What You Need to Know About the Child Care Is Essential Act

The childcare industry has no doubt been one of the hardest hit sectors of the nation?s economy throughout the COVID-19 pandemic. The Child Care Is Essential Act passed by the House on July 29th, 2020 now awaits Senate approval in an effort to mitigate the effects of reduced enrollment and substantial loss of revenue faced by childcare providers across the country. Read on to learn more about this important piece of legislation and what it could mean for your childcare business.

What Is the Child Care Is Essential Act?

The purpose of the Child Care Is Essential Act is to provide grant funding to childcare providers so they can safely reopen their doors and continue to serve the families in their communities. The necessary health and safety regulations imposed by the Center for Disease Control and Prevention (CDC) require daycare operators to modify everyday processes, purchase necessary supplies like personal protective equipment, reduce group sizes, rearrange classrooms to create more space between children, implement new sanitation practices, and adjust staffing, among other changes. These mandatory regulations may increase daycare providers? operating costs by as much as 30 percent. With many daycare facilities at risk of permanent closure due to the rising costs associated with the pandemic, the Center for American Progress estimates a possible loss of almost 4.5 million childcare slots permanently?a devastating loss for the millions of American families returning to work. The Child Care Is Essential Act would safeguard against these consequences.

The Child Care Is Essential Act would appropriate $50 billion for the Child Care Stabilization Fund within the existing Child Care and Development Block Grant (CCDBG) lead agency of each U.S. state or territory. The grant funding would be made available to licensed, registered, or regulated childcare businesses, whether or not they had previously received funding through the CCDBG program. Daycare providers that are currently open or temporarily closed due to the COVID-19 pandemic would be eligible to receive the funds, which would be rewarded based on the provider?s operating costs before the pandemic began, taking into account the increased operating costs as a result of COVID-19.

Grant recipients would be required to continue to meet health and safety regulations set in place by the CDC and state and local governing authorities, employ and pay the members of their staff, and provide relief from copayments and tuition fees for families of enrolled children.

How Could the Grant Funding Provided by the Child Care Is Essential Act Be Used?

According to a summary of the Child Care Is Essential Act provided by the U.S. Senate, childcare providers may use the grant money for the following expenses:

  • Personal protective equipment, sanitizing and cleaning supplies
  • Labor costs, including employee salaries, employee benefits, and premium pay
  • Training and professional development costs related to health and safety practices
  • Fixed childcare operation costs, like mortgage or rent payment, utilities, and insurance
  • Mental health support costs for both employees and children
  • Any costs relating to the moderation of childcare services resulting from the COVID-19 pandemic
  • Any costs relating to other goods and services necessary to maintain the viability of the childcare provider

With schools set to reopen for the 2020-21 school year, at least on a partially in-person basis in many districts, and parents across America making plans to go back to work, it is more important now than ever before for childcare providers to be given the assistance they need to continue to serve their communities. It is now in the hands of the Senate to approve the Child Care Is Essential Act and give daycare providers the grant funding they need.  

Most early childhood schools and daycares lack the accounting expertise on hand to take their business to the next level. This can stifle business growth and leave you feeling stuck. 

We are Honest Buck Accounting, your full-service accounting partner. Schedule a call with us today to learn how we can help! ?

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