Section A Your Contract with DHS

Contract vs. License

State law requires a child care license if you want to provide care to children in Oklahoma. In addition, if you want to receive payments from DHS for children who receive child care subsidy benefits, you must also have a contract.

Legally, having a contract with DHS is a privilege, not a right. Those who do not live up to its terms can lose their contract. Those who lose their contract with DHS–but retain their license–can still provide child care but will no longer be paid by DHS.

Terms of the Contract

If your contract is approved – and not all contract requests are approved – you will receive a copy showing your new contract number and the effective date. Please re-read your contract carefully and keep it in an accessible place for easy reference. It contains information about what is expected of you as a contracted provider.

By signing the contract, you agree to abide by all of its terms. Contracts are never backdated and are effective the date DHS staff approve and sign the document.

If you start caring for children eligible for subsidy payments before the date the contract is approved DHS will not pay for that care.

You also agree to never charge a discriminatory rate or violate anyone’s civil rights. You must also maintain a drug-free environment and allow DHS and parents unlimited access to your child care facility during normal business hours. In addition, you should never have a client sign an agreement or contract with you that conflicts with the Child Care Provider Contract.

Your contract expires September 30 of each year. Your contract may be automatically renewed each year at the sole discretion of DHS. If DHS makes the decision to automatically renew your contract you will be sent a letter informing you of this action. You should file this letter with your most recent signed contract. You may submit this letter to the food program as verification of your contract.

In other years, DHS may require you to sign a new contract in order to renew your contract. This usually occurs when the contract has been updated. You may also be required to complete training or some other requirement in order to renew your contract.

DHS may cancel your contract at any time by notifying you of the decision in writing. Likewise, if you no longer wish to contract with DHS, you must notify AFS Child Care Subsidy in writing at least 30 days prior to the date you want the contract to end.

If your license is denied, revoked or closed, your contract to receive subsidy payments will be cancelled at the same time. You will receive written notice of the contract cancellation by mail. You should never provide care or ask clients to record attendance on the POS machine after the date your license ends. The POS machine must be immediately returned to the EBT contractor or you will be charged for the cost of the machine.


You must notify AFS Child Care Subsidy at least 30 days before you plan to:

  • Change your business entity (to or from a sole proprietor, corporation, LLC, or partnership),
  • Change your facility status (center to home or home to center),
  • Sell your facility (change of ownership),
  • Close your facility,
  • Change your business location, or
  • Change of contract signor or responsible person to obligate the business.

Changes in business entity, facility status, or ownership are considered coordinated changes and require a new license, new stars certification, and a new contract. You must contact your licensing specialist to apply for a new license and stars. You must contact AFS Child Care Subsidy to apply for a new contract. For these types of coordinated changes, the new license, stars, and contract begin dates must occur on the first day of the same month to prevent payment problems. This is why it is important for you to contact your licensing specialist and AFS Child Care Subsidy as soon as possible to coordinate the effort.

IMPORTANT: The contract terminates immediately when a facility is sold or the owner dies. The new owner is responsible for getting a new contract if interested in receiving subsidy payments.

Location of Care

If you own more than one child care facility, you must have a separate contract for each location. If a child receives care at more than one of your locations, the family’s worker must authorize care for that child at each location. However, care can only be approved at one location per day. You are NOT authorized to move children or the POS machine from one location to another without prior written approval from AFS Child Care Subsidy.

Approval may be given when there is a time-limited, legitimate business reason for providing care at another location owned by you. An example of this would be damage to a facility due to a storm or other natural disaster. Both locations must be licensed at the same “Star” level and have separate contracts. Clients must be notified in writing that their children will be cared for at the other location.

Record Retention and Availability

You must agree to keep accurate business records and ensure that attendance information and payments made by DHS to your facility are accurate.

You must agree to make the physical facility and all records available and accessible to any DHS auditors, investigators or other representatives of DHS at any time, with or without notice, for DHS’ use in inspecting, monitoring, evaluating, and auditing for compliance with the terms of this contract.


Providers in partnership with Head Start, public schools or any other program funded by state or federal funding sources can only charge DHS for the hours of care not covered by these program’s hours. 21st Century Learning Grant programs are not eligible to receive subsidy payments. The funds received from these other programs are expected to meet the cost of care during the hours of that program.

For example, if you are receiving Head Start money to operate a Head Start program from 9am – 3pm Monday through Friday and the parent needs child care from 8am – 5pm, DHS should only be billed (through swiped attendance on the POS machine) to cover the 8am – 9am and 3pm – 5pm time periods. In order to qualify for a contract you must offer “wrap around” care or additional hours of child care beyond the Head Start hours. You must also charge families not approved for DHS assistance a fee for these additional hours.

You must provide AFS Child Care Subsidy a copy of any collaborative agreement you have signed within 30 days of entering into the agreement.

Allowable Fees and Rates

When you agree to accept a child approved for a subsidized child care payment, you are agreeing to accept the DHS rate for providing care. You are also responsible for collecting any assigned family share co-payments.

As a contracted provider, you CANNOT:

  • charge clients any additional co-payment;
  • charge the entire family share co-payment if the amount of care used for that month is less than the amount of the co-payment;
  • charge clients any additional rates for hours of care covered by the child’s authorization;
  • charge clients or DHS for hours before the child normally needs care if this is a requirement of your facility because of your curriculum or mealtime;
  • charge a place-holding fee when the child is absent for any reason including vacation, illness, school break, etc.; or
  • charge any other fees for care not given such as termination and late payment fees.

However, you CAN:

  • charge the clients certain approved fees such as enrollment fees, transportation fees, and activity fees as long as these fees are clearly posted and you charge non-DHS parents the same fees. You should discuss all allowable fees with DHS parents prior to enrollment.


You have the right to refuse to accept a child in your facility as long as your refusal is not based on a discriminatory reason.

  • Acceptable reasons to refuse service include: your facility is full, you are not open the hours care is needed, you only accept a certain number of children receiving a subsidy, etc.
  • Discriminatory reasons which are not acceptable include: refusing to serve someone because of his or her race, sex, color, national origin, religion or disability.

You cannot charge a client more money for the care of a child with disabilities than you charge a typical child of the same age simply because of his or her disability. You must be willing to make reasonable accommodations for a child with disabilities. However, you may be able to receive a Special Needs Rate which is additional compensation from DHS. If you have concerns about your ability to meet the needs of a child with disabilities, your licensing specialist has resource information he/she can give you.

Maintaining your Contract in Good Standing

To maintain your contract in good standing, you should NEVER do any of the following:

  • be in possession of a client’s EBT card;
  • swipe the card through the POS machine;
  • know a client’s Personal Identification Number (PIN);
  • be an authorized representative for a child attending your facility;
  • enter, or request the client to enter, attendance information for a day or time the child was not in your care;
  • charge DHS or the client for a day or time the child was not in your care; or
  • fail to maintain a drug-free workplace.

These are some serious violations of your contract with DHS and may lead to cancellation of your contract.

REMEMBER, you must immediately destroy any EBT card left or dropped in or around your facility by cutting across the magnetic strip on the back of the card. You cannot wait until the end of the shift or the end of the day, it must be done immediately. The client must go to the DHS county office and request a new card.