DEPf-\R11'vlENT O F H EALTP  \!,\!D HUMAN SERVICE::' 
OJ?FICE OF INSPECTOR GENERAL 
IV ,\-SHJ;\GTO-:. DC  2020 I 
JUN  2 8 2012 
TO: 	 George Sheldon, J.D. 
Acting Assistant Secretary 
Administration for Children and Families 
FROM:  S"tuart Wright 
Deputy Inspector General 
for Evaluation and Inspections 
SUBJECT: 	 Memorandum Report:  ACF Strengthened Its Oversight ofHead Start 
Eligibility in Fiscal Year 2011, OEI-05-11-00140 
This memorandum report describes the changes that the Administration for Children and 
Families (ACF) made to its oversight of Head Start eligibility between fiscal years 
(FY) 2010 and 2011, the extent to which grantees complied with requirements for 
keeping eligibility information on file, and the extent to which ACF issued findings of 
noncompliance or deficiency when eligibility information was not on file. 
SUMMARY 
In response to a request from Congressman John Kline, Chairman of the Committee on 
Education and the Workforce, we evaluated ACF' s efforts to strengthen its oversight of 
Head Start grantees in response to reported problems with grantees not correctly 
verifying children's eligibility. 
Overall, we found that ACF strengthened its oversight of eligibility between FY 2010 and 
FY 2011.  Specifically, ACF altered its FY 2011 triennial reviews to determine whether 
grantees kept on file the source documents proving children's eligibility.  Further, ACF 
began performing unannounced triennial reviews.  In addition, ACF promulgated draft 
regulations that, once final, will require grantees to keep source documents on file. 
Finally, ACF developed an online (i.e. Web) complaint process for the Head Start 
program to capture complaints that could help the agency uncover problems with 
grantees. 
According to data collected during ACF's FY 2011 triennial reviews, 79 percent of Head 
Start grantees had complete eligibility information for all sampled children.  ACF was not 
consistent in issuing findings to grantees missing eligibility information in FY 2011.  In 
FY 2012, ACF has taken steps to reduce this variation in issuing findings.   
Page 2 of 16  George Sheldon, J.D. 
 
 
BACKGROUND 
 
This study responds to a congressional request.  In May 2010, a Government 
Accountability Office (GAO) official testified at a congressional hearing about possible 
cases of eligibility fraud at eight Head Start grantees.1  At this hearing, ACF committed to 
improving its oversight of Head Start eligibility.  Following this hearing, Congressman  
Kline, then the Ranking Member of the Committee on Education and Labor, requested 
that the Office of Inspector General (OIG) conduct a review of Head Start.   
   
Head Start is an ACF-administered nationwide grant program designed to promote school 
readiness in children from low-income families.  Head Start grantees provide early 
childhood education; medical, dental, and mental health care; and nutritional services.  
Grantees may be local public agencies, private organizations, Native American tribes, or 
school systems. 
 
In FY 2011, ACF provided $8 billion to serve almost a million children enrolled at Head 
Start grantees.2  ACF awards funds to 1,624 Head Start grantees nationally.   
 
Head Start Eligibility Requirements 
Children are eligible for Head Start if they are of the appropriate age, and if their families 
fall within one of the following eligibility categories:  
   the family is homeless,3   
   the family is eligible for or receiving public assistance (or is potentially 
eligible in the absence of child care),4   
   the family is caring for foster children,5 or 
   the family has an income below the poverty line.6, 7  
 
A Head Start grantee may have up to 10 percent of its enrollment consist of children 
whose families have incomes above the poverty line.  An additional 35 percent of the 
grantees enrollment may consist of children with family incomes between 100 and  
   
                                                 
1  Undercover Testing Finds Fraud and Abuse at  Selected Head Start Centers: Hearing Before the United 

States House of Representatives Committee on Education and Labor, 111th Cong. (2010) (Statement of 
 
Gregory D. Kutz,  Managing Director, Forensic Audits and  Special Investigations, GAO). 

2 Department of Health and Human Services (HHS),  Fiscal Year 2011 Budget in Brief.  Accessed at 

http://dhhs.gov/asfr/ob/docbudget/2011budgetinbrief.pdf on  June 15, 2012. 

3 Head Start Act   645(a)(1)(B)(ii), 42  U.S.C.   9840. 

4 Head Start Act  645(a)(1)(B)(i),  42 U.S.C.   9840. 
 
5 45 CFR   1305.2(l). 

