could discourage some applicants.

Issues that could be considered a disadvantage to child care providers are:

1. The requirement to have a working phone on site could result in an additional expense to those providers who do not currently have one.

2. A cap on the amount that a provider can charge for care of children with special needs could decrease the number of providers willing to participate in the program.

Department of Planning and Budget's Economic Impact Analysis:

Summary of the Proposed Amendments to Regulation. The State Board of Social Services (Board) proposes to amend its regulations that govern the non-mandated child care subsidy program to facilitate a new statewide child care automation system. The Board specifically proposes to add a number of definitions and add some requirements now in guidance language into regulation. The Board also proposes several substantive changes: 1) the Board proposes to reduce the number of days from initial application to beginning date of service payment from 45 to 30, 2) mandate that Local Departments of Social Services (LDSS) have a 72 month limit on child care subsidy payments and 3) require that applicants for child care subsidy be at least 18 years of age.

Result of Analysis. Benefits likely outweigh costs for most changes. Costs and benefits will not be significantly altered for one proposed change and costs will likely outweigh benefits for one proposed change. There is insufficient information to ascertain whether benefits outweigh costs for one proposed change.

Estimated Economic Impact. Many of the changes that the Board proposes for these regulations will not alter how this child care subsidy program is administered. Definitions for ADH¹ and SNAP² are being added, for instance, so that interested parties will be better able to understand regulatory text. Changes like these are likely to have no costs attached. To the extent that these changes clarify the requirements of these regulations, regulated entities will benefit from them. In addition to these instructive changes, the Board proposes several substantive changes.

Currently, LDSS have 45 days to process applications and start child care subsidy payments. The Board proposes to reduce this time to 30 days. This change will likely benefit subsidy recipients as they may receive that subsidy several weeks sooner than they might under current regulations. This change may increase LDSS workload in this area given that they will have to process applications more quickly. However, the state Department of Social Services has recently taken responsibility for the approval of unregulated child care providers who want to participate in the program and for payments to providers. These actions have reduced the local department workload and make the 30-day deadline more feasible.

The Board proposes to add a 72 month limitation on receipt of assistance for those families in the Fee Program (income eligible, non-TANF³ families and TANF families not in VIEW⁴ who receive assistance to support education or training only). Child Care for TANF working families, VIEW participants, and families receiving Head Start Wrap Around services are not impacted by the time limit in the current or proposed regulation. This change will likely neither reduce nor increase the amount of money dispensed by LDSS, but may allocate it to different families than it would absent this regulatory change.

There is no restriction on the age of parents that may apply for child care subsidies in current regulation. The Board proposes to require that applicant parents be at least 18 years old. Board staff reports that it is not the Board's intention to deny subsidies to underage parents and that the Board intends there to be a process for the parents or guardians of underage parents to apply for the subsidies instead. Proposed regulatory text does not, however, make clear that this is the Board's intention. Additionally, the regulatory text as proposed imposes an outright ban on individuals under 18 applying for a child care subsidy. This means that underage parents who do not have an adult who is legally responsible for them would be precluded from taking advantage of this subsidy program. DPB has pointed this out to Board staff and they have indicated that the Board will reconsider this language before the final stage of this regulatory action.

Businesses and Entities Affected. These proposed regulatory changes will affect all 120 local Departments of Social Services, all parents that receive subsidies through this program and their children and all child care providers that are paid with subsidies from this program.

Localities Particularly Affected. No locality will be particularly affected by this proposed regulatory action.

Projected Impact on Employment. This proposed regulatory action is unlikely to have any effect on employment in the Commonwealth.

Effects on the Use and Value of Private Property. These proposed regulatory changes are unlikely to affect the use or value of private property in the Commonwealth.

Small Businesses: Costs and Other Effects. No small business is likely to incur any costs on account of this regulatory action.

Small Businesses: Alternative Method that Minimizes Adverse Impact. No small business is likely to incur any costs on account of this regulatory action.

