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[Federal Register Volume 76, Number 53 (Friday, March 18, 2011)]
[Proposed Rules]
[Pages 14841-14855]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2011-6326]

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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Administration for Children and Families

45 CFR Part 1305

RIN 0970-AC46

Head Start Program

AGENCY: Office of Head Start (OHS), Administration for Children and 
Families (ACF), Department of Health and Human Services (HHS).

ACTION: Notice of proposed rulemaking.

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SUMMARY: This proposed rule would amend Head Start program regulations 
to codify statutory eligibility requirements for Head Start and Early 
Head Start program enrollment and strengthen procedures to determine, 
verify, certify, and maintain records regarding eligibility for Head 
Start and Early Head Start program enrollment. It also proposes to 
create new requirements for the person seeking services to certify in a 
signed and dated statement that the documents and information that the 
person provided concerning eligibility are accurate to the best of the 
person's knowledge, as well as new requirements for program staff who 
make the eligibility determination to certify in a signed and dated 
statement that the information on eligibility in the file is accurate 
to the

[[Page 14842]]

best of the person's knowledge, and based on that information, the 
person has determined the pregnant woman or child to be eligible for 
services. In addition, it proposes to create a new requirement for 
agencies to establish policies and procedures describing the actions 
that will be taken against staff who violate eligibility determination 
requirements and requires agencies to provide training related to 
eligibility requirements and the legal consequences of committing 
fraud. The intent of this rule is to reduce substantially the risk that 
children or pregnant women who are ineligible for participation in Head 
Start or Early Head Start programs are enrolled in these programs.

DATES: In order to be considered, comments on this proposed rule must 
be received on or before April 18, 2011.

ADDRESSES: Interested persons are invited to submit comments to the 
Office of Head Start, 1250 Maryland Avenue, SW., Washington, DC 20024, 
Attention: Colleen Rathgeb, Office of Head Start, or electronically via 
the Internet at http://www.regulations.gov. If you submit a comment, 
please include your name and address, identify the docket number for 
this rulemaking (ACF-2010-XXXXX), indicate the specific section of this 
document to which each comment applies, and give the reason for each 
comment. You may submit your comments and material by electronic means, 
mail, or delivery to the address above, but please submit your comments 
and material by only one means. A copy of this Notice of Proposed 
Rulemaking may be downloaded from http://www.regulations.gov.

FOR FURTHER INFORMATION CONTACT: Colleen Rathgeb, Office of Head Start, 
202-205-7378 (not a toll-free call). Deaf and hearing impaired 
individuals may call the Federal Dual Party Relay Service at 1-800-877-
8339 between 8 a.m. and 7 p.m. Eastern Time.

SUPPLEMENTARY INFORMATION:

I. Statutory Authority

    This Notice of Proposed Rulemaking is published under the authority 
granted to the Secretary of Health and Human Services by section 644(c) 
of the Head Start Act, as amended by the Improving Head Start for 
School Readiness Act of 2007, as well as sections 645(a)(1)(A) and 
645A(c) of the Act.

II. Comment Procedures

    The Head Start Act provides for a period of at least 30 days for 
public comment. In making any modifications to this Notice of Proposed 
Rulemaking, we will not consider comments received beyond the 30-day 
comment period. To make sure your comments are fully addressed, we 
suggest the following:
     Be specific rather than general;
     Address only issues raised by the proposed rule;
     Explain reasons for any objections or recommended changes;
     Propose specific alternative language, as appropriate; and
     Reference the specific section of the proposed rule being 
addressed.

III. Background

    The Head Start program is a national program that promotes school 
readiness of low-income children by enhancing their cognitive, social, 
and emotional development through the provision of health, educational, 
nutritional, social, and other services that are determined, based on 
family needs assessments, to be necessary.
    The Head Start program provides grants to local public and private 
non-profit and for-profit agencies to provide comprehensive child 
development services to economically disadvantaged children and 
families, with a special focus on helping preschoolers develop the 
skills they need to be successful in school. In FY 1995, the Early Head 
Start program was established to serve families of economically 
disadvantaged children from birth to three years of age and pregnant 
women from such families in recognition of the mounting evidence that 
the earliest years matter a great deal to children's growth and 
development.
    On December 12, 2007, the President signed the Improving Head Start 
for School Readiness Act of 2007, Public Law 110-134. The law 
reauthorized the Head Start program through September 30, 2012, and 
built on the program's many successes. The reauthorization addressed 
the needs of children and families by focusing efforts on building 
increased systems of accountability, improving quality, and expanding 
program access. The 2007 reauthorization also made several changes to 
the eligibility criteria and related policies for participation in Head 
Start and Early Head Start programs described in Section 645 and 645A 
of the Act. The Act included homeless children as a category of 
individuals who are deemed to be from low-income families and therefore 
categorically eligible for enrollment in Head Start and Early Head 
Start, but who were not included explicitly in the previous version of 
the Act. Homeless children are among the most disadvantaged children in 
the country. Since the reauthorization, grantees have been informed of 
these changes through a Program Instruction and various policy 
clarifications related to categories of individuals that are 
categorically eligible and the definition of homeless child to be used 
to determine eligibility. However, the current regulations do not 
specify how agencies are required to verify or certify that a child is 
homeless.
    The proposed revisions to 45 CFR 1305.2 and 1305.4 directly respond 
to the findings of a recent investigation by the Government 
Accountability Office (GAO) that the Head Start program is at risk of 
having over-income children enrolled while legitimate under-income and 
categorically eligible children are put on wait lists. GAO presented 
its preliminary results about its ongoing investigation in testimony 
entitled, ``Head Start: Undercover Testing Finds Fraud and Abuse at 
Selected Head Start Centers'' before the House Education and Labor 
Committee on May 18, 2010, which is available at: http://www.gao.gov/new.items/d10733t.pdf. GAO published its final report on September 28, 
2010, which reiterated many of the findings disclosed in the May 
testimony and discussed new findings related to specific fraud 
allegations at two Head Start grantees. This report is available at: 
;http://www.gao.gov/products/GAO-10-1049.
    Specifically, in its investigation, GAO followed up on received 
allegations of fraud and abuse involving two Head Start grantees, 
including that Head Start centers allegedly manipulated recorded income 
to make over-income applicants appear under-income; encouraged families 
to report that they were homeless when they were not; enrolled more 
than 10 percent of over-income children allowed by the Head Start Act; 
and counted children as enrolled in more than one center at a time. In 
its final report, GAO states that it was able to substantiate that 
``children were enrolled in both the grantee and delegate sites,'' 
indicating that the grantee did not comply with the Head Start 
requirement to report an unduplicated count of its funded enrollment 
numbers. After further investigation of the programs alleged to have 
enrolled ineligible children by designating them as ``homeless,'' GAO 
was unable to substantiate the fraud claim because not all of the 
records reviewed contained sufficient information to determine whether 
a given family was homeless. However, GAO noted that the lack of 
requirements related to verifying and documenting a child's homeless 
status raised concerns about the risk of fraud in the Head Start 
program.
    In order to ascertain if this type of fraud was occurring at other 
Head Start

[[Page 14843]]

centers, GAO attempted to register fictitious children as part of 15 
undercover test scenarios at centers in six States and the District of 
Columbia. GAO found that in eight instances, staff at the Head Start 
centers fraudulently misrepresented information, including disregarding 
part of the families' income to register over-income children into 
under-income slots. The undercover tests revealed that seven Head Start 
employees lied about applicants' employment status or misrepresented 
their earnings. GAO concluded that ``this leaves Head Start at risk 
that over-income children may be enrolled while legitimate under-income 
children are put on wait lists.'' GAO also noted that ``at no point 
during our registrations was information submitted by GAO's fictitious 
parents verified, leaving the program at risk that dishonest persons 
could falsify earnings statements and other documents in order to 
qualify.''
    Upon learning of GAO's investigation, we immediately took numerous 
actions within our statutory and regulatory authority to respond to 
GAO's findings and to bolster program integrity efforts across the Head 
Start and Early Head Start programs; prevent future fraud and 
mismanagement; and ensure that every slot is reserved for an eligible 
child. For example, ACF issued a Program Instruction on May 10, 2010, 
entitled, ``Income Eligibility for Enrollment'' (ACF-PI-HS-10-01), 
which reminds grantees of their legal obligations to verify the 
eligibility of each child served and determine eligibility in 
accordance with the Head Start statute and regulations, as well as the 
serious consequences for falsifying eligibility determinations. The 
Program Instruction is available at: http://eclkc.ohs.acf.hhs.gov/hslc/Program%20Design%20and%20Management/Head%20Start%20Requirements/PIs/2010/resour_pri_002_051010.html. On May 17, 2010, the Secretary of 
HHS, Kathleen Sebelius, sent a letter to every Head Start and Early 
Head Start grantee in the country to underscore the serious nature of 
GAO's allegations and notify them that HHS is intensifying its 
oversight and enforcement actions. This letter is available at: http://www.hhs.gov/news/press/2010pres/05/head_start_letter.html. We also 
have begun to conduct more unannounced monitoring visits to Head Start 
grantees; have created a Web-based ``hotline'' that will allow those 
with information of impropriety of any kind to report directly to the 
Secretary of HHS; have begun to increase oversight and reviews of 
programs with identified risk factors; and will continue to use our 
authority to suspend or terminate grantees where pervasive fraud or 
misuse of funds is found.
    However, we believe GAO's findings necessitate the implementation 
of new enrollment procedures, as proposed by this regulation, in order 
to reiterate and strengthen the requirements. Therefore, we are 
proposing new requirements for Head Start and Early Head Start agency 
staff regarding verification, documentation, and certification of the 
information submitted by the applicants prior to determining if a 
pregnant woman or child is eligible for participation in a Head Start 
or Early Head Start program. This proposed regulation will ensure that 
taxpayer dollars are spent in conformance with the purpose and 
requirements of the Head Start Act and that the neediest children and 
families in our country benefit from the program's services. The 
purpose of the program, as stated in section 636 of the Head Start Act, 
is to ``promote the school readiness of low-income children'' and 
provide ``low-income children and their families of health, 
educational, nutritional, social, and other services that are 
determined, based on family needs assessments, to be necessary.'' As 
stated in sections 645 and 645A of the Head Start Act and Part 1305 of 
the current Head Start regulations, the eligibility requirements of the 
program require that, with limited exceptions, participants must be 
either ``income eligible,'' meaning the pregnant woman or family's 
income is equal to, or less than, the income guidelines (the ``official 
poverty line'') or ``categorically eligible,'' meaning that the 
individuals are eligible for participation in a Head Start or Early 
Head Start program even if the income of the pregnant woman or family 
exceeds the income guidelines due to being a member of one of the 
specific categories of individuals authorized under the Act and current 
regulations--being eligible for public assistance; being a homeless 
child; or being a child in foster care. While the Head Start Act 
provides authority for grantees to enroll a certain portion of pregnant 
women and children who are not income or categorically eligible, the 
statute nonetheless makes clear that the primary target populations for 
the Head Start and Early Head Start programs are low-income and 
categorically eligible children and their families, and, in the case of 
Early Head Start, low-income pregnant women. Therefore, most of the 
enrollment slots are reserved for pregnant women and children who are 
income or categorically eligible.
    In particular, we believe GAO's findings regarding the apparent 
fraudulent enrollment of ineligible children in Head Start slots that 
are reserved for children who are income and categorically eligible 
necessitate the implementation of new enrollment procedures to ensure 
eligible children receive Head Start services in a timely fashion and 
to prevent harm resulting from being denied access to these services. 
In the case of Head Start, if an eligible child misses all or a part of 
the year of Head Start services because an ineligible child is enrolled 
in a slot intended for the eligible child, the eligible child suffers 
real harm by being deprived of an essential educational experience 
needed to prepare him or her for success in elementary school. In the 
case of Early Head Start, if an eligible infant or toddler misses all 
or a part of the year of Early Head Start services, the child suffers 
harm by being denied participation in a program that has been shown by 
research to help children perform significantly better on a range of 
measures of cognitive, language, and social-emotional development than 
those in a randomly assigned control group and potentially to reduce 
the risk of poor cognitive, language, and school outcomes later on in 
life.
    GAO identified the lack of verification requirements as a concern 
related to enrollment fraud as they found evidence that ``Head Start 
staff encouraged parents to report that they were homeless when they 
were not in order to qualify them for the program.'' Therefore, we 
believe it is essential to issue this proposed rule to prevent cases of 
fraud in which staff intentionally enroll children based on being 
homeless, despite knowing they are ineligible. Specifically, this 
proposed regulation reflects the status of homeless children as 
categorically eligible for participation in Head Start and Early Head 
Start in order to conform to the Head Start Act and specifies how 
agency staff must verify, certify, and document in a child's record how 
they explored a claim by a child's parent, guardian, or other person(s) 
seeking services for the child who has knowledge of the family's 
situation that the child is homeless.
    We note that since GAO's findings were released, we have kept the 
Head Start grantee community, Congress, and the general public apprised 
of our increased focus on program integrity and our planned changes in 
operating procedures. In addition, these proposed requirements would 
place a minimal burden on grantees. For example, this proposed 
regulation would add a requirement for grantees to maintain source 
documents in each child and pregnant woman's record; grantees

