Department of Health and Human Servces


OFFICE OF


INSPECTOR GENERAL


HEAD START EXPANSION:


GRANTEE EXPERIENCES


, SERVICEo 

'l1! Q3a 

MAY 1993 
OFFICE OF INSPECTOR GENERA


The mission of the Offce of Inspector Oeneral (010), as mandated by Public Law 95-452, as amended 

is to protect the integrity of the Department of Health and Human Servce' (HHS) programs as well as the health and welfare of beneficiaries served by those programs. This statutory mission is carried 

out through a nationwide network of audits, investigations, and inspections conducted by three 010 

operating components: the Offce of Audit Servce, the Offce of Investigations, and the Offce of 

Evaluation and Inspections. The 010 also informs the Secretary of HHS of program, and management 

problems, and recmmends courses to correct them. 

OFFCE OF AUDIT SERVICE 

The OIO's Offce of Audit Servce (OAS) provides all auditing servce for HHS, either by conducting audits with its own audit resource or by overseeing audit work done by others. Audits examine the 

performance of HHS programs and/or its grantees and contractors in carryng out their respective 

responsibilties and are intended to provide independent assessments of HHS programs and operations 

in order to reduce waste, abuse, and mismanagement and to promote economy and effciency 

throughout the Department. 

OFFICE OF INSTIGATIONS 

The OIO's Offce of Investigations (01) conducts criminal, civil, and administrative investigations of 

allegations of wrongdoing in HHS programs or to HHS beneficiaries and of unjust enrichment by 

providers. The investigative efforts of 01 lead to criminal convictions, administrative sanctions, or civil 

money penalties. The 01 also oversees State Medicaid fraud control units which investigate and 

prosecute fraud and patient abuse in the Medicaid program. 

OFFCE OF EVALUATION AN INSPECTONS 

The OIO's Offce of Evaluation and Inspections (OEI) conducts short-term management and program 

evaluations (called inspections) that focus on issues of concern to the Department, the Congress, and 

the public. The findings and recommendations contained in these inspection reports generate rapid 

accurate, and up-to-date information on the efficiency, vulnerability, and effectiveness of departmental programs. This report was prepared in the San Francisco regional offce under the direction of Kaye 

D. Kidwell, Regional Inspector Oeneral, and Paul A. Oottlober, Deputy Regional Inspector General. 

Project staff included: 

SAN FRCISCO HEQUAR1ES 

Jennifer Mallen, Co-Project Leader Wm. Mark Krushat, Sc. , Mathematical Statistician 

Brad Rolln, Co-Project Leder Alan Levine, Program Specialist 

Elizbeth Bell 

Kathy Dezotte
 ATLA CHCAOO 

Robert Gibbons


Deborah Harvey
 Betty Apt Suzanne Johnson 

Ellen Kotler Ron Kalil 

Donald Loeb Chris Koehler 

Brian Pattison 

Alcia Simon OFFCE OF INGATIONS 

BOSTN Baldur Krahl Jose Munoz-Caro 

Timothy Corbett AI TO FAMIE Wf DEPENDENT CHRE 

Lori Rutter 

Agustin Quiles-Ocasio 

Irelys Ramirez-Ramos 

For additional copies of this report, please contact the San Francisco office at (415) 556-6830. 
Department of Health and Human Servces


OFFICE OF


INSPECTOR GENERAL


HEAD START EXPANSION:


GRANTEE EXPERIENCES


~ SERVICEo


'0 

'l1!~Q30 

MAY 1993 OEI-09-91-00760 
, 

EXECUTIVE SUMMAR Y


PUROSE 

This inspection assessed Head Start grantees' and Administration for Children and 

Famies staffs experiences during recent program expansions and their abilty to 

handle future expansions.


BACKGROUN 

Head Start operates on the premise that children are best prepared for success in 

school when they and their parents participate in a comprehensive program that 

addresses their educational, economic, social, physical, and emotional needs. In 

addition to providing children with classes and health services, Head Start addresses 

the needs of the entire family. 

Both Congress and the Administration are committed to expanding Head Start. Since 

Fiscal Year (FY) 1990, the total funding for Head Start has increased more than 

$1 billon, and the number of children served has increased by almost 300 000. 

Within the Department of Health and Human Servces (HHS), the Administration for 

Children and Families (ACF) is responsible for administering Head Start. The ACF 

the Assistant Secretary for Management and Budget (ASMB), and the Assistant 

Secretary for Planning and Evaluation (ASPE) requested that the Office of Inspector 

General (OIG) review the implementation and status of Head Start expansion because 

they were concerned that rapid expansion might jeopardize the quality of servces. 

We selected a random sample of 80 regional and American Indian Head Start 

grantees and delegates. From May through July 1992, we conducted either on-site 

visits or telephone intervews with each grantee and delegate using structured 

discussion guides. In addition, we reviewed grantee and delegate agency records to 

coHect management and performance data. At the completion of the fieldwork, we weighted the data and projected it to the universe of Head Start grantees and 

delegates that had expanded. We also conducted intervews with aH 10 ACF regional offces as weH as headquarters staff about their experiences and ability to provide 

support for future expansions.


This report, which is one in a series prepared by the OIG concerning Head Start 

expansion, reflects grantee and ACF staff experiences and opinions about expansion. 

A companion report Evaluating Head Start Expansion through Performance 

Indicators" (OEI-09-91-00762) used file reviews and selected indicators to assess the 

impact of expansion on grantees. While we did not find any statistically significant difference in grantee performance as a result of expansion, we found that the level of 
grantee performance as measured by our indicators was considerably lower than the

level of performance reported by grantees and published by ACF. Because of 

(1) inadequate grantee record keeping, (2) the lack of specificity in the Head Start performance standards, and (3) the fact that many grantees disregard ACF policy 

guidance, we were unable to determine if the program and performance data 

weaknesses that we found reflect serious deficiencies in the quality of services 

provided by Head Start. 

FIINGS 

Grantees described increased demands on staff and concerns about their ability to 

provide quality services to families while expanding. They reported problems in such 

areas as child enroHment, facilty acquisition, staffing, transportation, and social 

servces. Nevertheless, grantees told us that they were able to overcome most of these problems. They are, however, concerned that some of these problems may become 

insurmountable if they are not addressed in future expansions. Our specific findings 

are: 

Some grantees exerienced difculty enrolling children, and few plan to serve all eligile 

4-year-old by 1993 

Despite expansion and the existence of a large number of eligible children, 13 percent of grantees were unable to enroH all of the additional children they planned under 

expansion, and some grantees saw their waiting lists for enroHment increase. Based on 

their experiences and knowledge about future expansions, grantees indicated that they 

may not be able to serve all eligible 4-year-olds in the near future, primarily because of the overwhelming number of eligible children in their service areas. 

Th greatest challenge grantees faced durig exansion was obtaining adequate and 

affordable faciities


Grantees have had difficulty with the lack of adequate facilities in their servce areas 

the poor condition of available properties, the timing of expansion funding, and the 

high cost of rent and/or renovations. In addition, one-third of grantees believe that 

their current space is inadequate to serve children and families sufficiently. Grantees 

overwhelmingly support purchasing property as a cost-saving, stabilizing measure. The 

Head Start Improvement Act of 1992 contains provisions allowing grantees to 

purchase property. 

