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20–526 PDF 2005

S. HRG. 109–119

HEAD START: ENSURING DOLLARS BENEFIT THE

CHILDREN

HEARING

BEFORE THE

SUBCOMMITTEE ON EDUCATION AND EARLY

CHILDHOOD DEVELOPMENT

OF THE

COMMITTEE ON HEALTH, EDUCATION,

LABOR, AND PENSIONS

UNITED STATES SENATE

ONE HUNDRED NINTH CONGRESS

FIRST SESSION

ON

EXAMINING HEAD START, FOCUSING ON ENSURING DOLLARS BENEFIT

CHILDREN RELATING TO THE EFFECTIVENESS OF THE OVERSIGHT

BY THE DEPARTMENT OF HEALTH AND HUMAN SERVICES’ ADMINISTRATION FOR CHILDREN AND FAMILIES IN IDENTIFYING AND RESOLVING FINANCIAL MANAGEMENT WEAKNESSES IN HEAD START

GRANTEES

APRIL 5, 2005

Printed for the use of the Committee on Health, Education, Labor, and Pensions

(

COMMITTEE ON HEALTH, EDUCATION, LABOR, AND PENSIONS

MICHAEL B. ENZI, Wyoming, Chairman

JUDD GREGG, New Hampshire

BILL FRIST, Tennessee

LAMAR ALEXANDER, Tennessee

RICHARD BURR, North Carolina

JOHNNY ISAKSON, Georgia

MIKE DEWINE, Ohio

JOHN ENSIGN, Nevada

ORRIN G. HATCH, Utah

JEFF SESSIONS, Alabama

PAT ROBERTS, Kansas

EDWARD M. KENNEDY, Massachusetts

CHRISTOPHER J. DODD, Connecticut

TOM HARKIN, Iowa

BARBARA A. MIKULSKI, Maryland

JAMES M. JEFFORDS (I), Vermont

JEFF BINGAMAN, New Mexico

PATTY MURRAY, Washington

JACK REED, Rhode Island

HILLARY RODHAM CLINTON, New York

KATHERINE BRUNETT MCGUIRE, Staff Director

J. MICHAEL MYERS, Minority Staff Director and Chief Counsel

SUBCOMMITTEE ON EDUCATION AND EARLY CHILDHOOD DEVELOPMENT

LAMAR ALEXANDER, Tennessee, Chairman

JUDD GREGG, New Hampshire

RICHARD BURR, North Carolina

JOHNNY ISAKSON, Georgia

MIKE DEWINE, Ohio

JOHN ENSIGN, Nevada

ORRIN G. HATCH, Utah

JEFF SESSIONS, Alabama

MICHAEL B. ENZI, Wyoming (ex officio)

CHRISTOPHER J. DODD, Connecticut

TOM HARKIN, Iowa

JAMES M. JEFFORDS (I), Vermont

JEFF BINGAMAN, New Mexico

PATTY MURRAY, Washington

JACK REED, Rhode Island

HILLARY RODHAM CLINTON, New York

EDWARD M. KENNEDY, Massachusetts (ex

officio)

CHRISTINE C. DODD, Staff Director

GRACE A. REEF, Minority Staff Director

(II)

CONTENTS

STATEMENTS

TUESDAY, APRIL 5, 2005

Page

Alexander, Hon. Lamar, Chairman, Subcommittee on Education and Early

Childhood Development, opening statement ..................................................... 1

Enzi, Hon. Michael B., Chairman, Committee on Health, Education, Labor,

and Pensions, opening statement ....................................................................... 2

Kennedy, Hon. Edward M., a U.S. Senator from the State of Massachusetts,

opening statement ................................................................................................ 3

Prepared statement .......................................................................................... 4

Horn, Wade F., Ph.D., Assistant Secretary for Children and Families, U.S.

Department of Health and Human Services; and Marnie S. Shaul, Director,

Education, Workforce, and Income Security Issues, U.S. Government Accountability Office ................................................................................................ 6

Prepared statements of:

Wade F. Horn, Ph.D. ................................................................................. 7

Marnie S. Shaul ......................................................................................... 19

Dodd, Hon. Christopher, a U.S. Senator from the State of Connecticut, opening statement ........................................................................................................ 37

Caccamo, Jim, Director, Metropolitan Council on Early Learning, Kansas

City, MO; A.C. Wharton, Mayor, Shelby County, TN; Yvonne Gates, Director for Marketing and Community Relations, Center for Academic Enrichment and Outreach, Clark County, NV; and Olivia A. Golden, Senior Fellow, Urban Institute ............................................................................................ 44

Prepared statements of:

James M. Caccamo, Ph.D. ........................................................................ 46

Honorable A.C. Wharton, Jr. .................................................................... 49

Yvonne Atkinson Gates ............................................................................. 54

Olivia A. Golden ........................................................................................ 59

Clinton, Hon. Hillary Rodham, a U.S. Senator from the State of New York,

opening statement ................................................................................................ 73

ADDITIONAL MATERIAL

Statements, articles, publications, letters, etc.:

Response to Questions of Senator Enzi by Wade F. Horn ............................ 14

Response to Questions of Senator Ensign by Wade F. Horn ........................ 16

Response to Questions of Senator Alexander by GAO .................................. 26

Response to Question of Senator Alexander by Mayor A.C. Wharton ......... 51

Response to Questions of Senator Enzi by Olivia A. Golden ........................ 64

(III)

(1)

HEAD START: ENSURING DOLLARS BENEFIT

THE CHILDREN

TUESDAY, APRIL 5, 2005

U.S. SENATE,

SUBCOMMITTEE ON EDUCATION AND EARLY CHILDHOOD

DEVELOPMENT, COMMITTEE ON HEALTH, EDUCATION, LABOR,

AND PENSIONS,

Washington, DC.

The subcommittee met, pursuant to notice, at 9:30 a.m., in Room

106, Dirksen Senate Office Building, Hon. Lamar Alexander, chairman of the subcommittee, presiding.

Present: Senators Alexander, Roberts, Ensign, Dodd, Murray,

and Clinton; and Senators Enzi and Kennedy, Ex Officio.

OPENING STATEMENT OF SENATOR ALEXANDER

Senator ALEXANDER. Good morning. This is the Subcommittee on

Education and Early Childhood Development. We are pleased to

have with us the chairman of our full committee, Chairman Mike

Enzi, of the Committee on Health, Education, Labor, and Pensions.

We will be joined a little later by other Senators, including the

ranking member of the subcommittee, Chris Dodd of Connecticut.

For 40 years, Head Start has been the Federal Government’s

largest investment in early childhood education. Its goal is to encourage equal opportunity, to help all Americans reach the same

starting line.

When I attended nursery school and kindergarten in a converted

garage in my mother’s backyard in the mountains of Tennessee, I

was attending the only preschool program in town. That was well

before Head Start. The more we have learned about preschool education, the more important it has become. Now, 40 States and the

District of Columbia offer some form of preschool education and the

Federal Government has broadly expanded other programs for children under the age of 6.

Head Start offers low-income children and their families preschool education, family support, health screenings, dental care,

and assistance in accessing medical services. This past year, taxpayers spent about $6.8 billion to serve more

than 900,000 children in Head Start. These dollars have grown

much more rapidly than inflation. Ten years ago, Head Start spent

about $4,700 per child. Today, we spend about $7,500 per child.

This Head Start money is distributed in grants to nearly 1,700

local organizations. Many of these organizations, which we call

grantees, operate other Federal, State, or local programs, or subVerDate 11-MAY-2000 15:57 Sep 26, 2005 Jkt 000000 PO 00000 Frm 00005 Fmt 6633 Sfmt 6633 S:\DOCS\20526.TXT SLABOR3 PsN: SLABOR3
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contract with other agencies, to provide services, known as delegate

agencies. There are more than 20,000 Head Start centers with

more than 48,000 classrooms. As one of our witnesses observed,

managing a program of this complexity can present many challenges.

Our responsibility here in Congress is to make sure that taxpayer dollars are being spent for the purposes intended and for the

children intended. Between January 2003 and the first months of

this year, there were numerous accounts from communities across

the country of serious financial abuses or irregularities by individuals or entities entrusted with Head Start dollars. That is why the

House and Senate Education Committee leaders asked the Government Accountability Office to look into allegations of financial

abuse and irregularities by the local agencies or individuals entrusted with Head Start funds.

The purposes of today’s hearing is to consider the findings of the

GAO report as well as its recommendations for how the Department of Health and Human Services can do a better job of overseeing the spending of Head Start money. This is not a new issue.

In June of 1998, during the Clinton administration, a GAO report

raised questions about the inconsistency of Head Start monitoring.

We have with us today, as witnesses, representatives of the writers of the GAO report and of the Federal managers of the Head

Start money as well as representatives from the community agencies that actually administer and use the Head Start money.

Our job in Congress, especially as we consider reauthorization of

Head Start for another several years, is to make sure that it is accountable, financially solvent, and meeting the purposes for which

it is intended. I hope that as we consider program accountability,

we will look for ways to change a process-oriented system to one

that does a better job of measuring outcomes. In other words, instead of just requiring grantees to fill out forms and dot ‘‘i’’s,

should we not be putting more emphasis on finding out, for example, how much followup there has been on dental screenings, what

the quality is of parent involvement, and whether the children are

learning what they need to know, and need to be able to do, to

have a more equal opportunity when they enter school?

We have two panels of witnesses today. Wade Horn from the Department of Health and Human Services and Marnie Shaul from

the Government Accountability Office are on the first panel. Mayor

A.C. Wharton of Memphis, Yvonne Gates from Clark County, NV,

Jim Caccamo from Kansas City, MO, and Olivia Golden from the

Urban Institute are members of the second panel.

We will ask Mr. Horn and Ms. Shaul to testify in just a moment,

but first, I would like to call on our committee chairman and ranking member, both of whom are here, and to see if they have any

opening comments.

Senator Enzi?

OPENING STATEMENT OF SENATOR ENZI

The CHAIRMAN. Thank you, Mr. Chairman. I want to thank you

for your leadership on early childhood education policy and for putting this hearing together. There is no better investment that we

can make for our future than to support programs that help our

3

children learn, and Head Start is an important part of that effort.

I am looking forward to hearing today’s witnesses about the future

of the Head Start program and how we can make sure it is working

effectively to help children enter school ready to learn.

The testimony we receive today will help shape the reauthorization of the Head Start program in a way that will make it stronger,

better, and more effective for the children it serves. That is important. I am the father of three children and one grandchild. I understand the importance of early learning. Head Start provides an important service for thousands of children by providing a safe and

healthy environment. Many of these children do not receive the

same support at home as some of their more advantaged peers, and

Head Start helps meet many of their needs.

The Head Start program has demonstrated a great deal of success since its creation almost 40 years ago. Lately, however, several

instances of financial mismanagement and other troubling incidents have been brought to our attention, both through the recent

report issued by the Government Accountability Office and from

dozens of news reports around the country.

We aren’t going to be disparaging or accusing practitioners at

this hearing. Instead, we will look to our witnesses for help in identifying how Congress can ensure that Head Start program dollars

are being used for the purpose for which they were intended, which

is to help disadvantaged children succeed.

One of the findings in the recent GAO report is that the monitoring process for the Head Start program can be improved substantially to help ensure the program is more effective. It is my hope

that today’s witnesses will discuss options for Congress to help

strengthen the program’s integrity as well as its impact on student

outcomes.

In the past Congress, this committee unanimously supported a

Head Start reauthorization bill that would have made many of the

improvements suggested by the GAO study. It is my hope that today’s witnesses will comment on these efforts and suggest some alternative policy options, as well.

In the current economy, continued learning is more important

than ever. We need to make sure that Federal programs, such as

Head Start, are giving children the best possible start, since today’s

students are tomorrow’s leaders. The Head Start program is an important beginning to a lifetime of education opportunities that will

make it possible for today’s students to support families in the future. It is essential that all children get a good start and that the

Head Start program provides the type of educational foundation

that will support a lifetime of learning and success.

Again, thank you for holding this hearing. I expect it to be useful

to the committee as it works on the reauthorization.

Senator ALEXANDER. Thank you, Mr. Chairman.

Senator Kennedy, who is the ranking member of our full committee.

OPENING STATEMENT OF SENATOR KENNEDY

Senator KENNEDY. Thank you very much, Mr. Chairman. I want

to thank you for having this hearing, thank our chairman, Senator

Enzi, for his longtime interest in Head Start. Thank you, Mr.

4

Chairman, for your strong commitment on education and also for

your recognition about early intervention, its importance, the difference it makes in the development of a child’s life and also the

paths it opens up, not only educationally, but socially and in other

ways in terms of early intervention. I think we know that Head

Start does work. It is important.

We know, as well, that we tried to address some of the problems

in our bipartisan effort in the areas of recompetition and better enforcement and followup on under-involvement and more efficient

and thorough audits. I think we all know that increased and improved training at the local level can help resolve some of these

issues, and I think we are all interested in giving focus and attention to the major kinds of issues and problems that are out there

and how we can deal with them and give priority, obviously, to

those particular issues.

I am a strong believer in the Head Start program and have visited so many in my own State and talked with people and parents

and met these young people. I even had a chance during the break

to visit some in the Greater Boston area. So we are looking forward

to getting a solid result. We thank you very much for your leadership on this and we want to work very closely with you and the

chairman to try to get a positive outcome. Thank you. I will put

my full statement in the record.

Senator ALEXANDER. Thank you, Senator Kennedy.

[The prepared statement of Senator Kennedy follows:]

PREPARED STATEMENT OF SENATOR KENNEDY

I commend Chairman Enzi and Senator Alexander for scheduling

today’s hearing on Head Start, which gives us an opportunity to

consider effective ways to improve and strengthen all aspects of

this vital program.

One thing is clear—Head Start is a lifeline for the neediest families and children across the Nation. For 40 years, it has given disadvantaged children the assistance they need to arrive at school

ready to learn. Its balanced curriculum to help them develop the

intellectual skills they’ll need to meet high academic standards

later in school. Equally important, it helps them learn to get along

with their fellow students, and delivers the social and emotional

building blocks they’ll need to keep up once they reach kindergarten.

Head Start also makes it possible for these children to see doctors and dentists, and be immunized against childhood diseases. It

teaches children to eat healthy meals. Every Head Start center is

grounded in the community in which it operates and supports. Parents are welcomed into their children’s classrooms and urged to

participate actively in the local programs.

These services are backed by impressive research. Children who

participate in the program make gains in vocabulary, and develop

early reading and math skills. By the end of their kindergarten

year, Head Start children are typically performing at or above national averages. That’s a remarkable achievement, given the devastating effects of poverty on children.

Our challenge in reauthorizing Head Start this year is to build

on the program’s many strengths, identify the problems it faces,

5

and enable administrators, teachers, parents, and families to deal

with them. We welcome the opportunity today to hear more about

Head Start’s oversight, and discuss ideas to improve its management.

Our goal is to ensure that Head Start’s services reach as many

children and families as possible. The need for Head Start is still

miles from being met. Today it serves fewer than 6 out of every 10

eligible children and only 3 out of every hundred infants and toddlers through its sister program, Early Head Start.

President Bush’s budget proposes to increase funds for Head Start by only $45 million, and would set-aside those funds for nine

States willing to turn Head Start into a block grant. Block grants

are the wrong direction for Head Start. They don’t guarantee medical check-ups, healthy meals, dental visits, or medical screenings

for children. They don’t guarantee support to families and parents.