[[Page 14844]]

already are required to review these source documents for the purposes 
of income eligibility determination, so the proposed new requirement 
would be to review source documents for categorical eligibility, as 
well as maintain copies of all source documents used to determine 
eligibility in each pregnant woman and child's eligibility 
determination record.

IV. Discussion of Regulatory Provisions

    As discussed, the findings of a recent investigation by GAO 
identified weaknesses in existing eligibility verification and 
documentation requirements that allegedly resulted in the enrollment of 
ineligible children. The proposed revisions to Sec.  1305.2 and Sec.  
1305.4 are intended to reiterate and strengthen Head Start and Early 
Head Start agency procedures for determining eligibility for program 
enrollment, including procedures to verify, certify, and document such 
eligibility, and eliminate such weaknesses. In addition, the regulation 
proposes to create a new requirement for pregnant women and parents, 
guardians, or other person(s) seeking services for the child who have 
knowledge of the family's situation to certify that they have submitted 
factual and accurate documents to be used to verify their eligibility. 
The regulation proposes to create new requirements for program staff 
who make the eligibility determination to certify that the information 
relied on in making the decision is accurate to the best of his or her 
knowledge. The regulation proposes to initiate new requirements for 
agencies to establish policies describing the actions that will be 
taken against agency staff who intentionally violate Federal and agency 
eligibility determination regulations, policies, and procedures. The 
regulation also proposes new requirements for agencies to provide 
training related to eligibility requirements and the legal consequences 
of committing fraud. The proposed revisions also change the definitions 
of ``Head Start eligible,'' ``income guidelines,'' and ``low-income 
family'' and add a definition of ``homeless children'' to conform to 
statutory requirements and provisions.
    Note that we use the term ``we'' throughout the regulatory text and 
preamble. The term ``we'' means the Secretary of the Department of 
Health and Human Services in consultation with the Assistant Secretary 
for Children and Families and other officials within the Department. 
Likewise, the term ``Act'' refers to the Head Start Act, as amended.

Section 1305.2--Definitions

    This regulation proposes to modify the definitions of ``Head Start 
eligible,'' ``income guidelines,'' and ``low-income family'' to comply 
with statutory requirements and provisions. The current definitions 
contain outdated information regarding eligibility guidelines and/or 
incorrect statutory citations that we believe must be updated in order 
to ensure all grantees have correct and clear information related to 
participant eligibility and enrollment. Otherwise, the Head Start 
program will be vulnerable to incorrect eligibility and enrollment 
determinations. To provide clarification for grantees, we also propose 
to add the definition of ``homeless children'' as paragraph (i) from 
section 725(2) of the McKinney-Vento Homeless Assistance Act (42 U.S.C. 
11434a(2)), which was added as a definition in section 637(11) of the 
Head Start Act in the 2007 reauthorization, and to redesignate the 
subsequent definitions accordingly.
    The current definition of ``Head Start eligible'' states that: ``A 
child that meets the requirements for age and family income as 
established in this regulation or, if applicable, as established by 
grantees that meet the requirements of section 645(a)(2) of the Head 
Start Act. Up to 10 percent of the children enrolled may be from 
families that exceed the low-income guidelines. Indian Tribes meeting 
the conditions specified in 45 CFR 1305.4(b)(3) are excepted from this 
limitation.'' This definition does not reflect current statutory 
eligibility requirements. For example, the rule that ``up to 10 percent 
of the children enrolled may be from families that exceed the low-
income guidelines'' was changed when the 2007 reauthorization created 
several other eligibility provisions. In addition, the definition does 
not include ``Early Head Start'' in the lead-in language. Therefore, 
the new definition of ``Head Start and Early Head Start eligible'' at 
Sec.  1305.2(g) is proposed to read as follows: ``Head Start or Early 
Head Start eligible means a pregnant woman or child who meets the 
requirements for age and family income or categorical eligibility or, 
if applicable, the requirements established by a grantee under section 
645(a)(2) of the Head Start Act or by a Head Start program operated by 
an Indian Tribe under 45 CFR Sec.  1305.4(d).''
    As indicated, we propose to add a definition in Sec.  1305.2 of 
``homeless children.'' The 2007 reauthorization expanded eligibility to 
include homeless children as categorically eligible for participation 
in Head Start. The definition of ``homeless children'' also was added 
to section 637(11) of the Head Start Act, which states that ``[t]he 
term ``homeless children'' has the meaning given the term ``homeless 
children and youth'' in section 725(2) of the McKinney-Vento Homeless 
Assistance Act (42 U.S.C. 11434a(2)).'' To improve clarity for grantees 
and enable them to have the necessary references related to eligibility 
determination in one regulation, we propose to include a definition of 
``homeless children'' based on the McKinney-Vento Homeless Assistance 
Act as Sec.  1305.2(i) to mean individuals who lack a fixed, regular, 
and adequate nighttime residence (within the meaning of 42 U.S.C. 
11302(a)(1)); and include (i) children and youths who are sharing the 
housing of other persons due to loss of housing, economic hardship, or 
a similar reason; are living in motels, hotels, trailer parks, or 
camping grounds due to the lack of alternative adequate accommodations; 
are living in emergency or transitional shelters; are abandoned in 
hospitals; or are awaiting foster care placement; (ii) children and 
youths who have a primary nighttime residence that is a public or 
private place not designed for or ordinarily used as a regular sleeping 
accommodation for human beings (within the meaning of 42 U.S.C. 
11302(a)(2)(C)); (iii) children and youths who are living in cars, 
parks, public spaces, abandoned buildings, substandard housing, bus or 
train stations, or similar settings; and (iv) migratory children (as 
such term is defined in 20 U.S.C. 6399) who qualify as homeless for the 
purposes of this part because the children are living in circumstances 
described in paragraphs (i) through (iii).
    The current definition of ``income guidelines'' at Sec.  1305.2(j) 
references an outdated section of the Head Start Act. The current 
definition defines ``income guidelines'' as ``the official poverty line 
specified in section 652 of the Head Start Act.'' However, the official 
poverty line in the Act now is referenced in the definitions section 
(section 637(19)) of the Head Start Act. Therefore, we propose to 
update Sec.  1305.2(j) to reference the correct Head Start Act citation 
and to redesignate it as paragraph (k). The proposed new definition of 
income guidelines at Sec.  1305.2(k) means the official poverty line 
specified in section 637(19) of the Head Start Act. The U.S. Department 
of Health and Human Services publishes the income guidelines each year 
in the Federal Register; they also are available at http://aspe.hhs.gov/poverty/.
    The current definition of ``low-income family'' at Sec.  1305.2(l) 
states that low-

[[Page 14845]]

income family means a family whose total annual income before taxes is 
equal to, or less than, the income guidelines. The definition also 
states that, for the purpose of eligibility, a child from a family that 
is eligible for public assistance or a child in foster care is eligible 
even if the family income exceeds the income guidelines. Public 
assistance and foster care, as well as being a homeless child, are 
classified as the three types of ``categorical eligibility'' that are 
authorized by current statute and regulations and further specified in 
this regulation. We propose to remove the public assistance and foster 
care categories of recipients currently included in the definition of 
``low-income family'' to prevent confusion and mistakes because 
agencies are not required to verify family income in these cases. We 
also propose to redesignate paragraph (l) as paragraph (m). The 
proposed definition of ``low-income family'' at Sec.  1305.2(m) only 
refers to eligibility based on the income guidelines and reads as 
follows: ``Low-income family means a family whose total income before 
taxes is equal to, or less than, the income guidelines.''