Whil almst all grantees hired additional staff 40 percent had difculty fiing qualifed staff 

Grantees cited the lack of qualified appJicants and their inability to offer acceptable 

salaries and benefits as the major barriers to finding qualified staff. 
Exnsn hinred grantees' abil to provide adequate transportatin 

Larger servce areas and increased enrollment have affected grantees' ability to 

provide transportation, although ACF has been responsive to grantee requests for 

additional vehicles.


Exansn increased the demand on social services 

Social servces components are faced with an increased number of dysfunctional 

familes and children with special needs as well as reduced availability of community 

servces. 

Both grantees and ACF are hinered by inadequate planning 

Planning is vital for grantees to expand. More than half the grantees did not receive 

timely expansion funding. Grantees cited the need to add management staff and are 

concerned that their problems wil be exacerbated with future expansions. 

RECOMMATIONS 

Because Head Start has changed dramatically since its inception during the 1960s 

ACF should restructure the way it plans for and implements future Head Start 

expansions. In doing so, ACF should: 

Develop regional expertse and offer grantees better assistance with facilties. 

Guidance should include appropriate safeguards against fraud and abuse in its 

implementation of the facility purchase provisions of the Head Start 

Improvement Act of 1992. Furthermore, ACF should ensure that it provides 

grantees clear guidance and technical assistance when purchasing or otherwse 

acquiring facilities. 

Develop strategic and long-range plan to handle future expanions better. The 

goal of these plans should be to help grantees plan for future funding and 

enrollment increases, to address administrative and management weaknesses 

and to otherwse evaluate and implement program improvements. 

hnprove its traig and techncal assistance and reevaluate the effecteness of 

its technca assistance contracts. The ACF should evaJuate grantees' utilization 

of each resource, the appropriateness of the training offered by each 

organization to the grantees' overall training needs during expansion , and the 

quality of each training resource as measured by grantee evaluations. 
. ................, 

.. ......... . , ..... .. , 

AGENCY COMMNT 

We received written comments on the draft report from ACF, ASPE, and ASMB. 

The ACF concurred with the first two recommendations but requested that we clarify 

the recommendation concerning training and technical assistance. We have modified 

the recommendation so that it is more directly linked to our finding that grantees 

underutilzed traditional Head Start training resources during expansion. We have 

also addressed ACF's concerns about several details in the report's findings and have 

added language to explain that the report is based solely on the opinions of grantees. 

These opinions shed light on the attitudes and outlook of the individuals who will be 

responsible for implementing future expansions and, as ASPE stated in their 

comments have direct relevance to policy decisions being made about how future 

expansions are handled... 

The ASPE and ASMB provided useful comments and suggestions, many of which we 

have incorporated in the finaJ report. In response to specific comments from ASPE 

we have added information about the companion report EvaJuating Head Start 

Exansion through Performance Indicators." We have also modified the executive 

summary and recommendations to reflect ASPE's concerns. In response to comments 

from ASMB, we have further clarified that the report is based solely on the opinions 

of grantees and not on the record-based review that is the subject of the companion 

report on performance indicators. 

The complete text of the ACF comments and a detailed response is contained 

appendix A. The complete text of the ASPE and ASMB comments can be found in 

appendix B. 

u................. .

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . .. 

TABLE OF CONTENTS


EXCU SUMY


INODUCTON. . . . . . . . . . . . .. 1

FIINGS. . . . . . . . . . . . . . . . . . . 5

. Enrollment . . . . . . . . . . . . . . . . 5

. Facilities. . . . . . . . . . . . . . . . . . 6

. Staffng.. . . . . . . . . . . . . . . . . . 9

. Transportation . . . . . . . . . . . . . 9

. Social services. 


. Planning ....................................................


RECOMMNDATIONS AN AGENCY COMMNT. . 

APPENICE 

ACF Comments on the Draft Report and Detailed OIG Response 

ASPE and ASMB Comments on the Draft Report 
INTRODUCTION


PUROSE 

This inspection assessed Head Start grantees' and Administration for Children and 

Familes staffs experiences during recent program expansions and their ability to 

handle future expansions.


BACKGROUN 

Head Start operates on the premise that children are best prepared for success in 

school when they and their parents participate in a comprehensive program that 

addresses their educational, economic, social, physical, and emotional needs. In 

addition to providing children with classes and health servces, Head Start addresses 

the needs of the entire family. 

The Administration for Children and Families (ACF) is responsible for administering 

Head Start. The ACF, the Assistant Secretary for Management and Budget (ASMB), 

and the Assistant Secretary for Planning and Evaluation (ASPE) requested that the 

Offce of Inspector General (OIG) review the implementation and status of Head 

Start expansion. This report is one in a series prepared by the OIG on this subject. 

Th Head Start Prgram 

Head Start is a child development program funded primarily by the Federal 

government. At the headquarters level, the Head Start Bureau provides leadership 

and develops legislative and budgetary proposals for Head Start management and 

operations. In each regional office, ACF's Head Start and Youth Branch monitors all 

Head Start programs, except American Indian and migrant programs which are 

monitored by branches within headquarters. According to ACF, Head Start served 

approximately 622 000 children with FederaJ support of $2.2 bilion in Fiscal Year 

(FY) 1992.


Head Start programs are community-based, so agencies can respond to local needs 

and coordinate with other community organizations. As a resuJt, program options

locations, and hours vary. The Federal government awards grants to a public or 

private nonprofit agency (called a grantee) to operate a Head Start program. A 

grantee may contract with one or more other pubIic or private nonprofit organizations in the community (called delegates) to run all or part of its Head Start program. For 

the purposes of this report, we will refer to both grantees and delegates as "grantees unless specific differences need to be noted. 

Head Start programs consist of four major components: health, education, social 

services and parent involvement. Specific performance standards for each of these 

components require, among other things, that grantees: 
develop children s intellectual skills by encouraging them to solve problems 

provide children medical and dental examinations 

offer children nutritious meals and snacks, and 

identify familes' social service needs and work with other community agencies 

to meet those needs.


The two major program options center- based and home-based are both regarded as 

effective means of serving children and families. The center-based mode) focuses on 

the child, while the home-based model focuses on the parent. Home-based programs 

where servces are offered in the home rather than a classroom, must adhere to the 

same policies and offer the same range of comprehensive services as center-based 

programs. 

Head Start Exansn 

Both the Administration and Congress are committed to expanding Head Start. The 

Head Start Supplemental Authorization Act of 1989 and the Dire Emergency 

Supplemental Appropriation of 1990 marked the beginning of expansion for all 

grantees and provided funding for the first two expansions. Since FY 1990, the total 

funding for Head Start has increased more than $1 bilion, to an FY 1993 total of 

$2.779 bilion. The Human Services Reauthorization Act of 1990 continues the Head 

Start program through FY 1994 with the goal to serve all eligible children by 1994. 

The following table summarizes the allocated funding increases: 

HE START EXPANSIONS, 1991993 

Fiscal Announcement Proposed Number Funds to Additional 

Year Dale of Additional Expand Enrollment Expansion 

Children Funding 

Exnsion 1990 February 6, 1990 500 $99 980.000 $51 335,000 

Exansion 1990 June 12, 1990 000 $165 315 000 None 

Exansion 1991 undated 51,000 $159 447.000 $240 363,000 

Exansion 1992 February 19, 1992 500 $131 513.000 $118 487 000 

Exansion 1993 December 17, 1992 100 000 $372 706 000 $201 779 600 

TOTAL $92 961 $611 96, 

The additional expansion funding, identified in the chart above, was set aside for such 

things as quality improvement, salary enhancement, cost-of-living increases, and 

training and technical assistance improvement. Grantees generally use quality 

improvement funding to increase salaries and benefits, strengthen the social servce 

parent involvement, and/or health components, improve servces to disabled children 
, 

initiate or improve family literacy programs, and/or otherwse enhance servces to 

children and families. 

