OCC has a fundamental responsibility to be an effective steward of federal funds, including how they are used by CCDF grantees. OCC works cooperatively with the Office of Management and Budget (OMB), which leads the development of government-wide policy to ensure that grants are managed properly and that federal dollars are spent in accordance with applicable laws and regulations. OCC, in addition to being proactive in the provision of technical assistance for systems development and improvement for grantees, also works in conjunction with the Office of Grants Management to monitor program compliance through audits and recover funds misspent through violations with penalties and sanctions.

• Audits: Lead Agencies are required to have an audit conducted at the close of each program period in accordance with Office of Management and Budget Circular A-133 and CCDF regulations at 45 C.F.R. 98.65. They must report the findings to the Office of the Inspector General in the U.S. Department of Health and Human Services.
• Penalties: If a Lead Agency fails to substantially comply with the CCDBG Act, the CCDF regulations, and the CCDF Plan, HHS may take a disallowance of the improperly expended funds or a deduction of an amount equal to or less than the improperly expended funds from the administrative portion of the state’s allotment for the following fiscal year. (Funds misspent in the current fiscal year can be reallocated to allowable activities.)
• Sanctions: In addition to the imposition of penalties, if a Lead Agency fails to substantially comply with the CCDBG Act, the CCDF regulations, and the CCDF Plan, HHS may impose sanctions to disqualify the Lead Agency from the receipt of further CCDF funding or an assessment of a penalty of no more than 4 percent of the Lead Agency’s discretionary fund allotment for a fiscal year.

[1] CCDBG Act of 2014 658I, 658K(b); Child Care and Development Fund, 45 C.F.R. §§ 98.90–98.92 (2016).