DEPARTMENT OF HEALTH AND HUMAN SERVICES

CHILDREN’S SERVICES AGENCY

CHILD CARE FUND

(By authority conferred on the department of health and human services by sections 6

and 117a of the social welfare act, 1939 PA 280, MCL 400.6 and 400.117a)

PART 1. GENERAL PROVISIONS

R 400.2001 Definitions.

Rule 1. As used in these rules:

(a) “Child” means an individual who meets all of the following:

(i) Is not emancipated under 1968 PA 293, MCL 722.1 to 722.6.

(ii) Lives with a parent or caretaker.

(iii) Is either of the following:

(A) Less than 18 years of age.

(B) 18 years of age and a full-time high school student.

(iv) Is under the jurisdiction of the court pursuant to sections 2a and 5 of chapter XIIA

of the probate code of 1939, 1939 PA 288, MCL 712A.2a and 712A.5.

(b) “Community-based services” means programs or services that are used as

alternatives to residential or detention care or expedite the return home of a youth to the

community. Community-based services include respite care and shelter care for less than

30 days pursuant to sections 117a to 117h of the social welfare act, 1939 PA 280, MCL

400.117a to 400.117h.

(c) "County department" means the county office of the department of health and

human services created in each county by section 45 of the social welfare act, 1939 PA

280, MCL 400.45, or the tribal entity found within that county.

(d) "County department of health and human services subaccount" means the account

authorized by the county board of commissioners or tribal entity responsible for the

expenditure of child care funds by the county department.

(e) "Court" means the local or tribal court with jurisdiction over juvenile matters.

(f) “Department" means the department of health and human services.

(g) "Direct service" means service provided to a specific client rather than to a general

target group.

(h) “Judicial costs” means costs related to or connected with the administration of

justice that include, but are not limited to, the following:

(i) Filing fees.

(ii) Charges for service of summons and complaint.

(iii) Attorney fees.

(iv) Court reporter charges.

(i) "Published policies and business processes” means those policies and business

processes contained in "The Child Care Fund Handbook” and department policy.

Page 1

Courtesy of Michigan Administrative Rules

(j) "State ward charge-back" means the amount of money the department bills a

county for the cost of care for state wards.

History: 1987 AACS; 2020 AACS; 2025 MR 10, Eff. May 15, 2025.

R 400.2002 Exemption from rule.

Rule 2. (1) Upon written request of the court or county department, the department

shall grant an exemption from an administrative rule only if there is clear and convincing

evidence that the alternative to the rule complies with the intent of the administrative rule

from which exemption is sought.

(2) The decision of the department, including the qualification under which the

exemption is granted, shall be entered upon the records of the department and a signed

copy shall be sent to the court or county department. This exemption may remain in effect

for as long as the court or county department continues to comply with the intent of the

rule or may be time limited.

History: 1987 AACS; 2020 AACS.

R 400.2003 Court staff providing direct services; minimum qualification.

Rule 3. The court shall document that staff providing direct services to children, or

supervising staff who provide direct services to children, for which service costs are

reimbursed from the state child care fund meet the minimum qualifications established in

the juvenile court standards and administrative guidelines for the care of children

established by Supreme Court Administrative Order No. 1985-5, 422 Mich cxi (1985), as

modified by Administrative Order No. 1988-3, 430 Mich xcix (1988) and by order of May

19, 2009, effective September 1, 2009, 483 Mich civ (2009), or by department policy.

History: 1987 AACS; 2020 AACS.

R 400.2004 County department staff providing direct services; standards.

Rule 4. The county department shall document that staff providing direct services to

children, or supervising staff who provide direct services to children, for which service

costs are reimbursed from the state child care fund meet the standards set forth in R

400.4116, R 400.4117, R 400.4118, R 400.4119, R 400.4120, R 400.4121, R 400.12205,

R 400.12206, and R 400.12207.

History: 1987 AACS; 2020 AACS.

R 400.2005 Rescinded.

History: 1987 AACS; 2020 AACS.