Section 1305.4--Determining, Verifying, and Documenting Eligibility

    In order to update and strengthen the content of Sec.  1305.4 
related to determining, verifying, and documenting Head Start and Early 
Head Start program eligibility consistent with the changes made through 
the 2007 reauthorization of the Head Start Act, we propose to revise 
the heading of Sec.  1305.4, ``Age of child and family income 
eligibility'' to read ``Determining, verifying, and documenting 
eligibility.''
    Because the current regulations regarding eligibility were updated 
last on March 16, 1998, prior to the 2007 reauthorization of the Head 
Start Act, these proposed revisions represent the full scope of actions 
Head Start and Early Head Start agencies are required now by statute to 
undertake related to determining participant eligibility. We propose to 
revise Sec.  1305.4 to incorporate the new income eligibility criteria 
added in the 2007 reauthorization. These proposed determination 
requirements are described in paragraphs (a) through (d). We believe 
that the lack of updated and accurate descriptions of eligibility 
criteria in the current regulations otherwise would contribute to 
confusion and enrollment determination errors by Head Start and Early 
Head Start programs.
    The current regulations require programs to verify family income 
(Sec.  1305.4(c)); identify which documents should be reviewed (Sec.  
1305.4(d)); and establish rules under which an agency must maintain a 
signed statement by an employee that identifies which documents were 
examined and stating the child is eligible (Sec.  1305.4(e)). The 
current regulations only specify that income eligibility based on 
having income below the Federal poverty line, has to be verified and do 
not require that copies of documentation be maintained in the agency 
records. We believe that the lack of clear up-to-date rules governing 
eligibility determination, verification, certification, and 
documentation requirements in the current regulations exposes the Head 
Start and Early Head Start programs to an unacceptable risk of fraud, 
as revealed by GAO's investigation.
    Therefore, as detailed later in this preamble, in paragraphs (e) to 
(g), we describe proposed requirements for agency staff to verify 
income and categorical eligibility and propose specific instructions 
about the required certification and documentation steps program staff 
must take. In paragraph (g), the regulation proposes new requirements 
for pregnant women and person(s) seeking services for individual 
children to certify that the documents and information that they 
provided concerning eligibility are accurate to the best of their 
knowledge, as well as a new requirement for the program staff persons 
who made the eligibility determination also to certify that the 
information on eligibility in the file is accurate to the best of their 
knowledge. Paragraph (g) also proposes to add new requirements related 
to documentation to ensure that agency staff maintains eligibility 
determination records for each pregnant woman or child, including 
copies of all documents submitted by a pregnant woman or persons 
seeking services on behalf of a child to the program relating to the 
pregnant woman's or child's eligibility for services and any staff 
member's notes recording any other information related to eligibility 
received from any source; documentation establishing that an agency 
staff member verified the accuracy of the information on eligibility; a 
record of the category under which the pregnant woman or child was 
determined eligible; and the required beneficiary and staff 
certifications. Additionally, paragraph (g) explains the retention and 
access requirements related to eligibility determination records.
    In paragraph (h) we propose a new requirement that all Head Start 
and Early Head Start agencies must establish policies and procedures 
describing the actions that will be taken against agency staff who 
commit intentional violations of Federal and agency eligibility 
determination requirements, including enrolling pregnant women and 
children who staff have not documented as eligible to participate in 
the program.
    In paragraph (i), we propose to extend current regulatory training 
requirements at Sec.  1304.52(l) to specify that such training for all 
governing body, policy council, management and those staff members who 
have the responsibility to make eligibility determinations must include 
an explanation of the legal consequences of committing fraud and 
information on methods for obtaining facts necessary for complete and 
accurate eligibility determinations.
    Specifically, proposed paragraph (a) reflects the statutory 
requirements at section 638 of the Act regarding age eligibility for 
participation in the Head Start program. Following the statute, we 
begin paragraph (a) by noting the exception stated in section 645(a)(2) 
of the Head Start Act, which authorizes qualifying communities to 
develop their own eligibility criteria within statutory limits. Section 
645(a)(2) applies to a Head Start program that is operated in a 
community with a population of 1,000 or less individuals and the 
following conditions apply: There is no other preschool program in the 
community; the community is located in a medically underserved area, as 
designated by the Secretary pursuant to section 330(b)(3) of the Public 
Health Service Act [42 U.S.C. 254c(b)(3)], and is located in a health 
professional shortage area, as designated by the Secretary pursuant to 
section 332(a)(1) of such Act [42 U.S.C. 254e(a)(1)]; the community is 
in a location which, by reason of remoteness, does not permit 
reasonable access to preschool and medical services; and not less than 
50 percent of the families to be served in the community are eligible 
under the eligibility criteria established by the Secretary under 
paragraph in section 645(a)(1) of the Act. A Head Start program in such 
a locality is required to establish the eligibility criteria to be 
used, except that no child residing in such community whose family is 
eligible under such eligibility criteria shall, by virtue of regular 
eligibility criteria, be denied an opportunity to participate in such 
program.
    Section 645A(c) of the Act provides that to be eligible for 
participation in Early Head Start programs, an individual must be a 
pregnant woman or a child under the age of three. Section 645(a)(5)(A) 
of the Act provides that children who are at least three years old 
through the age of compulsory school attendance are age eligible for

[[Page 14846]]

participation in Head Start programs. The current regulations at Sec.  
1305.4(a) describe age eligibility requirements as follows: ``To be 
eligible for Head Start services, a child must be at least three years 
old by the date used to determine eligibility for public school in the 
community in which the Head Start program is located, except in cases 
where the Head Start program's approved grant provides specific 
authority to serve younger children. Examples of such exceptions are 
programs serving children of migrant families and Early Head Start 
programs.'' However, the paragraph is outdated and needs to be changed 
in order to reflect current statutory provisions. We believe the lack 
of thorough and clear descriptions of age eligibility criteria could 
contribute to confusion and enrollment mistakes by Head Start and Early 
Head Start programs as they respond to the new verification procedures 
proposed through this regulation. In addition, in order to clarify 
which age eligibility requirements apply to Early Head Start 
participation versus those that apply to Head Start participation, we 
propose to create two paragraphs to distinguish the different age 
eligibility requirements for each program.
    Since the current paragraph (a) does not refer to the specific age 
eligibility requirements for Early Head Start programs, we propose in 
paragraph (a)(1)(i) that to be eligible for Early Head Start services, 
``a child must be an infant or toddler between the ages of zero and 
three years old.'' Current paragraph (a) also does not refer to the age 
eligibility of pregnant women. Therefore, we propose to add a provision 
in (a)(1)(ii) to specify that a pregnant woman may be any age in order 
to be eligible for enrollment in an Early Head Start program.
    In proposed paragraph (a)(2), we primarily state the same 
eligibility requirements currently found in paragraph (a). 
Specifically, proposed (a)(2) states that ``To be age eligible for Head 
Start services, a child must be at least three years old by the date 
used to determine eligibility for public school in the community in 
which the Head Start program is located and not older than the age of 
required school attendance, except in cases where the Head Start 
program's approved grant provides specific authority to serve younger 
children. Examples of such exceptions are programs serving children of 
migrant and seasonal farmworker families.'' The date to be used for age 
determination remains the same as the current regulation. We propose to 
remove the current exception of Early Head Start programs since we now 
explain the Early Head Start requirements separately in proposed 
paragraph (a)(1). We also propose to add reference to ``seasonal 
farmworker families'' to reflect statutory terminology.
    Under proposed paragraph (b)(1), we describe the statutory income 
eligibility requirements found in section 645(a)(1) of the Act. As 
described above with regard to paragraph (a), we begin proposed 
paragraph (b) with the exception stated in section 645(a)(2) of the 
Head Start Act, which authorizes qualifying communities to develop 
their own eligibility criteria. Proposed paragraph (b)(1) reflects the 
requirements for Head Start and Early Head Start eligibility that 
pregnant women and age eligible children from low-income families shall 
be eligible for participation in Head Start and Early Head Start 
programs.
    Proposed paragraph (b)(2) reflects the new statutory authority at 
section 645(a)(1)(B)(iii)(I) established by the 2007 reauthorization of 
the Head Start Act. This paragraph explains that to a reasonable 
extent, but not to exceed 10 percent of participants, participants may 
include age eligible children and pregnant women in the area served who 
would benefit from Head Start or Early Head Start programs, but who are 
not eligible under paragraphs (b)(1) or (c) [income or categorically 
eligible]. In order to conform to the new statutory authority that was 
provided in section 645(a)(1)(B)(iii)(I) through the 2007 
reauthorization, we reiterate in proposed paragraph (b) that programs 
may enroll pregnant women or children from over-income families ``in 
the area served who would benefit from such programs.''
    Proposed paragraph (b)(3) reflects the new statutory authority at 
section 645(a)(1)(B)(iii)(II) established by the 2007 reauthorization 
of the Head Start Act. This paragraph explains that from the area 
served, programs may enroll an additional 35 percent of participants 
beyond the 10 percent eligible under proposed paragraph (b)(2) that are 
pregnant women and age eligible children whose families have incomes 
over 100 percent but below 130 percent of the income guidelines, who do 
not satisfy the eligibility requirements described under paragraphs 
(b)(1) or (c) [income or categorically eligible]. We are reiterating 
the provision in this proposed rule to conform to the new statutory 
authority that was provided through the 2007 reauthorization.
    Proposed paragraph (b)(3)(i) specifies that agencies that choose to 
serve individuals eligible under this paragraph must establish and 
implement outreach, prioritization, and enrollment policies and 
procedures that ensure they are meeting the needs of children and 
pregnant women eligible based on being a member of a low-income family, 
as defined in this proposed rule, and enrolling at least 10 percent of 
children with disabilities who are eligible under proposed paragraph 
(b)(2), prior to serving the pregnant women and children from families 
with incomes over 100 percent to 130 percent of the income guidelines.
    In order to align the Head Start regulations with the Act, proposed 
paragraph (b)(3)(ii) also references the annual reporting requirements 
stated in section 645(a)(1)(B)(iv) of the Act for agencies that choose 
to serve additional children and pregnant women per the authority 
granted at section 645(a)(1)(B)(iii)(II) of the Act. The 2007 
reauthorization added the reporting requirement under section 
645(a)(1)(B)(iv) for all Head Start and Early Head Start agencies that 
serve additional pregnant women and children under section 
645(a)(1)(B)(iii)(II) to document how the grantees enrolling additional 
over-income children are meeting the needs of children from low-income 
families, homeless children, children in foster care, and pregnant 
women and children from families eligible for public assistance, as 
well as to document that they have implemented outreach and enrollment 
policies and procedures that ensure the agency is enrolling at least 10 
percent of children with disabilities prior to serving children from 
families with incomes over 100 percent and under 130 percent of the 
income guidelines.
    Proposed paragraph (c) describes the three types of categorical 
eligibility for Head Start and Early Head Start based on section 
645(a)(1)(B)(i) and (ii) of the Act and 45 CFR 1305.4(l).
    The first proposed type of categorical eligibility reiterates the 
eligibility condition stated in section 645(a)(1)(B)(i) of the Act that 
a child is eligible if the child's family is ``eligible or, in the 
absence of child care, would potentially be eligible for public 
assistance.'' In addition, children and pregnant women are eligible 
under the proposed regulation for Early Head Start based on section 
645A(c) of the Head Start Act, which makes the eligibility criteria in 
section 645(a)(1) of the Act applicable to the enrollment of children 
and pregnant women in Early Head Start programs. As provided in policy 
guidance, TANF and SSI are the only two programs that are considered as

