BSF First Quarter Reallocation redirects BSF funds from agencies projected to underspend to agencies projected to overspend. The process is a way to direct funds to areas of the state where they will be utilized for child care assistance. The Department of Children, Youth, and Families determines whether BSF First Quarter Reallocation will occur prior to the start of each calendar year and notifies local agencies of the decision.

Criteria

Agencies that spent less than 70 percent of their previous calendar year’s BSF allocation AND are projected to spend less than 70 percent of their current calendar year’s BSF allocation at the end of the first quarter (January, February, and March) are subject to reallocation.

Agencies that are projected to overspend their current calendar year’s BSF allocation at the end of the first quarter (January, February, and March) are eligible to receive reallocated funds.

Reallocation process:

1. After the end of the first quarter, projected earnings for each agency are determined by multiplying the total of each agency’s earnings from January, February and March by four.

2. For agencies projected to overspend after the first quarter, the total statewide projected overspending amount is calculated.

3. For agencies projected to spend less than 70 percent of their allocation after the first quarter AND spent less than 70 percent of their previous calendar year’s BSF allocation, the projected underspending amount is calculated. Agencies must meet both of these criteria to be subject for reallocation.

The following safeguards are in place for agencies who underspend:

· No more than 50 percent of each agency’s projected underspending will be reallocated.

· The revised allocation for any agency will not be less than the agency’s previous calendar year’s BSF spending.

· Agencies with an allocation of $25,000 or less will not have their allocation reduced.

· An agency’s allocation will not be reduced below $25,000 due to reallocation.

· The department may provide additional safeguards to help ensure underspending agency allocations do not decrease below what is necessary to continue serving current BSF families.

4. If the projected overspending is more than the statewide amount available to be reallocated, the total amount available (as determined in Step 3) is reallocated to agencies projected to overspend. An equal percentage of each agency’s projected overspending will be reallocated to each overspending agency.

5. If the projected overspending is less than the statewide amount available to be reallocated, the total amount needed to cover all projected overspending is used. An equal percentage of each agency’s underspending is reallocated from the underspending agencies.

Future allocations

The revised allocations determined through the First Quarter Reallocation process are used to calculate each agency’s guaranteed floor for the next calendar year’s allocation.

Legal authority

Minnesota Statutes 142E.04 Subd. 5