R 400.2005a County requirements.

Page 2

Courtesy of Michigan Administrative Rules

Rule 5a. (1) In addition to the county requirements under section 117a(13) of the

social welfare act, 1939 PA 280, MCL 400.117a, the county shall provide data for each of

those requirements to receive state reimbursement.

(2) The data and method of providing the data will be cited in the department’s

published policies and business processes.

History: 2025 MR 10, Eff. May 15, 2025.

R 400.2006 Purchase of contractual services; requirements.

Rule 6. Contractual services purchased through basic grant or in-home care money

must conform to the requirements published in the Child Care Fund Handbook.

History: 1987 AACS; 2020 AACS.

R 400.2007 Case records.

Rule 7. (1) The court and county department shall document eligibility for each child

claimed for state child care fund reimbursement by the program and accounting records.

(2) Documentation of eligibility must be retained as directed by the Child Care Fund

Handbook.

History: 1987 AACS; 2020 AACS.

R 400.2008 County child care fund expenditure reimbursement; eligibility.

Rule 8. (1) To be eligible for state child care reimbursement, a county or tribal entity

shall annually submit a plan and budget, on forms provided by the department that conform

to the requirements established in published policies and business processes. Each annual

plan and budget shall be certified by the presiding judge of the court, director of the county

department, and chairperson of the county board of commissioners or county or tribal

executive.

(2) To be eligible for state child care fund reimbursement, expenditures made from

the court subaccount for out-of-home care must be pursuant to sections 2, 5, 8, and 25 of

chapter XIIA of the probate code of 1939, 1939 PA 288, MCL 712A.2, 712A.5, 712A.18,

and 712A.25.

(3) All of the following provisions apply to expenditures made from the county

department subaccount for out-of-home care for these expenditures to be eligible for state

child care fund reimbursement:

(a) The care is ordered by the court and the child is supervised by the county

department.

(b) The care is voluntary, and all the following provisions apply:

(i) The child is under 18 years of age.

(ii) A written, signed agreement has been received from the child's parent, legal

guardian, or other custodian.

(iii) The agreement specifies the amount of financial support required from the

parent.

Page 3

Courtesy of Michigan Administrative Rules

(iv) Financial need is not the sole reason for the request for out-of-home care.

(c) A county department supervising children funded through the child care fund shall

document that it is approved as a child placing agency under 1973 PA 116, MCL 722.111

to 722.128.

History: 1987 AACS; 2020 AACS.

R 400.2009 Community-based services.

Rule 9. (1) The community-based services option of the child care fund may be used

for youth under the jurisdiction of the court, or at risk of being under the jurisdiction of the

court, to provide for early intervention to treat problems of delinquency and neglect.

(2) Community-based services are provided as an alternative to, or to prevent, removal

from home and placement in detention or other out-of-home care, including diversionary

programming. Community-based services are reimbursable in the following situations and

if all the following provisions have been met:

(a) The approval of an implementation plan that articulates how the local program

and practice satisfies the quality assurance standards as determined by the department.

(b) The diversionary programming is consistent with sections 2 to 6 and 9 of the

juvenile diversion act, 1988 PA 13, MCL 722.822 to 722.826 and 722.829, and sections 2f

and 18 of chapter XIIA of the probate code of 1939, 1939 PA 288, MCL 712A.2f and

712A.18, or equivalent tribal law and practices and as approved within the annual plan and

budget.

(c) The child care fund can be used for programs and practices if a complaint, referral,

or petition is generated by the local prosecutor, law enforcement, parent or guardian, or

authorized school personnel for a youth at risk of juvenile court involvement through

residential placement and re-entry, excluding general prevention services for all youth at

risk of juvenile justice systems involvement. Community-based services include

programming consistent with sections 821 to 831 of the juvenile diversion act, 1988 PA

13, MCL 722.821 to 722.831, and sections 2f and 18 of chapter XIIA of the probate code

of 1939, 1939 PA 288, MCL 712A.2f and 712A.18, or equivalent tribal law and practices

and as approved within the annual plan and budget.