[[Page 14847]]

public assistance for determining Head Start Eligibility.
    The second proposed type of categorical eligibility specifies that 
a homeless child is eligible for participation, as stated in section 
645(a)(1)(B)(ii) of the Act. Section 645A(c) of the Head Start Act 
makes the eligibility criteria in section 645(a)(1) of the Act 
applicable to the enrollment of children and pregnant women in Early 
Head Start programs. As described earlier, the 2007 reauthorization 
added the provision stating that homeless children are categorically 
eligible for participation in Head Start. The definition of ``homeless 
children'' also was added to section 637(11) of the Head Start Act, 
which states that ``[t]he term ``homeless children'' has the meaning 
given the term ``homeless children and youth'' in section 725(2) of the 
McKinney-Vento Homeless Assistance Act (42 U.S.C. 11434a(2)).'' As 
stated previously, we propose to add this definition of ``homeless 
children'' to Sec.  1305.2(i) to improve clarity for grantees.
    The third type of categorical eligibility proposes that children in 
foster care are eligible for participation, which already is specified 
in the current definition of ``low-income family'' in Sec.  1305.2(l) 
(proposed to be redesignated as Sec.  1305.2(m)). It has been 
longstanding Head Start policy for foster children to be eligible for 
participation in Head Start, without regard to their foster family's 
income. We propose in paragraph (c) to add a reference to the 
regulatory definition of foster care used for Federal child welfare 
programs to this Head Start rule to enable grantees to conduct the 
eligibility determination process accurately and consistently. We 
propose to reference 45 CFR 1355.20(a), which defines foster care to 
mean ``24-hour substitute care for children placed away from their 
parents or guardians and for whom the State agency has placement and 
care responsibility. This includes, but is not limited to, placements 
in foster family homes, foster homes of relatives, group homes, 
emergency shelters, residential facilities, child care institutions, 
and preadoptive homes. A child is in foster care in accordance with 
this definition regardless of whether the foster care facility is 
licensed and payments are made by the State or local agency for the 
care of the child, whether adoption subsidy payments are being made 
prior to the finalization of an adoption, or whether there is Federal 
matching of any payments that are made.''
    In summary, proposed paragraph (c) provides that pregnant women and 
age eligible children are categorically eligible for enrollment in Head 
Start and Early Head Start if: (1) The pregnant woman or the child's 
family is eligible or, in the absence of child care, would potentially 
be eligible for public assistance; (2) the child is homeless, as 
defined in Sec.  1305.2(i); or (3) the child is in foster care.
    In proposed paragraph (d), we move the requirements and procedures 
related to the special income eligibility rules governing Indian Tribes 
that are reflected currently in Sec.  1305.4(b)(3) and (4) to proposed 
paragraph (d)(1) through (5). The current paragraph only includes 
references to income eligibility based on the low-income guidelines, 
but does not include references to categorical eligibility. Therefore, 
we also propose to update this paragraph to conform to the statutory 
authority.
    Under the proposed paragraph, a Head Start or Early Head Start 
program operated by an Indian Tribe may enroll more than 10 percent of 
its children from families whose incomes exceed the low-income 
guidelines or are not categorically eligible when:
     All children from Indian and non-Indian families living on 
the reservation that meet the low-income guidelines or are 
categorically eligible who wish to be enrolled in the program are 
served by the program;
     All children from income-eligible or categorically-
eligible Indian families native to the reservation living in non-
reservation areas, approved as part of the Tribe's service area, who 
wish to be enrolled in the program are served by the program. In those 
instances in which the non-reservation area is not served by another 
Head Start or Early Head Start program, the Tribe must serve all of the 
income-eligible and categorically-eligible Indian and non-Indian 
children whose families wish to enroll them in the program prior to 
serving over-income children;
     The Tribe has the resources within its grant or from other 
non-Federal sources to enroll children from families whose incomes 
exceed the low-income guidelines or are not categorically eligible 
without using additional funds from HHS intended to expand Head Start 
or Early Head Start services; and
     At least 51 percent of the children to be served by the 
program are from families that meet the income-eligibility guidelines 
or are categorically eligible.
    Proposed paragraph (d)(5) maintains the content from current Sec.  
1305.4(b)(4), but updates the reference in this provision from 
paragraph (b)(3) to paragraph (d). The paragraph proposes that programs 
which meet the conditions of paragraph (d) must annually set criteria 
that are approved by the Policy Council and the Tribal Council for 
selecting over-income children who would benefit from such a program.
    Proposed paragraph (e) would establish requirements for family 
income to be verified before a child or pregnant woman is determined to 
be eligible for Head Start or Early Head Start participation based on 
being a member of a low-income family. We propose adding these income 
verification requirements to respond to GAO's findings and concerns 
related to the lack of requirements in many programs to verify, 
document, and maintain records. This proposed income verification 
process would reduce the risk GAO cited whereby ``dishonest persons 
could falsify earnings statements and other documents in order to 
qualify.'' This responds directly to GAO's recommendation that we 
establish ``more stringent income verification requirements, 
documentation requirements, or both by Head Start employees responsible 
for certifying family eligibility, such as maintaining income 
documentation provided by the applicant (e.g., pay stubs or W-2s).'' 
Moreover, we have communicated to the public and to grantees on several 
occasions that we would be addressing GAO's findings by strengthening 
our verification requirements. For example, Secretary Sebelius provided 
notice to all grantees through her May 17, 2010 letter that we would be 
developing new regulations ``that will address verification 
requirements.''
    Proposed paragraph (e) incorporates the current regulatory 
requirement related to income verification in Sec.  1305.4(c), which 
requires that family income must be verified by the Head Start or Early 
Head Start program before determining that a child is eligible based on 
income guidelines. We propose to continue the longstanding requirement 
that family income must be verified prior to determining eligibility 
for enrollment in a Head Start or Early Head Start program. As defined 
in proposed Sec.  1305.2(b), the term ``enrollment'' means ``the 
official acceptance of a family by a Head Start program and the 
completion of all procedures necessary for a child and family to begin 
receiving services.''
    Paragraph (e) proposes a new requirement related to a pregnant 
woman's or family's declaration that the pregnant woman or family has 
no income. Currently, there are no regulations that specify what 
actions agencies should take when a pregnant woman or a child's parent, 
guardian, or other person(s) seeking services for the

[[Page 14848]]