For regional grantees (those monitored by ACF regional offices), the Head Start 

Bureau allocated expansion funds in FYs 1990 and 1991 based on the population in 

each State, as required by statute. It then allocated funds to counties based on the 

proportionate number of eligible children, taking into consideration the amount of 

Federal funding already received by the grantees in each county. The Head Start 

Bureau also set aside a portion of expansion funds for American Indian grantees, who 

could apply for expansion funds if they were not serving all eligible children in their 

servce area. 

The Head Start Bureau also allocated expansion funds to unserved counties based on 

the proportionate number of eligible children. Public and private nonprofit agencies 

(including existing grantees) competed to operate programs in the unserved counties. 

To receive the allocated funds, grantees submitted expansion proposals. These 

proposals specified planned objectives, such as the number of additional children they 

would enroll and the staff they would require to serve these chiJdren. The Head Start 

Bureau advised grantees to prepare proposals that would resuJt in high quality servces 

that fully comply with the Head Start performance standards. 

Concer about Exansion 

This report is one in a series prepared by the OIG concerning Head Start Expansion. A companion report Evaluating Head Start Expansion through Performance 

Indicators" (OEI-09-91-00762) used file reviews and selected indicators to assess the 

impact of expansion on grantees. While we did not find any statistically significant difference in grantee performance as a result of expansion, we found that the level of 

grantee performance as measured by our indicators was considerably lower than the

level of performance reported by grantees and published by ACF. Because of (1) 

inadequate grantee record keeping, (2) the lack of specificity in the Head Start 

performance standards, and (3) the fact that many grantees disregard ACF policy 

guidance, we were unable to determine if the program and performance data 

weaknesses that we found reflect serious deficiencies in the quality of services 

provided by Head Start. A 1991 OIG study, "Readiness for Head Start Expansion 

(OEI-02-91-00741), found that grantees were meeting their expansion goals for 

FY 1990. 

METHODOLOGY 

We selected a random sample of 80 regional and American Indian Head Start 

grantees and delegates. We conducted a separate study of migrant grantees because 

of the unique nature of their programs (see "Migrant Head Start Grantees: 

Perspectives and Challenges " OEI-09-91-00761). From a universe of the 50 States 

plus the District of Columbia, Puerto Rico, and the Trust Territories (hereafter 
referred to as "localities ), we randomJy selected eight localities with probability 

proportional to size with replacement. As a result, California was selected twce. The 

total amount of Federal funding received in FY 1991 determined the size of each of 

the localities. The following table presents the localities selected, their probability of 

selection based upon their total budget, and the number of grantees, original and 

adjusted, in each location. 

Probability Number of Grantees 

State Total Budget 

All Grantees Selection Original Adjusted 

California (One) $184 762 665 10.87% 133 

California (Two) $184 762 665 10.87% 133 

Florida $57 466 594 3.38% 

Maine 601 468 0.45% 

Michigan $71 904 040 23% 

Puerto Rico $70 947 229 17% 

Texas $95 413 705 61% 

Washington $24 586 682 1.45% 

Sampled $697 445 048 41.03% 

All States 700 448 467 

Because not all grantees and delegates received expansion funds, not all were eligible for selection at the second stage of sampling. At this stage, we selected grantees and delegates using simple random sampling until we obtained 10 grantees or delegates 

who received expansion funds in FYs 1990 and/or 1991. 

The adjusted number of grantees in the above tabJe represents the estimated number 

of grantees and delegates that received expansion funds based upon our sampling 

results. Projections used in this report are based upon this adjusted number of 

grantees. 

From May through July 1992, we conducted either on-site visits or telephone 

intervews with each grantee and delegate using structured discussion guides. For the 

delegates in our sample, we also interviewed their parent grantees about their 

experiences managing expansion. In addition, we reviewed grantee and delegate 

records to collect management and performance data. We also conducted intervews 

with all 10 ACF regional offices as well as headquarters staff about their experiences 

with and ability to provide support for expansion. 

The following findings reflect grantee and ACF staff experiences and opinions about 

expansion. The quotes reflect the generaJ sentiment of Head Start directors and ACF 

and grantee staff, not just the opinion of one director or staff person. We conducted 

this inspection in accordance with the Quality Standards for Inspections 
 issued by the President' s Council on Integrity and Efficiency. 
FINDINGS


SOME GRAES EXPERINCED DIFICULTY ENROLLING CHREN 

AN FEW PLA TO SERVE AL ELIGIBLE 4- YE-OLDS BY 1993 

Thireen percen of grantees were unable to enroll all of the additional chilren planned 

unr exansion 

With the first 3 expansions, ACF funded grantees to enroll 148 500 additional children. 

Grantees enrolled approximately 94 percent of this total. Our projections show that 

181 grantees were unable to enroll 8 700 children who had been funded under 

expansion. The major reasons were (1) obtaining, renovating, or licensing facilities 

(2) planning and management obstacles, and (3) finding eligible children. Specifically, 

of the 181 grantees


more than 30 percent were unable to obtain facilities, and an additional 

15 percent were unable to complete facility renovations prior to the start of the 

school year; 

approximately half identified management issues, such as the need to 

reorganize, hire management staff, or develop computerized systems; and 

more than a quarter were unable to find eligible children. 

Desite exansn, more than 40 percent of Head Start directors report an increase or no 

efect on the nuber of childen on their waiting lists 

Directors indicated that Head Start s increased visibility and credibility in recent years 

have resulted in more community interest and increased applications. Other grantees 

reported that expanding to previously unserved areas, better recruitment efforts, and 

increased poverty in their servce areas have resulted in increased waiting lists. 

Approximately 30 percent of the directors noted only a small reduction on the length 

of their waiting lists. A quarter of the grantees said they have enrolled more 

year-old children since expansion. These grantees were less likely than others to 

experience large decreases in their waiting lists. 

More thn 75 percent of all grantees applied or planned to apply for both the 1992 and 

1993 exansons 

Almost all grantees believe there are sufficient children to warrant further expansions 

but some grantees are already serving all eligible children in their service area. In 

addition to these grantees who can t expand, other grantees will not apply for 

expansion funds because they cannot locate facilities or they don t believe that they 

can handle another expansion at this time. 
............................. ...................... 

..........._........._........................... ........................ .................. ........... .......... ........... ........

1993 

On one-qrter of grantees inicated that they plan to serve all eligile 4-year-old by 

At the time that we conducted intervews, which was prior to the 1993 expansion 

announcement, grantees were pessimistic about their ability to serve all eligible year-olds by 1993. We specifically asked them whether they planned to serve all 

eligible 4-year-old children in their service areas by the 1993-94 school year, and , if 

not, when they expected to, given their knowledge of the current and future pace of 

expansion. More than 14 percent of a)) Head Start directors said they would never 

able to enroll all eligible 4-year-olds. These grantees frequently reported that they are 

servng only a very small percentage of the eligible children in their servce areas. 

Only 41 percent of grantees predicted that they would serve all eligible 4-year-olds in 

their servce areas by the turn of the century. The following chart ilustrates their 

predictions: 

When Will Grantees Serve All Eligible 4-Year-Olds? 