Lower quality and lower standards are not the way to strengthen

Head Start. We need to invest more—not less—in the families and

children the program serves.

We can do more to see that every dollar invested in Head Start

delivers the highest quality of services in the most effective manner. New resources for Head Start should be accompanied by effective steps to genuinely improve the program.

We welcome the testimony today from the GAO and other witnesses on the oversight and management of Head Start, especially

on ways to measure risks and potential problems more accurately

and adopt more effective strategies to meet them. We know what

works in Head Start and it’s time to put these practices into place.

For years, Head Start has had one of the most comprehensive

monitoring systems in early childhood education. Over the years,

it has been revised and improved, based on Head Start’s actual

services. Annual auditing, reporting, and financial accounting are

critical for the quality of the programs and the most effective level

of services.

It’s clear that the number of Head Start programs with serious

problems is small—15 percent or fewer of all programs, by the Department’s own calculation. But clearly, when any problem is identified in a program—no matter what the issue—it must receive appropriate attention and followup from those responsible at the Federal level.

Thanks to the bipartisan cooperation of committee members in

the last Congress, we made good progress in working together on

these improvements. We did more to enhance the skills and qualifications of Head Start teachers, upgraded the educational components of the program, and increased coordination at the State level

with other programs.

I look forward to continuing our bipartisan work this year. We

are fortunate to begin that work today by hearing from witnesses

who will share their expertise and insights from the Federal and

local levels. Thank you all for joining us this morning.

Senator ALEXANDER. I am going to give brief introductions so we

can get right on with it, and I will ask these two witnesses if they

will limit their remarks to 10 minutes or summarize their comments and focus on them. We have your statements. We appreciate

them. That will give the Senators more chance to ask questions.

6

Marnie Shaul is Director of the Education, Workforce, and Income Security Team at the U.S. Government Accountability Office.

So she is responsible for the studies GAO undertakes for the Congress on early childhood programs. Thank you very much, Ms.

Shaul, for being here.

And Dr. Wade Horn, who we will ask to go first, was named Assistant Secretary for Children and Families in the Administration

for Children and Families of the U.S. Department of Health and

Human Services. That is a very long title, but he has had a long

background in social services and is ultimately responsible for the

administration of this Federal Government for about $6.8 billion of

money that goes to Head Start grantees around our country.

So, Mr. Horn, why don’t we start with you, then with Ms. Shaul

on the report, and then we will go to questions.

STATEMENTS OF WADE F. HORN, ASSISTANT SECRETARY FOR

CHILDREN AND FAMILIES, U.S. DEPARTMENT OF HEALTH

AND HUMAN SERVICES; AND MARNIE S. SHAUL, DIRECTOR,

EDUCATION, WORKFORCE, AND INCOME SECURITY ISSUES,

U.S. GOVERNMENT ACCOUNTABILITY OFFICE

Mr. HORN. Thank you, Mr. Chairman and members of the committee. I am very pleased to have this opportunity to appear before

you today to discuss the recent report of the Government Accountability Office on Head Start. The President is committed to

strengthening Head Start, has made accountability a guiding principle of our work, and I can assure you that we take GAO’s findings very seriously.

For nearly 2 years now, we have been actively and aggressively

engaged in addressing many of the weaknesses cited in this report.

Other suggestions in the report will help us plan and implement

additional strategies for enhancing the quality and credibility of

our oversight of the Head Start program in order to ensure that all

Head Start children receive the Head Start they deserve.

The Head Start program is now in its 40th year. It is a nearly

$7 billion program, serving more than 900,000 low-income children

and families through a network of over 1,600 local grantees. Head

Start children are served in nearly 50,000 classrooms located within more than 20,000 centers which are located in more than 3,000

counties nationwide.

Head Start is, in short, a program that has wide-ranging presence and influence. It ought to be absolutely the best early childhood education program we can design. As stewards of this program, we are committed to making that goal a reality. I will focus

my testimony today on our ongoing efforts as well as some of our

planned initiatives to improve program oversight and stewardship.

As discussed in the GAO report, we have several ongoing procedures to examine program compliance and to measure results. Key

among these is the mandated triennial onsite monitoring of local

programs. Monitoring is one of our best opportunities to ensure

that every Head Start program is accountable to all applicable statutes and regulations.

In the last several months, and consistent with many of the

GAO’s observations and recommendations, ACF has implemented

several efforts to improve our oversight of local Head Start proVerDate 11-MAY-2000 15:57 Sep 26, 2005 Jkt 000000 PO 00000 Frm 00010 Fmt 6633 Sfmt 6601 S:\DOCS\20526.TXT SLABOR3 PsN: SLABOR3
7

grams. First, we have established for the first time minimum qualifications for all reviewers in the area that they are reviewing. Establishing these minimum qualifications helps ensure that all individuals on a monitoring review team have the knowledge, skills,

and experience necessary to be part of a quality review.

Second, in December of last year and February of this year, we

provided intensive multiday training for more than 1,000 reviewers

in the areas of fiscal, program management, and early childhood

development. Additional training will be conducted later this year

for reviewers in the fields of health and nutrition services, mental

health services, and family and community partnerships.

Third, we will soon be implementing a quality assurance initiative in which specially trained reviewers will lead teams to conduct

re-reviews of a sample of recently monitored grantees. We believe

this effort will substantially address GAO’s concern about consistency among reviewers and across ACF regional offices.

Fourth, we have begun conducting indepth analyses of all triennial and first-year monitoring reports to improve report quality,

comprehensiveness, accuracy, and uniformity within and across the

regions.

Fifth, ACF substantially revised the fiscal checklist used during

all fiscal reviews to incorporate a risk-based assessment approach.

This will allow us to identify fiscal issues which may suggest underlying fiscal problems.

Sixth, ACF is requiring that the program review instrument for

systems monitoring or PRISM review teams to closely examine several specific areas that were not as carefully or consistently considered in the past, including transportation services, condition and

Federal interest in facilities, salaries and staff compensation, maintenance of full enrollment, and income eligibility.

And finally, this year, ACF began emphasizing to grantees that

conducting quality, comprehensive program self-assessments are

critical to ensuring the delivery of high-quality services to children

and families in their programs.

I hope this information has provided a clear picture of our continued and more aggressive commitment to improving program oversight and monitoring. We also look forward to working with the

Congress in the upcoming discussion of Head Start reauthorization

to explore statutory changes that can enhance the Secretary’s flexibility to replace poorly performing grantees.

In conclusion, I want to assure this committee that the President, the Department, and ACF are committed to strengthening

the quality of Head Start. We acknowledge that we can and must

do better. I feel confident that, working together, we will achieve

this goal. Thank you very much.

Senator ALEXANDER. Thank you, Dr. Horn.

[The prepared statement of Mr. Horn follows:]

PREPARED STATEMENT OF WADE F. HORN, PH.D.

Chairman Alexander and members of the committee, I am pleased to have this

opportunity to appear before you today to discuss the recent report of the Government Accountability Office (GAO) on ‘‘Head Start: Comprehensive Approach to Identifying and Addressing Risks Could Help Prevent Grantee Financial Management

Weaknesses.’’ The President is committed to strengthening the quality of Head Start

to improve the school readiness of low-income preschool children and has made acVerDate 11-MAY-2000 15:57 Sep 26, 2005 Jkt 000000 PO 00000 Frm 00011 Fmt 6633 Sfmt 6621 S:\DOCS\20526.TXT SLABOR3 PsN: SLABOR3
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countability a guiding principle of our work. Within this context, I can assure you

that we take GAO’s findings very seriously and for nearly 2 years we have been actively and aggressively engaged in addressing the weaknesses cited in the report.

The Head Start program is now in its 40th year. It is a nearly $7 billion program,

serving more than 900,000 low-income children and families through a network of

1,600 local grantees. There are 212,000 staff employed in Head Start programs and

more than 1.3 million persons volunteer in local programs. Head Start children are

served in nearly 50,000 classrooms located within more than 20,000 centers, which

are located in more than 3,000 counties nationwide. Head Start is, in short, a program that has wide ranging presence and influence. It ought to be absolutely the

best early childhood education program we can design. As stewards of this program,

we are committed to making that goal a reality.

I will focus my testimony today on our ongoing efforts, as well as some of our

planned efforts, to improve program oversight and stewardship. Several of GAO’s

findings mirror weaknesses we previously identified and are actively working to resolve. Other suggestions in the report will help us plan and implement additional

strategies for enhancing the quality and the credibility of the Head Start monitoring

system in order to ensure that all Head Start children receive the head start they

deserve.

Head Start Monitoring

As discussed in the GAO report, we have several ongoing procedures to examine

program compliance and to measure results. Key among these is the mandated, triennial, onsite monitoring of local programs. Under the Head Start Act, each grantee

must be monitored at the end of the 1st year of operation and intensely at least

once every 3 years thereafter. These reviews are conducted by consultants with professional expertise in their assigned area, under the direction of a Federal team

leader. Most teams are composed of approximately six to eight reviewers; additional

reviewers may be assigned to review larger or more complex programs.

Written reports containing findings from these reviews are provided to each

grantee and corrective action must be implemented by the grantee. Programs identified as deficient must correct all deficiencies within a prescribed period of time or

we must seek to terminate the grantee’s authority to operate that Head Start program.

In fiscal year 2004, the Administration for Children and Families (ACF) conducted

triennial reviews of 570 programs. Eighty-nine of these programs were identified as

deficient. Each was issued a report by ACF mandating correction of their deficiencies within a specified time period, not to exceed 1 year. Any of these 89 grantees that do not correct their deficiencies must have their grant terminated. In fiscal

year 2004, ACF replaced 20 grantees with unresolved fiscal and quality issues.

Monitoring is one of our best opportunities to measure the quality of Head Start

programs. As Federal stewards, we must use our monitoring procedures to assure

we are holding every Head Start program accountable to all applicable statutes and

regulations.

In the last several months, and consistent with many of the GAO’s observations

and recommendations, ACF has implemented several efforts to improve our monitoring.

First, we have established for the first time minimum qualifications for all reviewers in the area they are reviewing. For example, a reviewer wanting to do fiscal reviews must have a minimum of a bachelor’s degree with at least 12 credits in accounting, with a preference for a degree in accounting. Establishing these minimum

qualifications helps assure that all individuals on a monitoring review team have

the knowledge, skills and experience necessary to be part of a quality review. Reviewers not meeting these qualifications can no longer participate in Head Start reviews. Qualified individuals must be annually certified and meet our minimum requirements. Additional individuals will be recruited, trained, mentored, and added

to the reviewer pool.

Second, we have implemented a formal assessment process in which the Federal

team leaders and reviewers assess the performance of their team members. These

assessments are conducted after every review. Assessment scores and comments are

tracked for individuals over multiple reviews. Reviewers with identified patterns of

‘‘poor performance’’ are removed from the Head Start reviewer pool.

Third, in February and December 2004 we provided intensive, multi-day training

for more than one thousand reviewers in the areas of fiscal, program management,

and early childhood development. We also have provided and are continuing to provide professional development for Federal team leaders and Federal grants staff.

Training for team members provides a very clear understanding of the nature of

9

their responsibilities as part of a monitoring team, and the important roles they

play in helping to assure a quality Head Start experience for every child and family.

Additional training will be conducted later this year for reviewers in the fields of

health and nutrition services, disabilities services, mental health services, and family and community partnerships. We feel confident that these three changes will go

a long way in helping us assure that only qualified, skilled reviewers perform the

vital role of evaluating the comprehensiveness, local management, and quality of

our Head Start programs.

Soon we will implement a quality assurance initiative in which specially trained

reviewers will lead teams to conduct re-reviews of a sample of recently monitored

grantees. We believe this effort will substantially address GAO’s concern about consistency among reviewers and across ACF regional offices. The re-review teams will

go onsite to grantees that have been monitored within the previous few months. A

second, complete monitoring review will take place and the results will be evaluated

by the Head Start Bureau. This will allow us to make better-informed professional

judgments about the reliability of our current monitoring teams, including individual reviewers and Federal team leaders. We believe this approach also will allow

us to achieve more complete, more accurate, and more consistent monitoring outcomes. In addition, we are conducting indepth analyses of all triennial and 1st year monitoring reports. The results of these analyses are provided to regional administrators

for regional quality assurance and staff training. The Head Start Bureau has created a two-part strategy to improve report quality, comprehensiveness, accuracy and

uniformity within and across regions. First, draft deficiency reports are analyzed

and reviewed for accuracy by the Head Start Bureau prior to release to grantees,

with the results and recommendations of these analyses sent to the regional administrators. In the second part of this strategy the Head Start Bureau has established

standards for all other letters and reports related to grantee monitoring.

Additionally, ACF is continuing our emphasis on improving each grantee’s fiscal

viability. For example, the Fiscal Checklist, now used by all fiscal reviewers, was

substantially revised in fiscal year 2005 to use a ‘‘risk-based’’ assessment approach

in alignment with GAO’s recommendation. The Fiscal Checklist includes a set of

very specific, prioritized indicators, or ‘‘red flags,’’ designed to identify fiscal issues

which may suggest underlying fiscal problems. These indicators focus on those areas

or irregularities which are most likely to have the greatest adverse impact on the

fiscal accountability of the grantee. Grantees whose indicators suggest current or

possible future problems will be subject to a more detailed review of their fiscal systems and records to determine if there are indeed problems that impact the grantee’s fiscal operations and management.

Further, ACF is requiring the Program Review Instrument for Systems Monitoring (PRISM) review teams to closely examine several specific areas that were not

as carefully or consistently considered in the past. These include transportation

services, condition and Federal interest in facilities, salaries and staff compensation,

maintenance of full enrollment, and income eligibility.

Also, in fiscal year 2005, ACF is emphasizing the conduct of required grantee selfassessments. Grantees have been reminded that conducting quality, comprehensive

program self-assessments are critical to ensuring the delivery of high-quality services to children and families. Grantees must conduct accurate, comprehensive selfassessments building on information from the triennial Federal monitoring review

to further program improvement, regularly identify issues, correct problems, and

improve services.

GAO Recommendations

I hope this information has provided a clear picture of our continued and more

aggressive commitment to improving program monitoring. This is a goal we have

undertaken in earnest over the past year. The GAO report synthesized many of the

concerns we have had regarding program weaknesses. This report affirms that we

are on the right track in strengthening our oversight and accountability efforts.

While my initial remarks today have provided some insight into our responses to

the GAO recommendations, I would like to take this opportunity to briefly and specifically walk through each of the recommendations in their report and our response.

1. (a) ACF should develop a strategy to produce a comprehensive risk assessment of the Head Start program which would provide reasonable assurance that a Head Start grantee’s finances are reasonably sound and that

program objectives are being met.

We fully support the recommendation to develop a ‘‘comprehensive risk assessment’’ of the Head Start program. We are looking to both the HHS Office of InspecVerDate 11-MAY-2000 15:57 Sep 26, 2005 Jkt 000000 PO 00000 Frm 00013 Fmt 6633 Sfmt 6621 S:\DOCS\20526.TXT SLABOR3 PsN: SLABOR3
10

tor General’s Risk Assessment Protocol as well as tools used by GAO that have been

adopted by other agencies in ACF in our efforts to develop this comprehensive risk

assessment.