Real Estate Development Costs. This regulatory action will likely have no effect on real estate development costs in the Commonwealth.

Legal Mandate. The Department of Planning and Budget (DPB) has analyzed the economic impact of this proposed regulation in accordance with § 2.2-4007.04 of the Administrative Process Act and Executive Order Number 14 (10). Section 2.2-4007.04 requires that such economic impact analyses include, but need not be limited to, the projected number of businesses or other entities to whom the regulation would apply, the identity of any localities and types of businesses or other entities particularly affected, the projected number of persons and employment positions to be affected, the projected costs to affected businesses or entities to implement or comply with the regulation, and the impact on the use and value of private property. Further, if the proposed regulation has adverse effect on small businesses, § 2.2-4007.04 requires that such economic impact analyses include (i) an identification and estimate of the number of small businesses subject to the regulation; (ii) the projected reporting, recordkeeping, and other administrative costs required for small businesses to comply with the regulation, including the type of professional skills necessary for preparing required reports and other documents; (iii) a statement of the probable effect of the regulation on affected small businesses; and (iv) a description of any less intrusive or less costly alternative methods of achieving the purpose of the regulation. The analysis presented above represents DPB's best estimate of these economic impacts.

_______________________________

¹ Administrative Disqualification Hearing

² Supplemental Nutrition Assistance Program

³ Temporary Assistance for Needy Families

⁴ Virginia Initiative for Employment not Welfare

Agency's Response to Economic Impact Analysis: The Department of Social Services concurs with the economic impact analysis prepared by the Department of Planning and Budget.

Summary:

The proposed action modifies the current child care subsidy program to facilitate the development and implementation of a statewide child care automation system and to expedite the automation process by ensuring uniform statewide child care guidance.

Proposed changes include (i) new requirements for vendors; (ii) a limitation on fees and rates paid by the program; (iii) a requirement for applicants to be at least 18 years of age; (iv) a requirement for both applicants and recipients to cooperate with the Division of Child Support Enforcement as a condition of eligibility; (v) a requirement that appellants refund the cost of services paid during the appeals process when the local department's decision is upheld; (vi) a decrease in the time allowed for processing applications; (vii) the use of the administrative disqualification hearing process to hear certain cases of alleged recipient fraud; (viii) the establishment of a time limitation for receipt of benefits in the fee program; and (ix) a change to require that overpayments caused as a result of a local department error be repaid to the state Department of Social Services with local funds.

22VAC40-661-10. Definitions.

The following words and terms when used in this chapter shall have the following meanings unless the context indicates otherwise:

"ADH" means an administrative disqualification hearing, an impartial review by a state hearing officer of an individual's actions involving an alleged intentional program violation for the purpose of determining if the individual did or did not commit an intentional program violation.

"Applicant" means a person who has applied for child care services and the disposition of the application has not yet been determined.

"Background checks" means a sworn statement or affirmation as may be required by the Code of Virginia, the Criminal History Record Check, the Sex Offender and Crimes Against Minors Registry Check, and the Central Registry Child Protective Services check.

"Child care services" means those activities that assist eligible families in the arrangement for or purchase of child care for children for care that is less than a 24-hour day. It also means activities that promote parental choice, consumer education to help parents make informed choices about child care, activities to enhance health and safety standards established by the state, and activities that increase and enhance child care and early childhood development resources in the community.

"Child protective services" means the identification, receipt and immediate response to complaints and reports of alleged child abuse or neglect for children under 18 years of age. It also includes assessment, and arranging for and providing necessary protective and rehabilitative services for a child and his family when the child has been found to have been abused or neglected or is at risk of being abused or neglected.

"Child support services" means any civil, criminal or administrative action taken by the Division of Child Support Enforcement to locate parents, establish paternity, and establish, modify, enforce, or collect, and disburse child support, or child and spousal support.