Percent of Grantees 

100% 

80% 

80% 

40% 39. 

20% . 

1993-94 1995-97 By 2000 Never Don No Answer 

Response Know

TH GRETET CHNGE GRAES FACED DURING EXPANSION 

WAS OBTAIG ADEQUATE AN AFORDABLE FACILIT 

Grantees had to fi renovate, or build centers and classrooms 

Approxiately one-third of the grantees cited problems finding and renovating 

facilities as the biggest challenge they faced during expansion. Almost all grantees 

(95 percent) had to obtain additional space, and one-third of these (more than 

450 grantees nationally) encountered major difficulties. More than 70 percent had to 

renovate their newly acquired space. The major difficulties were: 
, 

, 

the lack of adequate facilities in their service areas 

the poor condition of the properties and/or the need for substantial renovation


the timing of expansion funding (e. , delays until the end of the school year), 

and 

the high cost of rent and/or renovations.


Licensing and zoning were problems for approximately 10 percent of the grantees and 

can be major obstacles in some parts of the country. For example, one grantee had 

negotiated an agreement with a church to use a vacant lot for a portable, but the 

county refused to license the facility because "the lot was a foot or two short" of the 

local zoning ordinance requirement. 

Some grantees addressed facility problems by using the home-based option 

Because they were unable to open classrooms, some grantees expanded enrollment in 

existing home-based programs while others provided home-based servces for the first 

time. The latter viewed the home-based option as a temporary solution. They plan to 

return to center-based servces as soon as the facilities are ready for classroom use. 

On-thir of the grantees believe their extig space is inadequate 

Grantees complained about sites that are "dismal, drab, and dreary, contaminated 

with lead paint " and "so cramped for space that there is no place to hold parent 

meetings while classes are in session. " The OIG staff came away with similar 

impressions and observed that more than half of the Head Start centers and 

playgrounds they visited were only adequate or poor. The size, safety, and location of 

outdoor play areas was considered a liability at approximately one-quarter of the sites. 

The OIG staff identified only 3 out of 45 centers they considered "models" for others 

to emulate. The OIG' s Offce of Audit Services currently is reviewing Head Start 

foster care, and day care facilities to assess compliance with State and local health and 

safety standards. 

Approximately 45 percent of the grantees who complained about their space said they 

need completely new facilities. The others need upgrading or renovation, more space and/or improved handicapped access. More than 68 percent of all grantees anticipate 

facilty problems with future expansions. 

Grantees also cite the need for training and technical assistance in obtaining and 

renovating space. For example, they need specific training in working with electrical 

engineers, architects, and general contractors. As one grantee said They speak a 

totally different language. " Another grantee pointed out We didn t anticipate or 

understand all the issues that would be involved in setting down a portable (e. 
grading, sewers, required clearances, digging weHs for water). The result was that 

things didn t go smoothly, and there was a 4-month delay in opening the site. 

Fedal prohibitons againt purhaing propert with Head Start fu excerbated 

proble 

Since we conducted fieldwork, Congress passed the Head Start Improvement Act of 

1992, which contains provisions allowing grantees to purchase facilities and may help 

resolve grantees' problems upon implementation. Prior to the passage of the 

legislation, approximately 80 percent of the grantees believed it would be 

advantageous to purchase property and stated that there is space available for 

purchase in their servce areas. They believed purchasing property would: 

be cost effective 

improve the stability of their programs 

allow them to custom-build or obtain more suitable facilities, and 

make it easier to acquire space by increasing the number of options. 

Grantees are frequently faced with escalating rents and the possibility of eviction at 

the end of a lease. Rents may escalate for a variety of reasons: gentrification of the 

neighborhood, a school board or other public agency s need to generate revenue 

because of budget shortfalls, or merely a landlord's desire to take advantage of a 

tenant who has invested considerable sums of money renovating a building. One 

grantee summarized the experiences of many, "Owning property would protect us from 

outrageous increases. Rents have been going through the roof recently. The monthly 

rent for our administrative office increased from $275 to $825 in just 18 months. 

Other grantees said that for the amount of rent they paid, they could have purchased 

their centers three or four times. Others complained that they spend a fortune on 

renovations only to be evicted at the end of their leases which tyically run from 

1 to 5 years.


Although it wasn t easy to overcome these obstacles, grantees were usualJy able to 

locate and renovate space without serious delay. Because of their perseverance, more 

than half the grantees were able to locate new space within 3 months, and almost 

three-fourths were abJe to do so within 6 months. Approximately 9 percent required 

more than a year. Once they received their funding, grantees needed an average of 

4 months to complete renovations. Approximately 13 percent needed more than 

6 months. 
, 

, 

, 

WH ALOST AI GRAES ll ADDmONAL STAF, 40 PERCENT 

HA DIFCUTY FIING QUALIFIED STAF 

Head Start staff are not just day care workers. They not only teach children and 

parents, but also handle a diversity of problems from drugs to parenting to 

multicultural and language barriers. As one director stated With our starting wages 

re not going to attract the kind of person who is bilngual, bicultural, etc. " Another 

grantee s recruiting and hiring experiences are typical Due to the present economic 

situation, we have had plenty of teachers and social workers applying. However, these 

people don t have experience with preschool children. 

Grantees believe the problems in recruiting and retaining staff are mainly two-fold: 

the lack of qualified staff and the inabilty to offer acceptable salaries and benefits. 

Although all grantees face both problems, rural grantees have a greater problem 

finding qualified staff, and urban grantees have a greater problem offering competitive 

salaries and benefit packages. These problems may become more intense as a result 

of the 1990 reauthorization legislation that requires Head Start teachers to be certified 

by September 30, 1994. 

Almost half of the grantees reported offering salaries and benefits that were not 

comparable to similar jobs in the community. Of these, 82 percent said this is a 

barrer to hirig qualified staff. This is mainly a problem in urban areas where 

experienced Head Start teachers are lured away by higher salaries and benefits. Head 

Start competes for staff with the public school system, child care programs, and 

community action agencies. Health insurance, sick days, and vacation time are not 

part of many Head Start job packages. Salaries sometimes as low as half of those 

paid to public school teachers prompted one director to comment The issues and 

problems Head Start staff have to deal with are very complex. Staff capable of 

handling these get better paying jobs eJsewhere." We did not independently compare 

the salaries and benefits among Head Start and other child care programs, but salaries 

are a great concern to grantees.


EXANSION HIERED GRAES' ABILIT TO PROVIE ADEQUATE TRSPORTATION 

Thrt percent of grantees do not provide transportation for children. Instead , they 

are located within walking distance of their service population, encourage parents to 

carpool, utilize public school bus systems, or have worked with the local transit system 

to design bus routes that are accessible. 

Of the grantees that provide transportation, more than one-third report that expansion 

has had an adverse impact on their abilty to transport children. The problems arose 

from (1) expansion into remote, rural areas, (2) increased enrollment that exceeds the 

capacity of their vehicles, and (3) increased salary costs. More than 56 percent of the 

grantees anticipate transportation problems with future expansions, including the need 
for additional vehicles and longer distances to cover new and more remote servce 

areas. 

GeographicaHy dispersed servce areas pose particular problems. One grantee claimed 

that transportation problems in a remote area hampered its ability to maintain the 

required 85 percent average daily attendance. Another grantee thought that it had 

overcome distance, 20 feet of snow per year, and safety concerns by purchasing two 

vans with four-wheel drive and anti-lock brakes. The grantee was soon faced with 

another problem, however, when the State decided to adopt Federal transportation 

guidelines that specify children must be transported in school buses, not vans. 

