Great Start Compensation Support Transition Grants Frequently Asked Questions (FAQs)

Child care program types eligible for funds include:

• Family and group family licensed under Minnesota Rules, Chapter 9502
• Child care centers licensed under Minnesota Rules, Chapter 9503
• Certified license-exempt child care centers under Minnesota Statutes, Chapter 245H
• Tribally licensed child care programs
• Legal nonlicensed providers who are authorized by the Child Care Assistance Program under Minnesota Statutes, Chapter 119B.125 and serving eligible families under Minnesota Statutes, Chapter 119B (eligible to apply for Transition Grants funding only).

Also, the above  programs must be licensed, certified or registered and in good standing throughout the funding period with the Minnesota Department of Human Services (under Minnesota Rules, Chapters 9502, 9503, 245H or 119B) or their Tribe. This means the program must not have been:

• The subject of a current or past finding of fraud
• Prohibited from receiving public funds under Minnesota Statutes, Section 245.095
• Under revocation or under temporary immediate suspension.

To receive funds, an eligible program must have been operating and serving children for at least a portion of the funding period. Allowable temporary closures include seasonal closures for summer-only and school year-only programs. However, programs that permanently close during the funding period are ineligible.

Yes, legal nonlicensed providers who are currently registered with the Child Care Assistance Program and serving children who are eligible for the program, are able to apply for Transition Grants.

Online applications will be available to all eligible providers on a monthly basis. Eligible providers will receive an email at the start of each application period with a link to a personalized application link.

Providers can apply monthly for Transition Grants. All application periods close at 4 p.m. on the last day of the application period.

Funding periods beginning July 2023 can be found on the Great Start Compensation Support Transition Grants webpage, under the Application process heading.

First, check your email account’s spam and junk folders to make sure your application link email didn’t end up there. If it did, move your application link email to your inbox so that the link will work.

If you still cannot find your application link email, you can request a new application link email by following the steps below.

Steps for requesting a new Transition Grant application link email:

Click on the following link to request a new Transition Grants application link email: https://edocs.mn.gov/forms/DHS-8070K-ENG (link only active during Transition Grants application periods).

Once on the above linked webpage, follow the below steps.

• Enter your license number and click “lookup”
• Verify that this is your program
• Enter your email address twice and submit
• You will receive a new application link email within a few minutes.
• If you do not receive this email right away, check your spam or junk email folders.
• If you still do not see your new application link email contact Child Care Aware (CCA) right away at 651-290-9704 or supportfunds@childcareawaremn.org. If you contact CCA before the application submission deadline, CCA will try and forward you a copy of your new application link email.

If you are having trouble submitting your Transition Grants application, use these strategies to troubleshoot:

• If the submit button in your application doesn’t work, go back and make sure you answered all the necessary questions and all information is entered in the correct format (look for red text for items that need to be corrected). These issues must be resolved before you can submit your application.
  • Once you’ve successfully submitted your application, you will be redirected to a “Thank You” webpage AND you will receive a confirmation email.
  • If you do not receive this confirmation email, your application was NOT submitted.
• Try submitting your application using a different web browser (Google Chrome, Firefox, Microsoft Edge, etc.).
• Try submitting your application using a different device. Applications can be submitted from a computer, a smart phone or a tablet.
• Try submitting your application with a different internet connection (office, home, cellphone data connection, etc.).

If you are still having trouble submitting your Transition Grant application or you have not received your submission confirmation email, please contact Child Care Aware  at 651-290-9704 or supportfunds@childcareawaremn.org as soon as possible.

**Please reach out to Child Care Aware before the application period closes and allow enough time to receive assistance. Do not wait until the final hour of the application period to submit your application or contact Chile Care Aware.**

You can submit another application with corrected information using the same application link. The Department of Human Services only processes the last application submitted by a provider each application period. 

State statute requires Transition Grant amounts to be determined based on the number of full-time equivalent staff who regularly care for children in the program, including sole proprietors (i.e., family child care providers) or independent contractors. "Regularly cares for children" is defined as a paid staff person whose job description or responsibilities include interacting with, caring for and supervising children enrolled in the program. More information on the funding formula is available under the Transition Grants amounts heading on the Great Start Compensation Support Transition Grants webpage. 

Providers who have recently received payments through the Child Care Assistance Program, Early Learning Scholarships, or both will receive a 10% increase to their Transition Grant per funding period. The department will determine eligibility for the 10% increase based on payment records for the Child Care Assistance Program and the Early Learning Scholarship program, please see the Application Timeline table on the Great Start Compensation Support Transition Grants webpage for 10% bonus lookback periods.