6  Head  Start Act  645(a)(1)(B)(i), 42  U.S.C.  9840.   

7 In FY  2011, the poverty line was $22,350 for a family of four.  76 Fed. Reg.  36373638 (Jan. 20, 2011). 

ACF Strengthened Its Oversight of Head Start Eligibility in Fiscal Year 2011 (OEI-05-11-00140)         
Page 3 of 16  George Sheldon, J.D. 
 
130 percent of the poverty line.8 The remaining 55 percent of enrollment must consist of 
children from families with incomes below the poverty line.9 
 
Families applying for Head Start services must provide information that allows Head  
Start grantees to verify that children are eligible.  Families may provide information such 
as documents from relevant homeless shelters, documents regarding public assistance, 
documents confirming foster care, or income  tax forms.  Such documents are hereinafter 
referred to as source documents.  
 
Requirements for Head Start Grantees Verifying Eligibility  
Federal regulations require all Head Start grantees to verify eligibility before enrolling 
children whose participation is based on family income.10   To verify childrens eligibility,  
Head Start grantees must examine all source documents presented by families.  Grantees 
are not required to keep copies of source documents on file, although ACF has 
encouraged grantees to do so.11, 12   
 
Although grantees are not required to keep source documents on file, they are required to 
keep forms demonstrating that they verified eligibility for all enrolled children.13   
Grantees must indicate on these forms what documents they examined to verify 
eligibility.  They must sign these forms to attest that children are eligible for Head Start 
services. Grantees may use a form that they designed themselves or an ACF-designed 
form.14  Hereinafter, forms designed by Head Start grantees and ACF-designed forms will 
both be referred to as verification forms.  See Appendix A for a copy of the 
ACF-designed verification form. 
 
   
                                                 
8 Families must live in a designated service area to  be  eligible for Head Start services.  In addition,  Head 
 
Start grantees  must establish and implement outreach and enrollment policies before enrolling children  

from families with incomes between  100 and  130  percent of the poverty line.  Head Start Act  

 645(a)(1)(B)(iii), 42 U.S.C.  9840. 

9 For American Indian or Alaskan Native grantees, up to 49  percent of enrollment  may consist of children 
 
from families above the poverty line.  45 CFR 1305.4(b)(3)(iv).  In addition,  grantees that meet certain 
 
conditions and in areas with populations of  1,000 or less may establish their own criteria for eligibility.  

Head Start Act   645(a)(2),  42 U.S.C.  9840.   

10 45 CFR   1305.4(c).  

11 ACF,  Policy ClarificationsIEligibility, Recruitment,  Enrollment, and Attendance, OHS-PC-I-009, 

April 23, 2007.  Accessed at 

http://eclkc.ohs.acf.hhs.gov/hslc/standards/Policy%20Clarifications%20and%20FAQs on June 18, 2012. 

12 ACF, Income  Eligibility for Enrollment in  Head  Start and Early Head Start Programs, 

ACF-PI-HS-10-02, May 10, 2010.  Accessed at 

http://eclkc.ohs.acf.hhs.gov/hslc/standards/PIs/2010/resour_pri_002_051010.html on  June 15, 2012. 

13 45 CFR   1305.4(e).  

14 ACF, Income  Eligibility for Enrollment in  Head  Start and Early Head Start Programs, 

ACF-PI-HS-10-02, May 10, 2010.  Accessed at 

http://eclkc.ohs.acf.hhs.gov/hslc/standards/PIs/2010/resour_pri_002_051010.html on  June 15, 2012. 

ACF Strengthened Its Oversight of Head Start Eligibility in Fiscal Year 2011 (OEI-05-11-00140)         
Page 4 of 16  George Sheldon, J.D. 
 
ACF Oversight of Head Start Eligibility   
Federal law requires ACF to perform periodic monitoring and oversight of Head Start 
grantees.15   ACF determines through onsite visits whether Head Start grantees abide by 
eligibility requirements.  Onsite reviews should occur for first-year grantees, for 
operating grantees (on a triennial basis), for grantees that are found to be out of 
compliance, and a studyknown as the Erroneous Payments Studyidentifying 
improper payments.  ACF further oversees grantees through yearly risk management  
meetings. 
 
Triennial Reviews.   ACF conducts standardized, onsite reviews for each grantee once 
every 3 years. Known as triennial reviews, these reviews evaluate whether grantees are 
complying with a range of rules and regulations.16  In FY 2011, 537 granteesroughly 
one-third of the total of 1,624 granteesreceived triennial reviews.   
 