"Children with special needs" means children with documented developmental disabilities, mental retardation, emotional disturbance, sensory or motor impairment, or significant chronic illness who require special health surveillance or specialized programs, interventions, technologies, or facilities.

"Cooperate with the Division of Child Support Enforcement" means that an applicant or recipient of child care subsidy services must provide the information required by the Division of Child Support Enforcement to locate an absent parent, establish paternity, or establish a support order, unless a basis for good cause for noncooperation is determined by the program.

"Copayment" means a specific fee that is a portion of a household's income that is contributed toward the cost of child care.

"DCSE" means the Division of Child Support Enforcement, the division of the Department of Social Services responsible for locating absent parents; establishing paternity; and establishing, modifying, enforcing, collecting, and disbursing child support, or child and spousal support.

"Department" means the State Department of Social Services.

"Family" means any individual, adult, or adults and/or children related by blood, marriage, adoption, or an expression of kinship who function as a family unit.

"Federal poverty guidelines" means the income levels by family size, determined by the federal Department of Health and Human Services, used as guidelines in determining at what level families in the country are living in poverty.

"Fee" means a charge for a service and may include, but is not limited to, copayments, charges above the maximum reimbursable rate, or charges for registration, activities or transportation.

"Fee program" means a category in the child care subsidy program that assists low income, non-TANF families with child care services.

"Fraud" means the knowing employment of deception or suppression of truth in order to receive services one is not entitled to receive.

"FSET" means Virginia's Food Stamp Employment and Training Program, a multi-component employment and training program that provides Job Search, Job Search Training, Education, Training, and Work Experience to certain Food Stamp recipients.

"Good cause" means a valid reason why a parent in a two-parent household, or any other person under Virginia law responsible for the support of the children cannot provide the needed child care, or a valid reason why a parent will not be required to register with the Division of Child Support Enforcement.

"Head Start" means the comprehensive federal child development programs that serve children from birth through age five, pregnant women, and their families (as established by the Head Start Act (42 USC § 9840)).

"Income eligible" means that eligibility for subsidy is based on income and family size.

"In-home" means child care provided in the home of the child and parent when all the children in care reside in the home and the provider does not live in the home.

"In loco parentis" means an adult with whom the child is living who has assumed responsibility for the day-to-day care and supervision of the child.

"Intentional program violation" means fraudulent action by a client for the purpose of establishing or maintaining the family's eligibility for child care subsidy, increasing or preventing a reduction in the amount of the subsidy, or causing an improper payment to be made by intentionally giving false or misleading information.

"Level two provider" means a child care provider who is licensed by the Department of Social Services, approved by a licensed family day system, approved under local ordinance according to § 15.2-914 of the Code of Virginia, or federally approved.

"Local department" means the local department of social services of any county or city in this Commonwealth.

"Maximum reimbursable rate" means the maximum rate paid for child care services through the subsidy program that is established by the department and set out in the state Child Care and Development Fund plan filed with the United States U.S. Department of Health and Human Services.

"Noncooperation with DCSE" means failure of an applicant or recipient to provide the local department or the Division of Child Support Enforcement with information required to establish paternity or an order for child support, without good cause.

"Nonfraud overpayment" means an overpayment that was caused by the local department, or by an inadvertent household or provider error.

"Parent" means the primary adult caretaker or guardian of a child.

"Provider" means a person, entity, or organization providing child care services.

"Resource and referral" means services that provide information to parents to assist them in choosing child care, and may include assessment of the family's child care needs, collection and maintenance of information about child care needs in the community, and efforts to improve the quality and increase the supply of child care.

"Service plan" means the written, mutually agreed upon activities and responsibilities between the local department and the parent in the provision of child care services.

"SNAP" means the Supplemental Nutrition Assistance Program, a program administered by the United States Department of Agriculture to reduce hunger and increase food security.