(d) A complaint, referral, or petition is received and the court has considered the

results of a validated risk and needs assessment to determine the scope of community-based

services programming to comply with legislative requirements under section 117a of the

social welfare act, 1939 PA 280, MCL 400.117a, and section 18 of chapter XIIA of the

probate code of 1939, 1939 PA 288, MCL 712A.18.

(e) The expenditure of child care fund money for community-based services is not

for judicial costs.

(f) The programming provided must be consistent with best, promising, and culturally

appropriate practices.

(g) The family is eligible for public assistance programs, community-based services

payments must not be used to pay for basic family needs.

(3) The county department may provide for community-based services from its

subaccount for substantiated category 1 and 2 protective services cases if expenditures are

not for judicial costs. The case plan must identify all parties and services and 1 of the

following must apply to the service or services:

Page 4

Courtesy of Michigan Administrative Rules

(a) The service or services are ordered as an alternative to out-of-home care.

(b) The service or services prevent the need to petition the juvenile court for removal

or prevent placement in voluntary foster care.

(c) The service or services accelerate the return of a youth from out-of-home

care.

(d) The court documents that court staff or the designee responsible for case

plan development and monitoring, or both, meet the qualifications established in the

juvenile court standards and administrative guidelines for the care of children established

by Administrative Order No. 1985-5, 422 Mich cxi (1985), as modified by Administrative

Order No. 1988-3, 430 Mich xcix (1988) and by order of May 19, 2009, effective

September 1, 2009, 483 Mich civ (2009).

(e) Community-based programs use case service payments in support of community-

based services, which can be shown by the county's or court’s relationship between those

payments and the days of out-of-home care in the county.

(4) Case service payments are not made to cover basic family needs otherwise

available through public assistance programs.

History: 1987 AACS; 2020 AACS; 2025 MR 10, Eff. May 15, 2025.

R 400.2010 Basic grant programs; reimbursement eligibility.

Rule 10. To be eligible for state reimbursement, basic grant programs must be

provided to youth who are within or are likely to come within the jurisdiction of the court

as defined by sections 2a and 2b of chapter XIIA of the probate code of 1939, 1939 PA

288, MCL 712A.2a and 712A.2b. In addition, basic grant programs must comply with all

the following provisions to be eligible for reimbursement:

(a) The programs are described in the annual county plan and budget and conform to

the department’s published policies and business processes as provided in the Child Care

Fund Handbook.

(b) The court shall document that court staff or designee responsible for individual

case plan development and monitoring, or both, meet the qualifications established by

Supreme Court Administrative Order No. 1985-5, 422 Mich cxi (1985), as modified by

Administrative Order No. 1988-3, 430 Mich xcix (1988) and by order of May 19, 2009,

effective September 1, 2009, 483 Mich civ (2009).

(c) The county department shall document that county department staff responsible

for individual case management and monitoring meet the requirements for staff supervising

children in foster care as specified in R 400.12205, R 400.12206, and R 400.12207.

(d) The county department or court shall document that contractual providers who

develop or monitor case plans meet the requirements for staff supervising children in foster

care as established in rule I of the juvenile court standards and administrative guidelines

for the care of children established by Supreme Court Administrative Order No. 1985-5,

422 Mich cxi (1985), as modified by Administrative Order No. 1988-3, 430 Mich xcix

(1988) and by order of May 19, 2009, effective September 1, 2009, 483 Mich civ (2009).

(e) The county department and court shall maintain individual case record

documentation as specified by the department in published policies and business processes

as provided in the Child Care Fund Handbook and shall make the individual case record

documentation available to the department for review and monitoring.

Page 5

Courtesy of Michigan Administrative Rules

History: 1987 AACS; 2020 AACS.

R 400.2011 Rescission.

Rule 11. R 400.21, R 400.22, and R 400.23 of the Michigan Administrative Code,

appearing on pages 2984, 2985, and 2986 of the 1979 Michigan Administrative Code, are

rescinded.