Over the next few months, we will continue developing an approach that will

allow us to identify, early on, grantees that have issues that could suggest potential

fiscal or programmatic problems. Beginning with the indicators in the fiscal checklist, we will identify the factors we should use in determining a grantee’s fiscal and

programmatic accountability. We then will identify the data source or sources we

will use to consistently collect information about each of the factors. Finally, we will

determine the relative risks associated with each of these factors and develop a rating system that tells us when a grantee is at risk of heading down a path to larger

fiscal or programmatic problems. We believe that such a system will enable us to

identify at risk grantees while there is still time to work with them and implement

appropriate change.

1. (b) ACF should collect data on improper payments made by Head Start

grantees.

ACF will assure that grantees are held accountable for improper payments made

with Head Start grant funds. For example, this year monitoring teams will be looking more carefully and more systematically at the way grantees expend all of their

Head Start funds. Also, we are continuing our strong focus on improper payments

begun last year by visiting 50 randomly chosen grantees to review grantees’ enrollment files and determine whether they are serving only children who are eligible

for Head Start.

As an additional strategy for examining improper payments, we have begun rigorously enforcing the new requirement enacted by Congress to cap the compensation

of Head Start staff. We will move to disallow costs expended by a Head Start grantee when they are in violation of this cap. Further, we will continue our efforts to

assure all grantees are serving the full number of children for which they have been

funded by holding grantees accountable for upholding all terms and conditions of

their grant award. Grantees failing to do so will see their funding levels reduced.

2. ACF should train and certify all PRISM reviewers.

As I discussed earlier, over the last several months, we provided PRISM training

to Federal team leaders and to fiscal, program design and management, and early

childhood consultants. ACF has and will continue to schedule additional training

events for consultants in other areas of expertise to ensure that all reviewers have

appropriate training. ACF agrees with GAO that reviewer training needs to be provided regularly and designed to assure reviewers have the knowledge and appropriate understanding of their roles in assisting ACF in determining the management and quality of our Head Start programs.

3. ACF should develop an approach to assess the results of PRISM reviews and ensure consistency among Regional Offices.

ACF’s Head Start Bureau is continuing an effort begun last year in which all

monitoring reports to be issued by the regional offices are reviewed and critiqued,

providing feedback to the regions about the quality, comprehensiveness and accuracy of these reports and related letters to grantees. We also are analyzing data

from monitoring findings and discussing areas of inconsistency within and across

our regional offices. When regional data indicate inconsistencies in the number and

types of problems found in Head Start grantees, we are working more closely with

those regional offices to uncover the reasons for the inconsistencies and be certain

they do not reoccur.

As mentioned earlier, in fiscal year 2005, ACF will be implementing a quality assurance system in which a selected number of programs will be ‘‘re-reviewed’’ a few

months after their regularly scheduled PRISM review. This is another method that

will help us achieve greater consistency across regions and among reviewers. Further, ACF is supportive of legislative change that can provide the Administration

increased flexibility to use the best team leaders available for a particular review

by not requiring every team leader to be a Federal employee.

We want to acknowledge our agreement with the GAO, that for too many years

we have relied too heavily on a grantee’s self-certification that serious non-compliances have been corrected. There may be some situations in which such certifications are sufficient; however, reliance on this practice for ensuring grantee corrective action must be dramatically reduced. Therefore, ACF is significantly increasing

the use of onsite visits to verify corrective actions. These site visits will focus on

whether the grantee has made systemic, sustainable changes to reduce the possibility of repeating problems in the future. This approach also will help regional offices

more consistently assess a grantee’s success in correcting identified problems in both

the short and the long term.

11

4. (a) ACF should implement a quality assurance system to assure onsite

reviews are being conducted as intended to provide ACF with objective

and accurate data about grantees.

As noted above, in fiscal year 2005, ACF will be implementing a quality assurance

system designed to enhance consistency and quality among both regional offices and

reviewers. Specially trained review teams made up of some of the best reviewers in

the country will visit grantees that have been monitored within the last few months.

A complete monitoring review will take place; the results of which will be shared

with the responsible ACF regional office. This process will allow us to make more

informed, professional judgments about the reliability of our current monitoring

teams; including individual reviewers and Federal team leaders. We believe this approach will help enhance the process of achieving more complete, more accurate,

and more consistent monitoring outcomes.

4. (b) ACF should assure the accuracy of its data collection forms.

ACF and others rely upon the annual Program Information Report (PIR) and

other data. We will, therefore, continue to explore ways to increase the accuracy of

the PIR and other data sources. We will, for example, initiate an effort this year

in which we will visit randomly selected Head Start programs to conduct a validation study of the data reported on the PIR. We also initiated procedures to assure

that the information grantees report on their required salary comparability studies

is accurate and current. In addition, Head Start staff currently is working with ACF

information technology staff to develop a single, integrated database that will contain all the current Head Start data sources. This integrated database will allow

us to take a comprehensive approach to examining the management, fiscal and programmatic status of Head Start grantees.

5. ACF should make greater use of information currently available to regional offices to more quickly identify potential risks.

ACF will make more complete use of all data sources available to us to assure

we are able to identify risks as quickly as possible. Central and regional offices will

jointly develop specific protocols to assure that we are making full and timely use

of the fiscal and other data available.

6. ACF should recompete Head Start grants when the current recipient

has not met its obligations in the areas of program or financial management.

ACF is looking forward to working with the Congress in the upcoming discussions

on Head Start reauthorization to explore changes to the act that can enhance the

Secretary’s flexibility to replace poorly performing grantees. Without such statutory

changes, we do not believe we can implement GAO’s proposed recommendation in

this area. It is our position that, because of current statutory language there can

be lengthy delays before we can replace the grantee in charge of Head Start operations in that community.

More specifically, we would like to work with this committee to amend language

in the current Head Start Act which provides current grantees with priority consideration for funding and which requires grantees to be given a hearing before being

replaced, no matter how poor their operations and performance may be. We believe

the current system makes it unnecessarily time consuming and difficult to remove

grantees which are not responsibly delivering comprehensive, quality services. Like

GAO, we are particularly dismayed by the increasing number of grantees with recurring problems that fail to correct or only temporarily correct areas of non-compliance and deficiencies. We look forward to working with Congress to give HHS the

ability to quickly remove poor performing grantees so that we are providing the best

quality services possible to Head Start children.

Additional Program Improvement Efforts

I would like to close my remarks by sharing with this committee several other

efforts the Administration is engaged in designed to improve grantee quality and

accountability. Foremost among these is working with this committee and this Congress to pass a Head Start reauthorization bill which will send a clear message that

all Head Start grantees are expected, at all times, to deliver high quality services

to every enrolled child and family.

First, we would like the Congress to help us increase the involvement of selected

States in Head Start as we move to increase coordination between Head Start, State

pre-K programs, and child care services. Second, we would like the Congress to provide the Secretary with greater discretion to use funds appropriated for Head Start

in the most effective manner possible by enacting changes to the current statutory

set-aside for training and technical assistance. Third, we would like the statute to

more clearly state the expectation that all children should leave Head Start prepared for school and that the standards for school readiness are being met. Fourth,

12

we would like increased flexibility in the makeup of our monitoring teams so that

we always can send out the most qualified individuals for the job. And fifth, we

would like to work with Congress to ensure that the statute allows us to deal with

poorly performing grantees fairly but expeditiously.

In addition to these proposed statutory changes, I would like to close by sharing

information about one other training and technical assistance project which, although not directly related to monitoring, plays an important role in assuring grantees are providing high quality services to the communities they serve. We are in

the 2nd year of a new training and technical assistance (T/TA) system that we believe will help improve grantee quality and, by so doing, address some of the underlying issues raised by GAO. We have, for the first time, hired T/TA specialists who

are assigned to work on a regular basis with individual grantees. These specialists

will help grantees identify T/TA needs and appropriate ways of meeting these needs.

They will visit their assigned grantees several times a year to focus on improving

grantees. The local specialists are supported by a team of content experts in each

regional office to provide guidance to grantees and to support the local specialists

in their technical assistance work within programs.

Conclusion

In conclusion, I can assure this committee that the President, the Department

and ACF are committed to strengthening the quality of Head Start. In keeping with

the findings of this GAO report—we can do better. The Administration for Children

and Families will continue to improve program oversight to ensure program quality

and effectiveness. At the same time, we look forward to working with you to make

appropriate changes to Head Start’s legislation that will hold all grantees accountable for all requirements and for providing quality service. I feel confident that together we will achieve these goals.

Thank you. I would be happy to answer any questions.

13

14

RESPONSE TO QUESTIONS OF SENATOR ENZI BY WADE F. HORN

Question 1. The Senate bill to reauthorize the Head Start program from the 108th

Congress included provisions that would require Head Start grantees to recompete

for those funds periodically. One of the GAO’s recommendations to the Department

is to provide the current grantee with a certain degree of priority over other grantees. How should Congress help support these efforts to ensure high quality grantees

are able to continue serving children, while still weeding out less effective or troubled programs?

Answer 1. We would welcome the opportunity to work with you on language that

would enhance the Secretary’s ability to periodically recompete Head Start grants

and replace poorly performing grantees. In conjunction with this type of change,

statutory change also is needed to allow the Secretary to defund a deficient grantee

which has not corrected its deficiencies within the required timeframe. Currently,

section 646(a) of the Head Start Act precludes terminating funding of a grantee

pending appeal and a full and fair hearing, which often can take several months

and, sometimes more than a year.

Question 2. In the GAO report where the comments from the Department of

Health and Human Services are included, the Department suggests that it will take

action or continue to take action to address many of the concerns raised in the report. Since the report suggests that the Department may have an interest in having

15

Congress clarify our intent in statute, are there specific recommendations you can

make that will help Congress support your activities to improve the program?

Answer 2. My testimony provided a number of suggested changes to Head Start

that we would like to explore with the Congress. First, we would like the Congress

to help us increase the involvement of selected States in Head Start as we move

to increase coordination between Head Start, State pre-K programs, and child care

services. Specifically, we would like Congress to include in the reauthorization of the

Head Start Act a provision that will allow interested States to include Head Start

in their preschool plans. Under the proposal, States are offered the opportunity to

coordinate preschool programs with Head Start programs in exchange for meeting

certain accountability requirements. Second, we would like the Congress to provide

the Secretary with greater discretion to use funds appropriated for Head Start in

the most effective manner possible by enacting changes to the current statutory setaside for training and technical assistance. Third, we would like the statute to more

clearly state the expectation that all children should leave Head Start prepared for

school and that the standards for school readiness are being met. Fourth, we would

like increased flexibility under section 641A of the Head Start Act in the makeup

of our monitoring teams so that we always can send out the most qualified individuals for the job. And fifth, we would like to work with Congress to ensure that the

statute allows us to deal with poorly performing grantees fairly but expeditiously.

As I indicated earlier, the current statute requires a protracted hearing process before we can defund deficient grantees. I would be pleased to work with the committee to provide details on each of these proposals.

Question 3. According to the GAO report, more than half of the grantees identified

as having financial management problems also demonstrated recurring financial

management issues. Even so, the Department of Health and Human Services has

not taken action to deny grant funding to these programs. What can Congress do

to ensure that appropriate action is taken against grantees with severe and recurring financial management problems?

Answer 3. One problem is that in the past ACF Regional Offices often accepted

grantee letters of compliance stating that non-compliances were corrected. Although

there are legitimate situations in which a letter and corresponding documentation

may be sufficient to determine that a non-compliance has been corrected, there also

are many situations that should be verified through an onsite visit. In fiscal year

2005, ACF is establishing a new policy that reduces the acceptance of letters of compliance and greatly increases the use of onsite followup reviews to verify compliance.

This will help reduce the number of repeat findings by assuring, onsite, that all

problems have indeed been corrected.

In addition, ACF is developing a ‘‘comprehensive risk assessment’’ of the Head

Start program. This approach will allow us to identify, early on, grantees that have

issues that could suggest potential fiscal or programmatic problems. Beginning with

the indicators in the fiscal checklist, we will identify the factors we should use in

determining a grantee’s fiscal and programmatic accountability. We then will identify the data source or sources we will use to consistently collect information about

each of the factors. We also will determine the relative risks associated with each

of these factors and develop a rating system that tell us when a grantee is at risk

of heading down a path to larger fiscal or programmatic problems. This type of system will enable us to identify at risk grantees while there is still time to work with

them and implement appropriate change.

Finally, Congressional action is needed to allow the Secretary to defund a deficient grantee which has not corrected deficiencies within the required timeframe.

Currently, section 646(a) of the Head Start Act precludes terminating funding of a

grantee pending appeal and a full and fair hearing.

Question 4. The GAO report and your testimony today identifies self-certification

by grantees that they have resolved audit or site-visit findings as one of the reasons

the Administration on Children and Families is having difficulty preventing recurring financial or other types of mismanagement. What role do you see self-certification playing to resolve concerns in the future, and what can Congress do to support efforts by the Administration to ensure programs are independently reviewed?

Answer 4. As I discussed in my response to your previous question, ACF is making significant changes in the way we determine if grantees have corrected identified areas of non-compliance. In the past, we have often accepted grantee self-certification and to do onsite visits to verify compliance only on occasion. We are fundamentally revising this approach to require that verification of compliance be determined through an onsite visit and only, for a relatively small number of cases,

will we accept grantee self-certification.

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Question 5. The issue of recompetition appears to be the only area where the Administration on Children and Families suggests they need Congress to be involved

in addressing the suggestions within the report. Are there additional ways that Congress can improve the accountability process within the Head Start program, and

is there a role for Congress to play in the other recommendations made by GAO?

Answer 5. The issue of recompetition and a related issue of the grantee appeal

process are key areas in need of statutory change to assist us in improving the quality of Head Start programs. Specifically, with respect to the grantee appeal process,

we would like to work with the Congress to change provisions in the Head Start

Act which allow Head Start grantees which have been judged to be poorly performing and, consequently, have been sent letters terminating their grant to continue

receiving their full Head Start grant during the appeals process. Most Head Start

appeals take several months, some have lasted for well over a year and the grantee

which already has been determined to be deficient is allowed, during this time, to

continue to operate its failing Head Start program. We would like to change this

and give Head Start grantees the same appeal rights as all other HHS grantees

whose funding is discontinued as soon as a determination is made that performance

is deficient. Interim grantees would be put in place to ensure that services are not

interrupted.

RESPONSE TO QUESTIONS OF SENATOR ENSIGN BY WADE F. HORN

Question 1. The GAO report stated that many individuals hired as PRISM (Program Review Instrument for Systems Monitoring) reviewers do not have their references checked prior to hiring. This has led to widespread outcome differences

across regions during triennial PRISM reviews at Head Start Centers. I am very

concerned about this trend and the part it may have played in allowing grantees

to continue receiving Federal funds despite poor accountability and fiscal controls.

As part of the implementation of minimum requirements for these reviewers will

references and qualifications be checked prior to hiring? What benefits do you see

of having private sector individuals complete these PRISM reviews?