Generally,  ACF sends Head Start grantees written notification 30 days prior to the date of  
an upcoming triennial review.  However,  ACF has the authority to perform unannounced 
reviews, including unannounced triennial reviews.17    
 
While onsite, triennial reviewers complete an electronic, standardized guide that aids 
them in evaluating different areas of grantees performance, such as eligibility 
verifications, financial management, and childrens health.18  Reviewers record the results 
of their examination in ACFs review software.  When evaluating grantees performance 
in verifying eligibility, reviewers examine verification forms and source documents for a 
sample of children enrolled at each Head Start grantee.  Reviewers choose a separate 
sample for each grantee, based on the number of children enrolled at the grantee.   
 
ACF reviews the data collected during triennial reviews for each grantee and determines 
whether grantees are compliant with Federal regulations.  If  ACF determines that 
grantees are out of compliance with Federal regulations, it issues findings.   There are two 
types of findings. The more severe type is a finding of deficiency, hereinafter referred 
to as a deficiency.19   The less severe typea finding of noncompliance, hereinafter 
referred to as a noncomplianceis issued if a grantee is not compliant with Federal 
regulations but its infraction does not warrant a deficiency.  In FY 2009, the latest year 
with data available, ACF issued deficiencies to 5 percent of grantees reviewed.  That 
                                                 
15 Head Start Act   641A(c),  42 U.S.C.   9836A. 

16 Ibid. 

17 Head Start Act   641A(c)(1)(D), 42  U.S.C.   9836A. 

18 Triennial reviewers may include ACF staff and contracted  staff with experience in early education. 

19 A deficiency is legally defined as a systemic or substantial material failure of a grantee in specific areas  

of performance, a systemic or material failure of the governing body of any grantee to fully exercise its 

legal and fiduciary responsibilities, or an  unresolved area of noncompliance.  Grantees may receive a  

deficiency in areas of performance involving:  health, safety or civil rights; denial of  parental roles and 

responsibilities related to  program operations; failure to comply with  standards on early childhood  

development and health services, family and community partnerships, or  program design  and management;
  
misuse of Federal funds; loss of legal status  or financial viability; and failure to meet any other Federal or 

State requirement and  unwillingness or inability to correct.  Head Start Act   637(2), 42 U.S.C.  9832. 

ACF Strengthened Its Oversight of Head Start Eligibility in Fiscal Year 2011 (OEI-05-11-00140)         
Page 5 of 16  George Sheldon, J.D. 
 
same year, ACF issued noncompliances to 75 percent of grantees reviewed. 20   
Hereinafter, we will collectively refer to deficiencies and noncompliances as findings. 
 
ACF uses findings letters to notify all grantees of its assessment of their compliance.  
These letters outline grantees strengths and weaknesses, including any findings.  These 
letters also describe the specific Federal regulations that are related to each finding.  After 
sending findings letters, ACF may perform followup reviews of grantees that were out of 
compliance to determine whether the grantees corrected the problems that resulted in 
findings. 
 
Erroneous Payments Study.   ACF conducts the Erroneous Payments Study each year to 
identify a national rate of improper payments to Head Start grantees.  ACF defines the 
national rate of improper payments as payments to grantees that have more than the 
allowed percentage of children enrolled whose family income exceeds the eligibility 
guidelines.21  In FY 2011, Head Starts national error rate was 0.6 percent, amounting to 
$43 million in improper payments.22   This was down from the previous years error rate 
of 1.7 percent and overpayment amount of $123 million.23   
 
Like triennial reviews, ACFs Erroneous Payments Study consists of standardized onsite 
reviews. ACF chooses grantees from a stratified sample of all Head Start grantees 
receiving triennial reviews that year.  The Erroneous Payments Study takes place 
concurrently with the triennial reviews, but uses a different protocol, different sampling 
methodology, and different reviewers.     
 
Risk Management Meetings.  Staff at ACF regional offices conduct an annual risk 
management meeting with each Head Start grantee to discuss strengths and weaknesses.24   
These meetings include discussions about childrens eligibility.   ACF may hold these 
meetings in person or over the phone. 
 
ACFs Response to GAOs Investigation   
In FY 2010, GAO found that employees at 8 of 13 Head Start grantees disregarded 
portions of applicants documents so that families would appear to be below the poverty 
line.25  In response to the GAO investigation, ACF made a series of promises to 
strengthen its oversight of eligibility.  
 