History: 1987 AACS.

PART 2. ELIGIBLE EXPENDITURE CLASSIFICATIONS

R 400.2021 Definitions.

Rule 21. As used in this part:

(a) "Case Services payments,” formerly known as nonscheduled payments, means

payments to individuals or organizations for items specified and defined in the

department’s published policies and business processes that are not included in the state-

established per diem rate.

(b) "County-operated facility" means a facility licensed or approved as a child caring

institution or a court-operated facility, or both, to provide group care, shelter care, or

detention administered and staffed by county employees.

(c) "Intensive rate" means payment in excess of the state-established rate for

specialized abuse/neglect foster care that must receive special approval as specified in the

department’s published policies and business processes.

(d) "State rates” means rates established and published by the department for all the

following:

(i) Payment for foster family care and independent living costs.

(ii) Payment for a private child care institution.

(iii) Payment for a private child placing agency.

(e) "Subsidy payment bed hold” means payment to assure the availability of bed

space for placement referrals.

History: 1987 AACS; 2020 AACS.

R 400.2022 County child care fund expenditures; eligibility for reimbursement.

Rule 22. (1) Unless otherwise indicated, county child care fund expenditures

within the limits of the approved annual child care fund budget are eligible for 50%

reimbursement for residential services of detention and long-term residential placements.

Payments must be for a direct service, case-specific, identifiable to an individual child, and

not be for a judicial cost or an administrative cost. However, certain administrative costs,

as that term is defined by the department in published policies and business processes, are

reimbursable.

Page 6

Courtesy of Michigan Administrative Rules

(2) The county child care fund expenditures must be a 75% reimbursement of the

annual expenditures from the child care fund for community-based services, including

community-based supervision, services, respite care, and shelter care for less than 30 days

and related practices, except expenditures that exceed the amount of budget approved.

Payments must be for a direct service, case specific, identifiable to an individual child, and

not be for judicial cost or an administrative cost. However, certain administrative costs, as

that term is defined by the department in published policies and business processes, are

reimbursable.

(3) State child care fund reimbursement is allowed unless otherwise accessible and

available by other public assistance programs necessary to achieve the goals and outcomes

for community-based programming or out-of-home care. Reimbursement must not be

made for costs associated with an otherwise eligible child or family, or both, if the reason

for the unavailability of public assistance is due to intentional program violations and

disqualification of public assistance.

History: 1987 AACS; 2020 AACS; 2025 MR 10, Eff. May 15, 2025.

R 400.2023 Reimbursable family foster care expenditures and costs.

Rule 23. (1) The following child-specific direct supervision or purchased placing

agency family foster care expenditures are reimbursable within state-established rates or

approved intensive rates:

(a) Care provided in the following locations:

(i) Foster family homes.

(ii) Foster family group homes.

(iii) Legal guardian homes.

(iv) Homes of related persons.

(b) Initial clothing, clothing maintenance, and supplemental clothing allowances

within state rates as specified in the department’s published policies and business

processes.

(c) Items necessary for a child's educational experience that are not available without

additional cost through the public-school system.

(d) Medical, dental, psychological, and psychiatric service and materials, subject to

the limitations in R 400.2022.

(e) Unusual transportation costs incurred by the foster parents or payments to a public

carrier for transportation for treatment and service as part of a case plan.

(f) Transportation costs incurred by a foster child's parents if the case plan documents

that assistance is needed to assure contact between the parent and child. The maximum

reimbursable rates must conform to the requirements published in the department’s policies

and business processes.

(g) Other costs for behavioral incentive that are designed to encourage and support

desirable behavior, and that are documented in a service plan.

(h) A once-a-year allowance for a gift at holiday time for each child in foster care.

(2) All the following are reimbursable non-child-specific family foster care costs:

(a) Payment to foster parents for the cost of foster parent training. Reimbursable costs

include all the following:

(i) Cost of transportation.

Page 7

Courtesy of Michigan Administrative Rules

(ii) Child care.

(iii) Tuition.

