Why This Area Is Important

Millions of children under the age of 5 participate each year in federally funded preschool and other early learning programs or receive federally supported child care in a range of settings. Federal programs that funded early learning and child care as an explicit purpose received at least $13.3 billion in federal funding in fiscal year 2010.[1] Research supports the importance of providing high-quality early learning experiences during children’s formative years.[2] Furthermore, as GAO reported in May 2010, research indicates that having reliable, high-quality child care is also critical to sustaining parents’ ability to work. Federal support for early learning and child care developed over time to meet emerging needs. However, GAO previously reported that multiple federal agencies administer this important investment through numerous programs. This is perhaps a consequence of the different historical origins of early learning and child care programs, creating fragmentation of efforts, some overlap of goals or activities, and potential confusion among families and other program users.

What GAO Found

The federal investment in early learning and child care is fragmented in that it is administered through 45 programs that provide or may support related services to children from birth through age 5, as well as five tax provisions that subsidize private expenditures in this area.[1] The programs are concentrated within the Departments of Education (Education) and Health and Human Services (HHS)—the principal administrators of the federal government’s early learning and child care programs—but are also administered by the Departments of Agriculture, the Interior, Justice, Labor, Housing and Urban Development (HUD), the General Services Administration (GSA), and the Appalachian Regional Commission. Some of these programs overlap in that they have similar goals for children under the age of 5 and are targeted to similar groups of children. For example, five programs, administered by Education and HHS, provide school readiness services to low-income children, and programs in both Education and the Interior provide funding for early learning services for Indian children.

Among the 45 programs, 12 have an explicit program purpose of providing early learning or child care services.[2] GAO reported in January 2000 that although individual programs may differ in the exact services provided, the distinction between early learning and child care has blurred over time as policymakers seek to make educationally enriching care available to young children. As seen in the table below, all 12 programs serve children under the age of 5, and some also serve older children; however, they vary in targeted child population. Furthermore, they vary substantially in funding levels. For example, 9 of the 12 programs obligated less than $500 million each in fiscal year 2010, while the largest program, Head Start, obligated $7.2 billion in that year.[3]

Purposes and Targeted Populations of Federal Programs That Have Early Learning or Child Care as an Explicit Program Purpose

Source: GAO analysis of Catalog of Federal Domestic Assistance and federal agency program information.

Note: All programs included in this table are those for which early learning or child care is explicitly described as a program purpose, according to GAO’s analysis of Catalog of Federal Domestic Assistance and other agency information. It does not include additional programs that either support early learning or child care or that allow such services. All programs GAO identified are listed in appendix III.

^a In combination, Child Care and Development Block Grant funds and Child Care Mandatory and Matching Funds are referred to as the Child Care and Development Fund.

However, the majority of the 45 programs GAO identified do not have the explicit purpose of delivering early learning or child care services, but rather permit use of funds for this purpose or provide supportive services to facilitate such care.

• Some programs are multipurpose block grants for which early learning or child care is not a primary purpose but which are nevertheless known to provide significant funding for child care. For example, the Temporary Assistance for Needy Families block grant accounted for $3.5 billion in child care funding in fiscal year 2009.
• Other programs may allow funds to be used for early learning or child care, but these are not among their primary goals and such uses do not typically represent a significant portion of available program funds. For example, the Department of Justice has one program to help victims of violence that can provide child care as a short-term, ancillary service, and Title I Grants to Local Educational Agencies, an Education grant, spent about 2 percent of total obligations on early education programs in fiscal year 2009.
• Some programs provide supportive services that can facilitate early learning or child care. For example, the Department of Agriculture has four programs whose primary purpose is to provide food and nutrition services to mostly school-age low-income children, though preschool children also receive program services in some cases.[4]

In addition to these federally funded programs, five federal tax provisions support early education and care by forgoing tax revenue to subsidize the private purchase of child care services. Some tax provisions are for families and some are for employers that provide child care at the workplace. These five tax expenditures accounted for at least $3.1 billion of forgone tax revenue for the U.S. Treasury in fiscal year 2010.[5] The revenue that the government forgoes through tax expenditures can be viewed as spending channeled through the tax system, contributing to mission fragmentation and program overlap. As GAO previously reported in September 2005, coordinated reviews of tax expenditures and related programs may reduce fragmentation and overlap.[6] While it may be possible for some families to receive benefits through both tax provisions and federal early learning and child care programs in a particular year, many families eligible to participate in federal programs may not have tax liabilities due to their low incomes and would not benefit from these tax provisions.[7]

Although some programs fund similar types of services for similar populations, differing program structures, eligibility requirements, and data limitations create obstacles to assessing whether actual duplication exists among these programs.