                                                 
20 ACF,  Report to Congress on  Head  Start Monitoring, FY 2009, p. 18. 
 
21 HHS, FY 2011 Agency Financial Report, November 2011, p.  III-33.   Accessed at 

http://www.hhs.gov/afr/2011afr.pdf  on February 8,  2012.  

22 Ibid. 

23 Ibid. 

24 ACF,  Head  Start Risk Management Process, ACF-IM-HS-08-06,  February 5, 2008.  Accessed at 

http://www.acf.hhs.gov/programs/ohs/policy/im2008/acfimhs_08_06.html on March  23, 2012. 

25 GAO,  Undercover Testing  Finds  Fraud  and Abuse at  Selected Head Start Centers, GAO-10-1049, 
 
September 2010. 

ACF Strengthened Its Oversight of Head Start Eligibility in Fiscal Year 2011 (OEI-05-11-00140)         
Page 6 of 16  George Sheldon, J.D. 
 
ACF stated that it would strengthen its existing oversight processes.  This included 
performing a top-to-bottom review of triennial reviews, the Erroneous Payments Study, 
and risk management meetings.26    
 
ACF also stated that it would use unannounced triennial reviews to better determine how 
Head Start grantees operate on a daily basis.27   According to ACF staff, 10 percent of 
triennial reviews in FY 2011 were to be unannounced. 
 
Further,  ACF committed to developing new processes to improve oversight, including  
developing an online complaint process for Head Start (hereinafter referred to as a 
Web-based hotline) and an Office of Program Integrity.28  Established in 
September 2010, ACFs agencywide Office of Program Integrity is intended to strengthen 
internal procedures and improve financial management in all ACF-funded programs, 
including Head Start. This Office of Program Integrity did not work on the Head Start 
program in FY 2011. 
 
In addition, ACF stated that it would develop new guidance and regulations regarding 
eligibility verification. Following the congressional hearing, ACF issued a program  
instruction encouraging Head Start grantees to keep source documents for eligibility 
verifications on file.29  In addition, ACF promulgated draft regulations regarding income  
eligibility.30  
 
Related Reports 
In 2006, OIG issued a report on enrollment levels among Head Start grantees.31  OIG 
found that almost all Head Start grantees had high enrollment levels.  OIG also found that 
Head Start grantees reported that it was difficult to fill enrollment slots with children 
whose families were below the poverty line.  OIG recommended that ACF address 
challenges to maintaining full enrollment.  Since the reports release, ACF has taken steps 
to meet this recommendation.  
 
GAO has produced two reports identifying weaknesses in ACFs triennial reviews.  In 
2005, GAO expressed concerns that triennial reviewers may not be rigorously adhering to 
the review guide, and may not achieve consistent results.32  In 2008, GAO followed up on 
                                                 
26  Examining GAOs Review  of Selected Head  Start  Grantees: Hearing Before the United States House of
  
Representatives Committee on Education  and Labor, 111th Cong. (2010) (Statement of Carmen Nazario, 

Assistant Secretary for Children and Families, HHS). 

27 Ibid. 

28 Ibid. 

29 ACF,  Income  Eligibility for Enrollment in  Head  Start and Early Head Start Grantees, 

ACF-PI-HS-10-02, May 10, 2010.  Accessed at 

http://eclkc.ohs.acf.hhs.gov/hslc/standards/PIs/2010/resour_pri_002_051010.html on March 23, 2012. 
 
30 76 Fed. Reg. 1484114854 (Mar. 18, 2011). 

31 OIG,  Enrollment Levels in  Head Start, OEI-05-06-00250, April 2007. 

32 GAO,  Comprehensive Approach to  Identifying and Addressing Risks Could Help Prevent Grantee 

Financial Management  Weaknesses, GAO-05-176, February 2005. 
 
ACF Strengthened Its Oversight of Head Start Eligibility in Fiscal Year 2011 (OEI-05-11-00140)         
Page 7 of 16  George Sheldon, J.D. 
 
its previous report, finding that ACF was implementing new processes that should 
improve the consistency of triennial reviews.33  
 
METHODOLOGY 
 
Scope 
This study looked at changes to ACFs oversight of eligibility between FY 2010 and 
FY 2011. By analyzing data from this timeframe, we can determine what changes 
occurred in ACFs oversight of eligibility immediately after the May 2010 congressional 
hearing where a GAO official testified. 
 
