The NC General Assembly (NCGA) approves all block grants as distinct parts of the state budget. However, because the state fiscal year is July 1 – June 30, there is a difference in the amounts of Title V funding in the approved state plan from the annual Maternal and Child Health Block Grant award to the state. All budget and expenditure actions relating to the Title V funds occur within the approved state plan as determined by the NC General Assembly. Amounts of expenditures reported in the annual report therefore are within the state fiscal year. Because the same period is used year after year, the amounts reflect a consistent 12-month period of performance. The budgeted amounts are based on the previous year’s funding at the time of the MCHBG application/report preparation and submission. In FY22, federal Maternal and Child Health Block Grant expenditures were $16,451,537, which is a slight decrease of $352,984 from the previous year. There was some delay in contracting which led to a decrease in expenditures in some areas. Since we have two years to spend, we do not leave funds unexpended.

The conceptual framework for the Title V Maternal and Child Health Block Grant services is envisioned as a pyramid with three tiers of services and funding levels that provide comprehensive services for mothers and children. Based on the Maternal and Child Health Bureau’s definition of direct health care services, North Carolina’s MCH program does not fund any direct services with Title V dollars, nor does the MCHBG fund any services that are eligible for Medicaid reimbursement. A majority of expenditures (~81%) went to enabling services, with a smaller proportion (~19%) going towards public health services and systems.

North Carolina is in compliance with the reported expenditures for the 30%-30%-10% requirement as specified in Section 504(d) and Section 505(a)(3), see Form 2 and Form 3 for the details. We have noted one significant variation of more than 10% in Title V Administrative Costs. This was due to the General Assembly increasing pay and benefits for consecutive years. Three more significant variations were noted and documented in the Field Notes section of the report Form 2.

• Federal Allocation FY 2022 Expended compared to Budget; this remains a variance each year due to our State Budget Process. The NC General Assembly (NCGA) approves all block grants as distinct parts of the state budget. However, because the state fiscal year is July 1 – June 30, there is a difference in the amounts of Title V funding in the approved state plan from the annual Maternal and Child Health Block Grant award to the state. All budget and expenditure actions relating to the Title V funds occur within the approved state plan. Amounts of expenditures reported in the annual report therefore are within the state fiscal year. Because the same period is used year after year, the amounts reflect a consistent 12-month period of performance. The budgeted amounts are based on the previous year’s funding at the time of the MCHBG application/report preparation and submission. Since we have two years to spend, we rarely leave funds unexpended.
• There was in increase in State MCH Funds FY 2022 Expended compared to the Budget, which was mostly due to newly appropriated state funds totaling $7.2 million.
• Per the Office of State Budget and Management, programs are encouraged to budget based on a three-year average of receipts; therefore, since rebates are based on participation rates, differences between budget and expenditures can fluctuate greater than 10% (Other Funds Expended).

We have covered our process below on our procedures to ensure these set aside requirements are met.  

Section 503 (c)

Administrative costs are identified in specific cost centers. Typically, these are costs that are charged in the division's cost allocation plan, and certain direct costs for administrative offices. Budgets for these cost centers are summed and compared to the total budget to assure they are not more than 10% of the total grant amount.

Section 505 (a) (3) (A & B)

The state budget’s available funds are in a series of cost centers called RCCs. These centers are used to group dollars intended for certain types of programs and services. The RCCs are assigned to one or both of the 30% "set aside" categories and are assessed a percentage of the budget that can be attributable to services in the category.

The FY 24 Application Budget for the MCHBG is $18,871,732, a majority (87%) of which goes to support local women’s and children’s health programs and services. Funding for local programs goes to all local health departments, community-based organizations, and health care systems to carry out the programs described in the narratives and is a critical source of funding for LHDs to provide or assure maternal and child health services in NC. A smaller portion (10%) is used to support NCDHHS infrastructure, which is not only used to carry out critical statewide MCH work but also leveraged to bring in additional funding to expand initiatives and improve MCH outcomes in North Carolina. The remainder of ~3% of budget goes towards NCDHHS administration, which has consistently stayed below the maximum of 10%.

Per the Maternal and Child Health Bureau’s definition of direct health care services, North Carolina’s MCH program does not fund any direct services with Title V dollars, nor does the MCHBG fund any services that are eligible for Medicaid reimbursement. Most of this funding goes towards enabling services (~79% of budget), with the remainder (21% of budget) going towards public health services and systems. 

NC’s Maternal and Child Health Block Grant financial management plan assures the compliance with the Title V fiscal requirements as follows:

Section 503 (a)

The state requires that all state match for the grant be budgeted in the same cost center with the relevant federal dollars. Upon expenditure of those pooled dollars, the state draws the appropriate number of federal dollars to reflect the 4:3 federal to state match rate. There are some cost centers in which federal dollars are not matched to stated dollars; in other words, 100% of the budgeted funds are federal. For these dollars, the state designates with special codes the proper amount of state dollars elsewhere in the budget as match.

Section 503 (b)

The state applies annually for the MCH Block Grant funding, however, has two years in which to expend the federal MCH Block Grant allocation awarded in any fiscal year.

Section 503 (c)

Administrative costs are identified in specific cost centers. Typically, these are costs that are charged in the division's cost allocation plan, and certain direct costs for administrative offices. Budgets for these cost centers are summed and compared to the total budget to assure they are not more than 10% of the total grant amount.

We have covered our process below on our procedures to ensure these set aside requirements are met. The Budget is reported for the 30%-30%-10% requirement as specified in Section 504(d) and Section 505(a)(3), see Form 2 and Form 3 for the details.

Section 505 (a) (3) (A & B)

The state budget’s available funds are in a series of cost centers called RCCs. These centers are used to group dollars intended for certain types of programs and services. The RCCs are assigned to one or both of the 30% "set aside" categories and are assessed a percentage of the budget that can be attributable to services in the category.

For example, the RCC 5745 consists of allocated funds to local health departments for child health services. We determine the proportion of the funds that are attributed to preventive and primary care services and services for children with special health care needs, then multiply the percentages by the allocation to come up with the respective amounts for each category. This assessment is performed for each RCC in which Title V funds are budgeted, and the sums for the two categories are compared to the total budget award to determine compliance.

Section 505 (a) (4)

The maintenance of effort from 1989 is $29,063,379. Total state funds budgeted for MCH programs for FY24 as shown in Form 2 is $46,722,582. This includes state funds used for matching Title V funds, which for the FY24 application is $182,373,181.