[Code of Federal Regulations]
[Title 45, Volume 1]
[Revised as of October 1, 2003]
From the U.S. Government Printing Office via GPO Access
[CITE: 45CFR98.53]

[Page 550-551]
 
                        TITLE 45--PUBLIC WELFARE
 
                           AND HUMAN SERVICES
 
PART 98--CHILD CARE AND DEVELOPMENT FUND--Table of Contents
 
           Subpart F--Use of Child Care and Development Funds
 
Sec. 98.53  Matching fund requirements.

    (a) Federal matching funds are available for expenditures in a State 
based upon the formula specified at Sec. 98.63(a).
    (b) Expenditures in a State under paragraph (a) of this section will 
be matched at the Federal medical assistance rate for the applicable 
fiscal year for allowable activities, as described in the approved State 
Plan, that meet the goals and purposes of the Act.
    (c) In order to receive Federal matching funds for a fiscal year 
under paragraph (a) of this section:
    (1) States shall also expend an amount of non-Federal funds for 
child care activities in the State that is at least equal to the State's 
share of expenditures for fiscal year 1994 or 1995 (whichever is 
greater) under sections 402(g) and (i) of the Social Security Act as 
these sections were in effect before October 1, 1995; and
    (2) The expenditures shall be for allowable services or activities, 
as described in the approved State Plan if appropriate, that meet the 
goals and purposes of the Act.
    (3) All Mandatory Funds are obligated in accordance with Sec. 
98.60(d)(2)(i).
    (d) The same expenditure may not be used to meet the requirements 
under both paragraphs (b) and (c) of this section in a fiscal year.
    (e) An expenditure in the State for purposes of this subpart may be:
    (1) Public funds when the funds are:
    (i) Appropriated directly to the Lead Agency specified at Sec. 
98.10, or transferred from another public agency to that Lead Agency and 
under its administrative control, or certified by the contributing 
public agency as representing expenditures eligible for Federal match;
    (ii) Not used to match other Federal funds; and
    (iii) Not Federal funds, or are Federal funds authorized by Federal 
law to be used to match other Federal funds; or
    (2) Donated from private sources when the donated funds:
    (i) Are donated without any restriction that would require their use 
for a specific individual, organization, facility or institution;
    (ii) Do not revert to the donor's facility or use; and
    (iii) Are not used to match other Federal funds;
    (iv) Shall be certified both by the donor and by the Lead Agency as 
available and representing expenditures eligible for Federal match; and
    (v) Shall be subject to the audit requirements in Sec. 98.65 of 
these regulations.
    (f) Donated funds need not be transferred to or under the 
administrative control of the Lead Agency in order to

[[Page 551]]

qualify as an expenditure eligible to receive Federal match under this 
subsection. They may be given to the entity designated by the State to 
receive donated funds pursuant to Sec. 98.16(c)(2).
    (g) The following are not counted as an eligible State expenditure 
under this Part:
    (1) In-kind contributions; and
    (2) Family contributions to the cost of care as required by Sec. 
98.42.
    (h) Public pre-kindergarten (pre-K) expenditures:
    (1) May be used to meet the maintenance-of-effort requirement only 
if the State has not reduced its expenditures for full-day/full-year 
child care services; and
    (2) May be eligible for Federal match if the State includes in its 
Plan, as provided in Sec. 98.16(q), a description of the efforts it will 
undertake to ensure that pre-K programs meet the needs of working 
parents.
    (3) In any fiscal year, a State may use public pre-K funds for up to 
20% of the funds serving as maintenance-of-effort under this subsection. 
In any fiscal year, a State may use other public pre-K funds for up to 
20% of the expenditures serving as the State's matching funds under this 
subsection.
    (4) If applicable, the CCDF Plan shall reflect the State's intent to 
use public pre-K funds in excess of 10%, but not for more than 20%, of 
either its maintenance-of-effort or State matching funds in a fiscal 
year. Also, the Plan shall describe how the State will coordinate its 
pre-K and child care services to expand the availability of child care.
    (i) Matching funds are subject to the obligation and liquidation 
requirements at Sec. 98.60(d)(3).