• Programs are differently structured, administered, and regulated. For example, the two largest programs—funded under Head Start and the Child Care and Development Fund (CCDF)—differ significantly in their structure.[8] Head Start was created in part to support children’s early development by offering comprehensive, community-based services to meet multiple needs and, as such, provides federal grants directly to community-based public and private service providers. CCDF, created under welfare reform, helps states reduce dependence on public assistance by subsidizing child care to support parents’ involvement in the workforce and provides grants to states, which they in turn generally provide as subgrants to counties or other local entities for distribution to parents.
• The nature of eligibility requirements also differs among programs, even for similar subgroups of children, such as those from low-income families. For example, Head Start serves primarily low-income children under the age of 5 whose families have incomes at or below the official federal poverty guidelines, while CCDF funds services to children under age 13 whose parents are working or in school and who may earn up to 85 percent of state median income.
• For some programs, relevant programmatic information is sometimes not readily available. For example, Education and HHS officials were unable to provide GAO with information on the number of children served for several programs. As GAO previously reported in 2005 and September 2011, HHS did not collect data on working families who receive child care assistance directly funded by TANF, and GAO suggested that Congress may wish to require this data collection.
• Inadequate or missing data, as well as difficulties quantifying the benefits of some tax expenditures, can make it difficult to study the efficiency of these expenditures.[9]

To the extent that programs in different agencies have similarities, fragmentation and program overlap can create an environment in which programs may not serve children and families as efficiently and effectively as possible. The existence of multiple programs can also create added administrative costs, such as costs associated with determining eligibility and meeting varied reporting requirements. However, despite some overlap in program purposes and targets, it is likely that service gaps exist, since these programs generally are not designed as entitlements that serve all eligible children. For example, as GAO previously reported in May 2010, about one-third or fewer of potentially eligible children received child care subsidies from CCDF, Temporary Assistance for Needy Families, and the Social Services Block Grant between fiscal years 2004 and 2007, according to GAO’s review of several HHS estimates. HHS has identified improving program access and quality as high-priority performance goals for both Head Start and child care programs.

Coordinating the administration and evaluation of early learning and child care programs can help mitigate the effects of program fragmentation and overlap and potentially help bridge service gaps; however, there is currently no federal interagency workgroup that coordinates early learning and child care efforts across all federal agencies with such programs. Education and HHS have numerous coordinating initiatives and agreements with each other, within their departments, and in support of state and local coordination. For example, Education and HHS formed an interagency policy board in August 2010 whose goals included improving the quality and effectiveness of Education and HHS early learning programs; increasing the coordination of research, technical assistance and data systems; and, in an advisory role, maximizing resources. In 2009, HHS established an executive-level liaison office to coordinate interagency efforts, and Education proposed establishing a similar coordination office in 2011. Education and HHS have also collaborated in jointly administering the Race to the Top - Early Learning Challenge. In addition, the two departments have supported early learning and child care coordination at the state and local levels, such as through State Advisory Councils on Early Childhood Education and Care and other early childhood programs.[10] HHS has also established workgroups and collaborative efforts with several other individual federal departments, such as Agriculture, Defense, and HUD, to increase the availability and quality of child care or for other goals. However, these workgroups do not bring multiple agencies together, and GSA, the Departments of the Interior, Justice, Labor, and the Appalachian Regional Commission also have programs with some child care component that are not part of broader cross-agency initiatives but could likely benefit from the expertise of Education and HHS.

The GPRA Modernization Act of 2010 (GPRAMA) could serve as a vehicle for furthering interdepartmental coordination of early learning and child care. The Act established a new, cross-cutting, and integrated framework for achieving results and improving government performance.[11] Among other things, each agency is to identify the various federal organizations and activities—both within and external to the agency—that contribute to its goals, and describe how the agency is working with other agencies to achieve its goals as well as any relevant crosscutting goals. The executive branch and Congress could use this process to identify and address program areas where strengthened interagency coordination is needed to better achieve results as well as areas of fragmentation, overlap and duplication.

Actions Needed

As the principal administrators of the federal government’s early learning and child care programs, and consistent with Education’s and HHS’s identification of early learning access and quality as priorities, the Secretaries of Education and HHS should

• deepen and extend their ongoing coordination efforts by including all the federal agencies that provide or support early learning or child care services in an inter-departmental workgroup that focuses on this population.