Increased enrollments have required grantees to send vehicles on double runs or 

purchase additional vehicles. Several grantees requested funds for additional vehicles. 

The ACF has been responsive to grantees' requests , and only one grantee reported 

that its request for a bus had been denied. 

Grantees that purchased buses have experienced increased salary costs because of 

State bus driver licensing requirements. Some grantees use vans, which carry fewer 

chidren, for this very reason. 

EXANSION INCRED TI DEMAS ON SOCIA SERVICE 

Grantees report that expansion increased the number of (1) families with complex 

needs, (2) children with behavioral problems and special needs, and (3) familes with 

drug and alcohol abuse problems. Not only did the number of these families increase 

but also the severity of their problems. Almost 40 percent of grantees report that 

currently enrolled children come from families who are economically worse off than 

the families they served before expansion. This finding mirrors one from a November 

1989 OIG study entitled "Dysfunctional Families in the Head Start Program: Meeting 

the Challenge " (OAI-09-89-01000). The study found that the comprehensive needs of 

dysfunctional families pose a special challenge for grantees. These familes need a 

wide range of servces that place additional and frequently burdensome demands on 

Head Start social service components. 

Almost half of all grantees said that the greater number of children with certified 

special needs increased the complexity and volume of their work as well as their need 

for more supervisors. Certified special needs include children who are hearing 

impaired, speech impaired, visually handicapped, crippled, and seriously emotionally 

disturbed. These children frequently need modified physical facilities, modified 

currcula, new or different feeding skiJs, and continuation of special medical care. 

The diminishing availability of community servces for children and families worries 

grantees. They are concerned about the decreasing numbers of professionals who are 

willng to donate services, the increased burden on publicly-funded facilities, and the 

diminishing number of doctors willing to accept Medicaid. 
, 

BOTH GRAES AN ACF AR HIERED BY INADEQUATE PLAG 

Lack of adequate planning overwhelm staff impair morale, causes unue stres, and unnnin qulity 

Twenty-five percent of grantees said that adequate planning is a critical factor in their 

ability to expand. Grantees believe that expanding too quickly leads to management 

compliance, quality, staffing, and facilty problems. Both grantees and ACF regional 

staff believe they need time to assess past expansions before proceeding with new 

ones. Long-range strategic planning is crucial. Typical comments included Head 

Start needs a master plan 'we need to step back and see the impact of expansion 

before moving on " and "our growth has outdistanced our administrative capacity. 

Th ACF Reginal Ofces suggest a more flexle and fair allocation system 

To simplif and expedite the allocation of expansions funds, ACF decided to award 

grantees a minimum of $50 000, which operationally became the standard expansion 

amount. Both grantees and ACF staff would like a more flexible needs-based system 

to replace or amend the arbitrary allocation of $50 000. One regional manager 

summarized the views of many: "Allocations should be competitive and based on 

need. 

Regional staff suggested some solutions: allow for more regional flexibility in funding 

decisions, eliminate the $50 000 minimum, and/or use census data to rank needy areas. 

Regional staff emphasized the importance of using 1990 census data, rather than 

updated 1980 census data, as a basis for determining need. Many grantees agreed 

that the current statistical data are too inaccurate to be used for assessing community 

needs and projecting the number of eligible children. As one regional manager said 

The 1980 data do not take into account the massive population shifts from region to 

region." The ACF began using 1990 census data for allocation of FY 1993 funds. 

Approxitely half of the grantees did not receive tiely exansion fuing 

Many grantees were unable to enroll children on time and incurred carry-over 

balances, because they did not receive their expansion money until late in the school 

year. In fact, 47 percent of the grantees were unable to enroll children before the end 

of the school year and expansion. , as a resuJt, twice as many had carry-over balances than before 

Of the grantees who had carry-over balances, 41.4 percent had balances that exceeded 

the minimum expansion figure of $50 000. Before expansion, only 18 percent of the 

programs had carry-over balances exceeding $50 000. 

Despite their concern about carry-over balances, only 13 percent of grantees requested 

funding delays and only 4 percent refused expansion funding. Some directors believe 
, 

, 

that refusing expansion funding wil lead to a complete cessation of all expansion 

opportunities rather than the adoption of a more gradual approach. 

Many grantees believe that even with adequate lead time, large expansions should not 

occur on an annual basis. One director summarized I am afraid to tell my staff that 

we are expanding again. Our days are already 12 hours. 

Th non-federal matching requiement was a problem for more than one-third of grantees 

Exansion strained many grantees' ability to meet the non-Federal share matching 

requirement, i.e. , 20 percent of their total budget. Large expansions, one-time start-up 

funds, the recession, and an increase in two-parent working familes have all 

contributed to the matching problem. Some programs have doubJed in size. The 

recession has limited business contributions. Parent volunteer hours have dropped as 

more parents enter the workforce. 

The matching requirement will become more burdensome in the future. More than 

one-quarter of the grantees who did not consider matching to be a probJem during 

past expansions expect problems in future expansions. To lessen the demands on 

programs, grantees suggested lowering the match, excluding some types of funding 

(e. , one-time costs for purchasing portables or renovations) from the match, or 

elimating the match requirement altogether. Grantees would then be able devote


more time to servng children and families, rather than spending so much time 

'beating the bushes " and accounting for matching funds. 

Whle the intention of the matching requirement is laudable, some realities are 

suspect. In-kind contributions can be a form of paper shuffing. One grantee found 

another $10 000 just by reviewing its records again. Some grantees have been 

creative " for example, by counting parental transportation to the center and parental 

attendance at home visits as in-kind contributions. 

The ability to match Head Start funds in the future is a particular concern for 

grantees. A tyical grantee comment is The public s perception of Head Start 

expansion is that we have a lot of money and that we don t need anything. We have 

lost a lot of donations. Business put us at the bottom of the pile for donations. 

While 80 percent of the grantees that needed help durg exansion said they receied 

astance, much of it came from in-house or private consultants 

Traditional Head Start technical assistance and training--that offered by ACF regional 

offces, the Public Health Service, or the Regional Access Project, for example--was 

underutilized by grantees. As ilustrated in the chart on page 13, fewer than half of 

the grantees used training and technical assistance offered by these organizations 

during expansion. Fewer than a quarter used that offered by the Head Start Bureau. 

More than half, however, did use the Regional Resource Center. 
................................................... , 

, 

..........

Grantees Have Not Relied Exensively on Traditonal 

Head St Training During Exansion 

Percentage of Grante.e 100 

hh.. h... ......... ... ..... ... ................ 


BO. 

RO: Regional Office 

HSB: Head Start Bureau 

PHS: Public Health SelVice 

RRC: Regional Resource Center HS8 PHS RRC RAP Other Dldn l U.. 

Training Source RAP: Regional Access Project 

Grantees that used the traditional training sources were relatively satisfied. Almost 

70 percent of the grantees that used any of these sources believe their needs were 

fully met. Many grantees do not use these sources, however, because they consider 

the training to be incomplete, inappropriate, and inaccessible. According to one Head 

Start director They don t have travel money, and I can t afford to send my staff to 

them. How can I utilize the training if it's not available to me here?" Another 

director described the Head Start Bureau and regional office trainings as ' 'very limited" 

while stil another said A lot of helpful information does not get out of the regional 

offce." Furthermore, some delegates complained that their grantees limited their 

access to traditional training and technical assistance.