Although ACF performs other types of reviews, we analyzed data only from triennial 
reviews and the yearly Erroneous Payments Study.   We did not analyze data from other 
types of reviews, such as followup reviews or reviews for first-year grantees.  Because 
ACF does not always use its full standardized review guide when performing followup 
reviews, such reviews may not necessarily evaluate how grantees verify eligibility.   ACF 
performed only six first-year reviews in FY  2011, so we believe that excluding these few 
reviews does not significantly affect our results.  
This study did not analyze changes that ACF may have made to its oversight processes 
unrelated to eligibility, such as new regulations regarding grant renewal.   
 
Data Collection and Analysis  
We reviewed: (1) documents including protocols, guides, relevant laws and regulations, 
and findings letters; (2) ACFs national review schedule; (3) structured interviews with 
Head Start grantees and ACF; (4) triennial review data; and (5) complaint data from the 
Web-based hotline.  
 
Changes to ACFs Oversight of Eligibility  
Triennial Review.  We collected and analyzed FY 2010 and FY 2011 standardized review 
guides, other guidance, and national schedules, as well as interview responses, to 
determine whether and how ACF made changes to triennial reviews.   
 
We calculated the percentage of unannounced triennial reviews in FY 2010 and FY 2011.  
To do this, we analyzed ACFs national schedule of reviews and documents identifying 
grantees that received an unannounced triennial review.  We called all Head Start 
grantees that ACF identified as having received unannounced triennial reviews to 
confirm that these grantees did not receive advance written notifications with the dates of  
their reviews. Of these grantees, only one grantee stated that it received advance 
notification before the triennial review was conducted.  For the purpose of our analysis, 
we considered this grantee to have received an announced triennial review. 
 
                                                 
33 GAO,  A More  Comprehensive Risk Management Strategy and Data Improvements  Could Further 
Strengthen Program, GAO-08-221, February 2008. 
ACF Strengthened Its Oversight of Head Start Eligibility in Fiscal Year 2011 (OEI-05-11-00140)         
Page 8 of 16  George Sheldon, J.D. 
 
Erroneous Payments Study.  We collected and analyzed FY 2010 and FY 2011 protocols, 
guides, data dictionaries, and interview responses to determine whether and how ACF 
changed its Erroneous Payments Study.  
 
Web-based Hotline. We collected and analyzed data from the complaint-tracking 
database that ACF implemented.  We collected and analyzed all data since the 
Web-based hotline was developed in June 2010.  After identifying all of the 
eligibility-related complaints that ACF received via this hotline, we analyzed how 
frequently ACF investigated these complaints and what actions it took to do so.   
 
Risk Management Meetings.  We collected and analyzed FY 2010 and FY 2011 risk 
management protocols and ACF interview responses to determine whether and how ACF 
changed its risk management meetings. 
 
Assessing Grantee Compliance with Eligibility Requirements and Related Findings 
We reviewed triennial review data for the 533 Head Start grantees that received such 
reviews in the first three quarters of FY 2011 (i.e., from October 1, 2010, to 
June 30, 2011). During the fourth quarter of FY 2011, ACF performed only 4 triennial 
reviews, for an annual total of 537 such reviews. 
 
Of these 533 grantees, we analyzed triennial review data for 530 grantees.  We removed 
three grantees from our analysis:  one because we did not receive the triennial review  
data due to an administrative error, and two because ACF was still in the process of 
issuing findings letters to these grantees at the time of our review.  The triennial review  
data for the remaining 530 grantees contained eligibility information for 49,436 sampled 
children. 
 
We determined the number and percentage, by grantee, of sampled children with 
complete eligibility information on file.  We considered a grantee to have complete 
eligibility information if the verification forms for each sampled child:  (1) were present 
in the file and signed by a grantee employee, (2) indicated which documents were 
reviewed to verify eligibility, and (3) indicated the childs eligibility category.  We  
considered a grantee to be missing eligibility information if it was missing information in 
any of these components for at least one child. 
 
For the sampled children, we determined what types of source documentssuch as pay 
stubs or W-2 formswere on file, and how frequently grantees kept these documents on 
file. We also determined the number and percentage of source documents kept on file for 
sampled children at each Head Start grantee.   
 
We collected and analyzed all findings letters for grantees missing eligibility information 
for at least one child. We determined and reviewed the instances when ACF issued a 
finding related to missing eligibility information.  When written deliberations between 
ACF headquarters staff and triennial reviewers about whether to issue a finding were 
available, we reviewed those deliberations. 
 
ACF Strengthened Its Oversight of Head Start Eligibility in Fiscal Year 2011 (OEI-05-11-00140)         
Page 9 of 16  George Sheldon, J.D. 
 