child who has knowledge of the family's finances states that the 
pregnant woman or family has no income to report. We recognize the 
difficulty Head Start and Early Head Start agencies face in obtaining 
documentation supporting a declaration that an individual has no 
income. Therefore, in such cases when a pregnant woman or family 
reports having no income and submits no documentation proving that the 
pregnant woman or family has no income, proposed paragraph (e) would 
require agency staff to document that they explored a pregnant woman or 
family's declaration that they have no income. For example, programs 
should gather as much relevant information as possible about the 
pregnant woman or family; i.e., the location, living arrangements, 
employment situation, etc. of the pregnant woman or family to make as 
informed a judgment as possible about the pregnant woman or family's 
eligibility status. Agencies may examine and maintain documentation 
representing relevant evidence of a pregnant woman or family's low-
income status, such as receipt of Supplemental Nutrition Assistance 
Program (SNAP) or Medicaid benefits, or any other evidence of public or 
private assistance by which a family with children is meeting its 
ongoing needs for food, housing, and health care.
    Accordingly, under proposed paragraph (e), before a child or 
pregnant woman is determined to be eligible on the basis of family 
income, the pregnant woman or the child's parent, guardian, or other 
person(s) seeking services for the child who has knowledge of the 
family's finances must submit information to the program concerning the 
family's income. Under the proposed rule, verification must include 
examination of documents, such as individual income tax forms, W-2 
forms, pay stubs, pay envelopes, or written statements from employers 
(if individual income tax forms, W-2 forms, pay stubs, or pay envelopes 
are not available). Income would be required to be compared to the 
poverty guidelines for the appropriate size of family, and program 
staff would need to document whether a pregnant woman or child's family 
qualifies as a low-income family under the income guidelines for the 
appropriate size of family. Under the proposed rule, when appropriate, 
in cases in which no documentation regarding the income eligibility of 
the pregnant woman or child has been received by the agency, or when it 
is either more efficient or reliable to do so rather than to search for 
eligibility documentation, programs could seek information from third 
parties who have first-hand knowledge about the pregnant woman's or 
child's eligibility, and document the names, titles, and relationship 
to the applicant in the participant's record. Programs also could seek 
third party information in cases where documents are not submitted to 
prove a claim that a pregnant woman or family has no income. We believe 
all applicants must be given the opportunity to withhold consent 
related to each third party the program would like to contact. 
Therefore, we propose that if programs plan to seek third party 
verification from one or more entities regarding an applicant's 
eligibility, staff must inform the applicant about each entity that 
they intend to contact and have the applicant sign a consent form 
permitting the program to contact each of the specified third parties; 
this would provide applicants the opportunity to withhold their consent 
for third party verification from one or more entities. If applicants 
do not sign the consent form, the Head Start program would not be 
allowed to contact that entity and the applicant would remain 
responsible for providing appropriate documentation. We also propose 
that when programs contact third parties, they should limit the 
information discussed and questions posed to the third party to the 
information necessary to obtain the required eligibility information. 
Programs should be especially sensitive to any potential domestic 
violence issues prior to seeking verification of the required 
eligibility information.
    In paragraph (f), we propose to require agencies to verify and 
document categorical eligibility before a pregnant woman or child is 
determined to be eligible for Head Start or Early Head Start 
participation. We propose to require the pregnant woman or the child's 
parent, guardian or other person(s) seeking services for the child who 
has knowledge of the family's situation to submit information to the 
program concerning the family's categorical eligibility. As proposed, 
verification of categorical eligibility by the program must include 
examination of the relevant documents submitted by the pregnant woman 
or family for the relevant type of categorical eligibility, as 
described below. If a pregnant woman or child could qualify for Head 
Start or Early Head Start participation based on more than one 
eligibility criterion, then the program should enroll the child under 
the criterion that is easiest to verify and document; it would not be 
necessary to verify and document multiple eligibility criteria.
    The first requirement in proposed paragraph (f)(1) addresses 
categorical eligibility based on eligibility for public assistance. 
This proposal aligns with the requirement currently at Sec.  1305.4(d), 
which specifies that verification of family income ``must include 
examination of * * * documentation showing current status as recipients 
of public assistance.'' Under proposed paragraph (f)(1), we require 
agency staff to examine any official documents submitted for the 
purpose of demonstrating that the pregnant woman, the child, or child's 
parent or guardian, is eligible or, in the absence of child care, would 
potentially be eligible for public assistance. Based on Federal Head 
Start grantee monitoring experience, we are aware that some agencies 
already have developed policies and procedures, or practices, for 
verifying public assistance eligibility or receipt status. Since the 
substance of this proposed requirement is based on current practice by 
many grantees, we do not believe this would impose a large burden.
    Under proposed paragraph (f), in cases in which a child is in 
foster care, we add a new requirement for agency staff to review a copy 
of a court order, other legal or government-issued document, or a 
statement of a State, Tribal, or local child welfare official 
demonstrating the child is in foster care. The current regulations do 
not require agencies to verify or document foster care status. Based on 
Federal Head Start grantee monitoring experience, we are aware that 
some agencies already have developed policies and procedures, or 
practices, for verifying foster care status through their 
collaborations with local child welfare agencies. Since the substance 
of this requirement is based on current practice by many grantees, we 
do not believe this proposed requirement would impose a large burden.
    Proposed paragraph (f) also adds a new provision to address cases 
when documents are not submitted to provide evidence of a child's 
status as homeless. Under proposed paragraph (f)(3), in lieu of other 
source documents, the program could substitute a written statement of a 
program staff member certifying that he or she has made reasonable 
effort to confirm a declaration by the parent, guardian, or other 
person(s) seeking services for the child that the child is a ``homeless 
child,'' as defined in Sec.  1305.2(i). As stated previously, the 2007 
reauthorization added homeless children as a category of individuals 
that are categorically eligible for enrollment. The current regulations 
do not specify how agencies should verify

[[Page 14849]]

that a child is homeless. We believe it is essential for program 
integrity, especially in light of GAO's recent investigation into 
allegations that grantees enrolled children who were known by agency 
staff not to be homeless, to require that homelessness must be 
verified, and documentation must be maintained in the agency's files 
(as described in proposed paragraph (g)), in order to prevent cases of 
fraud in which staff intentionally enroll children based on being 
homeless despite knowing they are not. We recognize that obtaining 
verification and documentation of the circumstances that fall within 
the Federal definition of homeless children can present unique 
challenges to Head Start and Early Head Start agencies and to 
vulnerable families. We would encourage agencies to enroll homeless 
children based on the families' description of their living situation, 
if that description meets the definition and documentation is not 
readily available. Statements that describe the living situation also 
could be accepted from family members and other individuals that are 
cohabitating temporarily with the family. As proposed, verification of 
circumstances and collection of documents should be obtained within a 
reasonable timeframe. In order to verify homelessness, we would 
encourage grantees to conduct the following types of efforts: Engage 
their school district homeless liaisons, private and public shelter 
providers, HUD Continuums of Care, and other homeless service agencies 
in their service area to assist in the verification and documentation 
process. We also would urge agencies to exercise care to ensure that 
their verification activities do not increase the risk that families 
may be evicted or suffer other resulting adverse consequences. In 
addition, we would urge agencies to ensure that these efforts do not 
impose barriers to the enrollment and participation of homeless 
children in Head Start programs, an important goal expressed in the 
Head Start Act.
    Paragraph (f) proposes that, before a child or pregnant woman is 
determined to be eligible on the basis of categorical eligibility, the 
pregnant woman or the child's parent, guardian, or other person(s) 
seeking services for the child who has knowledge of the family's 
situation must provide the program with: (1) A copy of official 
documents demonstrating current eligibility or receipt of public 
assistance benefits or services by the pregnant woman's or the child's 
family; (2) a copy of the court order or other legal or government-
issued document or statement of government child welfare official 
demonstrating the child is in foster care; or (3) a copy of any other 
source document that establishes categorical eligibility. Under the 
proposal, in place of the foregoing documents, the program could 
substitute a written statement of a program staff member certifying 
that the staff member has made reasonable efforts to confirm a child is 
homeless, as defined in proposed Sec.  1305.2(i). The lack of 
documentation of homelessness should not be a barrier to enrollment. 
Under the proposal, when appropriate, in cases in which no 
documentation regarding the income eligibility of the pregnant woman or 
child has been received by the agency, or when it is either more 
efficient or reliable to do so rather than to search for eligibility 
documentation, programs could seek information from third parties who 
have first-hand knowledge about the pregnant woman's or child's 
eligibility, and document the names, titles, and relationship to the 
applicant in the participant's record. As proposed, programs also could 
seek third party information in cases where documents are not submitted 
to prove a claim that a pregnant woman or family has no income. We 
propose that if programs plan to seek third party verification from one 
or more entities regarding an applicant's eligibility, staff must 
inform the applicant about each entity that they intend to contact. In 
addition, the applicant would be required to sign a consent form 
permitting the program to contact specified third parties; this would 
provide applicants the opportunity to withhold their consent for third 
party verification from one or more entities. An applicant must be 
given the opportunity to withhold consent related to each entity the 
program would like to contact. If applicants do not sign the consent 
form the Head Start program could not contact that entity and the 
applicant would remain responsible for providing appropriate 
documentation. We propose that when programs contact third parties, 
they should limit the information discussed and questions posed to the 
third party to the information necessary to obtain the required 
eligibility information. Programs should be especially sensitive to any 
potential domestic violence issues prior to seeking verification of the 
required eligibility information.
    In proposed paragraph (g), we strengthen and supplement current 
regulatory requirements related to eligibility certification and 
documentation to respond to GAO's finding that ``the lack of 
documentation made it virtually impossible to determine whether only 
under-income children were enrolled in spots reserved for under-income 
children'' and its recommendations that we establish ``more stringent 
income verification requirements, documentation requirements, or both 
by Head Start employees responsible for certifying family eligibility, 
such as maintaining income documentation provided by the applicant 
(e.g., pay stubs or W-2s).'' As previously mentioned, current 
regulations require a signed statement by an employee of the Head Start 
program, identifying which documents were examined and stating that the 
child is eligible to participate in the program, but do not require 
staff to maintain copies of the documents.
    First, this proposed paragraph requires all Head Start and Early 
Head Start programs to keep an eligibility determination record for 
each child or pregnant woman as part of the record maintained by the 
agency on that individual. Proposed paragraph (g)(1) requires this 
record to include copies of all documents submitted by a pregnant woman 
or persons seeking services on behalf of a child to the program by such 
persons or other persons relating to the pregnant woman's or child's 
eligibility for services and any staff member's notes recording any 
other information related to eligibility received from any source.
    Proposed paragraph (g)(2) requires the record to include a copy of 
the statements and documents required under proposed paragraphs (e) and 
(f) (related to income and categorical eligibility). Based on Federal 
Head Start grantee monitoring experience, we are aware that some 
agencies already have developed policies and procedures, or practices, 
for maintaining copies of documents verified during eligibility 
determination. Since the substance of this requirement is based on 
current practice by some grantees, we do not believe this proposed 
requirement would impose a large burden.
    Proposed paragraph (g)(3) requires that the record also includes a 
signed and dated statement by the person seeking services, i.e., the 
pregnant woman or the child's parent, guardian, or other person seeking 
services for the child who has knowledge of the family's situation that 
``the documents and information that the person provided concerning 
eligibility are accurate to the best of the person's knowledge.''
    Proposed paragraph (g)(4) requires the record to include 
documentation establishing that an agency staff member has sought to 
verify the accuracy of the information on eligibility provided to