(iv) Training supplies.

(b) Subsidy payments to foster parents if supported by a contract.

(c) Relief payments to foster parents of an approved group or shelter home program

if supported by a contract.

(d) Respite payments to foster parents of an approved group or shelter home program

if supported by a contract.

(e) Recreation payments to foster parents of an approved group or shelter home

program as defined and restricted by the department’s policies and business processes.

(f) Supply payments to foster parents of an approved group or shelter home program

for personal items for children in the program.

History: 1987 AACS; 2020 AACS.

R 400.2024 Reimbursable costs of institutional care.

Rule 24. All the following are reimbursable costs of institutional care:

(a) The operating costs of a county-operated facility approved to provide detention,

group care, or shelter care, as defined by the office in published policies and business

processes, which is limited to the governing policy provided by the office in published

policies and business processes. These costs are restricted to the following expenditures

for services and goods necessary to provide direct services to the youth placed in the

facility:

(i) The cost for direct care, administrative, and support staff who devote 100% of

their time to the youth placed in the facility.

(ii) The cost of supportive services on a prorated basis if supported by

documentation.

(iii) Prorated space costs if the entire facility is not utilized as a child care institution.

(iv) A once-a-year allowance for a gift at holiday time for each ward in institutional

care.

(b) The cost of care in an out-of-state institution that has filed documentation, with

the state or the court, of having a valid license to provide care and the details of the rates

and service provided.

(c) The cost of care provided in another county's child care facility if the facility has

established and published the same per diem rate for all county and state placements.

(d) Subsidy payments to a facility operated by another county to assure the

availability of bed spaces if approved in the annual plan and budget.

(e) The cost of care in a certified medical or psychiatric hospital.

(f) The cost of care, at the state-established rate, in a facility licensed as a private

child care institution.

(g) The cost of care, exclusive of the education costs, at a boarding school licensed

under section 1335 of the revised school code, 1976 PA 451, MCL 380.1335.

(h) The cost of case service payments for services or materials not included in state-

established rates.

History: 1987 AACS; 2020 AACS.

Page 8

Courtesy of Michigan Administrative Rules

R 400.2025 Out-of-country placements; cost not reimbursable.

Rule 25. The cost of out-of-country placements is not reimbursable.

History: 1987 AACS.

R 400.2026 Reimbursement for in-home care service costs.

Rule 26. The cost of in-home care service as approved in the county annual plan

and budget is reimbursable.

History: 1987 AACS.

R 400.2027 Reimbursement for costs for independent living.

Rule 27. The cost, at the state rate, for independent living is reimbursable.

History: 1987 AACS.

R 400.2028 State expenses.

Rule 28. The following county child care fund expenditures are 100% reimbursable

from the state child care fund:

(a) Reimbursement to a private child caring agency for the cost of foster care,

exclusive of administrative costs, for a child released to the agency under section 29 of

chapter X of the probate code of 1939, 1939 PA 288, MCL 710.29.

(b) Basic grant costs as approved in the county annual plan and budget as set forth in

R 400.2010.

History: 1987 AACS; 2020 AACS.

PART 3. ACCOUNTING

R 400.2031 Standards and requirements.

Rule 31. In addition to the accounting standards and requirements specified in section

117c of the social welfare act, 1939 PA 280, MCL 400.117c, and section 1 of the uniform

budgeting and accounting act, 1968 PA 2, MCL 141.421, the following provisions apply:

(a) All expenditures and disbursements from the court subaccount for which state

reimbursement is claimed must be recorded in the county child care fund in the expenditure

accounts specified in the publication entitled "Accounting Procedures Manual for Local

Units of Government in Michigan” issued by the department of treasury.

(b) All expenditures and disbursements from the county department subaccount for

which state reimbursement is claimed must be recorded in the county child care fund in the

expenditure accounts specified in the department accounting manual.

Page 9

Courtesy of Michigan Administrative Rules

(c) All revenues and receipts to the court subaccount related to child care costs for

which state reimbursement is claimed shall be recorded in the child care fund and be

classified in the revenue accounts as specified in the publication entitled "Accounting

Procedures Manual for Local Units of Government in Michigan” issued by the department

of treasury.