Yes, providers who receive Child Care Assistance Program payments are eligible for these funds.

Yes, providers who receive Early Learning Scholarships are eligible for these funds.

Yes. However, providers accepting these funds must ensure the funds are not used to pay for something that has already been paid for with other federal, state, Tribal or local public funds. Examples of other funding sources may include Peacetime Emergency Child Care grants, COVID-19 Public Health Support Funds for Child Care grants, Tribal grants, forgiven Paycheck Protection Program loans , Child Care Aware Regional Grants, and others.

Programs are required to use 70% of the Transition Grant funds to increase compensation for staff who regularly care for children in their program. Compensation increases only count toward the requirement if (1) they are provided after the first day of the funding period of their first Transition Grant, or (2) they are provided after the first day of the funding period of their first Child Care Stabilization Base Grant.

Programs are allowed to use the remaining 30% of Transition Grant funds as reimbursement for any of the approved uses listed in question 4.13 and under Allowable uses of Transition Grant funds on the Great Start Compensation Support Transition Grants webpage. These expenses must be incurred since Jan. 30, 2020. Providers accepting these funds must ensure the funds are not used to pay for anything that has already been paid for with other federal, state, Tribal or local public funds. If you are uncertain whether the source of funding from other support programs is public, you should verify with the organization that provided that support.

Yes. Providers wishing to decline the funds are encouraged to indicate this by answering the initial questions in their personalized application link. This will assist the department in budgeting and planning for Transition Grants. Choosing to decline funds one month will not affect your ability to apply for funding in future months.

Transition Grants are funded by state dollars and do not have a CFDA number, CFDA numbers are only assigned to federal funding. 

The UFARS finance code – used by school districts to report Transition Grant funds received in 2023 to the Minnesota Department of Education – is 000 and the source code is 369.

Transition Grants are calculated based on the number of full-time equivalent (FTE) staff who regularly care for children in the program. The monthly application will require you to list the individuals, both full- and part-time, and their hours worked caring for children during the previous calendar month. Based on that information, the exact FTE amount for each individual and the sum total FTEs for your program will be automatically calculated by the application.

Child care centers and certified child care centers

• Only list paid staff who regularly care for children.
• Do not include:
  • Volunteers
  • Individuals paid to provide occasional enrichment activities for the children.
• Be prepared to supply documentation that supports the information provided in the application regarding staff and hours worked, if requested by the Minnesota Department of Human Services.

Family child care providers

• A family child care provider is considered a “staff member” when calculating FTEs for Transition Grants. The provider will be asked to list the hours they worked, directly caring for children during the previous calendar month, in the application.
• If a spouse also works in the family child care program, has met licensing qualifications, and regularly cares for children, list that individual separately and the hours they worked directly caring for children in the application.
• If the family child care program has a joint license between two people, list the hours spent caring for children for each person separately.
• A provider’s child, age 13-17 years, who has met the qualifications to be a designated helper and assists in caring for children in the program, may be listed separately in the application.
• List any other individual(s) who you pay to regularly care for children in your program.
• Do not include in the FTE calculation:
  • Individuals paid to provide occasional enrichment activities for the children
  • Individuals outside the household who are not paid, but occasionally care for children for a short time (Example: a provider doctor appointment) 
  • Any hours worked not directly caring for children
• Be prepared to supply documentation that supports the information provided in the application regarding individuals and hours worked if requested by the Minnesota Department of Human Services.

FTEs are calculated based on the number of hours staff regularly cared for children in the previous calendar month.

Yes, the hours for a substitute or temporary staff who directly cared for children may be included in the application.

No, the application only asks for hours worked caring for children during the hours reported. If a staff member is on paid time off/paid leave and not working, those hours should not be included.

Providers accepting Transition Grants must still follow the requirements of the Base Grants in the Child Care Stabilization Grant program. These include federal requirements to maintain weekly compensation and benefits and to not furlough staff for providers who accept grant funds. Federal guidance has led Minnesota to require the following:

Providers must maintain weekly compensation and benefits for staff during program or classroom closures caused by COVID.

Providers must maintain weekly compensation and benefits for staff who test positive for COVID.

Providers must maintain compensation and benefits for staff who experienced a COVID exposure, unless providers have internal policies that state they will not maintain compensation and benefits for unvaccinated staff who experience a COVID exposure.

Providers can follow internal policies for non-COVID-related sick time instances.