Answer 1. ACF will, within the next few weeks, begin a policy of checking reviewer references and qualifications. We appreciate that it is important to assure

that all Head Start reviewers have the skills and background needed to properly

perform their job of monitoring the performance of Head Start programs. This effort,

coupled with additional efforts we are currently undertaking—such as implementing

a quality assurance system in which a selected number of programs will be re-reviewed within a few months of their initial onsite review, establishing a rating system for reviewers and providing all reviewers indepth training—will help address

the problem of Regional inconsistency. We also are working closely with our Regional Offices to assure that all Federal Team Leaders fully understand the importance of doing a professional and objective assessment of each Head Start program,

and we will explore cross regional review efforts, where appropriate, as another way

to enhance regional consistency.

We will assure that all fiscal reviewers are competent to do the job for which they

have been hired. These reviewers now have to meet, for the first time, minimum

qualifications and have been provided indepth training on how to conduct a fiscal

review. Fiscal reviewers are, in fiscal year 2005, using a new fiscal checklist which

will, we believe, go a long way to identifying Head Start grantees with fiscal problems early on when there is still time to correct the problem.

We think we must continue to take advantage of using reviewers who are not

Federal employees. There are many individuals available to the Head Start review

system who are expert in their fields. We would not be able to even approach this

level of expertise using only the staff in the Federal Government who work on Head

Start. Most Federal Head Start staff are generalists who, while certainly knowledgeable about Head Start and early childhood education, do not have the kinds of specific skills, experiences or training that our private reviewers have. We have, for example, dentists, certified public accountants, early childhood experts and many

other well qualified contractors who are vital to a comprehensive, quality monitoring

system.

In addition, it would be extremely helpful if the committee would consider a statutory change providing flexibility in the makeup of monitoring teams so that we can

always send out the most qualified individual for the job. Currently, section

641A(c)(2) requires that monitoring reviews are performed and supervised by departmental employees knowledgeable about Head Start. We would like this changed

to provide the Secretary the flexibility to ensure that reviewers are experts in the

fields they are responsible for reviewing.

17

Question 2. In the case of the Economic Opportunity Board (EOB) in Las Vegas,

the entity was required to submit annual audits. It is unclear to me how these audits were used and whether onsite review teams relied on the audit data. In fact,

the GAO report stated that many regional staff do not effectively use the audit data

provided, often because of the lag in reporting the audit outcomes. Over the course

of 2 years EOB had two different onsite reviews, first the triennial PRISM review,

and second, a follow up review by the Head Start Bureau to determine if the deficiencies found in the PRISM review had been resolved. What happens with this

audit data once it is reported to the Head Start Bureau and the Administration for

Children and Families? As part of the comprehensive risk assessment, is the Bureau

going to put in place policies that utilize these audits in determining whether a

grantee is a financial risk, or having financial difficulties?

Answer 2. ACF currently reviews all grantee audits which have findings in order

to help inform us about the state of our grantees’ fiscal health. OMB Circular A-133 requires non-Federal entities that expend $500,000 or more

in a year in Federal awards to have an audit conducted for that year. Audits are

to be submitted to the Federal Audit Clearinghouse which reviews the audit reports

to assure they meet the A-133 requirements. HHS Audits are then sent to the HHS

Office of the Inspector General (OIG), where they are reviewed and those with any

findings are assigned to the appropriate HHS office. For audits with findings in the

Head Start program, the audit is sent to the responsible ACF regional office for resolution. ACF makes a determination as to how to resolve the audit findings and so

informs the grantee. Findings with monetary values typically require the grantee

to pay back funds. Non-monetary findings require the grantee to correct its problems to the satisfaction of the ACF office.

Onsite review teams look at many documents in assessing grantee performance,

including the annual audit. While no one document necessarily provides all the information needed to fully understand the fiscal state of any Head Start program,

using many documents, plus using the newly revised fiscal checklist, should provide

reviewers with a full understanding of the financial situation of a Head Start grantee. ACF will certainly include audit findings as part of its risk assessment strategy

to look holistically at the programmatic and fiscal health of all Head Start programs.

Question 3. I was pleased to see in your testimony that the Head Start Bureau

and the Administration on Children and Families are working on a comprehensive

risk assessment that will help identify grantees that have potential fiscal or programmatic problems. However, it did greatly concern me to read in GAO’s report

that 838 grantees, or 76 percent of those reviewed using the PRISM system in 2000

were out of compliance with one or more financial management standards. It disturbed me even more that 440 or 53 percent of those same grantees were cited again

for fiscal or programmatic problems in the subsequent 2003 review. About half of

those grantees were found to have two or more areas of concern. It is my hope that

in creating the comprehensive risk assessment that the Head Start Bureau and

ACF will seriously look at this problem and come up with viable answers. Do you

anticipate that the new risk assessment will help in reducing the number of repeat

offenders? Also, do you believe that this new assessment will help grantees find

long-term solutions to fiscal management concerns?

Answer 3. ACF anticipates that risk assessment will help in reducing the number

of ‘‘repeat offenders’’ in the future. ACF already has identified the risk factors that

we are moving quickly to address. For example, in the past, Regional Offices often

accepted grantee letters of compliance stating that non-compliances were corrected.

Although there are legitimate situations in which a letter and corresponding documentation may be sufficient for a Regional Office to determine that non-compliance

has been corrected, there are also many situations that should be verified through

an onsite visit. In fiscal year 2005, ACF is establishing new policy that reduces the

acceptance of letters of compliance and greatly increases the use of onsite followup

reviews to verify compliance. This will help reduce the number of repeat findings

by assuring, onsite, that all problems have indeed been corrected.

ACF believes that some repeat non-compliances occur because the original review

team did not establish and report the connection between a non-compliance and the

underlying governance and/or management systems that should have detected and

corrected the non-compliance as part of their ongoing local oversight responsibilities.

Through training, policy development, and quality assurance ACF will insist on review teams addressing these interrelationships and making them known to grantees

in monitoring reports so that grantee corrective action is completed in a way that

ensures that changes are long-lasting and sustainable in fiscal as well as programmatic areas.

18

Senator ALEXANDER. Ms. Shaul? I guess I should say Dr. Shaul.

Excuse me.

Ms. SHAUL. Mr. Chairman and members, thank you for the opportunity to present the findings of our review on the financial

oversight of the Head Start program by the Department of Health

and Human Services.

As you pointed out, Head Start has provided services to low-income children for about 40 years, and as both you and Dr. Horn

point out, it is the largest Federal investment in early childhood

education and care. So it is important that this program is managed so that it ensures that children receive the services that they

do deserve.

With me today are members of the GAO team that worked on

this report.

My remarks today focus on three issues. First, risk assessment,

the extent to which the Administration for Children and Families,

which is the part of HHS that is responsible for Head Start, connects the information it has to make an assessment of financial

risks. Second, information quality, the quality of information in

ACF’s processes. And third, correcting financial problems, the effectiveness of ACF’s approaches in ensuring that grantees with financial weaknesses correct their problems.

Let me turn first to risk assessment. ACF does not bring the information it collects together to comprehensively assess the financial risks the program faces. We brought a chart over here which

shows a number of individual processes that ACF has for looking

at the program. But instead of integrating this information, which

is collected by several ACF offices, and I am pointing out on this

chart—we have got these colored in some of the different offices in

ACF that have some responsibility for the Head Start program—

instead of integrating that information, Head Start sometimes relies on ad hoc responses, for example, in response to calls made to

regional offices about grantee problems or to questions from Congress. This type of response is useful, but it cannot substitute for

a comprehensive approach to determining where Head Start faces

the greatest risks.

Second, regarding information quality, we found problems with

ACF’s processes, and again, I am referring to these processes in the

chart over here. For example, different onsite teams have had inconsistent findings about the status of the same grantee. Let me

give you another example. The information provided in ACF’s annual surveys is not verified and some critical information, such as

enrollment, has been inaccurately reported by grantees.

Third, with respect to correcting financial problems, we found

that ACF is not fully effective in ensuring that grantees correct

their financial problems. In 2000, 76 percent of the grantees ACF

reviewed onsite were out of compliance with one or more financial

management standards. And since then, when ACF did a followup

visit, more than half of these grantees still were not compliant with

financial standards.

A small percent of Head Start grantees have a level of noncompliance that ACF determines deficient, a status that brings corrective action beyond self-certification. However, we found that

ACF’s regional offices did not use common criteria to determine deVerDate 11-MAY-2000 15:57 Sep 26, 2005 Jkt 000000 PO 00000 Frm 00022 Fmt 6633 Sfmt 6601 S:\DOCS\20526.TXT SLABOR3 PsN: SLABOR3
19

1GAO, Head Start, Comprehensive Approach to Identifying and Addressing Risks Could Help

Prevent Grantee Financial Management Weaknesses, GAO-05-176 (Washington, D.C.: Feb. 28,

2005).

ficiency. In our review of 20 grantee files that contain similar financial problems, and where we would have expected to see similar

results, half were deemed deficient and half were not.

Finally, when ACF finds that a grantee has very serious and continuing problems that may impair services to children, its corrective action may be limited. Over the past decade, a relatively small

percentage of grantees have relinquished their grants or were terminated.

As Dr. Horn pointed out, ACF generally agreed with GAO’s recommendations to strengthen the tools it uses for financial management. However, ACF disagreed with GAO’s interpretation of its authority to recompete grants. ACF says that it must give current

grantees priority at renewal time, which effectively eliminates its

opportunity to replace grantees then. We believe that when grantees reapply for their grant, ACF has an opportunity to change

grantees if a grantee fails to fulfill program and financial requirements. For that reason, we suggested that the Congress might

want to consider clarifying the circumstances under which ACF can

recompete a Head Start grant.

Mr. Chairman, that concludes my remarks. I would ask that my

full statement be placed in the record and I would be pleased to

answer questions. Thank you very much.

Senator ALEXANDER. Thank you, Dr. Shaul, and thanks to you

and your team for your work at the request of Congress. It is a

great help.

[The prepared statement of Ms. Shaul follows:]

PREPARED STATEMENT OF MARNIE S. SHAUL

Mr. Chairman and members of the committee, I am pleased to be here today to

discuss our recent report on oversight of the Head Start program by the Department

of Health and Human Services (HHS). Although Head Start is a popular program

and millions of low-income children have benefited from the program over the past

40 years, it is important to ensure that all grantees are held accountable for achieving program results and properly managing their Federal funds. The reauthorization of Head Start presents an opportunity to address some of the management

challenges facing the Head Start program.

Head Start is the Federal Government’s single largest investment in early childhood education and care for low-income children. HHS’s Administration for Children

and Families (ACF) manages Head Start and relies on hundreds of different grantees throughout the country to provide services to more than 900,000 children and

their families. Head Start funding increased three-fold in real terms during the

1990s. Currently, ACF disburses about $6.8 billion annually to Head Start grantees.

As you can imagine, managing a program of this size, with this many grantees and

beneficiaries, can present many challenges.

My testimony today will focus on how well ACF manages the risks associated with

the Head Start program. Specifically, I will discuss: (1) ACF’s processes to assess

financial risks; (2) how those processes can be improved to ensure the accuracy and

reliability of the information ACF collects on its Head Start grantees; and (3) the

effectiveness of the approaches ACF uses to make sure Head Start grantees address

any financial management weaknesses in a timely manner.

My written statement is drawn from our recent report on Head Start risk management, which was completed for the committee in accordance with generally accepted government auditing standards.1

In summary, ACF does not have a comprehensive risk assessment process it can

use to collect information on how well grantees are performing and managing their

Federal grant funds. Such an assessment should be able to provide ACF with the

information it needs to target its oversight activities, reduce the risks inherent in

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managing a large Federal grant program, and help prevent grantees from failing financially, through earlier intervention. While ACF has many processes it uses to

collect information on its grantees, these efforts are conducted by different organizations within ACF, and ACF does not have a process in place to systematically bring

the information together in one place to do an assessment of how well the program

is operating.

When we looked more closely at ACF’s oversight processes, we identified flaws

that limit the quality, accuracy, and reliability of the information ACF collects on

its grantees. For example, ACF does not have a quality assurance process that could

validate the findings of the reviews it conducts of its grantees at least every 3 years;

it does not verify the accuracy of the data it asks its grantees to submit on key performance indicators each year; and it does not reconcile a grantee’s actual withdrawals with its reported expenditures until all of the funds have been spent. These

flaws limit the information ACF has on Head Start grantee’s financial status and

operations and, as a result, many program specialists in ACF regional offices that

we visited told us they most frequently learn that a grantee is having trouble

through a call from a parent or teacher reporting a problem. Program specialists

said that such calls were a routine part of their day-to-day monitoring activities.

Over-reliance on this approach to identifying problems can result in missed opportunities to help grantees address management challenges before they become problems. As a result, unchecked problems may worsen. Although infrequent, there have

been cases in which grantees have furloughed employees or temporarily closed centers—thereby disrupting services to children and their families—because they spent

their grant funds too quickly and did not adequately manage their grants to ensure

that there would be funds available throughout the school year.

When ACF identified grantees with financial management problems, we found

that it took limited actions to ensure that grantees quickly corrected their problems

and made lasting changes to their programs so the problems would not surface

again. This is a concern because ACF’s data show that more than 76 percent of

Head Start programs that were reviewed in 2000 were out of compliance with financial management standards, and more than half of these grantees were still out of

compliance during their next review. When we looked at the approach ACF takes

to ensure that grantees correct their problems, we found that ACF most frequently

relies on grantees to self-certify that they have corrected their problems without

ever visiting the grantees for verification. One of the more aggressive approaches

ACF can take to address longstanding problems is to require the grantee to develop

and implement a quality improvement plan, but first ACF must declare the grantee

‘‘deficient’’—a term it uses to identify grantees with severe problems. Yet, we noted

inconsistencies in the process used by the ACF regional offices to determine the severity of the problem. As a result, one grantee could be deemed deficient while another, with similar problems, would not. We also found that ACF makes limited use

of its authority to terminate its relationship with poorly performing grantees. ACF

does not seek competition for a grant until after the current grantee has exhausted

all its appeals or it has convinced a poorly performing grantee to voluntarily relinquish its grant. The process to remove a grantee that fails to perform up to standards is protracted, and that grantee can continue to receive funds long after financial management weaknesses have been identified. In the meantime, the community

has no other option for Head Start services and low-income children may not receive

the quality or intensity of services that they need.

We made a number of recommendations in our report and ACF agreed to implement many of them. Implementing these recommendations will go a long way towards ensuring that those responsible for overseeing the Head Start program and

its 1,680 grantees have the information they need to target oversight resources effectively and reduce the program’s risks. More importantly, however, these improvements should help ACF prevent grantee financial management weaknesses before

the problems become too severe. We also recommended that ACF make greater use

of its authority to seek competition by taking steps to seek qualified applicants

where the current grantee fails to meet program requirements. While such a step

should be taken after carefully considering all available options, competition would

help to ensure that children are no longer served by poorly performing grantees. Ultimately, enforcing all the program’s requirements—especially financial management requirements—strengthens the Federal commitment to poor children and their

families by effectively managing scarce Federal resources and making sure as many

eligible families as possible can participate in the program.

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BACKGROUND

Begun in 1965 as part of the Johnson Administration’s War on Poverty, Head

Start offers poor children and their families a range of services, including preschool

education, family support, health screenings, dental care, and assistance in accessing medical services. The program may either provide the services directly or facilitate access to existing services. Eligibility for Head Start is generally limited to children who are below the age of school entry and from families with incomes below

the Federal poverty level or receiving cash assistance from the Temporary Assistance for Needy Families program. To accomplish Head Start’s goals for these poor

children and families, the Congress last year provided $6.8 billion in Federal funds,

which HHS awards directly to nearly 1,700 grantees nationwide. As funding for this

longstanding program has grown, so has the risk associated with any mismanagement of program funds.