Grantees need additional management staff to handle future exansons 

Proper planning and implementation of new procedures requires an adequate number 

of experienced and trained management staff. Approximately one-third of grantees 

considered management issues to be their biggest challenge for future expansions. 

Grantee directors and ACF regional staff worry that not enough of the expansion 

funding is spent on management and program administration, including 

computerization. 
Grantees antcipate myd problems wih futue exansons 

According to grantees, the problems they faced during previous expansions win not 

only continue but probably win increase with future expansions. The fonowing chart 

summarizes the most common problems anticipated by grantees: 

SIGNICAN PROBLE 

Anticipated Problems Percent Mentioning Common Barriern 

Facilties 68. Availabilty, zoning reuirements 

SeJce For Children 61.7 Overall shortge of servce 

SeJce For Families 59. Overall shortage of servce 

Transporttion 56. Need for additional equipment 

Staff 43. Lack of qualifed sLaff, low salaries 

Matching Federal Funds 41.7 Support agency cUlbacks, fewer volunteer hours 
, 

... , 

RECOMMENDATIONS


Because Head Start has changed dramatically since its inception during the 1960s 

ACF should restructure the way it plans for and implements future Head Start 

expansions. In doing so, ACF should: 

Develop regional experte and offer grantees specialed assistance with 

facities. Guidance should include appropriate safeguards against fraud and 

abuse in its implementation of the facility purchase provisions of the Head Start 

Improvement Act of 1992. Furthermore, ACF should ensure that it provides 

grantees clear guidance when purchasing or otherwse acquiring facilities. 

Develop strategic and long-range plans to handle future expanions better. The 

goal of these plans should be to help grantees plan for future funding and 

enrollment increases, to address administrative and management weaknesses 

and to otherwise evaluate and implement program improvements. 

Improve its traig and techncal assistance and reevaluate the effecteness of 

its technca assistance contract. The ACF should evaluate grantees' utilization 

of each resource, the appropriateness of the training offered by each 

organization to the grantees' overall training needs during expansion , and the 

quality of each training resource as measured by grantee evaluations. 

AGENCY COMMNT 

We received wrtten comments on the draft report from ACF, ASPE, and ASMB. 

The ACF concurred with the first two recommendations but requested that we clarify 

the recommendation concerning training and technical assistance. We have modified 

the recommendation so that it is more directly linked to our finding that grantees 

underutilized traditional Head Start training resources during expansion. We have 

also addressed ACF' s concerns about several details in the report s findings and have 

added language to explain that the report is based solely on the opinions of grantees. 

These opinions shed light on the attitudes and outlook of the individuals who wil be 

responsible for implementing future expansions and, as ASPE stated in their 

comments have direct relevance to policy decisions being made about how future 

expansions are handled... 

The ASPE and ASMB provided useful comments and suggestions, many of which we 

have incorporated in the final report. In response to specific comments from ASPE 

we have added information about the companion report Evaluating Head Start 

Exansion through Performance Indicators." We have also modified the executive 

summary and recommendations to reflect ASPE's concerns. In response to comments 

from ASMB, we have further clarified that the report is based solely on the opinions 

of grantees and not on the record-based review that is the subject of the companion 

report on performance indicators. 
The complete text of the ACF comments and a detailed response is contained 

appendix A. The complete text of the ASPE and ASMB comments can be found in 

appendix B. 
APPENDIX A


ACF COMMNT ON TH DRA REORT 

DETAID OIG REPONSE 




... ...

OIG REPONSE TO ACF'S COMMNT 

GENERA CONCERNS


ACF COMM (page 1): we do have some concern which stem from the way in 

which the information for the report was gathered and the presentation of some of the 

findings. As we understand it, the report is based solely on grantee or staff perceptions 

and attitues. These perceptions are very sensitive to the way the questions were asked 

and when they were asked. The result is a report which mixes fact and opinion. On page 

5, for example, the title reads: 'Some grantees experienced difculty enrollng children. ' 

This statement is undoubtedly factual and , as noted above, consistent with our 

observations. On page however, the report states that 'more than 14 percent of all

Head Start directors said they would never enroll all eligible 4-year-olds. ' The report does 

not state what assumptions were made by the directors in answering this question, nor the context in which it was asked. It is thus dificult to understand what the 14% statitic 

means, partcularly as we would assume that given suffcient resources all programs could 

eventually serve all eligible 4-year olds. 

OIG REPONSE: We have added the following caveat to the introduction to the 

report: "The following findings reflect grantee and ACF staff experiences and 

opinions about expansion." The inspection was designed to elicit grantees' experiences 

and perceptions about expansion, including their predictions about their ability to 

expand in the future. 

Grantees were highly pessimistic about their ability to serve all eligible children 

regardless of resources. The number of eligible children in some servce areas is 

several thousand, far larger than existing grantees could serve, even with future 

expansions. Therefore, ACF's statement that " we would assume that given sufficient 

resources all programs could eventually serve all eligible 4-year olds... " is not accurate 

according to grantees. We have, however, revised the section on eligibJe 4-year-olds to 

clarify how we asked the question. 

ACF COMMNT (pages 1-2): This type of problem is also found in other sections of 

the report, partcularly the discussion on training and technical assistance, in which a 

distinction is made between 'traditional' and other types of training and technical 

assistance. We do not understand how the chart and discussion on pages 12- 13 help 

inform future policy decisions about the expansion process or our training and technical 

assistance program... " 

OIG REPONSE: We have revised the report to emphasize that we asked grantees 

about their utilzation of specific training resources, such as the regionaJ offices 

regional resource centers, and Public Health Service. We designated this group of 

HHS components and HHS contractors as "traditional" sources. Head Start grantees 

have negative impressions of these resources, and a significant percentage of Head 
Start grantees are not receiving training and technical assistance from them. 

Furthermore, many of the grantees who use these resources are not receiving quality 

assistance, in their opinion. In this context, the finding and the chart we used are 

intended to provide information about ACF's need to reevaluate its training and 

technical assistance. On this basis, we made our third recommendation. 

ACF COMMNT (page 2): 
 We would also suggest that the report provide more 

descriptive information on the methodology used so that the reader wil be aware that, in 

some instances, opinions or 'predictions ' were elicited from the interviewees. This is 

especially important because of the selective use of quotes in the report. We are unable to 

judge whether the many quotes throughout the report are truly reflective of the opinions of 

Head Start staff or if they represent the opinion of just one Head Start Director. Our 

concern is that these quotes wil be read as representing the opinions and experiences of 

all Head Start grantees and that conclusions will be drawn which may be inaccurate 

when applied to the greater Head Start community. 

OIG REPONSE: As mentioned above, we have added the folJowing caveat to the 

introduction to the report: "The folJowing findings reflect grantee and ACF staff 

experiences and opinions about expansion." In addition, we have added the statement 

The quotes reflect the general sentiment of Head Start directors and ACF and 

grantee staff, not just the opinion of one director or staff person. " We also have 

clarifed many of the quotes in the body of the report to ilustrate that the quote 

reflected the sentiments of several or many Head Start directors and staff. 

SPECIFIC COMMNT 

On pages 2 and 3 of its comments, ACF made specific, technica1 comments and asked 

that we clarify other statements in the report. We have addressed alJ of these 

comments by making necessary revisions , clarifications, and additions to report. 