"SNAPET" means Supplemental Nutrition Assistance Program Employment and Training, which provides job search, job search training, education, training, and work experience to nonpublic assistance SNAP recipients.

"Subsidy programs" program" means the department programs program that assist assists low income eligible families with the cost of child care, including the TANF child care program and the income eligible child care programs.

"TANF assistance unit" means a household composed of an individual or individuals who meet all categorical requirements and conditions of eligibility for TANF.

"TANF capped child" means a child who the TANF worker has determined ineligible for inclusion in the TANF assistance unit because the child was born more than 10 full months after the mother's initial TANF payment was issued.

"Temporary assistance for needy families" or "TANF" means the program administered by the department through which a relative can receive monthly cash assistance for the support of his eligible children.

"Transitional child care" means the program that provides child care subsidy to eligible former TANF recipients after the TANF case closes.

22VAC40-661-30. Child care programs.

Child care subsidy, to the extent of available funding, is provided through the following programs:

1. TANF Child Care Program. Child care subsidy and services are made available to recipients of TANF. TANF child care includes needed care for the TANF capped child. These services are also provided to:

a. A child who receives Supplemental Security Income (SSI), if the parent is on the TANF grant and if the child would have been in the TANF assistance unit were it not for the receipt of SSI, or

b. Children who are not in the TANF assistance unit but who are financially dependent upon the parent who is in the TANF assistance unit.

2. Income eligible child care programs.

a. Transitional child care. Child care subsidy and services are made available to eligible children of former TANF recipients to support parental employment if the TANF case is closed, and they are found income eligible.

b. Head Start child care. Head Start child care subsidy and services are made available to eligible Head Start enrolled children. The program is for extended day and extended year child care beyond times covered by federally funded Head Start core hours.

c. Fee child care. Fee child care subsidy and services are made available to children in eligible low income families who are not receiving TANF, not in the Head Start Program, and who meet the eligibility criteria for child care, to the extent of available funding is available.

3. Food Stamp SNAP child care. Child care subsidy and services are made available to children of parents in Virginia's FSET SNAPET program to allow participation in an approved activity.

22VAC40-661-40. State income eligible scale and copayments.

A. State income eligible scale. The department establishes the scale for determining financial eligibility for the income eligible child care programs. Income eligibility is determined by measuring the family's income and size against the percentage of the federal poverty guidelines for their locality. Income to be counted in determining income eligibility includes all earned and unearned income received by the family except certain disregarded income : Supplemental Security Income; TANF benefits; general relief; food stamp benefits; child support paid to another household; earnings of a child under the age of 18 years; garnished wages; earned income tax credit; lump sum child support payments; and scholarships, loans, or grants for education except any portion specified for child care.

Unless a local alternate scale is approved, the income eligibility scale established by the department must be used for the transitional, Head Start and fee programs. Proposed alternate sliding scales must be approved by the department prior to submission to the local board of social services.

B. Copayments. Copayments are established by the department. All families receiving child care subsidy have a copayment responsibility of 10% of their countable monthly income or the copayment established by an approved local alternate scale except that families whose gross monthly income is at or below the federal poverty guidelines who are recipients of TANF, participants in the FSET SNAPET program, or families in the Head Start program will have no copayment.

C. Five-year limit. Localities may limit receipt of fee child care program subsidies to a maximum of 60 months (five years). Receipt of transitional child care does not count toward the five years.

D. Waiting list. Local departments must have a waiting list policy for the fee child care program. Prior receipt of TANF must not be a reason for preferential placement on a waiting list. Proposed policy for a waiting list must be approved by the department prior to submission to the local board of social services. A waiting list policy must assure that decisions are made uniformly.

22VAC40-661-57. Provider requirements.

A. Providers who participate in the subsidy program must be at least 18 years of age, obtain background checks as required by the regulations for their type of child care, and participate in annual training. Providers and other individuals required to have background checks according to § 63.2-1725 of the Code of Virginia who are not otherwise governed by another state regulation requiring background checks shall obtain background checks as defined in this regulation.