Yes, as long as a provider is operating and caring for children during a funding period, a provider may temporarily close and still be eligible for that Transition Grant. Providers must have been in good standing with the Minnesota Department of Human Services throughout the whole funding period. Providers who permanently close during a funding period are not eligible for that Transition Grant.

Providers can use Transition Grant funds to pay for payroll taxes. For the 70% of Transition Grant funds required to be used for increased compensation, payroll taxes associated with compensation increases can be funded with Transition Grant funds and count towards the 70% requirement.

For the remaining 30% of Transition Grant funds available for additional uses, this portion of Transition Grant funds can also be used for payroll taxes. See Question 4.13 and the Great Start Compensation Support Transition Grants webpage under the heading Allowable uses of Transition Grant funds for more information on allowable uses. Transition Grant funds cannot be used to pay any other type of taxes.

No, providers are not required to provide tuition or copayment relief to families if they accept Transition Grants funds.

State law and Section 2202 (d)(2)(D)(i)(I) of the American Rescue Plan Act of 2021 require child care provider grant applicants to “implement policies in line with guidance from the corresponding State, Tribal, and local authorities, and in accordance with State, Tribal, and local orders, and, to the greatest extent possible, implement policies in line with guidance from the Centers for Disease Control and Prevention.” See below for information on specific policies:

• All licensed child care providers, including those receiving a Great Start Compensation Support Transition Grant, are still required to: (1) report COVID-19 cases to the Minnesota Department of Health (MDH), (2) inform families of COVID-19 exposures, and (3) isolate children and staff who test positive for COVID-19 based on MDH guidance.
• Effective January 11, 2022, child care providers are no longer required to quarantine children and staff who are close contacts with a positive COVID-19 case as part of licensing requirements.

The Department of Human Services expects that providers will review their COVID-19 policies and procedures for alignment with CDC COVID-19 guidance to the greatest extent possible.

The Minnesota Department of Health continues to align its COVID-19 guidance with the CDC’s guidance. Accordingly, this FAQ will be updated along with any changes to MDH and CDC COVID-19 guidance.

Eligible providers must attest in writing to:

• Having been open and serving children during the funding period.
• Use at least 70% of the Transition Grant funds to provide increased compensation, benefits, or premium pay to all paid employees, sole proprietors (i.e. a family child care provider), or independent contractors who regularly care for children, unless granted a waiver from the department. For details see questions 4.8 and 4.9.
• Report program capacity information through the Provider Business Update tool at Child Care Aware at least every six weeks. (Legal nonlicense providers are exempt from this requirement.)

Child care providers must agree not to:

• Use these funds to pay taxes, except for payroll taxes
• Use these funds for items that have already been paid for by federal, state, Tribal or local public funds.

Transition Grant recipients may request a waiver from the requirement to use 70% of the Transition Grant requirement to provide increased compensation, benefits or premium pay to all staff who regularly care for children if they cannot do so due to restrictions included in agreements with employee bargaining units, such as a union contract, or because the program is experiencing unusual and significant financial hardship. 

Programs that need to request a waiver will be able to do so through the application process.

Based on state statute there are two allowable reasons for a waiver:

• A contract with an employee bargaining unit (for example a union contract) that prohibits increased compensation for employees of your program.
• If the program is experiencing financial hardship, they will be asked to provide information about their financial situation in order to determine if their situation qualifies for the waiver. In order to qualify, a provider must have an operating loss (revenue – expenses), for the previous calendar month, larger than the Transition Grants payment they would be eligible to receive based on the number of FTEs reported.

Hiring new permanent employees does not count towards providing increased compensation, benefits or premium pay to paid employees regularly caring for children. The state law expects staff regularly caring for children will receive an increase above their base compensation and/or benefits from the beginning of the first funding period a program is awarded a Transition Grant.

The requirement to use 70% of Transition Grant funds to increase compensation for staff who regularly care for child cannot be backdated. Funds must be used to increase compensation above the compensation rate at the time a program was first awarded a Stabilization Base Grant. 

For example, programs awarded a July 2023 Transition Grant could count any increases to staff compensation offered with the first Stabilization Base Grant funding period of August 15 - September 15, 2021 or later. Increased compensation offered prior to starting to accept Stabilization Grants would not count toward the requirement to use 70% of Transition Grant funds for increased compensation for staff who regularly care for children.

No, only increased compensation for staff who regularly care for children can be counted towards the Transition Grant’s 70% requirement. Increasing compensation for staff who do not regularly care for children is an allowable use of the remaining 30% of Transition Grant funds.