While effective oversight of Federal funds is always a guiding principle in managing the various Federal Government programs, accounting scandals in the private

sector in 2001–02 reinforced the need for organizations to have stronger financial

oversight. Since that time, both public sector and private sector organizations—including many not-for-profit organizations—are paying closer attention to managing

the risks in their operations. Indeed, the Office of Management and Budget (OMB)

recently revised its guidance for Federal Agencies’ financial managers to better integrate and coordinate their risk assessments and other management activities.

The primary goal in managing any Federal program is to provide reasonable assurance that the program is operating as intended and is achieving expected outcomes. A key step in the process of providing this assurance is conducting a risk

assessment. A risk assessment is a comprehensive review and analysis of program

operations, especially the management of Federal funds, to identify risks and to

measure the potential or actual impact of those risks on program operations. The

potential for such risks exist in all Federal grant programs; for example, the diversion of funds to other purposes, inefficient use of funds, failure to contribute the

grantee’s share of funds, or other problems that reduce the effectiveness with which

financial resources are brought to bear on achieving program goals. When a Federal

program relies heavily on grantees to provide services, as the Head Start program

does, the risk assessment process can become more complex. Processes must be developed to assess the operations of every grantee to ensure that each complies with

program rules and to measure whether each achieves expected results.

The Federal Government makes Head Start grants directly to nearly 1,700 local

organizations, including community action agencies, school systems, for-profit and

nonprofit organizations, other government agencies, and tribal governments or associations. Many of these grantees operate other Federal, State, or local programs in

addition to the Head Start program. Many of these Head Start grantees also provide

services by subcontracting with other organizations, known as delegate agencies. In

2003, there were about 800 delegates providing services in the Head Start program.

Some grantees had multiple delegate agencies while others had none. The various

layers of grantees, the administrative complexity of the program, and the interrelationship between programs operated by the same grantee add to the challenges

of overseeing the Head Start program.

ACF uses a number of processes to collect information on grantee performance

and financial management. Table 1 summarizes ACF key processes for monitoring

Head Start grantees.

Various offices within ACF have roles in developing and implementing processes

to monitor grantee performance and financial management. (See fig. 1). The Head

Start Bureau develops program policies and designs the program-specific oversight

processes to collect information on grantee performance. Staff from the 10 regional

offices implement the policies developed by the other offices within ACF, ensure that

all grantees are in compliance with program rules, and frequently develop additional policies to aid in their oversight responsibilities.

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TABLE 1: ACF’S OVERSIGHT PROCESSES FOR MONITORING GRANTEES’

FINANCIAL MANAGEMENT

Monitoring process Required frequency Purpose and description

onsite review (PRISM) ............ Triennial ................................. To determine whether a grantee meets standards established in the Head Start Act, including those related to

financial management, teams of Federal staff and contracted consultants conduct a weeklong, onsite review

using a structured guide known as the Program Review

Instrument for Systems Monitoring (PRISM).

Survey of grantees (PIR) ........ Annual .................................... To provide management information to the Bureau and

policymakers, all programs (grantees and delegates) are

mandated by Federal regulations to submit performance

data, including key financial measures such as enrollment and teacher salary ranges. Grantees report these

data through a survey known as the Program Information Report (PIR).

Review of financial reports ... Semiannual ............................ To account for use of grant funds, all grantees must submit semiannual reports on the status and use of their

Federal funds.

Review of audits .................... Annual .................................... To ensure that Federal grantees’ financial statements are

accurate, that they have adequate controls in place to

protect Federal funds, and that they are in compliance

with key regulations, under the Single Audit Act all

grantees must obtain an annual audit of their financial

statements and compliance with selected Federal laws

and regulations.

Day-to-day contacts with

grantees.

Variable .................................. To assist Head Start programs, program specialists in ACF

regional offices respond to grantee queries and other

calls from grantee staff, parents, and others with an

interest in their local Head Start programs.

Renewal application .............. Annual .................................... To provide information to support determination of the

grantee’s future funding level, grantees are required to

submit renewal applications each year to the ACF regional office.

Source: GAO analysis.

ACF LACKS A COMPREHENSIVE STRATEGY TO ASSESS HEAD START RISKS

ACF uses many processes to collect information on grantee performance and financial management but does not bring together this information to comprehensively assess the program’s risks or identify areas where it might need new or improved processes to collect information. Staff in ACF regional offices maintain dayto-day contact with the Head Start grantees and monitor the operations of those

grantees throughout the country. Many of those regional office staff told us that

they most frequently learn if a grantee is having a problem through a call from a

parent or a teacher. The staff in the regional offices said these calls are a routine

part of their day-to-day monitoring activities. Over-reliance on this approach can result in missed opportunities to help grantees address management challenges before

they become problems. Greater linkages among the various programs offices and

oversight activities could produce a more comprehensive approach to assessing program risks and help prevent financial management weaknesses in Head Start

grantees. (See fig. 2).

In our review of ACF’s management of the Head Start program, we noted a number of ongoing activities that were not well-integrated and did not present a comprehensive view of the program’s risks. For example, Head Start’s 2004 Management Initiative targeted risks that were identified in recent GAO reports, news articles, and congressional inquiries. The Initiative targeted well-known problems such

as underenrollment, overenrollment of children from families that did not meet income eligibility requirements, and excessive executive compensation at some Head

Start programs. However, efforts to address broader concerns about program governance—the skills and knowledge of local Head Start governing boards to effectively manage their programs—were notably absent from the Initiative.

In another example of an ACF oversight process that is too limited in scope, we

reported that before 2004 ACF had not collected information it could use to estimate

the extent of improper payments made by grantees or the Head Start Bureau. But

when ACF began to collect this information, the agency focused on just one type of

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improper payments to grantees—payments made to grantees that enrolled too many

children from families that did not meet the program’s income eligibility requirements. These improper payments pose a program risk because eligible children may

not have access to services. While this effort is an important step in systematically

assessing risks, the study overlooked many other possible forms of improper payments, such as those made to contractors, to grantees that are significantly underenrolled, or for unallowable program activities.

Finally, we noted in our report that ACF relies on its regional offices to assess

their own operations for gaps that might pose risks to all ACF programs, including

Head Start. Such gaps might include failure to follow ACF grant management policies or to maintain files on property acquired or renovated with Head Start funds.

Self-assessments can be an important tool, but ACF had not recently conducted an

independent compliance review to ensure that its own grant policies are enforced

and that the Federal Government’s financial interests are protected.

PROCESSES ACF USES TO COLLECT AND ANALYZE INFORMATION ON GRANTEES ARE

FLAWED

We found that the main processes ACF uses to collect information on its grantees’

financial management—onsite reviews, annual grantee surveys, and analyses of financial reports and audits—have flaws that limit the value of the information collected. The onsite review process, mandated by the Head Start Act and often known

as PRISM—the name of the review protocol—is ACF’s main tool to assess whether

grantees are in compliance with statutory and regulatory requirements. While the

Head Start Bureau has made progress in improving its onsite reviews, we found

that problems remain. We found that the Bureau has no process to ensure that the

teams of reviewers follow the Bureau’s guidance. This is a concern because there

is evidence that some PRISM reviewers might not follow the guidance for the onsite

reviews. For example, comparisons of simultaneous onsite reviews of the same

grantees by two different teams—a PRISM review team and an improper payments

study team—revealed significant discrepancies. Notably, 21 of the 50 grantees in the

improper payments study were cited for enrolling too many children that did not

meet the income eligibility guidelines, but the PRISM review teams cited only 3 of

those same grantees for failing to comply with income eligibility criteria.

The effectiveness of onsite reviews to systematically identify grantees with financial management weaknesses depends on some assurance that the onsite review is

implemented as designed and that the reviewers have the necessary skills to assess

grantees’ compliance with Head Start performance standards. The review teams are

lead by staff from ACF’s regional offices and include a number of reviewers under

contract with Head Start. Many of these contractors are employees of Head Start

programs throughout the country. While this level of experience should indicate a

familiarity with Head Start program requirements, ACF does not check reviewer

credentials or test their knowledge of the rules before they are sent to conduct reviews. ACF seeks feedback, on a voluntary basis, on the contractors’ performance

but ACF’s Director of Regional Operations expressed reluctance to solicit feedback

on the team leaders’ performance.

ACF also uses an annual survey of its grantees to collect information on the status of their programs to measure results, but ACF does not verify the information

collected. We reported last year that important information, such as enrollment in

many Head Start programs, is often reported inaccurately. Also, our analysis raises

concerns about the reliability of the survey data. ACF relies on 700 checks of internal consistency to ensure that data are reported accurately. Many ACF officials said

that the checks make it difficult for grantees to provide inaccurate information.

However, our own review of the internal consistency of the data found problems; as

long as grantees complete the survey consistently, the data—whether accurate or

not—would pass the tests. While ACF officials said they would be able to address

the problems we identified in our analysis, because the data are used widely by policymakers and the public to assess the program’s results, until ACF takes steps to

ensure the accuracy of the database we urge caution in using data from the survey

to monitor Head Start grantees.

All Head Start grantees report on the status of their funds through periodic financial reporting and annual audits of their financial statements. We found that ACF

made limited use of the information collected through these two processes to analyze

Head Start grantees’ financial status. For example, ACF does not routinely reconcile

a grantee’s withdrawals with its reported expenditures until after the funds have

all been spent. It is therefore difficult for ACF to identify grantees that might be

drawing down excess funds at the beginning of the grant period and risking shortfalls at the end of the period. Regarding audits, all grantees must obtain an annual

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2The data base for onsite reviews, PRISM, contains both grantees and grantees with any delegate agencies reviewed. The data presented in this section contains both types of entities. When

we analyzed the grantees separately, we obtained the same results about percentages of grantees that were non-compliant and had recurrent problems in their next review.

audit of their financial statements and compliance with selected Federal laws and

regulations. These audits are conducted under a framework mandated by the Single

Audit Act. While these audits may not be as comprehensive as an onsite program

review, they are designed to ensure that Federal grantees’ financial statements are

accurate, that they have adequate checks and balances in place to protect Federal

funds, and that they are in compliance with key regulations. However, ACF officials

cited limitations in the scope and timing of the audits for failing to use them more

systematically in their day-to-day oversight activities. In focusing on the limitations

of these audits, ACF officials may overlook some valuable information on grantees’

financial management practices.

ACF DOES NOT ENSURE THAT GRANTEES EFFECTIVELY RESOLVE FINANCIAL

MANAGEMENT PROBLEMS

One way to assess the effectiveness of the approaches ACF uses to address grantees’ financial management weaknesses is to examine whether grantees resolve their

problems and then stay in compliance. ACF’s data from its onsite reviews from

2000–03 show that many grantees that were cited for failing to comply with financial management requirements in one review still had problems in their next review. 2 Our analysis of the data shows that more than half of the grantees cited for

failure to comply with financial management-related rules were out of compliance

again with one or more financial management standards during their next review.

(See fig. 3).

Moreover, the number of areas of financial management in which grantees were

noncompliant did not decrease with subsequent reviews. As figure 4 shows, of the

70 grantees cited in 2000 for problems in all three major areas of financial management—fiscal management, program governance, and record keeping/reporting—69

still had one or more problems in each area at the next review.

The repeat problems could be a result of failure to correct the problems in the

first place—something that might have been identified with a follow up review—or

an initial correction that did not take hold. One senior official in a regional office

said that many Head Start grantees will fix a problem identified in the PRISM report in the short term but fail to make lasting changes to their financial management systems. For example, a grantee might try to meet financial reporting deadlines for a few months after being cited by a PRISM review team for missing deadlines, but if the grantee did not implement a system to ensure that these reports

are consistently on time, the improved performance may not be sustained.

When grantee problems are identified through onsite reviews or audits, ACF often

relies largely on grantees’ self-certification that they have corrected problems rather

than imposing special conditions or conducting a site visit. While self-certification

may be appropriate in cases when minor problems can be corrected quickly, the

analysis in figure 4 suggests that many grantees with problems are not getting the

help they need to correct their problems and make lasting improvements in their

financial management capabilities. We reviewed the files of 34 grantees with financial management problems identified by ACF during its onsite reviews. In 18 cases,

ACF determined that the grantees’ problems were not severe enough to be deemed

deficient—a term ACF uses to identify grantees with severe problems. Of those 18

grantees ACF required 16 to submit letters certifying that they had corrected the

problems and no further action was pursued. In the other two cases, ACF returned

to review the grantees and found that they had not corrected their problems. It was

not clear from our file review how ACF prioritized these two grantees for followup,

but in revisiting these grantees ACF took an aggressive step to ensure compliance.

Because the two grantees had not corrected their problems, as required by law, ACF

deemed them deficient and required them to develop a quality improvement plan.

ACF also relies primarily on self-certification to resolve problems identified in

grantees annual audits. In each of the 30 audits we tracked from the date the auditor completed a report identifying financial weaknesses until the regional office

judged the audit findings resolved, that judgment was based on a letter from the

grantee rather than a site visit or other followup. Regional staff said they relied on

subsequent audits to ensure that such findings are resolved, but we found it frequently takes up to 2 years from the point an audit identifies a problem until the

regional office receives the next audit, during which the grantee continues to receive

Federal funds. While the results of our review in four regional offices may not repVerDate 11-MAY-2000 15:57 Sep 26, 2005 Jkt 000000 PO 00000 Frm 00028 Fmt 6633 Sfmt 6621 S:\DOCS\20526.TXT SLABOR3 PsN: SLABOR3
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resent the range of actions taken by all ACF regional offices nationwide, we interviewed managers in other regional offices who generally described similar procedures.

To the extent that grantees have recurring financial management problems, more

aggressive approaches might be appropriate. ACF has the authority to impose special award conditions—such as requiring grantees to seek approval for every withdrawal of grant funds—but ACF rarely imposes these conditions. ACF can also

make a follow-on visit to ensure that the grantee has implemented corrective actions

and is in compliance with the program’s rules. The Head Start Act requires ACF

to conduct follow-on visits when it determines that a grantee has such severe problems that it deems the grantee deficient; ACF can also return to grantees with less

severe problems, but we found ACF rarely does so. We could not discern an objective

rationale for when ACF regional offices decide that a grantee is deficient and when

they do not. For example, reports based on the onsite reviews for 20 of the grantees

we reviewed showed similar problems in the quantity of violations and the severity

of the problems cited, but the regional offices deemed only 10 of the grantees deficient. Regional office staff and their managers in the offices we visited said they

meet to discuss any problems identified during the onsite review to determine

whether to deem the grantee deficient, but they said they treat each case differently

and largely base their determinations on their previous experiences with the grantee.

