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Community Child Care: Employees and Fund 80

Friday, August 28, 2020

 

Is your school district considering or offering employees free or discounted access to a child care program operated through your Community Service Fund (Fund 80)? If so, there are a couple of important points to consider.

First, all costs in Fund 80 must be for non-instructional community programs and services accessible to district residents. Children of non-resident employees may be enrolled in a Fund 80 child care program only if (1) they can be enrolled without displacing district residents and (2) the costs of enrolling them are covered in full without the use of Fund 80 levy dollars.

Second, free or discounted employee access to Fund 80 child care is an employee benefit and must be recorded as such. The benefit expenditure is recorded to the employee’s fund and function with object 290, and there must be a corresponding revenue in Fund 80 using source 272. A check or transfer of funds should be used to reflect the payment of the employee benefit to the child care program.

The value of the child care benefit is the reduction from what the employee would otherwise be charged for enrolling their child(ren). If the employee is a non-resident, then the benefit plus whatever portion they are charged must cover the full cost of enrollment. The district is responsible for compliance with all tax and reporting requirements associated with providing employees the benefit of free or discounted access to Fund 80 child care. Contact your benefits consultant or legal counsel for details on these requirements.

As always, the SFS Team strongly recommends that districts considering new or expanded child care or other community service programming this fall start by consulting the “Decision Tree for Potential Fund 80 Community Program or Service Costs” and other information on our Community Service Fund page.