RECOMMNDATIONS 

ACF COMMNT: 
 With regard to the first recommendation, the change in authority 

regarding the purchase of facilities has, of course, considerably altered the nature of the 

regional experte and technical assistance that is needed in this area. We wil work to 

identify the specifc types of expertise and assistance grantees wil need, and then to find 

ways to provide these. A "Head Start Facilties Manual" (the exact title has not been 

decided) is currently in draft form, and wil be ready for dissemination to the regional 

offces and to grantees within the next few months. We hope that this manual will be of 

great assistance as grantees explore new approaches to solving problems with facilities. 

OIG REPONSE: No response is necessary. 

ACF COMMNT: 
 We agree with the second recommendation regarding strategic 

planning, and wil endeavor to provide regional offce staff and grantees with the 

maxmum time available to carr out future expansions. However, we note that the recent 
expansions of Head Start were, in fact, based on a long-term Administration plan for 

universal Head Start that was transmitted to the regional offce staff and to grantees. 

Given the timing constraints on the appropriation cycle, the requirement that funds be 

obligated in the fical year of an appropriation, and the recent legislative requirement that 

guidance on expansion be sent to grantees within 90 days of an appropriation, there was 

not suffcient time for planning of the type described. 

OIG REPONSE: No response is necessary. 

ACF COMM: The third recommendation regarding the relationship between 

technical assistance contracts and implementing Head Start expansion is not clear. We 

would appreciate the opportunity to discuss this matter further with you so that the 

recommendation can be fully understood and any necessary action taken. 

OIG REPONSE: We have revised and clarified the recommendation to more 

directly link the recommendation with our finding that grantees underutilized 

traditional Head Start training resources during expansion. 
APPENDIX B


ASPE AN ASMB COMMNT ON TH DRA REPORT 
.... : . .:

, ,..,  !: j \ :; . ,!, jj 

. _

DEPARTMENT OF HEALTH &. HUMAN SERVICES 

:t.....o 

JAN , 3 100 

TO: Bryan B. Mitchell 

Pricipai Deputy Inpecor General


FROM: Assistat Secetifor Planng and Evaluation 

,  

Offce of the Secetary 

Washington. D.C. 20201 

PDIG "'--

DIG-AS ' DIG-EI DIG-OI 

AIG-MP 

OGC/IG

EXSEC -i-''' TJA'TSF ;7; SUBJECT: Comments on OIG Dra Report: Head Sta Expanion: Grate Experiences OEI-Q-91-O760 

Than you for the opportty to review the dr report of this importt inpecon. This report and its companon "Evaluatg Hea Sta Expanion Thugh Performce Indicators, " both have the potential to guide HHS policy in the comig month. I believe these are among the most signficant 

report your offce has produced on children s isues in recent yea. I am extremely concerned however, that the fidings are not cuently presented so as to maxime their utiity for futue policy discussions. I am parcuarly concerned with the recmmendatons secon of the report and the executive summar. In addition, the two report on Hea Sta expanion are closely related and should refer to one another more than they do now. 

Below I describe what I consider an appropriat presentaon for this reprt If changes such as those below are not mae, I request that these comments be included at the end of the fi report. I have also ated notaon of severa mior language clarficaons my sta have suggested. 

OIenine- Secion 

The experience of grtee reported in this inpecon have direc relevance to policy decisions being mae abut how futue expanions are handled, and in parcuar the disbution of fuds for FY 1993 and beyond. I recmmend that the openg secon of this report eslis this contex in which 

the fidings should be viewed.


In addition, this report should more exlicitly reference the "perormce indicars" report. In parcuar it should clealy note that while that report found that exanion has not yet had an effec on the quality indicars examed, the progratc weaesses reprted in that report combined with the loca and federa maement concer expresed in this report rae signficat about reainess for futue expanion. Improvig quaity and questions management in the face of future expanion must be addresed as the progr moves forward. 

Recmmendations Secon 

I am extremely disappointed in the recmmendations secon of this report The recmmendations as wrtten do not reflec the serousness of the ises raed in the findings and are not specific enough to 

guide ACF and the Secet c and
 in mag progJmm rlmini.trative changes which should be considered. I suggest the recmmendaons reflec the following: 

Dwrn fom 

.M 111S I i;J 

i !- '.""";=0 DIG OEI IX 
. .

Page 2 - Bryan B. Mitchell


1. Progra mangement at the fedenll, grntee, and projec level - Since your inpectrs found weaesses overall in the magement of Hea Sta grts, and ha\: said inormly that they believe the cuent federal manement strcte should be reconsidered, a recmmendation for a form and overal magement review of the program would therefore see appropriate. The fidigs of the performce indicars report simarly suggest the nee for such a review. Given the 

large amount of fuds, grts, and projec involved, contiuing to maage the progr in the same 

way as durg the 19705 is questionable. 

2. Matchng requirements and facilities purche - As you note, the Hea Sta Improvement ACt 

pased in Octber of 1992 makes changes in the progr in the area of matching requirements and

facilties purchase. Both these area are ones in which there is potential for inequitale implementation acrss regions as well as for frud and abuse. Parcularly since it is likely that the OIG wil be asked a couple of yea from now to audit implementation of these new provisions , we suggest that this report provide up-front guidance to ACF regarding what guidelines and safeguards 

should be put in place, based on your knowledge of problems in other federa progr. 

3. Strategc planing - I would suggest providing more det regarding the recmmendation for 

long rage and stregic plan. In parcuar, the recmmendaon should briefly, but explicitly, discus the faCt that choices have been mae and wil contiue to be mae abut how to spend the FY 1993 fuding increae as well as any futue increaes. Trae-Qff wil be mae beteen servg additiona children, increaing the hours of progr operon, strengtenig the quality of exitig services, and addressing adstrtive and manement weaeses. Ea of these choices has consequence for the direcon of the progr, and should be considered in a systematc faion 

resultig in a stregic plan that shapes progr spendin in the comig yea. 

4. Traning and tecnical asistace on both progr and progr maement matter - The Hea Sta Bureau has recgned the weaes in its trg and tecca asisce effrt, and is in the proce of reorganing them. Does this effort satfy your concern abut T rr A (in which cae the recmmendaton should probably support these changes) or are there additional concerr that should be addressed (in which cae more det is necessar). 

Exective Summar 

The Exective Summ should include a pargraph on the policy context in which this report should 

be viewed (as descrbed abve) and the relatonsip beteen this report and the perrmance indicars report. The recmmendations secon of the Exective Sumar should reflec changes

mae to the recmmendatons secion as suggested abve. 

Should you have any questions about our co ts, pleae contaCt Ann Segal of my sta at 690-7148. 

Attchment 
. 

Minor Clarifications in Lan!!Ual!e SUl!l!ested 

Page Ii (and other places) says that the Head Sta Improvement Act "permts grtee purchase faciities. " This language suggests that the act ::':ady perts faities purchase at grtee discretion. In fact as we underta it, the law is more circumsec reqg HHS approval of

requests for purchase of facilties and alowing the Secet to set gudelines for such purchases. 

Relat to this, the discuion of facilties on pages 7-8 is mileag bece it presents only the advantaes, and not the diadvataes, of faciities purchase. While the IG's offce has expresed concern abut facilties purchases in other conte, this report fa to point out such conce and 

leaves the reaer with the impression th such purchases are undoubtey an effecve solution 10 

grtee conce. 

