Introduction

As a Texas Family Child Care Network (Texas FCCN) Mini-Grant recipient, you will be required to report how your funds were spent and provide documentation of your expenses. You will submit a Final Report after spending your complete award to remain in good standing.

Your report will require information on how funding was spent within allowable expense categories. This guide will help you understand what expenses are allowed, how to properly document them, and what to expect during the reporting and monitoring process.

Connection to Application Scoring

The documentation and financial management practices required for monitoring align with the competencies evaluated in the Financial Preparation & Sustainability category of the application scoring process. Strong recordkeeping demonstrates your budgeting accuracy and cash flow projection skills, which support both compliance and long-term business success.

What is Monitoring and Why Does It Matter?

Monitoring is a standard process to verify that grant funds are spent appropriately and according to program guidelines. It ensures accountability for both your protection and the funding agency's records.

Why it matters to you:

• Keeps you in good standing with the Texas Family Child Care Network (Texas FCCN) and Texas Workforce Commission (TWC). Failure to comply with reporting requirements can result in recoupment of funds and prevention from participating in future TWC-funded initiatives

• Protects your award by confirming expenses meet all requirements

• Builds strong financial practices that benefit your business long-term

Who must participate:

All award recipients must:

• Spend funds within six months of receiving your award

• Submit a Final Report (after spending your complete award)

• Provide documentation of expenses as part of the monitoring process

• Maintain spending records for three years from receipt of funding

Required Reporting Activities

• Final Report: Document how you spent your complete award amount.

• Documentation: Upload receipts, invoices, and proof of payment for all expenses paid for with the award.

• Review: The Review team verifies that your expenses are allowable and properly documented.

• Meeting reporting deadlines is essential for maintaining good standing with the initiative.

Understanding Key Terms

• Allowable Expenses: Business costs and expenses related to health, safety, and child learning that can be paid for using the funds awarded (detailed in the next section)

• Unallowable Expenses: Business expenses and costs that cannot be paid for with Mini-Grant funds

• Documentation: Receipts or invoices showing who paid, how much, when, and what was purchased

• Compliance: Meeting all reporting deadlines and requirements to maintain good standing with your award

Understanding Allowable Expenses

How I CAN use my funds

Funding can be used towards allowable business expenses and costs related to health, safety, and child learning.

There are a number of ways that child care businesses may effectively use their Texas FCCN Start-Up Mini-Grant award. We recommend thinking about what you need in order to receive your initial HHSC CCR permit, including required background checks and application fees, which can be covered through these funds. If you need spending guidance and ideas for your business, check out the Texas FCCN Start-Up Mini-Grant Initiative Spending Guide and keep an eye out for upcoming webinar opportunities to learn more about maximizing the use of your award funds.

How I CANNOT use my funds

Funding from a mini-grant must NOT be used for the following items:

• Down payments, security deposits, and other one-time payments associated with securing a location to provide child care;

• Construction of new facilities;

• Payments for providers and staff

• Major Renovations to existing facilities;

• Vehicles; and

• Equipment.

Major renovation is defined as:

• (1) structural changes to the foundation, roof, floor, exterior, or load-bearing walls of a facility, or the extension of a facility to increase its floor area; or

• (2) extensive alteration of a facility such as to significantly change its function and purpose, even if such renovation does not include any structural change.

Equipment is defined as physical items that:

• Last more than 1 year

• Cost $5,000 or more per item, including acquisition cost

Acquisition cost means the total cost to buy the item and get it ready to use. This includes:

• The purchase price

• Any needed modifications or accessories

• Installation or setup

You can learn more about expenses to avoid by reading the Texas FCCN Start-Up Mini-Grant Initiative Spending Guide

Gathering Your Documentation

To comply with required reporting and monitoring, you must document all spending and maintain records for at least three years after receiving your award. This includes receipts, invoices, and other documentation that show how funds were spent.

Keep both digital and physical copies of all invoices and receipts. Photos or scans are acceptable and should be kept with your grant records. Your budget and cash flow projection, completed with your application, should align with your actual spending. This can help you categorize expenses during the monitoring process.

The monitoring process will require you to submit complete documentation of how all award funds were spent. Keep your documentation organized and readily accessible for monitoring.

• Tip: Keep receipts for more items than you plan to claim. If any expense is deemed unallowable during monitoring, you may be able to substitute it with another allowable receipt.

Before spending your funding, it is a good idea to set up a recordkeeping system to properly document all past and future expenses. Follow these simple steps to gather and maintain documentation needed for reporting and monitoring:

Step 1: Categorize your Expenses

First, review your monthly business expenses and categorize them. Allowable costs under the mini-grants are those related to health, safety, and child learning, which include:

• Indoor furnishings and supplies;

• Outdoor learning materials;

• Instructional materials;

• Child safety items;

• Personal protective equipment, cleaning and sanitization supplies;

• General liability insurance;

• Minor repairs and building modifications necessary to ready the dedicated indoor and outdoor learning areas, including fencing, only if and to the extent required for licensing, and excluding construction or major renovation;

• Kitchen and household safety materials or supplies, including fire extinguishers, smoke detectors, and carbon monoxide detectors;

• Permitting fees, for example for CCR or as related to inspections; and

• Outreach costs associated with recruitment of families and staff;

You will need proof of payment like a receipt, or an invoice marked "paid" for every cost that you are covering through the Texas FCCN Start-Up Mini-Grant award. Ensure that the documentation shows exactly what goods or services were purchased.