The most aggressive approach ACF can take to ensure that a community is served

by a Head Start grantee with sound financial management is to seek a new grantee

if the current grantee cannot perform as expected. However, we found that ACF

rarely terminates its relationships with poorly-performing grantees. Instead, ACF

said that, in lieu of terminating a poorly performing grantee, it will try to convince

such a grantee to voluntarily relinquish its right to its grant. When ACF does undertake the protracted process of terminating its relationship with a grantee, the

grantee will continue to receive funding even if it appeals ACF’s decision—regardless of the appeal’s merits. Under ACF’s current regulations, it must also fund a

grantee’s legal costs until the grantee has exhausted its appeals before HHS’ Departmental Appeals Board. According to an Administrative Judge on the Appeals

Board, no other HHS grant program except Head Start allows grantees to continue

receiving funding throughout the appeals process.

When ACF decides to award a grant, the Head Start Act requires that ACF give

priority to grantees already operating a Head Start program in the community. This

aspect of the law provides important continuity for Head Start services in a community. It also provides important stability for grantees. However, the act allows the

Secretary to deny priority to any grantee the Secretary finds fails to meet the program’s performance or financial management requirements. Denial of priority status

to current Head Start grantees would open up the possibility of competition for the

grant among other qualified applicants. ACF could seek a new grantee that can

demonstrate the ability to manage Federal funds responsibly, in accordance with

program rules, and that can provide high-quality Head Start services to eligible children in the community. Obviously, denying priority status to a grantee that has

been a part of a community for years, has educated multiple generations of children

from that community, and has employed a number of staff from the community is

a major step that should be taken after carefully considering all available options.

But, denial of priority status is a step that ACF should take if a grantee fails to

make the necessary changes to effectively manage its program. Ultimately, enforcing all the program’s requirements—especially financial management requirements—is really about strengthening our commitment to future generations of children, seeking better ways of managing scarce Federal resources, and making sure

that we reach as many eligible families as possible.

We made 8 recommendations in our report to improve the overall management

of the Head Start program, strengthen the tools ACF uses to collect useful information on its grantees, and improve ACF’s analysis of the information it collects. Specifically we recommended that the Assistant Secretary for Children and Families:

Produce a comprehensive risk assessment of the Head Start program and update

it periodically. Such an assessment should:

Consider plans to collect data on and estimate the extent of improper payments

made for unallowable activities, payments to grantees that are significantly underenrolled, or other unauthorized activities,

Aim to improve the processes ACF currently uses to collect and analyze information on program risks; for example, ACF should:

Train and/or certify its onsite reviewers to ensure they have the skills and

knowledge necessary to perform their responsibilities,

26

Develop an objective approach for regional office management to use in assessing the severity of the problems identified during onsite reviews and for finding

grantees deficient or not, and

Implement a quality assurance process to ensure that the framework for conducting onsite reviews is implemented as designed, including holding ACF’s regional

management accountable for following this framework and for the quality of the reviews.

Verify key data from the annual survey of grantees to enhance the usefulness

of this data in overseeing its grantees and managing the program, and

Seek ways to make greater use of the data it collects on the status and use of

Federal funds through a periodic reconciliation of grantees’ reported expenditures

with their withdrawals.

Take steps to obtain competition for a grant if ACF has determined that the current grantee fails to meet program, financial management, or other requirements.

Such a competition could be held without giving priority to the current grantee.

ACF agreed to implement most of our recommendations. However, ACF expressed

concerns about our last recommendation, suggesting that it did not have the authority to seek competition from other qualified applicants for grant funds in communities that are currently served by poorly performing grantees without first terminating its relationship with such grantees. Seeking other qualified applicants under

these circumstances would strengthen the linkages between a program’s performance—including financial management—and its funding. Congress may wish to seek

other qualified applicants and clarify the extent of ACF’s authority to deny priority

status to grantees it determines fail to meet program, financial management, and

other requirements.

Mr. Chairman, that concludes my prepared statement. At this time, I would be

happy to take any questions you or other committee members may have.

GAO CONTACT AND STAFF ACKNOWLEDGMENTS

For more information regarding this testimony, please call Marnie S. Shaul at

(202) 512–7215. Individuals making key contributions to this testimony include

Betty Ward-Zukerman, Bill J. Keller, Mark Ward, and Neal Gottlieb of our Education, Workforce, and Income Security Team; Kim Brooks, Diane Morris, and

Gabrielle Fagan of our Financial Management and Assurance Team; Curtis Groves

of our Applied Research and Methodology Team; and Richard Burkard and James

Rebbe of our General Counsel.

RESPONSE TO QUESTIONS OF SENATOR ALEXANDER BY GAO

Question 1. According to the report, more than half of the grantees identified as

having financial management problems also demonstrated recurring financial management issues. Even so, the Department of Health and Human Services has not

taken action to deny grant funding to these programs. What can Congress do to ensure that appropriate action is taken against grantees with severe and recurring financial management problems?

Answer 1. While only about 24 percent of the grantees reviewed in 2000 passed

their reviews without any findings of non-compliance with financial management

standards, nearly half—about 47 percent—of those with problems passed their next

review with no financial management problems.

The Head Start Act requires HHS in awarding new Head Start grants to give priority to current Head Start grantees. We are aware that this provision is designed

to ensure the continuity of high quality programs and avoid unnecessary and disruptive changes in grantees that serve a particular community. However, HHS may

deny priority to a grantee if it determines that the grantee fails to meet financial

management or performance standards. In such a situation, HHS may, as we suggested, choose to conduct a competition which could ultimately result in a new

grantee being selected and the current grantee being terminated. The Congress may

wish to consider amending the current law by providing for alternative termination

procedures and timeframes to minimize disruption under these circumstances. Congress may also wish to more explicitly specify the circumstances under which a

grantee could maintain its priority status and the level of failure to meet financial

management or performance standards that would be necessary for a grantee to be

denied priority status.

Question 2. The Senate bill to reauthorize the Head Start program from the 108th

Congress included provisions that would require Head Start grantees to recompete

for those funds periodically. One of the GAO’s recommendations to the Department

is to provide the current grantee with a certain degree of priority over other grantVerDate 11-MAY-2000 15:57 Sep 26, 2005 Jkt 000000 PO 00000 Frm 00030 Fmt 6633 Sfmt 6621 S:\DOCS\20526.TXT SLABOR3 PsN: SLABOR3
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ees. How should Congress help support these efforts to ensure high quality grantees

are able to continue serving children, while still weeding out less effective or troubled programs?

Answer 2. Our recommendation was based on current law that generally provides

priority to grantees that operate programs that meet financial management and

program requirements. Among those grantees that were reviewed in 2000, 24 percent met their financial management requirements and, of those that did not, 47

percent were able to correct any noncompliances before their next review. Clearly,

we do not want to lose the experience and expertise such providers bring to the program. On the other hand, of the grantees reviewed in 2000 that had financial management weaknesses, 53 percent continued to have financial management problems

in subsequent reviews. ACF will need to focus its oversight resources on these

grantees in order to ensure that such programs can succeed; if no improvements are

forthcoming, then ACF may need to exercise its authority to recompete those grants.

While we did not address the Senate bill to reauthorize the Head Start program,

we generally believe that competition on a level playing field will result in the consistent selection of high quality grantees and that a grantee’s past experience can

and should be an important factor in these selection decisions.

As noted in our report, if ACF improves the processes it uses to collect and analyze data on grantee financial management, ACF will be in a stronger position to

link funding opportunities to performance. Reliable, accurate, and transparent processes are needed in order for ACF to be effective in separating stronger grantees

from poorly performing grantees.

Question 3. Testimony that will be given later today suggests that the data used

in the report could be improved by separating grantees into categories based on

whether or not they had multiple findings, or whether the findings were severe or

not. Is that data available, and how might the GAO report be different if the data

were reported in this way?

Answer 3. ACF provided us with its databases summarizing the results of its onsite reviews for fiscal years 2000–03. The 2000 database contained approximately

1,100 records reflecting reviews done by ACF in 2000. These records include both

grantees and grantees with any of their delegates. We have run the analysis for

both the entire database and for grantees separately and the results are the same:

76 percent of the grantees had at least one of the three areas with non-compliance

and 53 percent had recurrent problems.

Of the 76 percent that were out of compliance with at least one financial management standard in 2000:

• 14 percent were out of compliance with only 1 financial management standard,

• 32 percent were out of compliance with 2–5 financial management standards,

• 54 percent were out of compliance with 6 or more financial management standards, and

• 36 percent were out of compliance with 10 or more financial management standards.

In both 2000 and 2003, the four standards with which grantees were most often

found out of compliance were:

• The requirement to maintain an effective reporting system to generate reports

on grantee financial status and program operations to advise governing bodies, policy groups, and program staff of program progress;

• The requirement that grantees maintain a recordkeeping system to provide accurate and timely information regarding children, family and staff and assure appropriate confidentiality of this information;

• The requirement that the grantee establish procedures describing how the governing body and the appropriate policy group will implement shared decisionmaking;

• The requirement that each grantee and delegate agency establish written procedures for resolving internal disputes between the governing body and the policy

group.

In 2000, 13 percent of grantees reviewed were judged deficient based on financial

management standards. However, in our review we found that ACF did not use

common criteria to determine deficiency.

Question 4. The issue of recompetition appears to be the only area where the Administration on Children and Families suggests they need Congress to be involved

in addressing the suggestions within the report. Are there additional ways that Congress can improve the accountability process within the Head Start program, and

is there a role for Congress to play in the other recommendations made by GAO?

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Answer 4. All of the recommendations we set forth in our report are actions that,

we believe, ACF can take without seeking further authorities and ACF has indicated that it intends to act on most of these recommendations. However, congressional oversight is always necessary to ensure that Federal Agencies demonstrate

continued commitment to improvements. If asked, we are prepared to assist the

committee to monitor ACF’s progress in implementing our recommendations.

Question 5. As we’ve heard from Assistant Secretary Horn, the Administration on

Children and Families is committed to strengthening the Head Start accountability

process. He’s outlined a number of recent policies that have been put in place, as

well as a number of new initiatives that will help ensure Head Start program dollars are being used most effectively. Do you expect that these activities will be sufficient, and are there additional activities you might suggest?

Answer 5. The steps set forth in Assistant Secretary Horn’s statement should lay

a solid foundation to ensure that ACF can do a better job identifying and addressing

the program’s risks and preventing grantee financial management weaknesses.

However, continued monitoring may be necessary.

The Congress may wish to ask ACF to conduct additional systematic analyses of

other types of improper payments in order to provide a better estimate of program

risks. In Assistant Secretary Horn’s statement, he expressed support for looking

more carefully and systematically at the way grantees expend all of their Head

Start funds. However, he did not indicate that ACF would specifically look at other

types of improper payments the same way it reviewed compliance with the incomeeligibility rules in 2004 as we recommended in our report that HHS should do so.

In February, ACF provided technical comments on a draft of our report and noted

that audit reports and other reviews would be used to identify other possible improper payments. However, reliance on these oversight tools will not provide ACF

with a systematic way to assess risks associated with other types of improper payments.

Question 6. In your testimony you stated that the Head Start program is the only

program operated by the Department of Health and Human Services that allows a

grantee to continue grant operation while appealing the termination of the grant.

Could you determine in your review why this is the case? Are there other Federal

programs that allow this?

Answer 6. Our work did not cover grant conditions in Federal grant programs in

other Federal Agencies. We limited the scope of our work to the Head Start program

specifically and sought supplementary information from the HHS’ Departmental Appeals Board in order to draw comparisons to other programs under its oversight authority.

Question 7. Also mentioned often in your testimony and in the GAO report is that

regional staff believe they are overworked and have control over too many grants.

How pervasive is this problem? Do you believe that additional staff at the regional

level would help earlier detect some of the financial and programmatic problems at

the grantee level? Or would additional staff simply add to the Federal bureaucracy

of the program?

Answer 7. We did not assess the human resource capacity in ACF’s regional offices. We did report that regional office program specialists working with Head Start

grantees typically are responsible for about 12 grantees. According to the Assistant

Secretary for Children and Families’ testimony before the committee, ACF fully supports our recommendation to develop a comprehensive risk assessment of the Head

Start program. Once completed, ACF should be in a position to make more efficient

use of its human resources and better target its oversight resources to identify financial and program problems at the grantee level. Additional training for ACF’s

existing staff is also an area discussed in the report.

Question 8. It is often stated in the GAO report that ACF rarely uses the authority it has to recompete a grant if a grantee has been found deficient. The report

also states that deficient grantees are often given bonus points during renewal, even

though ACF is not required to give priority to a grantee that has failed to meet program, financial management or other requirements established by an agency. Do

you believe that increased use of this authority would strengthen current grantees

or would it hurt the continuity of the program?

Answer 8. We believe that ACF has the authority to deny priority status to a

grantee that fails to meet program or financial management requirements—i.e., deficient grantees—when awarding grants and that ACF should use its authority in

order to open up the possibility of competition for grants to other qualified providers. Denial of priority status is a major step that should be taken after carefully

29

considering all available options so as to avoid unnecessary and disruptive changes

in grantees that serve a particular community. However, denial of priority status

is a step ACF should take if a grantee fails to make the necessary changes to effectively manage its program.

Senator ALEXANDER. And Dr. Horn, thank you. Your comments

will be placed in the record.

Each of us will take 5 minutes, and let me begin with a more

general question. I have some more specific questions, but I would

like to talk about the theory of management and regulation a little

bit.

It seems to me, as we look at how the Federal Government funds

educational activities, we have got two models. One is a Head

Start/higher education model, let us say, and one is the K through

12 model. Now, what I mean by that is that in higher education,

we have 5,000 or 6,000 entities and we basically give the money

to students. It follows them to the entities and the entities have

great autonomy and we really don’t manage—we don’t try to manage the Vanderbilt University and the University of Tennessee or

the community college in California from Washington. We have accrediting agencies and we have a very light touch from Washington

and that has helped to produce the greatest system of colleges and

universities in the world.

On the other hand, in K through 12, we have a very heavy touch.

We get in and tell everybody what to do and we tell children where

they have to go to school and it is a completely different model.

Head Start for 40 years has been more like higher education, it

seems to me. We have 1,700 different local organizations, more or

less, to whom the Federal Government directly gives money. They

have a lot of autonomy in what they do. And there are about

20,000 Head Start centers.

So I am trying to understand, how can we effectively be good

stewards of that money without having too heavy a management

touch from Washington on 20,000 different Head Start centers

which is really impractical? I don’t want to see us get into a situation, for example, where we have a lot of rules from Washington

and a lot of local centers going around filling out forms and doing

small things, and trying to do all the regulation from here when,

in fact, the model is autonomous local agencies with responsibility

for results and Federal oversight of big financial problems and

hopefully some measurable outcomes.

We will hear a little later on the second panel from Mayor Wharton of Memphis, who is the mayor of our largest county in Tennessee. He found a Head Start center that was a mess. More recently, it has been alleged that the people there were pilfering from

the pension fund as well as other problems. He is here today because he was prevented from taking charge and solving the problem by the regulatory system that we have.

So if each of you would help me understand, what would be the

ideal system here? How can we maintain autonomy for these

20,000 centers and 1,700 organizations, and allow the people working there to focus on the children rather than filling out forms? I

don’t want them to become like the Federal Election Commission,

where you spend 10 percent of your time and your money satisfying lawyers and accountants rather than doing what you are supVerDate 11-MAY-2000 15:57 Sep 26, 2005 Jkt 000000 PO 00000 Frm 00033 Fmt 6633 Sfmt 6601 S:\DOCS\20526.TXT SLABOR3 PsN: SLABOR3
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posed to be doing. So can you help me with that general observation?