Child care providers must agree to use the funds for one or more of the following purposes:

• Personnel costs (including payroll taxes), benefits, premium pay, and employee recruitment and retention for an employee (NOTE: someone who owns their own business, like a sole proprietor or an independent contractor, can count themselves as an employee)
• Rent or mortgage payments, utilities, facilities maintenance and improvements, or insurance
• Personal protective equipment, cleaning and sanitation supplies and services, or training
• Professional development related to health and safety practices
• Purchases of or updates to equipment and supplies to respond to COVID-19
• Goods and services necessary to maintain or resume child care services
• Mental health supports for children and employees

Programs are allowed to use the 30% of Transition Grant funds for reimbursements for any of the uses above, paid between Jan. 31, 2020, and Sept. 30, 2023 , that have not been covered by other federal, state, Tribal or local public funds. If you are uncertain whether the source of funding from other support programs is public, you should verify with the organization that provided that support.

Access the Update Tool through the Parent Aware log-in. It allows you to update your program’s capacity. If you have never used the Update Tool before, please refer to these instructions for using the Update Tool. If you need further assistance, email updatetool@parentaware.org. Plan to complete this survey, at a minimum, once every six weeks to ensure that the data remains current.

Data from the Update Tool is used to update the map and survey data, which are shared publicly through Parent Aware. This information helps parents of young children get connected to your program when they are looking for child care.

Note: Legal nonlicensed providers are exempt from this requirement.

Below is a list of some, but not all, examples of allowable ways to increase compensation under Transition Grants:

• Increased hourly wage
• Premium/bonus pay
• Month-end bonus
• Quarterly bonus (you may save up Transition Grants funds to use later)
• Increased benefits coverage
• Additional benefits coverage such as dental or vision care coverage
• Increased employer portion of benefit costs
• Retirement plan contributions above what has been provided previously

• ​If your child care program is organized as a Sole Proprietorship, add together (1) total expenses before expenses for use of your home (Line 28) and (2) expenses for business use of home (Line 30) values from your Schedule C. 
• If your child care program is organized as an S Corporation, enter the Total deductions value on Form 1120-S, Line 20. 
• ​If your child care program is organized as a C Corporation, enter the Total deductions value on Form 1120, Line 27. 
• ​If your child care program is organized as a Partnership, enter the Total deductions value on Form 1065, Line 21. 

Minnesota Management and Budget, a state agency, will mail monthly payments to the authorized agent, center operator, license holder, or legal nonlicensed provider at the address on file with the Minnesota Department of Human Services, Licensing Division.

Please note, these payments cannot be forwarded by the postal service and will be returned to Minnesota Management and Budget if your address on file with DHS Licensing Division or your Child Care Assistance Program Agency is not current, which will delay you receiving your payment. All address changes need to be made by your county licensor (family child care providers), Tribal licensor, or Minnesota Department of Human Services licensor (child care centers and certified child care centers). Legal nonlicensed providers should contact their county Child Care Assistance Program agency.

No, programs are not required to submit proof of how the funds were spent, unless specifically requested by the Minnesota Department of Human Services (DHS). Programs are required to document spending and be prepared to share those records should DHS request them. 

The department will conduct compliance monitoring by random audits. Providers selected for an audit must provide the department with their documentation related to eligibility and use of funding.

Providers should contact their Department of Human Services or county licensor as soon as the change occurs and ask them to update the information. Legal nonlicensed providers should contact their county Child Care Assistance Program agency. Additionally, if a program is contemplating operating status changes (i.e. moving from school year only to full year operations) that may affect their eligibility, they should refer to questions 1.1, 4.1, 4.2 and 4.4.

Those with additional questions or who are contemplating other changes that may affect their eligibility for funding should contact the Minnesota Department of Human Services by email to determine impacts.

Providers who move during the funding period remain eligible for the funds as long as they continue to meet eligibility criteria. Providers are permitted to be closed for up to 14 calendar days while they move business locations. This includes family child care providers moving between counties and opening a new license.

If a move exceeds the allowable time, the provider will not be eligible to receive that month’s funding payment. Providers planning to move during the funding period should work closely with their Minnesota Department of Human Services or county licensor to ensure the move does not impact funding eligibility. Legal nonlicensed providers should contact their county Child Care Assistance Program agency.

For assistance, please contact the Minnesota Department of Human Services, Child Care Services Division, at compensationsupport.dhs@state.mn.us  Please include your license ID, certification number, or registration number in all communications. Providers should expect to receive their funds within three weeks of the application close date. For application periods, refer to the Transition Grant landing page.