Using the GPRAMA framework, workgroup goals could include mitigating the effects of program fragmentation (for example, through simplifying children’s access to these services), identifying and managing service gaps, meeting data requirements for the coordinated operation and evaluation of these programs, and identifying and minimizing any unwarranted overlap. These efforts could also provide a vehicle to conduct a coordinated analysis of child care tax expenditures and program spending.

How GAO Conducted Its Work

The information contained in this analysis is based on findings from the products listed in the related GAO products section as well as additional work GAO conducted. GAO searched the Catalog of Federal Domestic Assistance to identify federal early learning and child care programs; obtained supplementary information from Education, HHS, and other agencies; and reviewed previous GAO reports on early learning and child care.[1] GAO did not conduct a separate legal review to identify and analyze relevant programs. In its work, GAO identified 45 early learning and child care programs that met its criteria for analysis: those that (1) fund or support early education or child care services; (2) are provided to children under age 5; and (3) deliver services in an educational or child care setting. GAO also identified a subset of 12 programs with early learning and child care as an explicit program purpose. GAO determined that the Catalog of Federal Domestic Assistance was sufficiently reliable for GAO’s purposes by confirming with federal agency officials that the programs identified met GAO’s criteria and obtaining information from agencies about any additional programs for GAO consideration. GAO searched the Congressional Research Service’s 2010 Tax Expenditures: Compendium of Background Material on Individual Provisions to identify five tax expenditures that met similar criteria for early learning and child care.[2] GAO obtained and analyzed descriptions of Education and HHS coordination efforts for early learning and child care programs, but assessing the effectiveness of these two particular agencies’ coordination efforts was beyond the scope of this study. See pages 371-373 of the PDF version of this report (appendix III) for a list of the programs GAO identified that may have similar or overlapping objectives, provide similar services or be fragmented across government missions. Overlap and fragmentation may not necessarily lead to actual duplication, and some degree of overlap and duplication may be justified. See page 374 of the PDF version of this report (appendix III) for a list of related tax expenditures.

Agency Comments & GAO Contact

GAO provided a draft of this report section to Education, HHS, and OMB. HHS provided written comments. Education and OMB, as well as HHS, provided technical comments, which were incorporated as appropriate.All three agencies agreed on the importance of further coordination of the federal programs supporting early learning and child care. Education explicitly agreed with GAO’s recommended action and identified an existing interagency workgroup as a means of coordinating early learning and child care services. This group currently focuses primarily on services for youth from early to late adolescence. HHS acknowledged but did not explicitly agree or disagree with the specific action GAO recommended, while OMB questioned the need for a new interagency working group and the efficiency of including agencies whose programs are not explicitly designed to deliver early learning or child care services. GAO believes that agencies with some, but not extensive, investment in early learning or child care might benefit greatly from such inclusion to reduce any effects of fragmentation. Extending interagency coordination could be efficiently accomplished through an existing workgroup on early learning and child care, for example, by establishing a subcommittee with representation from the additional agencies. GAO has modified the recommended action to clarify that inclusion of these additional agencies does not necessarily entail establishing a new federal interagency workgroup.

HHS also highlighted information on its ongoing coordination efforts and noted concerns with the report’s treatment of specific issues. Specifically, HHS stated that the report did not fully explore how program services may be complementary rather than duplicative, take into account that many states jointly administer flexible funding streams to provide services to children and families, or adequately explain the distinction between federally funded early learning and child care programs and federally funded programs that permit the use of funds for the provision of child care. As noted in this report, the complexity of the current service delivery system, combined with data limitations, form significant obstacles to assessing the extent to which services are complementary or duplicative. GAO’s report acknowledges the role that states play in coordinating these programs but, as HHS’s comments indicate, the extent to which states coordinate the administration of early learning and child care funding streams can and does vary. Moreover, the federal government also has an important role in program administration, necessitating a federal role in coordination. Further, GAO clearly distinguished between programs that have an explicit purpose to provide these services, like CCDF and Head Start, and those that permit the use of funds for these services or that provide supportive services to facilitate such care; however, it remains important to note that some of the latter group, such as Temporary Assistance for Needy Families nonetheless provide significant funding for child care.

OMB recommended that GAO remove two programs from the list of programs with an explicit early learning or child care purpose; however, GAO did not change the program list because the programs met GAO’s criteria.

As part of its routine audit work, GAO will monitor the progress agencies make in addressing this needed action and report to Congress. All written comments are reprinted in appendix IV of the PDF version of this report.

For additional information about this area, contact Kay E. Brown at (202) 512-7215 or brownke@gao.gov.

Comments from Department of Health and Human Services

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