Dr. Shaul, what is your reaction to that?

Ms. SHAUL. The Head Start program is a unique program with

a long history of how it is provided. It does have very high standards for the kinds of services children are to receive.

I think part of how to give programs flexibility is to have the results-oriented part. Our work was really about the financial side,

so I am not going to speak much to that, but to have the resultsoriented part for the children with some local autonomy about how

they get there.

But on the financial side, I think it is to do this risk assessment,

to focus your energy on the most important areas, not to have a

really long checklist of things that are of equal importance but perhaps individually may not be getting to the absolute most important things, but to really look at what are the key issues that give

you risks in the financial area. Is it that people aren’t paying attention to single audit results or what are in them, and those kinds

of things. So it is creating some focus rather than treating everything as though it is equally important.

Senator ALEXANDER. Dr. Horn?

Mr. HORN. I believe that one of the great strengths of the Head

Start program over the years has been the local control. I think

that is very important for us to preserve, the ability of local programs to design their programs to meet the needs of their community and that whatever we do, we ought not to unduly constrain

the ability of local programs to design that program to meet those

local needs.

I also want to say that I think that despite our acknowledgement

of weaknesses in our oversight of local programs, I think most local

programs do a good job. I think that most people who work in Head

Start get up every day and come to the Head Start program and

help to fulfill a very important ideal, that no child should be disadvantaged in their later education because of the circumstances of

their birth. At the same time, I think that there are two things

that are very legitimate for the Federal Government to do, given

that this is a Federal-to-local grantee administered program.

First of all, I think it is important for us to be able to assure the

American taxpayers that their funds are being used appropriately

and are being used only for the purposes authorized by Congress

and are being used to the maximum extent possible to benefit the

well-being of the kids in the local programs.

The second thing is that I think we need to do a better job of

managing by results and not just intentions, that we ought to have

a greater focus on whether or not children are, in fact, progressing

developmentally in their local Head Start programs as opposed to

simply making sure that programs fill out forms accurately.

So there is a nice balancing act here that we have to continue

to strive to achieve. Preserve local control, recognize most programs

are doing a pretty good job, but at the same time, do a better job

of overseeing the fiscal management of the taxpayers’ dollars at the

local level and also manage more by results.

Senator ALEXANDER. Senator Kennedy?

31

Senator KENNEDY. Thank you very much. I appreciate your answer, and let me say the record ought to show that Marnie Shaul

was nodding at a good part of what you said on these issues.

I think for those of us who have been strong supporters, understand that we want this to be run well, run well, the way that you

described it, Mr. Horn, and that it is the local kind of component

so that it is going to take into consideration the local needs of children, and they vary extensively, as we all know, and also people

that are trying to do a job. These are challenging jobs that they do

and they have got to be equipped to be able to meet the financial

kind of responsibilities, and how you do that in a way that is nonbureaucratic, as the chairman has said, but yet requires some

skills, some auditing skills and some requirements and some training programs, and to be able to do that effectively and have the

role of the regional office.

We want obviously to have some, I think, addressing of these

problems of the under-enrollment. I mean, that is not good. We

want to make sure that these audits are done and done right and

done well.

I like the idea of this recompetition of deficient programs that we

are going to have for those that are deficient. There are new kinds

of opportunities for children in other places and they are going to

try to do it. That sends a very powerful message to people, too, so

people are going to make sure that theirs doesn’t fall in that kind

of level. That is very important.

Just in terms of the training programs, I would like you just to

talk, and maybe Marnie Shaul could talk a little bit. There was a

training program at the Institute for Head Start Directives on

management practices for programs. I would like you to comment

where that is. Does that reach out? Is the program providing the

kind of training that it should? Should they get more help and assistance, being able to do the job and do it right? Are they getting

that kind of support? I think we ought to know that. Maybe you

could tell us, both whether we are giving that kind of training from

the Head Start program, whether we are doing that in the regional

and whether we do it at the national, do it enough.

And also, I noticed in the report there were some concerns about

individual Head Start centers. They told the GAO about the issues

on staffing and workload and travel that kept them from addressing some of the problems that they saw in these Head Start centers, or in the regional office. Maybe you could comment on that,

if you are familiar with that. I mean, what is that about?

So I am interested in how much help and assistance. If we want

to get it simplified, we want it nonbureaucratic, we want accountability. We know that is the way. But, quite frankly, the people

need help and assistance at the local level and regional level. How

much assistance are they getting? Should they be getting more?

Mr. HORN. We recently revamped the way that we deliver training and technical assistance to local grantees. In the past, there

has been, in my judgment, too much emphasis on training via conferences and too little emphasis training onsite. As a psychologist,

I know that, unfortunately, the research on training suggests that

what you are most likely to do after you go to a training conference

is what you did before you went to the training conference, despite

32

the best intentions of everybody, both the trainers and those who

attend. The best way to get actual behavior change is to work onsite, hands on, to provide guided practice and mentoring and then

do a lot of followup to ensure that the changes are being maintained.

And so what we have done within the Training Technical Assistance Network is we are shifting to a more local grantee focus,

where we have specialists in each of the regional offices and their

job is to work directly with each of the local grantees to encourage

more of this local training. So if there are difficulties with fiscal

management, for example, the best thing is not to send somebody

off to a conference to learn about fiscal management. The best

thing is to send someone who knows something about fiscal management into the local program, review the way they are doing

things, make suggestions for improvement, and then go back a

number of times to ensure that those changes are being made.

So I do believe that we have had not as great as success as I

would like to see in training local programs to ensure they have

the skills to be able to manage these programs most effectively.

Again, I hasten to add, that is not to say that most programs are

not being managed effectively. I think they are. But the problem

is that we have to ensure that all the programs are being managed

effectively and we think this more locally-based T&TA structure

will go a long way to helping do that.

Senator KENNEDY. Could you make a comment?

Ms. SHAUL. One of the things that we saw, Senator, when we

saw grantees with problems, when we reviewed the files, was that

oftentimes that was because they had difficulty in maintaining a

financial officer who knew how to do things. And so I think the

kind of onsite training that you are talking about is important.

I want to add, though, that I think the training of the PRISM

reviewers, too, to be sure that they are able to see things on the

ground when they get there is another training element that I believe is important and that you are working toward, as well.

Senator KENNEDY. Thank you, Mr. Chairman.

Senator ALEXANDER. Thank you, Senator Kennedy.

Senator Enzi?

The CHAIRMAN. Thank you, Mr. Chairman.

Assistant Secretary Horn, I appreciate the effort on the report

and your testimony. In your testimony, you listed five areas that

you believe Congress and the administration should work together

on the reauthorization. Could you comment briefly on each of those

five areas and give us a little bit more detail for the record, briefly

summarize what you think Congress should do?

Mr. HORN. Let me turn to that page to remind me of those five

specifically.

Well, the first recommendation is that we believe that Congress

should find ways to increase the involvement of States in the administration of the Head Start program, particularly when it comes

to coordination of Head Start with pre-K programs and their child

care programs directed at preschool children. As has been pointed

out at this hearing, back in 1965, there were no States that had

a state-run and state-financed pre-K program. Today, there are 40

States or more that do so.

33

Does it really make sense to have two systems grow up parallel

with each other and not well coordinated? I think the answer is no

and the President thinks the answer is no. He thinks that we

ought to find ways to better coordinate the State pre-K efforts with

Head Start because when they are not coordinated well, it creates

inefficiencies and can lead to under-enrollment problems.

Second, we think that Congress should provide the Secretary

with greater discretion in the use of Head Start dollars, particularly related to the current 2 percent set-aside when it comes to

training and technical assistance. As you know, the current statute

says that 2 percent of the total budget shall be reserved for training and technical assistance, and for some years, that may be a

reasonable amount. It is a lot of money. It is about $160, $165 million. But for other years, it may be too much, and why hamstring

the Secretary’s discretion when in any given year, we may make

the choice to add more children to the program as opposed to

spending an exact prescribed amount of money on training and

technical assistance.

We would also like greater flexibility in the makeup of the monitoring teams that we send out on the PRISM reviews. Right now,

the statute—and let me read the section that I am talking about

here. The statute, 641(c)(2), Conduct of Reviews, and subpart (c)

under that says that the makeup of the reviewers shall be conducted by review teams that shall include individuals who are

knowledgeable about the Head Start programs and to the maximum extent practicable the diverse needs of eligible children.

Well, we think the most important thing for the reviewers is not

necessarily—I mean, they should know something about Head

Start, but they should really know something about the area that

they are reviewing. There is no requirement in the statute, for example, for fiscal reviewers to be experts in fiscal management

issues. If you have—under the statute, the current statute, have a

choice between someone who is expert in fiscal management and

somebody who knows a lot about Head Start, the statute compels

us to pick the latter, not the former. Does that really make sense?

It seems to me that what we ought to do is change the statute to

make it clear that what we want are reviewers with the expertise

in the areas that they are reviewing.

The last thing I would say, because I know I am talking a lot

here, has to do with our ability to replace deficient grantees. There

are two relevant statutes in this regard. The first is Section

641(a)(2), and what this requires is that the Secretary shall give

priority to the designation of Head Start agencies to any local public or private nonprofit or for-profit agency which is receiving funds

under any Head Start program. Now, there are some exceptions in

terms of if they are not meeting certain performance standards.

But if you cross-reference that with Section 646(a)(3)—I am giving these numbers for the record. I don’t imagine everyone is following those numbers. But what it says is, it says that under this

objective, a financial system shall not be terminated or reduced and

an application for funding shall not be denied, and a suspension for

financial assistance shall not be continued for longer than 30 days

unless the recipient has been afforded reasonable notice and opportunity for full and fair hearing.

34

This is kind of unique when it comes to Federal grants management. In most cases, when we find a grantee is doing something

deficient, we can move in and defund them and then we sort it out

through the appeals process. The current statute does not allow us

to do that in the Head Start program, and as you know, appeals

can last a long time. At a minimum—at a minimum, and that is

assuming that the hearing at the appeals level is only 1 day—it requires 240 days for us to go through the process, and sometimes

the appeals hearing can last months, if not, in some cases, years.

That section prevents us from moving in and defunding that

grantee. So we would appreciate some greater flexibility under the

statute to actually protect the taxpayers’ money during the appeals

process.

The CHAIRMAN. As an accountant, I love this detail stuff—[laughter]—and I have some followups on it, but I will have to do that

and request those in writing. I have some additional questions that

I will do for you, too, but they are all detailed like that, but they

are very important information for us to get in order for us to be

able to do a good job drafting legislation, so I will appreciate your

answers to them.

My time has expired. Thank you.

Senator ALEXANDER. Senator Murray?

Senator MURRAY. Thank you, Mr. Chairman.

Let me follow up on that, because there seems to be some discrepancy between what GAO says you have authority on and what

you think you have authority on. Ms. Shaul, can you tell us what

authority you think ACF has to recompete these programs?

Ms. SHAUL. Based on our review, we believe that the agency has

the ability to say that a grantee does not have priority status at

renewal time if it is not meeting the program or financial standards.

Senator MURRAY. So you believe they have the authority to do

that right now, but——

Ms. SHAUL. That was our conclusion.

Senator MURRAY [CONTINUING]. I believe that Mr. Horn just said

he doesn’t think they do.

Ms. SHAUL. That was a disagreement. Mr. Horn—Dr. Horn—

agreed with all of the recommendations in our report, basically,

with the exception of this area where there seems to be some lack

of clarity and where I think both of us have suggested that it would

be helpful for the Congress to make clearer the circumstances.

Senator MURRAY. Well, let me follow up on Senator Kennedy’s

question, as well. Mr. Horn, you talked about what can be done to

help these programs that do have some fiscal management problems, going in and working with the programs and following up.

How much of that is done today?

Mr. HORN. Not as much as we should. That is the honest answer.

Senator MURRAY. And what is precluding that from happening?

I mean, it is one thing to say to a program, you have got fiscal

management problems and then to go back the next year and say,

you have got fiscal management problems, and another thing to

say, it is our responsibility to give you the training and assistance

you need to be able to meet the goals we have set out for you. So

what is the obstacle from making it happen?

35

Mr. HORN. First of all, you have to know there is a problem before you can solve it, and so what we have been trying to do over

the last 12 months is to implement systems so that we can identify

fiscal problems before they become huge problems. One of the ways

we have done that is by putting into our PRISM reviews a series

of red flags when it comes to fiscal issues that would require that

we go back and do a more indepth look at what is going on at the

grantee level.

For example, one of the questions is, has the grantee borrowed

money within the last 12 months? That could show some difficulty

with cash management. Have vendor payments been late? Again,

it could be issues with cash management. Has the amount of cash

reported on the balance sheet decreased over the past 3 years, and

so forth? These are red flags that were put into the PRISM reviews

that we require——

Senator MURRAY. Are those in place now so that——

Mr. HORN [CONTINUING]. They are in place now, yes.

Senator MURRAY. OK.

Mr. HORN. The other thing that just recently has come to my attention, and we will do a better job of this, is taking a look at the

financial statements that come to us on an every 6 months basis

from local grantees to ensure that if we see substantial drawdowns

or changes in drawdowns over the course of time, that we go back

to the grantee and talk to them about that, because the goal—a

goal of reviews, in my view, should never be just ‘‘gotcha.’’ What

they should be is they should be reviews that are designed to help

to improve the program.

Senator MURRAY. OK. So in my understanding, are you saying

since you know these challenges are there for a few of the programs, you are now reviewing that more consistently and you are

flagging that and sending out to these programs some help——

Mr. HORN. Exactly.

Senator MURRAY [CONTINUING]. Is that not correct?

Mr. HORN. Yes.

Senator MURRAY. So I would assume that a year from now, 2

years from now, you would come back with better numbers from

some of our programs?

Mr. HORN. I would hope that would be true, yes.

Senator MURRAY. Without any changes, correct? Do you have the

ability to do it now, I assume?

Mr. HORN. Well, again, there are certain things we don’t have,

in our judgment, the ability to do, such as, for example, we do have

a disagreement with the GAO as to whether or not we are able to

recompete grants when we find a grantee deficient during the appeals process, which I said can last in some cases years. And again,

this is unique in the Federal management of grants——

Senator MURRAY. Right. But I understand, also, that one of the

problems is ways to identify accurately those programs that do

have problems so that we are not taking corrective action on programs arbitrarily.

Mr. HORN [CONTINUING]. Well, we should never take corrective

action on programs arbitrarily, but if I understand your point, I

agree with it, which is this. The goal of reviews is not to defund

grantees.

36

Senator MURRAY. Right.

Mr. HORN. The goal of reviews is to try to have the maximum

number of quality programs as possible. And so I don’t think that

we should be judged—the Federal Government should be judged by

if we defunded 50 grantees this year and only 25 last year, we did

twice as good.

Senator MURRAY. OK. But one of the things, if we are going to

change authority and give you more authority to recompete programs, we had better make sure there are really accurate identifiers in place so that it is not discriminately targeting programs, but

it is based on accurate information which we don’t currently have.

Mr. HORN. I am always in favor of accurate information.

Senator MURRAY. Ms. Shaul, would you agree?

Ms. SHAUL. Yes. One of our recommendations was, in fact, that

how grantees are determined to be deficient be very clear, not only

from the standpoint of the agency, but so that also grantees know

exactly what those circumstances are, that the standards be clear

and transparent to everyone.