We determined the average percentage of incomplete eligibility information on file 
among all grantees and among grantees that were issued findings.  To determine the 
relationship between missing eligibility information and findings, we analyzed how 
frequently ACF issued findings to grantees at varying thresholds of missing eligibility 
information.  
 
Although we combine both kinds of findingsnoncompliance and deficiencyin our 
analysis, ACF rarely issued deficiencies to grantees missing eligibility information, 
issuing a deficiency to only one such grantee.  The remaining grantees received 
noncompliances.     
 
Limitations  
We relied on data collected by triennial reviewers.  We did not independently verify these 
data. 
 
We also did not independently verify complaints received through the Web-based hotline.  
We did not speak with the regional office staff who investigated these complaints or 
obtain corroborating documentation outside of the complaint-tracking database.  
Nonetheless, we were able to determine whether complaints were related to eligibility 
and whether ACF followed up on these complaints. 
 
We analyzed and reported on data from children sampled during triennial reviews in the 
first three quarters of FY 2011.  We did not project our results to all enrolled children.  
During triennial reviews, ACF collects information from a sample of childrens files at 
each Head Start grantee.  However, ACF does not use the results from this sample to 
project to the universe of all children enrolled at that grantee.  When determining whether 
a grantee is compliant with eligibility laws, ACF relies on eligibility information 
collected from only this sample of childrens files. 
 
We could not analyze whether grantee employees disregarded any source documents.  
Any documents intentionally disregarded would likely not be on file, meaning that 
neither triennial reviewers nor OIG would see these documents when reviewing a sample 
of childrens files.  
 
Standards 
This study was conducted in accordance with the Quality Standards for Inspection and 
Evaluation issued by the Council of the Inspectors General on Integrity and Efficiency. 
 
RESULTS  
 
In FY 2011, ACF strengthened its oversight of Head Start grantees in response to 
reported problems with grantees verifying eligibility  
In response to GAOs investigation of eight Head Start grantees that disregarded 
families source documents, ACF strengthened its oversight of eligibility. ACF changed 
ACF Strengthened Its Oversight of Head Start Eligibility in Fiscal Year 2011 (OEI-05-11-00140)         
Page 10 of 16  George Sheldon, J.D. 
 
many of its preexisting oversight processes, including triennial reviews and the Erroneous 
Payments Study.  ACF did not make any changes to the risk management meetings.   
 
ACF improved oversight of grantees through new actions.  ACF promulgated draft 
regulations and developed a Web-based hotline to receive complaints. 
 
ACF took steps to strengthen its oversight of eligibility by focusing on source documents. 
At the May 2010 hearing on potential eligibility fraud, ACF committed to strengthening 
its existing oversight in response to GAOs testimony.  In FY 2011, ACF began 
examining source documents in triennial reviews and the Erroneous Payments Study.  
Even though grantees were not required in FY 2011 to maintain source documents, 
examining source documents gave ACF a more complete understanding of how grantees 
were determining childrens eligibility.  ACF also issued draft regulations that would 
require grantees to keep source documents on file in the future.  This would allow ACF to 
use source documents to perform its own assessment of childrens eligibility.   
 
In FY 2011, ACF prompted triennial reviewers to examine source documents and  record 
whether grantees kept source documents on file.  In addition, reviewers recorded whether 
verification forms identified which source documents had been initially reviewed by 
grantee staff to determine eligibility.  ACF did not collect this information in FY 2010.      
 
ACF also instructed triennial reviewers to interview grantee employees and parents of 
Head Start children to discover what source documents were provided as proof of 
eligibility. By interviewing these individuals, triennial reviewers may better understand 
what source documents were provided at the time the child was enrolled.  
 
In addition, ACF added a question to its guide for the Erroneous Payments Study 
regarding the location of source documents.  In both FY 2010 and FY 2011, ACF 
instructed reviewers for the Erroneous Payments Study to record which source 
documents were kept on file.  Beginning in FY 2011, ACF prompted reviewers to record 
the location of source documents.  Due to privacy concerns, some grantees may not keep 
source documents such as W-2 forms on file alongside the required verification forms.  
Without the prompt, reviewers for the Erroneous Payments Study in the past might have 
overlooked optional source documents kept in a separate location.     
 