The Internal Revenue Service requires the Minnesota Department of Human Services to obtain your Social Security number or Federal Employer Identification Number in order to issue a Tax Form 1099-G. The name and number you give must match your name with the IRS. If your name and tax identification number are determined to not be valid due to a fraudulent act, you will not receive Transition Grant funds, you will have to pay back any of the funds you have been paid, and you may be subject to an IRS fine.

Yes, the IRS and Minnesota Department of Revenue considers grant payments as income. Providers who receive these funds will be mailed a 1099-G form by January 31 of following year, showing how much was paid to the provider in that year. Providers are encouraged to consult with an accountant or tax expert to fully understand the tax implications of this funding. If you have not received your 1099-G form by mid-February, you can contact the Minnesota Management and Budget’s 1099-G help line at 651-201-8201 or email W9-1099.MMB@state.mn.us to request a copy. Minnesota Management and Budget can provide a copy of your 1099-G form through secure email, ZIXmail, by request.

If providers have questions after receiving their 1099-G form, they can contact Minnesota Management and Budget at 651-201-8201. First Children’s Finance, a Minnesota-based nonprofit, may be able to provide overall budgeting and financial planning for any tax liability, as well. Email to infoMN@firstchildrensfinance.org or call 1-866-562-6801.

No, the department will not be publishing who received funding or the data provided as part of the application.

Most application data is classified as public data, and if requested, must be made available to the person requesting it. Examples of private data that cannot be shared with the public are an individual’s Social Security number, and data that can potentially identify children or staff in programs. If you have data-related inquiries, please contact the Minnesota Department of Human Services, Child Care Services Division by sending an email to compensationsupport.dhs@state.mn.us. 

If there is indication that a provider has failed to meet Transition Grant requirements, they will receive written notice and have an opportunity to clarify and/or correct any non-compliance. Failure to make the required corrections, and/or indication that a provider provided false or misleading information to the Minnesota Department of Human Services with regard to the funding requirements, may result in discontinuation of future eligibility for funds, recoupment of payments already made, and/or referral to the Office of Inspector General for additional action.

These funds do not constitute a loan and child care providers who comply with Transition Grant requirements will not be required to pay funds back to the Minnesota Department of Human Services (DHS). However, funding recipients found to have violated the terms of the application process or attestation, or who are found to have provided false or misleading information to DHS may have prior payments recouped, be deemed ineligible for future funds, and/or be referred to the Office of Inspector General for additional action.

Actions to establish recoupment, except for findings of fraud, must be made within six (6) years of the conclusion of Transition Grants. Once recoupment is established, collection may continue until funds are repaid in full.

If you are concerned that a Transition Grant recipient is not following the funding requirements, you can submit a report by calling 651-431-3968 or 800-627-9977 or emailing dhs.oig.ccaptips@state.mn.us with “Great Start Compensation Support Transition Grant Complaint” in the subject line. Include as much detail as you can, including:

• Child care provider or program name
• Name of director if it’s a child care center
• Address of child care provider or program
• If licensed, the license number (which can be found at Licensing Lookup)
• The requirement you believe the child care provider may not be following
• A description of the way in which the child care provider is not following the requirement.

Any tips reported will remain anonymous and details about who submitted the tip will never be shared with the program alleged to be non-compliant.

No, an audit is not an indication or an accusation that the child care provider has done something wrong. An audit is a random eligibility review process done by the Department of Human Services to verify that child care providers are managing their Transition Grant funds in compliance with all rules and regulations.

Transition Grant recipients identified for an audit will receive a Request for Records by email, using the email address on file with DHS Licensing. The provider will have fourteen (14) calendar days to submit records via email, fax, or U.S. Mail.  If the auditor has questions about the records or needs additional information, they will contact the provider via phone or email to discuss the review.

If a provider is selected for an audit, they will be asked to provide documentation. Requested documentation may include, but is not limited to, any or all of the following:

• Attendance Records or Affidavit from parent/guardian regarding a child’s attendance
• Billing Records and/or Payment Records
• Payroll records or Employee time-cards
• Copies of health and safety policy/guidelines implemented
• Payroll records – prior to Transition Grant(s) and after
• Payroll records of bonus or premium pay
• Child Care business financial records
• List of expenses and corresponding receipts

Please call Child Care Aware at 651-290-9704 or email supportfunds@childcareawaremn.org.

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