[[Page 14850]]

the agency by: (i) Conducting an in-person interview with the pregnant 
woman or the child's parent, guardian, or other person seeking services 
for the child who has knowledge of the family's situation; and (ii) 
when appropriate, in cases in which no documentation regarding the 
income eligibility of the pregnant woman or the child's family or 
regarding the categorical eligibility of the child based on being 
homeless has been received by the agency, or when it is either more 
efficient or reliable to do so rather than to search for eligibility 
documentation, seeking information from third parties who have first-
hand knowledge about the pregnant woman's or child's eligibility, whose 
names, titles, and affiliations would be recorded in the record. If 
programs seek third party verification regarding an applicant's 
eligibility, the record would be required to include the applicant's 
signed consent form permitting the program to contact each particular 
third party, as required under proposed paragraphs (e) and (f).
    Proposed paragraph (g)(5) requires the eligibility determination 
record to include documentation of the specific eligibility criterion 
under which the child or pregnant woman was determined eligible for 
participation. As stated above, under the proposed rule, if a pregnant 
woman or child could qualify for Head Start or Early Head Start 
participation based on more than one eligibility criterion, then the 
program should enroll the child under the criterion that is easiest to 
verify and document; it would not be necessary to verify and document 
multiple eligibility criteria. This includes a record of the income 
level or relevant eligibility category, as addressed in proposed 
paragraphs (b) and (c). The first criterion under which the child or 
pregnant woman could be determined eligible is based on having income 
below the income guideline for the family size, with the family size 
used documented, as described in proposed paragraph (b). The second 
criterion under which the child or pregnant woman could be determined 
eligible is whether the child's family or pregnant woman is eligible 
or, in the absence of child care, would potentially be eligible for 
public assistance, as described in proposed paragraph (c)(1). The third 
criterion, as stated in proposed paragraph (c)(2), is based on being a 
homeless child, as defined in proposed Sec.  1305.2(i). The record also 
would need to include the provision of proposed Sec.  1305.2(i) under 
which the child was determined to be homeless. The fourth criterion is 
whether the child is in foster care, as proposed in paragraph (c)(3). 
The fifth criterion, as proposed in paragraph (b)(2), is being a 
pregnant woman or child in the area served who would benefit from such 
programs but who is not eligible otherwise for services (total 
enrollment in this category not to exceed 10 percent of the enrollment 
slots). The sixth criterion under which the pregnant woman or child 
could be determined eligible, which is described in proposed paragraph 
(b)(3), is whether the pregnant woman or child's family has income over 
100 percent to 130 percent of the income guidelines (total enrollment 
in this category not to exceed 35 percent of the enrollment slots, in 
addition to any slots filled under paragraph (b)(2)). The final 
proposed criterion under which the pregnant woman or child could be 
determined eligible is whether the pregnant woman or child meets 
alternative eligibility criteria as permitted under Sec.  1305.4(d) or 
section 645(a)(2) of the Act.
    Proposed paragraph (g)(6) also adds a new Head Start staff 
certification requirement in direct response to GAO's aforementioned 
recommendation to establish ``more stringent income verification 
requirements, documentation requirements, or both by Head Start 
employees responsible for certifying family eligibility.'' The proposed 
paragraph requires the record to include a signed and dated statement 
by the program staff person who made the eligibility determination 
certifying that the information on eligibility in the file is accurate 
to the best of the person's knowledge, and based on that information, 
the person has determined the pregnant woman or child to be eligible 
for services.
    Finally, proposed paragraph (g)(7) specifies the record retention 
and access requirements for the documents and certifications maintained 
in each child and pregnant woman's record under this paragraph. These 
record retention and access practices must be consistent with section 
647 of the Head Start Act and the uniform administrative requirement 
regulations regarding HHS grant awards implemented at 45 CFR 74.53 for 
awards and subawards to institutions of higher education, hospitals, 
other nonprofit organizations, and commercial organizations and 45 CFR 
92.42 for grants and cooperative agreements to State, local, and Tribal 
governments. Among other requirements, Section 647 states that all 
grant recipients to ``keep such records as the Secretary shall 
prescribe'' and provide ``access for the purpose of audit and 
examination to any books, documents, papers, and records of the 
recipients that are pertinent to the financial assistance received'' 
under the Head Start Act. A key requirement explained in both 45 CFR 
74.53 and 92.42 is that documents shall be retained for a period of 
three years. Additionally, both of these sections state requirements 
related to the right of access by the HHS awarding agency, the U.S. 
Comptroller General, or any of their authorized representatives, to any 
pertinent books, documents, papers, or other records of recipients in 
order to make audits, examinations, excerpts, transcripts and copies of 
such documents. We have included a reference to these longstanding 
Departmental policies in order to respond to GAO's concerns that 
agencies were not required to maintain documents related to enrollment. 
This requirement will ensure that documents and certifications required 
to be maintained under this paragraph are retained for the appropriate 
amount of time and are accessible to the Office of Head Start and other 
Federal agencies, such as the HHS Inspector General and the GAO, as 
needed for monitoring, audit, investigative, and other purposes.
    Proposed paragraph (h) addresses the establishment of agency 
policies regarding violation of eligibility determination regulations, 
policies, and procedures. Under this paragraph, we propose that all 
Head Start and Early Head Start agencies must establish policies and 
procedures describing the actions that will be taken against agency 
staff who commit intentional violations of Federal and agency 
eligibility determination regulations, policies and procedures 
including enrolling children and pregnant women who staff have not 
documented as eligible to participate in the program. We believe this 
proposed requirement is necessary in order to prevent future incidents 
of fraud like those found in the GAO investigation and to make clear to 
all agency staff the legal consequences of intentionally committing 
enrollment fraud.
    Proposed paragraph (i), ``Training,'' requires that all Head Start 
and Early Head Start agencies train all governing body, policy council, 
management and those staff members who have the responsibility to make 
participant eligibility determinations on Federal and agency 
eligibility regulations, policies, and procedures, including 
verification, certification, and documentation requirements. The 
requirements in proposed paragraph (i) are an extension of current 
requirements stated at Sec.  1304.50(g)(1) that grantee and delegate 
agencies must have written policies that define the roles and 
responsibilities of the governing body

[[Page 14851]]

members and inform them of the management procedures and functions 
necessary to implement a high-quality program. They also would expand 
on current requirements stated at Sec.  1304.52(l) that the training 
and development requirements that grantee and delegate agencies must 
implement, including to provide an orientation to new staff, 
consultants, and volunteers; provide training or orientation to Head 
Start and Early Head Start governing body members; and provide 
orientation and ongoing training to Head Start and Early Head Start 
Policy Council and Policy Committee members to enable them to carry out 
their program governance responsibilities effectively.
    We have communicated to the public and to grantees on several 
occasions that we would be addressing GAO's findings by strengthening 
our training requirements. For example, we told GAO after it shared its 
investigation findings that we would ``make sure that grantee staff 
received training regarding the proper way to validate income 
documentation;'' this assurance was documented and shared publicly in 
GAO's May 18, 2010 testimony in the section entitled ``Corrective 
Action Briefing.'' In addition, Secretary Sebelius provided notice to 
all grantees through her May 17, 2010 letter that we would be 
developing new regulations to address ``staff training on eligibility 
criteria and procedures.''
    Proposed paragraph (i) specifies that the training must be 
conducted within 30 days following the effective date of this final 
rule, and within 30 days of hiring or beginning of tenure of new 
governing body, policy council, management and those staff members who 
have the responsibility to make participant eligibility determinations. 
We propose to require agencies to develop policies regarding how often 
such training would be provided after the initial training to ensure 
that governing body, policy council, management and those staff members 
who have the responsibility to make participant eligibility 
determinations are aware of all current eligibility determination 
regulations, policies and procedures. The National Center on Program 
Management and Fiscal Operations will be developing training assistance 
on this topic to assist grantees.
    We propose to require the training to include explanations of the 
legal consequences for individuals and agencies that commit fraud 
related to eligibility determinations, including by intentionally 
enrolling children or pregnant women that they know are ineligible. 
Examples of legal consequences to be explained during training include 
the disallowance of the agency's Head Start or Early Head Start funds; 
the determination of deficiencies through the monitoring review 
process; the suspension or termination of the grant; or individual 
consequences for the staff involved who intentionally commit fraud. We 
also would require such training to address methods and strategies for 
obtaining facts necessary for complete and accurate eligibility 
determinations. These methods and strategies would need to address 
treating families with dignity and respect and give due regard for 
possible issues of domestic violence, stigma, and privacy. We propose 
to require all agencies to maintain ongoing records of training 
sessions. Examples of information that would need to be documented 
include: The dates sessions were conducted, instructor names and 
titles, and attendee names.

V. Paperwork Reduction Act

    This proposed rule establishes new information collection 
requirements in Sec.  1305.4(b), (e), (f), and (g). As required by the 
Paperwork Reduction Act of 1995, codified at 44 U.S.C. 3507, the 
Administration for Children and Families will submit a copy of these 
sections to the Office of Management and Budget (OMB) for review and 
they will not be effective until they have been approved and assigned a 
clearance number.

----------------------------------------------------------------------------------------------------------------
                                                                                      Average
                                                                                    burden per     Total burden
              Requirement                 Respondents            Annual             respondent         hours
                                                                                      (hours)
----------------------------------------------------------------------------------------------------------------
Sec.   1305.4(b)(3)(ii)...............              10  1.......................               2              20
Sec.   1305.4(e) and (f)..............           1,600  (should reflect info                   2           3,200
                                                         collections for each
                                                         applicant).
Sec.   1305.4(g)......................           1,600  (should reflect info                   2           3,200
                                                         collections for each
                                                         applicant).
----------------------------------------------------------------------------------------------------------------

    We estimate the costs of implementing these proposed requirements 
would be approximately $132,188 annually. We calculated this estimate 
by multiplying the average hourly salary for family services 
coordinators ($20.59) by the estimated total burden hours (6,420).
    With respect to these provisions, the Administration for Children 
and Families will consider comment by the public on this collection of 
information in the following areas:
     Evaluating whether the proposed collection is necessary 
for the proper performance of the functions of ACF, including whether 
the information will have practical utility;
     Evaluating the accuracy of ACF's estimate of the proposed 
collection of information, including the validity of the methodology 
and the assumptions used;
     Enhancing the quality, usefulness, and clarity of the 
information to be collected; and
     Minimizing the burden of the collection of information on 
those who are to respond, including through the use of appropriate 
automated, electronic, mechanical, or other technology, e.g., 
permitting electronic submission of responses.
    OMB is required to make a decision concerning the collection of 
information contained in this proposed regulation between 30 and 60 
days after publication of this document in the Federal Register. 
Therefore, a comment is best assured of having its full effect if OMB 
receives it within 30 days of publication. This does not affect the 
deadline for the public to comment to the Department on the 
regulations. Written comments to OMB for the proposed information 
collection should be sent directly to the following: Office of 
Management and Budget, either by fax to 202-395-6974 or by e-mail to 
OIRA at submission@omb.eop.gov. Please mark faxes and e-mails to the 
attention of the desk officer for ACF.