(d) All revenues and receipts to the county department subaccount related to child

care costs for which state reimbursement is claimed must be recorded in the child care fund

and be classified in revenue accounts as specified in the department accounting manual.

(e) County child care fund expenditures submitted for state reimbursement must be

recorded separately from expenditures that are not eligible for state reimbursement.

(f) A record of the cost for each child must be maintained for direct supervision or

purchased placing agency family care, another county's institution, private institution,

medical and psychiatric hospital, boarding schools, in-home care, and independent living.

(g) Money received for a child's care up to the cost of care must be reported on the

monthly financial report forms provided by the department.

(h) Money received for a child's care more than the cost of care must be placed in a

trust for the child.

(i) The accounting records of the probate court subaccount of the child care fund must

be retained in compliance with the publication entitled "Record Retention General

Schedule #15 Circuit Courts" issued by the state supreme court administration office.

(j) The accounting records of the county department subaccount of the child care fund

must be retained in compliance with the department's child care fund policy and made

available for state audit.

(k) The county shall document that the expenditure of child care fund money reported

for state reimbursement for goods or services from a third party complies with county

policy with respect to contract and bidding requirements.

(l) The county shall document that all supplies and equipment for which state

reimbursement is received are identified as county property and controlled in compliance

with the inventory and control policies of the county.

History: 1987 AACS; 2020 AACS.

PART 4. REPORTING

R 400.2041 Definition.

Rule 41. As used in this part, "offset" means the process the department uses to

determine the dollar amount to bill a county for state ward charge-back or the remittance

of state aid for the reimbursement of department child care fund expenditures.

History: 1987 AACS; 2020 AACS.

R 400.2042 Reporting county child care fund expenditures.

Page 10

Courtesy of Michigan Administrative Rules

Rule 42. County child care fund expenditures submitted to the department for

reimbursement shall be reported monthly to the department on the forms provided by the

department.

History: 1987 AACS.

R 400.2043 Reporting county basic grant expenditures.

Rule 43. County basic grant expenditures submitted to the department for

reimbursement shall be reported monthly on forms provided by the department.

History: 1987 AACS.

R 400.2044 Department approval of county annual plan and budget.

Rule 44. The department shall approve, within 30 calendar days after receipt, a

properly completed annual plan and budget that complies with the requirements of section

117c of the social welfare act, 1939 PA 280, MCL 400.117c.

History: 1987 AACS; 2020 AACS.

R 400.2045 Rescinded.

History: 1987 AACS; 2020 AACS.

R 400.2046 Offset of uncontested county child care fund reimbursement and state

ward charge-back liabilities.

Rule 46. The department shall offset county child care fund reimbursements

and uncontested state ward charge-back liabilities monthly.

History: 1987 AACS.

R 400.2047 Department reports to counties.

Rule 47. The department shall provide counties with monthly child care fund

expenditure/reimbursement reports and monthly child care fund-state ward charge-

back/offset reports.

History: 1987 AACS.

R 400.2048 Department responsibilities to counties.

Rule 48. (1) The office department shall be responsible for providing all necessary

information to counties to meet the requirements of these rules and child care fund policy.

Page 11

Courtesy of Michigan Administrative Rules

(2) The department shall provide county-level assistance for county plan and budget

development, program eligibility monitoring, and compliance.

History: 1987 AACS; 2020 AACS.

R 400.2049 Monitoring county population projections.

Rule 49. The department shall monitor county population projections produced by

the department of technology, management and budget. The department shall provide to

those counties that are projected to exceed or decline below the 75,000 population mark a

15-month period within which to develop a basic grant program or to change to the county

juvenile officer grant payment system as provided in section 3 of 1919 (Ex Sess) PA 22,

MCL 400.253.

History: 1987 AACS; 2020 AACS.

Page 12

Courtesy of Michigan Administrative Rules