Page 2 taks abut "the Admtron. " Durg this tie of trition, and depending on when the report is actally issued, this language nee clarficaon (or omiion). 

Page 2 conta the phrae "all eligible children (including four yea olds). " Why does nee the clarfication that eligible children includes four yea olds? Was this intended to be paculaly four yea olds, perhaps? 
(. ,. . . . . . 

) ,

,_. 

t'JJJ.\7 

DEPARTMENT OF HEALTH &. HUMAN SERVICES DIG-A 

DIG-EI 

/ ul the Seaetary 

DIG OJ 

'...Id AIG-MP (\A' . D. C. 20201 

JAN 25 199 OGC/IG 

EXSEC 

TO: Bryan B. Mitchell T),ATESE Principal Deputy Inspector General 


/7-/ 

FROM: zabeth es

C'rJ 

ting Assist nt se eme "; Budget 

SUBECT: OIG Draft Report: "Head start Expansicm: Grantee

Experiences, " OEI-09-91-00760 

Thank you for the opportunity to review the draft report 
 Head

Start Excansion: Grantee Exceriences . This report as well as 

OIG' s two other companion reports on Head start expansion will be 

very valuable to the program at this point in its history. 


have several general as well as specific comments and


recommendations on this report.


GENERAL COMMNTS 

The two reports, Grantee Exceriences and Performance Indicators , as currently drafted appear to contradict each 

other. Grantee Experiences leads the reader to believe


there are significant problems with expansion, whereas


Performance Indicators seems to prove that expansion alone
 has not yet caused significant problems. We suggest the IG 

attempts to integrate the findings of these reports so a


reader of both reports is not left confused.


Grantee Excerience is based on the feelings and opinions


that Head Start grantees expressed during interviews.


However, the second IG report in the series,
 Performance

Indicators , is based on a statistical analysis done by IG 

investigators. This distinction is important and should be


highlighted in the Executive Summaries.


Grantee Exceriences suggests that all of the problems


grantees are currently having are caused by expansion, when


in fact they may be inherent in the Head Start program and


have only been exacerbated by expansion. For example,


grantees would still have problems finding affordable


facilities even if expansion did not happen. Expansion has c: just made it more difficult. This report should clearly 

.. 0- state that these problems would still exist without 

W'- L"\ expansion. The second report, Performance Indicators , seems

t3 . C,"" to verify this by finding no statistical difference in pre- UJ

a: c and post-expansion quality indicators. This should be 

stated when cross-referencing the two reports.


SPECIFIC ISSUES


Page ii and Page 15 - Shaded Box: The second sentence in the 

first paragraph is somewhat misleading as the Department never


prepared a FY 1994 policy budget, only a baseline budget.


Suggested replacement sentence: "These findings provided

Page 2 - Byran B. Kitchell


information to these agencies for preparing future budgets and


planning for future expansions.


Page ii and Page 15 - Shaded Box: The recommendations concerning 

facility purchases and the match requirement have been deleted in


light of passage of the Head Start Improvement Act. We suggest


not removing these recommendations, but changing them to reflect


the new legislation. Each issue has numerous implementation


problems and the IG may want to craft recommendations regarding


what types of safeguards ACF should put in place so Head Start ' 

fiscal integrity is assured. Perhaps these recommendations can


guide ACF in developing regulations for each of these issues.


The report states that over 80 percent of grantees interviewed


believed it would be advantageous to purchase property. The Head


start Improvement Act does ease the restrictions on purchasing
 facilities. 

P. 1 - Last sentence of first paragraph under "Backqround" -

Recommend changing last clause from "Head start addresses the


needs of the entire family" to "Head start identifies the
 families I social services needs and assists them in meeting those 

needs. " 

P. 1 - First sentence under "The Head start Program" header -

Suggest clarifying the statement "Head Start is the only child


development program funded primarily by the Federal governent"


Even Start and Comprehensive Child Development Centers are among


other Federally funded child development programs.


P. 2 - Second sentence under "Head Start Expansion" header - A


Supplemental Authorization Act did not exist. The sentence could 

be modified to read "The Dire Emergency Supplemental


Appropriation of 1990 marked the beginning of expansion for all
 grantees and raised FY 1990 total funding to $1. 552 billion. 

P. 2 - Fourth sentence under "Head Start Expansion" header ­


Suggest deleting the phrase "with the goal to serve all eligible


children (including 4-year-olds) by 1994" as no such goal is 

found in the Human Services Reauthorization Act.


P. 2 - Please update the Fiscal Year 1993 information in the

"Head Start Expansion, 1990-1993" table with the Announcement
 Date. Also, "Funds Allocated to Expand Enrollment" is actually

$372, 706 000. 

P. 2 - We recommend including an additional table to accompany

the existing "Head Start Expansion, 1990-1993" table to show


funds spent on cost of living and quality increases. - currently, 

the Head Start statute requires 25 percent of the funding


increase over the previous year I s adjusted appropriation to be 

set-aside for quality improvement. The amount of quality funds


that have gone to grantees is significant.

Page 3 - Byran B. Kitchell


Suggested table to insert:


BE START QUALITY IMPROVENTS, 1990-1993 

Anouncement 

Date 

COLA Quality

Improvement 

Expansion 14/6/90 $49, 000, 000 

Expansion 6/12/90 

Expansion III undated $195, 000 000 

Expansion 2/19/92 $62, 625, 000 $45, 910, 000 

Expansion V Fortcoming $61, 945, 000 $127, 883, 000 

P. 3 - First sentence in first paragraph. We suggest clarifying


what a " region grantee" is. Also , adding the clause " 

required by statute" to the end of the sentence.


Suggest stating in either the first or third paragraph that new


grantees could only apply for funds in unserved counties, and


funding has gone only to existing grantees in served counties.


P. 5 - There appears to be some inconsistency in statements

regarding grantees finding eligible children. The first sentence


of the last paragraph states that "almost all grantees believe


that there are sufficient children to warrant furter expansion"


However, the third bullet , half-a-page above that statement,


finds that more than a quarter of all grantees examined were


unable to find eligible children. The Performance Indicators


report shows grantees at 99. 1 percent of full enrollment, a


higher level than pre-expansion. Perhaps these findings are 

unclear and are not inconsistent; if so clarification is needed.


Given the apparent inconsistencies regarding finding eligible


children, perhaps the first bullet under "Findings" on page 


"Some grantees experience difficulty enrolling children, " should


be made conditional \ 

P. 6 - section following "Only one-quarter of grantees indicated


that they plan to serve all eligible 4-year olds by 1993" header
 - We suggest this be clarified to note that the grantee responses

were recorded well in advance of any specific information about


resource availability during FY 1993.


P. 11 - The second paragraph under the "ACF Regional Offices

Suggest a more flexible and fair allocation system" suggests that


ACF should use 1990 instead of 1980 census data to aLlocate
 funding. However, the Census Bureau had not released this data 

in time for Head Start to use it in their FY 1991 or FY 1992


allocations. H ad Start now has the 1990 census information and


used this data to altocate FY 1993 funds. Since the 1990 data is


being used, the problem is solved and perhaps this paragraph


should be eliminated. If the 
 paraqraph remains, please add the
Page 4 - Byran B. Kitchell


sentence "Head start began using 1990 Census data for allocation


of FY 1993 funds as this was the first year the data was made


available to ACF. 


If you have any questions or concerns regarding these comments,


please contact Karen Shafer(690-6238) of my staff.