VI. Regulatory Flexibility Act

    The Secretary certifies that, under 5 U.S.C. 605(b), as enacted by 
the Regulatory Flexibility Act (Pub. L. 96-354), this proposed rule 
will not result in a significant economic impact on a substantial 
number of small entities.

[[Page 14852]]

This proposed rule primarily is intended to ensure accountability for 
Federal funds consistent with the purposes of the Head Start Act and is 
not duplicative of other requirements. We believe this proposed rule 
implements the aims of the Head Start Act, as amended, to improve the 
effectiveness of Head Start programs while preserving the ability of 
Head Start grantees to continue using creativity and innovation to 
promote the school readiness of low-income children.
    Specifically, as noted under the Paperwork Reduction Act section of 
this preamble, we estimate the cost of implementing the proposed new 
reporting requirements would be approximately $132,188 annually, which 
when applied to all 1,600 grantees nationally, results in a cost per 
grantee of less than $85. In developing this estimate, we assumed that 
each of the 1,600 Head Start and Early Head Start grantees would spend 
an additional four hours beyond what they spend currently to conduct 
the proposed new eligibility verification, certification, and 
documentation procedures, as required by paragraphs (e) through (g). 
Included in our estimated annual costs are the minimal costs incurred 
by those grantees that choose to serve additional pregnant women and 
children per the authority granted at section 645(a)(1)(B)(iii)(II) of 
the Head Start Act, and therefore would be required to comply with the 
annual reporting requirements described in section 645(a)(1)(B)(iv) of 
the Head Start Act and paragraph (b)(3)(ii) of this proposed rule. 
Since no grantees have taken the opportunity to serve additional 
pregnant women and children per the authority granted at section 
645(a)(1)(B)(iii)(II) of the Head Start Act to date, our reasonable 
expectation is that approximately 10 grantees per year might choose to 
use this authority in the future, at a total estimated cost of $412 per 
year.
    We request public comments on whether we have adequately considered 
all costs for small entities.

VII. Regulatory Impact Analysis

    Executive Order 12866 requires that regulations be reviewed to 
ensure that they are consistent with the priorities and principles set 
forth in the Executive Order. The Department has determined that this 
Notice of Proposed Rulemaking is consistent with these priorities and 
principles. These regulations incorporate statutory changes to the Head 
Start program enacted in the Improving Head Start for School Readiness 
Act of 2007 and strengthen procedures to determine, verify, certify, 
and maintain records regarding eligibility for Head Start and Early 
Head Start program enrollment. We have consulted with the Office of 
Management and Budget (OMB) and determined that these proposed rules 
meet the criteria for a significant regulatory action under E.O. 12866.
    ACF does not believe there would be a significant economic impact 
from this proposed regulatory action. Based on our estimate described 
under the Paperwork Reduction Act section of this preamble, the total 
cost would fall well below the $100 million threshold. The estimated 
total cost of implementation of these rules for all grantees is 
approximately $132,188 annually.

VIII. Unfunded Mandates Reform Act of 1995

    Section 202 of the Unfunded Mandates Reform Act of 1995 requires 
that a covered agency prepare a budgetary impact statement before 
promulgating a rule that includes any Federal mandate that may result 
in the expenditure by State, local, and Tribal governments, in the 
aggregate, or by the private sector, of $100 million or more in any one 
year. If an agency must prepare a budgetary impact statement, section 
205 requires that it select the most cost-effective and least 
burdensome alternative that achieves the objectives of the rule 
consistent with the statutory requirements. Section 203 requires a plan 
for informing and advising any small government that may be 
significantly or uniquely impacted. The Department has determined that 
this proposed rule would not impose a mandate that will result in the 
expenditure by State, local, and Tribal governments, in the aggregate, 
or by the private sector, of more than $100 million in any one year.

IX. Congressional Review

    This regulation is not a major rule as defined in 5 U.S.C. Chapter 
8.

X. Executive Order 13132

    Executive Order 13132, Federalism, requires that Federal agencies 
consult with State and local government officials in the development of 
regulatory policies with federalism implications. This proposed rule 
will not have substantial direct impact on the States, on the 
relationship between the National Government and the States, or on the 
distribution of power and responsibilities among the various levels of 
government. Therefore, in accordance with section 6 of Executive Order 
13132, it is determined that this proposed rule does not have 
sufficient federalism implications to warrant the preparation of a 
federalism summary impact statement.

XI. Treasury and General Government Appropriations Act of 1999

    Section 654 of the Treasury and General Government Appropriations 
Act of 1999 (Pub. L. 105-277) requires Federal agencies to issue a 
Family Policymaking Assessment for any rule that may affect family 
well-being. This proposed rule would not have any impact on the 
autonomy or integrity of the family as an institution. Accordingly, HHS 
has concluded that it is not necessary to prepare a Family Policymaking 
Assessment.

List of Subjects in 45 CFR Part 1305

    Education of disadvantaged, Grant programs/social programs, 
Individuals with disabilities.

(Catalog of Federal Domestic Assistance Program Number 93.600, 
Project Head Start)

    Dated: September 14, 2010.
David A. Hansell,
Acting Assistant Secretary for Children and Families.
    Approved: December 22, 2010.
Kathleen Sebelius,
Secretary.
    For the reasons set forth in the preamble, we propose to amend Part 
1305 of 45 CFR Chapter XIII as follows:

PART 1305--ELIGIBILITY, RECRUITMENT, SELECTION, ENROLLMENT, AND 
ATTENDANCE IN HEAD START

    1. The authority citation for part 1305 is revised to read as 
follows:

    Authority: 42 U.S.C. 9801 et seq., 5 U.S.C. 553(b).

    2. Amend Sec.  1305.2 by:
    a. Revising paragraph (g)
    b. Redesignating paragraphs (i) through (s) as paragraphs (j) 
through (t);
    b. Adding a new paragraph (i); and
    c. Revising newly redesignated paragraphs (k) and (m).
    The revisions and addition read as follows:

Sec.  1305.2  Definitions.

* * * * *
    (g) Head Start or Early Head Start eligible means a child or 
pregnant woman who meets the requirements for age and family income or 
categorical eligibility or, if applicable, the requirements established 
by a grantee under section 645(a)(2) of the Head Start Act or by a Head 
Start program operated by an Indian Tribe under 45 CFR 1305.4(d).
* * * * *

[[Page 14853]]

    (i) Homeless children:
    (1) Means individuals who lack a fixed, regular, and adequate 
nighttime residence (within the meaning of 42 U.S.C. 11302(a)(1)); and
    (2) Includes--
    (i) Children and youths who are sharing the housing of other 
persons due to loss of housing, economic hardship, or a similar reason; 
are living in motels, hotels, trailer parks, or camping grounds due to 
the lack of alternative adequate accommodations; are living in 
emergency or transitional shelters; are abandoned in hospitals; or are 
awaiting foster care placement;
    (ii) Children and youths who have a primary nighttime residence 
that is a public or private place not designed for or ordinarily used 
as a regular sleeping accommodation for human beings (within the 
meaning of 42 U.S.C. 11302(a)(2)(C));
    (iii) Children and youths who are living in cars, parks, public 
spaces, abandoned buildings, substandard housing, bus or train 
stations, or similar settings; and
    (iv) Migratory children (as such term is defined in 20 U.S.C. 6399) 
who qualify as homeless for the purposes of this part because the 
children are living in circumstances described in paragraphs (i)(2)(i) 
through (iii) of this section.
* * * * *
    (k) Income guidelines means the official poverty line specified in 
section 637(19) of the Head Start Act.
* * * * *
    (m) Low-income family means a family whose total income before 
taxes is equal to, or less than, the income guidelines.
* * * * *
    3. Revise Sec.  1305.4 to read as follows:

Sec.  1305.4  Determining, verifying, and documenting eligibility.

    (a) Age eligibility. Except as provided in section 645(a)(2) of the 
Head Start Act:
    (1) To be age eligible for Early Head Start services:
    (i) A child must be an infant or toddler between the ages of zero 
and three years old.
    (ii) A pregnant woman may be any age.
    (2) To be age eligible for Head Start services, a child must be at 
least three years old by the date used to determine eligibility for 
public school in the community in which the Head Start program is 
located and not older than the age of required school attendance, 
except in cases where the Head Start program's approved grant provides 
specific authority to serve younger children. Examples of such 
exceptions are programs serving children of migrant and seasonal 
farmworker families.
    (b) Income eligibility. Except as provided in section 645(a)(2) of 
the Head Start Act:
    (1) Age eligible children and pregnant women from low-income 
families shall be eligible for participation in Head Start and Early 
Head programs.
    (2) To a reasonable extent, but not to exceed 10 percent of 
participants, participants may include age eligible children and 
pregnant women in the area served who would benefit from Head Start or 
Early Head Start programs, who are not eligible under paragraphs (b)(1) 
or (c) of this section.
    (3) From the area served, an additional 35 percent of participants 
may include pregnant women and age eligible children whose families 
have incomes over 100 percent but below 130 percent of the income 
guidelines who also are not eligible under paragraphs (b)(1) or (c) of 
this section, if:
    (i) Prior to serving the children and pregnant women eligible under 
paragraph (b)(3) of this section, the agency involved establishes and 
implements outreach, prioritization, and enrollment policies and 
procedures that ensure such agency is meeting the needs of children and 
pregnant women eligible under paragraphs (b)(1) or (c) of this section 
and children with disabilities eligible under paragraph (b)(2) of this 
section; and
    (ii) Any agency serving additional children and pregnant women 
under this paragraph must report annually to the Secretary the 
information required at section 645(a)(1)(B)(iv) of the Head Start Act.
    (c) Categorical eligibility. Pregnant women and age eligible 
children are categorically eligible for enrollment in Head Start and 
Early Head Start if:
    (1) The pregnant woman or the child's family is eligible or, in the 
absence of child care, would potentially be eligible for public 
assistance;
    (2) The child is homeless, as defined in Sec.  1305.2(i); or
    (3) The child is in foster care, as defined in Sec.  1355.20(a).
    (d) Special rule for Indian Tribes. Notwithstanding paragraph 
(b)(2) of this section, a Head Start or Early Head Start program 
operated by an Indian Tribe may enroll more than 10 percent of its 
children from families whose incomes exceed the low-income guidelines 
or are not categorically eligible when the following conditions are 
met:
    (1) All children from Indian and non-Indian families living on the 
reservation that meet the low-income guidelines or are categorically 
eligible who wish to be enrolled in the program are served by the 
program;
    (2) All children from income-eligible or categorically-eligible 
Indian families native to the reservation living in non-reservation 
areas, approved as part of the Tribe's service area, who wish to be 
enrolled in the program are served by the program. In those instances 
in which the non-reservation area is not served by another Head Start 
or Early Head Start program, the Tribe must serve all of the income-
eligible and categorically-eligible Indian and non-Indian children 
whose families wish to enroll them in the program prior to serving 
over-income children.
    (3) The Tribe has the resources within its grant or from other non-
Federal sources to enroll children from families whose incomes exceed 
the low-income guidelines or are not categorically eligible without 
using additional funds from HHS intended to expand Head Start or Early 
Head Start services; and
    (4) At least 51 percent of the children to be served by the program 
are from families that meet the income-eligibility guidelines or are 
categorically eligible.
    (5) Programs which meet the conditions of this paragraph (d) must 
annually set criteria that are approved by the Policy Council and the 
Tribal Council for selecting over-income children who would benefit 
from such a program.
    (e) Income verification. Before a pregnant woman or child is 
determined to be eligible on the basis of family income, the pregnant 
woman or the child's parent, guardian or other person(s) seeking 
services for the child who has knowledge of the family's finances must 
submit information to the program concerning the family's income. 
Verification must include examination of documents such as individual 
income tax forms, W-2 forms, pay stubs, pay envelopes, or written 
statements from employers (if Individual Income Tax Forms, W-2 forms, 
pay stubs, or pay envelopes are not available). Income must be compared 
to the poverty guidelines for the appropriate size of family, and 
program staff must document whether a pregnant woman or child's family 
qualifies as a low-income family under the income guidelines for the 
appropriate size of family. When appropriate, in cases in which no 
documentation regarding the income eligibility of the pregnant woman or 
child has been received by the agency, or when it is either more 
efficient or reliable to do so rather than to search for eligibility 
documentation, programs