In March 2011, ACF promulgated draft regulations.  Once final, these regulations will 
increase the evidence that grantees must keep on file to support their eligibility 
determinations.  These regulations would require grantees to keep source documents on 
file for all children. They would also require grantees to collect and retain signed 
statements from Head Start families attesting that the families had submitted complete 
and accurate eligibility information.  The regulations would also require grantee staff to 
attend training on verifying eligibility, including how to identify eligibility fraud and how 
to verify source documents prior to enrollment.   
 
The regulations should increase the number of grantees keeping source documents; in the 
absence of such regulations, not all grantees kept source documents on file for all 
ACF Strengthened Its Oversight of Head Start Eligibility in Fiscal Year 2011 (OEI-05-11-00140)         
Page 11 of 16  George Sheldon, J.D. 
 
children. Almost a third of grantees did not keep source documents on file for any 
children sampled in the first three quarters of FY 2011.  Only 13 percent of grantees kept 
source documents on file for all children sampled.  See Chart B-1 in Appendix B for a 
breakdown showing different types and percentages of source documents kept on file in 
the first three quarters of FY 2011. 
 
ACF began performing unannounced triennial reviews. Following the congressional 
hearing about potential eligibility-related fraud, ACF promised to conduct unannounced 
triennial reviews. ACF reviewers began performing such reviews in July 2010, 2 months 
after the hearing. Two percent of FY 2010 triennial reviews were unannounced; all were 
conducted in the final quarter of FY 2010. In FY 2011, 11 percent of triennial reviews 
were unannounced. 
 
ACF investigated complaints related to eligibility that were submitted through its new 
Web-based hotline. Following the congressional hearing, ACF created a Web-based 
hotline for complaints.  ACF advertised this Web-based hotline through an email to all 
Head Start grantees and 14,000 subscribers to Head Start-related email updates.  By 
November 2011, ACF had received 289 complaints through its Web-based hotline.  
 
Of the 289 complaints, 16 were related to eligibility.  These 16 complaints implicated 
15 separate grantees. These complaints were related to grantees and parents disregarding 
source documents, grantees  enrolling over-income children in Head Start, or grantees 
not prioritizing the neediest children for enrollment.   
 
After investigation, ACF closed all Web-based hotline complaints related to eligibility.  
For all 16 complaints, ACF did not find any evidence of wrongdoing.   
 
ACF regional staff used a variety of methods to investigate the 16 Web-based hotline 
complaints related to eligibility.  In five cases, ACF regional staff met with grantee 
employees onsite to review and discuss eligibility practices and policies.  In one case, 
ACF regional staff performed a desk review of eligibility information.  In seven cases, 
ACF regional staff had conversations with employees at the grantees in question.  In 
three cases, ACF regional staff did not document specific actions taken to investigate 
these complaints.   
 
ACFs triennial reviews found that most grantees had complete eligibility 
information for all children sampled  
Most grantees had complete eligibility information for all children sampled.  Specifically, 
79 percent of grantees (417 out of 530) had required eligibility information for all 
children sampled in the first three quarters of FY 2011.  Grantees were considered to 
have complete eligibility information if the verification forms for each sampled child:  
(1) were present and signed by grantee employees, (2) indicated which documents the 
grantee employees examined to verify the childs eligibility, and (3) indicated the childs 
eligibility category.  
 
ACF Strengthened Its Oversight of Head Start Eligibility in Fiscal Year 2011 (OEI-05-11-00140)         
Page 12 of 16  George Sheldon, J.D. 
 
The 21 percent of grantees that were missing eligibility information were usually missing 
information for few children sampled.  This group of grantees consisted of 113 of the 
530 grantees that received a triennial review in the first three quarters of FY 2011. 
 
These 113 grantees were missing eligibility information for an average of 8 percent of 
children sampled. The median percentage of information missing was 4 percent.  The 
range was less than 1 percent to 100 percent.34  Only 3 percent of all grantees were 
missing information for 11 percent or more of children sampled.  Chart 1 shows a 
breakdown of grantees by percentage of missing information. 
 
Chart 1: Percentage of Missing Eligibility Information Among Grantees  
 
Complete eligibility 
3% 
information (n=417) 
18% 
Missing eligibility information 
in 1-10% of children's files 
(n=96) 
79%  Missing eligibility information 
in 11-100%  of children's files  
(n= 17) 
 
 
Source:  OIG analysis of triennial review data from the first three quarters of FY 2011. 
 