Be sure to collect information about the following common business expenses for each month:

• Facilities Maintenance and Repairs: The amount spent on minor repairs and building modifications that are specifically required to meet HHSC CCR licensing standards for your dedicated indoor or outdoor learning areas.

  • Tip: Since your business operates in your home, you may need to calculate your Time-Space Percentage. This calculation determines what portion of your home expenses, including maintenance and repairs, can be counted as business expenses. You can learn more about calculating your percentage in our Time-Space guide.

• Classroom Supplies: This includes items necessary for your child care business such as children's toys, curriculum, or books.

• Outreach Costs: Include costs for both physical outreach such as flyers or postcards, as well as the cost for digital outreach such as online ads or job announcements. Remember, outreach can include efforts made to attract new staff to your business as well as marketing for new families.

• Liability Insurance Costs: Include costs associated with securing liability insurance for your business. Minimum liability insurance requirements for permitting have changed as of January 2026, however you will still want to make sure you have adequate coverage to protect your specific business beyond minimum license requirements, if needed.

• Permitting Fees and Required Background Checks: You can also receive a reimbursement for your permit application fee and for required background checks for personnel. Reimbursement requests require receipts dated within 3 months of your request for each cost, so make sure you keep these documents as you receive them.

Step 2: Find and Keep Your Receipts

Now that you have a clear picture of the expenses you regularly incur or expect to incur, and you have gathered your receipts in one place, you will want to set up a recordkeeping system to properly document all expenses. Create a file or get a large manila envelope ready for your receipts so that you have a way to keep them safe until you need them.

A receipt or other proof of payment should show:

• That you paid the expense

• The amount you paid

• The date you paid it

• Where it was purchased

• What you paid for: For transactions like a plumber's bill for required minor repairs or modifications, the invoice or bill sufficiently describes the service. For other purchases, include a description of the item purchased or service received.

Some examples of valid receipts or payment documentation are:

• An itemized receipt from Target or Walmart

• A payment receipt from HHSC CCR for your permit application

• A payment confirmation from your liability insurance company

• Tip: Identifying your larger allowable expenses first can help to streamline the process. A few larger expenses will take less time to document than multiple receipts for smaller purchases.

Step 3: Create a Digital Backup

As you begin spending your award, create a digital backup of your receipts by taking pictures or scanning the documentation. Since you need to keep your receipts for three years, a digital backup provides additional protection in case something happens to the original hard copies. Save all your digital documents in the same place, just like you would your hard copies. Store all scanned files in the same folder, or if taking photos on your mobile device, save all photos in the same album

The Reporting and Monitoring Process

• All applicants are required to submit a Final Report and participate in monitoring.

• You will be notified of your Final Reporting Date and monitoring deadline after you are issued your funding.

To help you feel more at ease, here is an outline of what to expect during the process:

Step 1: Notification of Final Reporting

You will receive an email after your funding is issued notifying you of your Final Report and monitoring due date. Your award agreement will include instructions on how to submit your report and documentation.

You will have six months to spend your award funds. You may submit your Final Report and monitoring documentation early if you complete spending sooner. If you have not submitted your report and monitoring documentation by the end of the six-month spending window, the monitoring team will email you a request. You must respond to these requests for information within fifteen (15) calendar days to remain in compliance with the Award Agreement.

• Important: If documentation is not submitted within fifteen (15) calendar days of the initial request, your award may be flagged for noncompliance, which can lead to recoupment of funds and disqualification from future TWC-funded initiatives.

Step 2: Submit Final Reporting Form

When you are ready to complete your Final Report, you will be able to access the questionnaire through the survey link provided to you in an email from minigrant.texasfccn@civstrat.com. Your report will include questions about your actual spending within allowable expense categories and questions about the progress of your permitting status, areas of concern, and areas of support accessed during the application process. Documentation of your expenses will be required at this time.

To submit documentation of your spending, you will complete a cover sheet listing expenses and you must provide eligible documentation to support those expenses. You will upload your documentation through the same survey link provided to you in the notification email from minigrant.texasfccn@civstrat.com.

All recipients must submit a Final Report to remain in compliance with the terms and conditions associated with receiving Texas FCCN Start-Up Mini-Grant funding. Applicants with late submissions will face potential recoupment of funds.

Step 3: Review of Final Reporting

The monitoring team will review your responses and if necessary, contact you to address any questions or concerns. Your submission will be reviewed to ensure that all expenses are allowable, documentation is sufficient, and spending amounts add up to the total amount you’ve received. After documentation has been reviewed and approved, you will receive an email notifying you that your reporting and monitoring is complete.

What happens if some of my expenses are found ineligible?

In some cases, the monitoring team may find certain expenses that are unallowable under your award. For this reason, we recommend keeping receipts for more purchases than you plan to claim. If any expense is deemed ineligible during monitoring, you may be able to substitute it with another allowable expense.

Conclusion

Reporting and monitoring can seem intimidating, but there are two important points to remember. First, the monitoring team does not want to take your money back! They are here to review your spending and make sure your expenses are accurately recorded. Second, there are resources available to support you in the reporting and monitoring process. By using the guidance in this resource, you're setting yourself up for success and staying in compliance with the requirements.

Learning these practices not only helps you with your award compliance right now, but also it makes your business stronger in the long run. As always, if you ever feel unsure or have any questions, reach out to the Texas FCCN team for assistance.