[[Page 14854]]

may seek information from third parties who have first-hand knowledge 
about the pregnant woman's or child's eligibility, and document the 
names, titles, and relationship to the applicant in the participant's 
record. Programs also may seek third party information in cases where 
documents are not submitted to prove a claim that a pregnant woman or 
family has no income. If programs plan to seek third party verification 
from one or more entities regarding an applicant's eligibility, staff 
must inform the applicant about each entity that they intend to 
contact. In addition, the applicant must sign a consent form permitting 
the program to contact specified third parties; this provides 
applicants the opportunity to withhold their consent for third party 
verification from one or more entities. An applicant must be given the 
opportunity to withhold consent related to each entity the program 
would like to contact. If applicants do not sign the consent form the 
Head Start program may not contact that entity and the applicant 
remains responsible for providing appropriate documentation. When 
programs contact third parties, they should limit the information 
discussed and questions posed to the third party to the information 
necessary to obtain the required eligibility information. Programs 
should be especially sensitive to any potential domestic violence 
issues prior to seeking verification of the required eligibility 
information.
    (f) Verification of categorical eligibility. (1) Before a pregnant 
woman or child is determined to be eligible on the basis of categorical 
eligibility, the pregnant woman or the child's parent, guardian, or 
other person(s) seeking services for the child who has knowledge of the 
family's situation must submit information to the program concerning 
the family's categorical eligibility. Verification of categorical 
eligibility by the program must include examination of the following 
documents:
    (i) A copy of official documents demonstrating that the pregnant 
woman or the child, child's parent, or guardian, is eligible, or in the 
absence of child care, would potentially be eligible for public 
assistance;
    (ii) A copy of the court order or other legal or government-issued 
document or statement of a government child welfare official 
demonstrating the child is in foster care; or
    (iii) A copy of any other source document that establishes 
categorical eligibility.
    (2) In place of the foregoing documents, the program can substitute 
a written statement of a program staff member certifying that the staff 
member has made reasonable efforts to confirm a child is homeless, as 
defined in Sec.  1305.2(i). The lack of documentation of homelessness 
should not be a barrier to enrollment. When appropriate, in cases in 
which no documentation regarding the eligibility of the pregnant woman 
or child has been received by the agency, or when it is either more 
efficient or reliable to do so rather than to search for eligibility 
documentation, programs may seek information from third parties who 
have first-hand knowledge about the pregnant woman's or child's 
eligibility, and document the names, titles, and relationship to the 
applicant in the participant's record. Programs also may seek third 
party information in cases where documents are not submitted to prove a 
claim that a pregnant woman or family has no income. If programs plan 
to seek third party verification from one or more entities regarding an 
applicant's eligibility, staff must inform the applicant about each 
entity that they intend to contact and the applicant must sign a 
consent form permitting the program to contact each of the specified 
third parties; this provides applicants the opportunity to withhold 
their consent for third party verification related to each entity the 
program would like to contact. If applicants do not sign the consent 
form the Head Start program may not contact that entity and the 
applicant remains responsible for providing appropriate documentation. 
When programs contact third parties, they should limit the information 
discussed and questions posed to the third party to the information 
necessary to obtain the required eligibility information. Programs 
should be especially sensitive to any potential domestic violence 
issues prior to seeking verification of the required eligibility 
information.
    (g) Records and Certification. A Head Start or Early Head Start 
program must keep an eligibility determination record for each pregnant 
woman or child as part of the record maintained by the agency on that 
individual, which must include:
    (1) Copies of all documents submitted by a pregnant woman or 
persons seeking services on behalf of a child to the program by such 
persons or other persons relating to the pregnant woman's or child's 
eligibility for services and any staff member's notes recording any 
other information related to eligibility received from any source;
    (2) A copy of the statements and documents required under 
paragraphs (e) and (f) of this section;
    (3) A signed and dated statement by the person seeking services 
certifying that the documents and information that the person provided 
concerning eligibility are accurate to the best of the person's 
knowledge;
    (4) Documentation establishing that an agency staff member has 
sought to verify the accuracy of the information on eligibility 
provided to the agency by:
    (i) Conducting an in-person interview with the pregnant woman or 
the child's parent, guardian, or other person(s), seeking services for 
the child who has knowledge of the family's situation; and
    (ii) When appropriate, in cases in which no documentation regarding 
the income eligibility of the pregnant woman or the child's family or 
regarding the categorical eligibility of the pregnant woman or child 
has been received by the agency, or when it is either more efficient or 
reliable to do so rather than to search for eligibility documentation, 
seeking information from third parties who have first-hand knowledge 
about the pregnant woman's or child's eligibility, whose names, titles, 
and affiliations will be documented in the record, and the applicant's 
signed consent form permitting the program to contact each particular 
third party, as required under paragraphs (e) and (f) of this section;
    (5) A record of the eligibility criterion under which the pregnant 
woman or child was determined eligible as:
    (i) Having income below the income guideline for the family size, 
with the family size used documented;
    (ii) Being eligible or, in the absence of child care, being 
potentially eligible for public assistance;
    (iii) Being a homeless child, including the specific provision of 
Sec.  1305.2(i) under which the child was determined to be homeless;
    (iv) Being a child in foster care;
    (v) Being a pregnant woman or child in the area served who would 
benefit from such programs but who is not otherwise eligible for 
services (total enrollment in this category not to exceed 10 percent of 
the enrollment slots);
    (vi) Being a pregnant woman or child from a family with income over 
100 percent but below 130 percent of the income guidelines (total 
enrollment in this category not to exceed 35 percent of the enrollment 
slots, in addition to any slots filled under paragraph (b)(2) of this 
section; or
    (vii) Meeting alternative eligibility criteria as permitted under 
paragraph (d) of this section or section 645(a)(2) of the Head Start 
Act; and
    (6) A signed and dated statement by the program staff person who 
made the

[[Page 14855]]

eligibility determination certifying that the information on 
eligibility in the file is accurate to the best of the person's 
knowledge, and based on that information, the person has determined the 
pregnant woman or child to be eligible for services.
    (7) Retention and access practices for the eligibility 
determination record for each pregnant woman or child described under 
this paragraph must be consistent with section 647 of the Head Start 
Act and the uniform administrative requirement regulations regarding 
HHS grant awards implemented at 45 CFR 74.53 for awards and subawards 
to institutions of higher education, hospitals, other nonprofit 
organizations, and commercial organizations and 45 CFR 92.42 for grants 
and cooperative agreements to State, local, and Tribal governments.
    (h) Establishment of agency policies regarding violation of 
eligibility determination regulations, policies and procedures. All 
Head Start and Early Head Start agencies must establish policies and 
procedures describing the actions that will be taken against agency 
staff who commit intentional violations of Federal and agency 
eligibility determination regulations, policies and procedures, 
including enrolling pregnant women and children who staff have not 
documented as eligible to participate in the program.
    (i) Training. Head Start and Early Head Start agencies must train 
all governing body, policy council, management and those staff members 
who have the responsibility to make participant eligibility 
determinations on Federal and agency eligibility determination 
regulations, policies and procedures, including verification, 
certification, and documentation requirements within 30 days following 
the effective date of this rule, and within 30 days of hiring or 
beginning of tenure of new governing body, policy council, management 
and those staff members who have the responsibility to make participant 
eligibility determinations. Agencies must develop policies regarding 
how often such training will be provided after the initial training is 
conducted to ensure that governing body, policy council, management and 
those staff members who have the responsibility to make participant 
eligibility determinations are aware of all current eligibility 
determination regulations, policies and procedures. Agencies shall 
maintain ongoing records of training. The training must include:
    (1) Explanation of the legal consequences for individuals and 
agencies that commit fraud related to eligibility determination; and
    (2) Information on methods and strategies for obtaining facts 
necessary for complete and accurate eligibility determinations. Such 
methods and strategies must address treating families with dignity and 
respect and give due regard for possible issues of domestic violence, 
stigma, and privacy.

[FR Doc. 2011-6326 Filed 3-17-11; 8:45 am]
BILLING CODE P
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