ACF was not consistent in issuing findings to grantees missing eligibility 
information   
ACF did not issue findings to all grantees missing eligibility information.  After 
reviewing grantees data collected during triennial reviews, ACF issued findings to only 
20 of the 113 grantees missing eligibility information.  Of the 20 grantees that received a 
finding, 8 had missing eligibility information for 10 percent or less of sampled children.  
The remaining 12 grantees were missing eligibility information for 11 percent or more of 
sampled children.  
 
ACF did not always issue findings to all grantees missing similar amounts of information.  
For example, ACF issued a finding to one grantee missing information for 18 percent of 
                                                 
34 Only one grantee was missing eligibility information for 100 percent of children sampled.  This grantee 
lacked grantee signatures on all of the required verification forms, but otherwise the required forms were  
present and had complete eligibility information.    
ACF Strengthened Its Oversight of Head Start Eligibility in Fiscal Year 2011 (OEI-05-11-00140)         
Page 13 of 16  George Sheldon, J.D. 
 
sampled children.  However, ACF did not issue a finding to a grantee missing 
information for 19 percent of sampled children. 
 
Despite some inconsistency in issuing findings, ACF usually issued findings to grantees 
that were missing higher percentages of eligibility information.  ACF issued findings to 
the majority (12 of 17) of the grantees missing information for 11 percent or more of 
sampled children.  However, ACF issued findings to few (8 of 96) grantees missing 
information for 10 percent or less of sampled children.  In FY 2011, ACF did not set a 
percentage of missing eligibility information that would trigger the issuance of a finding.  
However, in practice a threshold emerged, as ACF usually issued findings to grantees 
missing information in 11 percent or more of childrens files.  Further, ACF staff reported 
developing a threshold for issuing findings in FY 2012.  See Chart 2 for a breakdown of 
grantees by percentage of missing information. 
 
Chart 2: Findings by  Percentage of Missing Eligibility  Information 
Received Finding  Did Not Receive Finding 
20% 
33% 
82% 
90% 
100% 
80% 
67% 
18% 
10% 
1% or less  2-5%  6-10%  11 -25%  More than 25% 
n=32  n=42  n=22  n=12  n=5 
 
 
Source:  OIG analysis of triennial review data from the first three quarters of FY 2011. 
   
ACF Strengthened Its Oversight of Head Start Eligibility in Fiscal Year 2011 (OEI-05-11-00140)         
Page 14 of 16  George Sheldon, J.D. 
 
 
CONCLUSION 
 
In response to a congressional request, we conducted a review of ACFs monitoring and 

oversight of Head Start eligibility.  ACF strengthened its oversight of eligibility in 

FY 2011 by improving its triennial reviews and its Erroneous Payments Study.  ACF also 

promulgated draft regulations regarding eligibility and established a Web-based hotline 

for complaints.   

 
Once final, the regulations regarding eligibility will increase the evidence that grantees 
 
must keep on file to support their eligibility verifications.  The regulations would require 

grantees to keep source documents on file for all children.  In addition, the regulations 

would require grantees to collect and retain statements signed by Head Start families.  

The statements would attest that the families had submitted complete and accurate 

eligibility information. 

 
Overall, in FY 2011 grantees largely kept required eligibility information.  However, 

ACF was not consistent in issuing findings to grantees missing eligibility information.  

ACF has already taken steps to address this slight variability in issuing findings.  In 

FY 2012, ACF staff reported setting a threshold for issuing findings related to missing 

eligibility information.  By doing so, ACF is making an effort to increase consistency in 

issuing findings to grantees. 

 
This memorandum report is being issued directly in final form because it contains no 

recommendations.  If you have comments or questions about this report, please provide 

them within 60 days.  Please refer to report number OEI-05-11-00140 in all 

correspondence. 

 
   
ACF Strengthened Its Oversight of Head Start Eligibility in Fiscal Year 2011 (OEI-05-11-00140)         
Page 15 of 16  George Sheldon, J.D.  
 
 
APPENDIX A 
   
ACF Strengthened Its Oversight of Head Start Eligibility in Fiscal Year 2011 (OEI-05-11-00140)         
Page 16 of 16  George Sheldon, J.D. 
 
APPENDIX B  
 
 
Chart B-1: Types and Percentages of Source Documents Kept on File 
 
 
30 
25 
22 
10 
8 
6 
5  5 
1  1 
 
 
 
Source:  Office of Inspector General analysis of triennial review data from the first three quarters of fiscal year 2011.     
Grantees  may have multiple source documents on file for a child; as a result, percentages exceed 100. 
 
 
ACF Strengthened Its Oversight of Head Start Eligibility in Fiscal Year 2011 (OEI-05-11-00140)