B. Background checks for regulated child care providers and local department approved child care providers remain valid according to the provisions of the regulations for their type of child care. Background checks for employees of certified preschools or nursery schools and unregulated family day home providers that participate in the child care subsidy program will remain valid for three years as long as the provider provides continuous services under the child care subsidy program. For any other individual who is required to have background checks according to § 63.2-1725 of the Code of Virginia, the background checks will remain valid for three years as long as the individual maintains continuous employment, residence or volunteer status with that provider.

C. Training requirements will consist of current certification in first aid and cardiopulmonary resuscitation (CPR) as appropriate for the age for the children in care, the cost of which will be borne by the provider. Four hours of skills training will also be required annually. Skills training is available through the department at for a cost of less than $20 per participant nominal fee.

D. All providers who participate in the subsidy program must sign a department-approved agreement that will be based on the level of regulation of the provider. The provider's signature confirms his agreement to comply with the terms of the agreement, including payment processes, absences, and attendance tracking.

E. All providers who participate in the subsidy program must have a working telephone at each site at which child care is provided, as required by the department-approved agreement.

22VAC40-661-60. Determining payment amount.

A. Maximum reimbursable rates.

1. The department will establish maximum reimbursable rates for child care subsidies for all localities in the state by type of care.

2. For children with special needs, payment over the maximum reimbursable rate is allowed when this is appropriate as determined by the local department. The maximum reimbursable rate for children with special needs may not exceed twice the reimbursable rate for care of children who do not have special needs.

3. Providers will be paid for the amount of care approved up to the maximum reimbursable rate of the jurisdiction in which the provider is located. Local departments must The department will pay the rates and fees providers charge the general public, up to the maximum reimbursable rate, or a negotiated rate that is lower.

4. For out-of-state providers, the local department maximum reimbursable rate of the locality in which the local department is located is used.

5. Parents who choose to place a child in a facility with a rate above the maximum reimbursable rate are responsible for payment of any additional amount, unless the local department elects to pay the additional amount out of local funds.

B. In-home care. For in-home child care, payment must be at least minimum wage, but not more than the maximum reimbursable rate for the number of children in care.

C. Registration fee. A single annual registration fee, if charged, will be paid to level two providers. The registration fee may not exceed $100. Transportation fees are paid only when the transportation services are provided by the provider. The total cost of care, excluding the single annual registration fee, but including special programs, other fees and transportation, must not exceed the maximum reimbursable rate and must be identified as one child care cost.

22VAC40-661-70. Case management.

A. Application and assessment. Parents who are not receiving TANF and who are at least 18 years of age and who wish to request child care services are required to sign an application and cooperate with an assessment by the local department. Consumer education, including the selection and monitoring of child care, must be provided to parents to assist them in gaining needed information about child care services and availability of providers. As a condition of eligibility, all applicants and recipients must cooperate with the Division of Child Support Enforcement unless the subsidy program determines that good cause exists for their failure to do so.

B. Service planning. Child care workers must complete a written service plan for each child care case. The service plan outlines the mutually agreed upon activities and responsibilities between the local department and the parent in the provision of child care services.

C. Due process. Applicants and recipients will be afforded due process through timely written notices of any action deciding or affecting his eligibility for services or copayment amount. Such written notice shall include the reason for the action and the notice of appeal rights and procedures, including the right to a fair hearing if the applicant or recipient is aggrieved by the local department's action or failure to act on an application. If a client requests an appeal within 10 days of the effective date of the notice of action, child care services will continue until a decision is rendered by a hearing officer. If the decision of the local department is upheld by the hearing officer, the client must repay the amount of services paid during the appeal process.

D. Reassessment. Local departments will make regular contacts with a member of the case household or the provider. The purpose of these contacts is to evaluate whether the child care services authorized are meeting the needs of the child and the parent.

E. Beginning date of service payment.

1. The beginning date of service payment is the date the signed application is received in the local department if the family is determined eligible within 45 30 days.

2. If the determination is made more than 45 30 days after the signed application is received, services may begin only on the date eligibility is actually determined, except in the case of administrative delay.

3. Administrative delay is when either the parent or provider does not provide needed information for eligibility purposes to the local department within the 45 30 days due to circumstances beyond their control.

4. Payment cannot be made to licensed providers prior to the effective dates of their initial licenses.

F. Parental responsibilities.

1. Parents must be informed of their responsibility to report changes that could affect their eligibility. These changes must be reported to the local department within 10 calendar days. Parents must be informed that failure to report required changes may result in case closure, repayment of child care costs, or prosecution for fraud.

2. Parents must be informed of their responsibility to pay all fees owed. Parental failure to pay fees may result in case closure.

G. Termination. Local department termination of child care services must be planned jointly with the parent and provider. Adequate documentation supporting the reasons for termination must be filed in the case record. Eligibility in the fee program is limited to a total of 72 months per family. Receipt of assistance in any other category does not count toward the 72-month limitation.

H. Waiting list. When sufficient funds are not available in the fee program, local departments of social services must screen applicants for potential eligibility and place them on the department's waiting list if the family chooses.

22VAC40-661-80. Fraud.

A. Fraud.

1. When it is suspected that there has been a deliberate misrepresentation of facts in order to receive services, the local department must determine whether or not fraud was committed. There must be clear and convincing evidence that demonstrates that the household or provider committed or intended to commit fraud. Suspected instances of child care fraud shall be referred to the fraud staff for investigation. If there is clear and convincing evidence that fraud has occurred, the case will be referred to the attorney for the Commonwealth to determine if the case will be prosecuted. If the case does not meet the criteria for prosecution as established by the attorney for the Commonwealth, the case will be referred for an administrative disqualification hearing.

2. Disqualification.

a. Parents will be disqualified from participating in the child care subsidy program for three months upon the first finding of child care fraud or an intentional program violation, 12 months upon the second finding, and permanently upon the third finding.

b. Providers will be permanently disqualified from participating in the child care subsidy program upon the first finding of child care fraud.

B. Repayment. In addition to any criminal punishment, anyone who causes the local department to make an improper vendor provider payment by withholding required information or by providing false information will be required to repay the amount of the improper payment.

C. Nonfraud overpayment. In cases of nonfraud overpayment, neither the parent nor provider will be disqualified from participating in the subsidy program, as long as a repayment schedule is entered into with the local department and payments are made according to that schedule. If an overpayment was made as result of an error by the local department, the local department will not seek to recoup those funds from the parent or the provider.

22VAC40-661-100. Administration.

A. Nonfraud overpayment. In cases of nonfraud overpayment, neither the parent nor provider will be disqualified from participating in the subsidy program as long as a repayment schedule is entered into with the local department and payments are made according to that schedule.

B. Local department error. If an overpayment was made as a result of an error by the local department, the local department will not seek to recoup those funds from the parent or the provider. Any overpayments made as a result of a local department error must be refunded to the Department of Social Services with local-only funds.

FORMS (22VAC40-661)

60 Month Lifetime Limit Letter (undated)

Absent Parent/Paternity Information (undated)

Attesting to the Lack of Information Form (undated)

Good Cause Communication Form, Child Care Subsidy Program (undated)

Notice of Cooperation and Good Cause (undated)

Administrative Disqualification Hearing Decision (undated)

Notice of Disqualification for Intentional Program Violation (undated)

Notice of Intentional Program Violation and Penalties

DOCUMENTS INCORPORATED BY REFERENCE (22VAC40-661)

Child Care and Development Fund Plan for FFY 2004-2005, Department of Social Services, effective October 1, 2003.