Senator MURRAY. And I am hearing you say that is not currently

the case?

Ms. SHAUL. When we reviewed files in the field, we looked at 20

files where we had grantees that looked in the file review to have

similar numbers of financial problems, similar types of financial

problems, similar program governance problems, and yet half of the

grantees were determined deficient and half were not. We would

have expected pretty similar outcomes, whatever the outcome was,

for all 20 of those files. So I would say that there is not a—has not

been a consistent standard.

Mr. HORN. And if I may add one thing, Senator, we are concerned about inconsistencies across the regions, and that is one of

the reasons why this year we are implementing for the first time

a system of re-reviews of a sample of reviews that have been done

over the course of the year by specially-trained reviewers who go

in and basically will act as calibrators across the various regions

to make sure that each of them are reviewing the same information

and coming to the same—you know, in the same way and coming

to the same conclusion. So we share the concern about the issue

and we are taking steps to try to deal with it.

Senator MURRAY. I think that is really important, because Head

Start programs out there are struggling with a lot of different challenges—kids who are coming really needy to their programs, parents that are struggling, all kinds of things, and they want to do

a good job. But if we have different ways of evaluating different

programs, then we are just going to send these programs of Head

Start into nightmares of trying to do all kinds of forms rather than

doing what we want them to do, which is to make sure kids get

the best possible start.

Thank you, Mr. Chairman.

Senator ALEXANDER. Thank you, Senator Murray.

Our ranking member of our subcommittee, Senator Dodd?

Senator DODD. Thank you very much, Mr. Chairman. I apologize

to my colleagues and others for arriving a bit late. I have two new

young ones, and one with a high fever this morning. I am learning

the joys of parenthood at this stage, so I apologize for arriving late.

37

Senator ALEXANDER. We call those field hearings.

Senator DODD. Yes. [Laughter.] You know, having written a lot

of these laws as a single person, I am beginning to appreciate the

effect of my efforts here now.

[Laughter.]

Well, thank you very much, and thank you, Mr. Chairman, for

doing this. This is very worthwhile and tremendously helpful and

important and I want to thank GAO for their work. I am always

impressed with the work that the Government Accountability Office does, and certainly it can be very helpful in all of this, too.

I would ask, Mr. Chairman, unanimous consent that some opening comments be included in the record.

Senator ALEXANDER. Without objection.

[The prepared statement of Senator Dodd follows:]

OPENING STATEMENT OF SENATOR DODD

Mr. Chairman, I’m pleased to join you in holding this hearing

today. I know we share a common goal that our Nation’s poorest

children have access to a high quality preschool program.

Of course, Head Start is much more than a preschool program,

offering comprehensive services to 900,000 children throughout the

country. I often refer to Head Start as a stealth health program because without Head Start, hundreds of thousands of poor children

each year would not receive the health care, dental care, vision

screening, and screenings for potential developmental delays that

the program provides to help poor children enter school ready to

succeed.

As we all know, the children that participate in Head Start enter

with great deficiencies compared to their counterparts who are better off financially. That’s why it is so important that Head Start

programs remain the gold standard for early learning and preschool.

The Government Accountability Office has found some troubling

breakdowns within the monitoring system for overseeing Head

Start programs. I welcome GAO’s recommendations and look forward to working with GAO and the Administration for Children

and Families to ensure that both Head Start programs and the

monitoring system designed to help guide and oversee their operation work as intended.

Head Start has a more comprehensive, extensive monitoring system than any other preschool or pre-kindergarten program in the

Nation. That’s by design, a system that has evolved over the years

as the science about early learning has grown matched only by our

desire to ensure that each Head Start program meets the quality

performance standards, which have evolved over the years as well.

When I look at the number of monitoring tools available within

the Head Start oversight process, it is clear that the monitoring

tools are in place. But, somehow, both at the Head Start grantee

level and within HHS, the tools have become just another checkoff item in the process.

I suspect that local Board governance and oversight is a problem

for grantees with serious or chronic problems. It seems to me that

with the extensive monitoring system that applies to Head Start,

38

potentially stronger local Boards could pick up on problems in the

self-assessment, the monthly financials, and the annual audits.

I know that the PRISM review is comprehensive, it has nearly

1,800 program requirements, including 573 requirements in fiscal

management alone. And, it speaks to the quality of the monitoring

system that such a comprehensive review occurs onsite for every

Head Start grantee every 3 years. But, that review represents the

back-end of the monitoring system in my view.

We need to figure out a way to strengthen Board training, management, oversight, and systems review on the front-end as the

first step in program governance and program oversight. This is a

role for HHS, not one where HHS should say ‘‘go find your own

training.’’ The local Boards need to be actively engaged in each program and knowledgeable about program rules.

No Head Start agency begins the day asking what program violations can they commit today? I am hopeful that this hearing will

offer many recommendations to further strengthen Head Start as

we begin drafting reauthorization legislation in the weeks ahead.

We need to reform the monitoring system so that it serves as a

management tool, not a check-off list of items that is ignored upon

completion. If we invest in appropriate training on the front-end,

including management and systems training, we will have stronger

programs and better outcomes for children.

Senator DODD. Let me, if I can, I would like to focus, if I could,

on what I consider to be sort of the absence of some real management tools, if I can, Mr. Horn, with the kind of review we are looking at here. Let me sort of state, if I can, my concerns here about

this approach.

I don’t think that boards of these Head Start centers begin the

day by saying to themselves, ‘‘I wonder what violations we can

commit today?’’ I work off the presumption, and I assume you do,

that these are very good, very talented, committed people who believe that Head Start makes a significant contribution, and it

seems to me it is in our common interest, then, to try and do what

we can to strengthen these boards.

My concern basically comes down to this, and that is whether or

not we are putting enough emphasis on the front end of this process rather than the back-end of the process, whether or not we are

providing these boards with the kind of management skills and

tools that they can conduct the kind of reviews of how these centers

are being run rather than sort of waiting at the end of the process

and going in with an 1,800—look at the size of this thing. I mean,

it is a huge thing, these PRISMs, that go in and go back and review this. It seems to me you can—catching the violation.

If we are truly interested in making Head Start work, then we

ought to be doing what we can to see to it that these institutions

have the tools necessary. Why don’t we put up, if you want, that

chart there on these management tools. I know you are familiar

with all of these, but it seems to me it is important to look at it.

So I begin on that presumption. I presume you do, as well——

Mr. HORN. Yes.

Senator DODD [CONTINUING]. That these people are not out to

somehow violate the law, but rather want to do a good job and the

question is, can HHS provide them with the necessary tools to

39

make it possible for them to do a better job so we minimize the

very things that the Government Accountability Office has encountered in their review, and that is really the essence of my question

for you, I suppose.

When I look at the number of tools available within the Head

Start oversight process, it is clear that the monitoring tools are in

place, as you see them here. These are the management tools, and

those are pretty good tools, and pretty comprehensive, because I

was reading them last night, going back over them. They are rather significant. But somehow, both at the Head Start grantee level

and within the HHS, the tools have become just another checkoff

system in the process. Has the annual self-assessment been done?

Check. Have the monthly financial reports been given to the board?

Check. Did the financial audit get completed? Check.

What I would like to know from Dr. Shaul at GAO is how many

of the violations are related to the operation of the local grantee

boards, for instance? We can get to the answer in a minute, if you

would. I expect that board governance and oversight is a problem

for grantees with serious or chronic problems.

And for Dr. Horn, while I appreciate your testimony today about

the reforms that you are making, frankly, when I looked at your

Head Start management initiative, I didn’t see anything in it with

regard to the board training, board management, board oversight,

and systems review by the boards. So it seems to me that with the

extensive monitoring system that applies to Head Start, potentially

stronger boards could pick up on the problems in the self-assessment, the monthly financials and the annual audits, rather than

just going and saying they have been done and checking them off,

but rather really getting into them.

The review, in my opinion, represents—what we are looking at

here, the PRISM review, while it is comprehensive, but that is the

review, in my opinion, that represents the back end of the monitoring system. What steps could HHS take to provide management assistance and program oversight assistance to the boards themselves

is what I am getting at here.

So that is really my question to both of you. Why don’t we begin

with you, Dr. Shaul, and how many of these problems did you encounter as I raised here related to the operation of the local grantee boards?

Ms. SHAUL. Senator, when we looked at the kinds of issues that

came up most often with grantees, they turned out to be areas of

program governance, just what you suggested that they might be.

It is things like not having systems in place so that the agency

would generate the kinds of reports on finances and program results that would allow the board to have—to know what is going

on at the agency on a regular basis and be able to provide guidance

to the executive director and the staff. The Federal Government

can do the systems approach, but the day-to-day oversight of the

agency really is the board’s responsibility, and so they are very,

very key.

And some of our other examples of problems that we saw in

grantees that we mentioned in our report, what we sometimes saw

was poor communication between the board and the executive director, the board not knowing what was going on with the audits,

40

and so on. So in those situations, it happens that grantees can get

off track when the board doesn’t have the information it needs to

provide the oversight. So you have identified a very key element.

Senator DODD. And to you, Mr. Horn, then why don’t we do this?

If we are truly interested—if you begin with the assumption that

people aren’t getting up in the morning on these things and saying,

‘‘I wonder what violations we can commit today,’’ but rather, ‘‘How

can we do a better job?’’ wouldn’t it make some sense to really provide that kind of assistance?

And I know you are providing some money already. I am anticipating a response to this will be some of the resources you are putting into that. But as I looked over the amount of money, a onetime $3,000 grant to boards, presumably to purchase their own

training somewhere, or that you once provided satellite video to

boards, it seems to me we might want to revisit a sampling of Head

Start grantees to do an additional PRISM, which may or may not

be necessary, but it may fit into this process a little more in a more

worthwhile way. What is your answer to that?

Mr. HORN. Well, first of all, may I say for the record I do agree

with you that people do not get up every day and wonder what

kind of violations——

Senator DODD. I should have acknowledged your head was nodding affirmatively when I said that.

Mr. HORN [CONTINUING]. And governance of any nonprofit is really critical to the effective functioning of that organization, and that

is particularly true in Head Start because there is a unique piece

of the governance structure in Head Start, which is the Parent Policy Council. One of the things that I think is so extraordinary

about Head Start and I think is very, very well worth preserving

no matter what reforms we do is the idea that parents themselves

should be in the majority status when it comes to the Parent Policy

Council and that that is a way to ensure that parents have input

into the program and that the program reflects the needs and desires of the parents of the children being served.

The problem, however, or maybe not a problem, but the challenge is that means that we are dealing with probably some governance boards which are not very sophisticated initially and that

puts a special obligation, it seems to me, on the Federal managers

to ensure that we build in that sophistication and that expertise in

the Parent Policy Councils, in particular. That is why last year we

did dedicate about $6.7 million in supplemental funding to local

programs to do training in terms of governance.

It is also one of the reasons why we have restructured our Training and Technical Assistance System to be more local program

based and focused as opposed to focused to a large extent on conference training. And what we are doing is with the Training and

Technical Assistance Specialists assigned to each of the local programs is we are trying to figure out what are their most compelling

needs. And I agree with you that one of the most compelling needs

of many programs may be better training in a governance system.

So we hope—this is a new system that is really focused on local

programs and getting the training done at the local program level

as opposed to a distance learning. But I am hopeful that that will

41

help us strengthen the governance structures within local programs.

Senator DODD. That is a good point, but actually, we need to do

both. I mean, I think the boards and the policy councils, it is not

an exclusivity here. They both need the help. And it seems to me

particularly, since the boards themselves are the governing body,

in a sense, that to the extent we can take some of these scarce resources, and they are scarce and I appreciate that. You don’t have

unlimited resources. But rather than, as I mentioned earlier, sort

of revisiting a sampling of these Head Starts, to take those resources and put them into training, so if you are the new board,

here is what your obligations are, here is what your responsibilities

are, and early on, we get them involved.

I am assuming, again, a good board wants to know what is going

on and wants to be able to make the kind of corrections, be an effective board, my point being it seems to me that would make more

sense than coming in after the fact, as we have done here and as

Dr. Shaul, I think, agrees with me in a sense from your comments

there, to really put the emphasis on the front end, at least as much

on the front end as we do on the back end of the process. Do you

agree with that?

Mr. HORN. Yes, I do. Look, it is always better to prevent a problem from beginning in the first place than trying to cure a problem.

It is cheaper for everybody and the kids are going to be far better

off when problems are prevented from happening.

I think we need to do both. We need to do a better job of up-front

training and we also need to do a better job of our oversight of the

way that the programs are actually being implemented. But in

terms of poor training, I think that is a very critical issue and I

take your recommendation quite seriously.

Senator DODD. Maybe, Mr. Chairman, we might take a look at

that at some point, maybe just even have a witness or two come

and give us some ideas of how we might strengthen that aspect of

this.

But again, I thank GAO and I thank the chairman for doing this

today. Thank you very much for coming.

Senator ALEXANDER. Those are very constructive suggestions and

this has been very helpful testimony, Dr. Horn and Dr. Shaul.

Thank you for your work.

Senator ALEXANDER. We will now invite the second panel to come

to the table. While they are doing that, I will introduce them, to

save a little time. As we discussed with them before, we have your

statements and either have read or will read them. We will ask

each of the witnesses, who will be introduced in just a moment, if

you could summarize your comments in 5 minutes or less, and that

will give the Senators—we will try to restrain the Senators to 5

minutes, as well—that will give us a chance to ask more questions

and to have a better, more indepth discussion.

I will introduce two of the witnesses and then I am going to ask

Senator Dodd if he would like to introduce Olivia Golden. Would

you like to do that? And then Senator Roberts is coming over to

introduce Dr. Caccamo.

The two witnesses that I will introduce: first, it gives me great

pleasure to present A.C. Wharton, who is the Mayor of Shelby

42

County. Shelby County surrounds Memphis. It is our largest county in Tennessee and A.C. Wharton is one of our most distinguished

public servants. He has been the Shelby County Public Defender.

He has been Chairman of the Tennessee Higher Education Commission.

He is a law professor, a pioneer in a great many areas, and he

is invited here today because he has been for the last 3 years tackling problems with the Head Start grantee in Shelby County. And

while we have been hearing in this first set of panels the difficulties in managing and controlling and, if necessary, defunding a

grantee as between Washington and the grantee, I hope we will

hear from Mayor Wharton and from others on this panel what it

is like to try to take control of a local agency that is having problems.

I would like to also introduce Yvonne Atkinson Gates, who is a

County Commissioner from Clark County in Nevada. Senator Ensign strongly recommended that we hear your story, Ms. Gates.

She attended Clark County High School, graduated from the University of Nevada-Las Vegas in 1978 with a Bachelor’s degree in

political science and journalism, and has a distinguished career locally. We welcome you and thank you for coming such a long distance to let us hear from you.

Senator Roberts is here. Senator Roberts, would you like to make

an introduction, and then we will go to Senator Dodd.

Senator ROBERTS. I certainly would, Mr. Chairman. I apologize

for the lateness of my arrival, but we were discussing some intelligence matters with some of our allies in the Intelligence Committee, and it was a good meeting. I don’t want to alarm anybody.

[Laughter.]

Mr. Chairman and members of the committee, I am honored to

introduce Dr. Jim Caccamo, a true expert and an advocate in the

field of early learning. I am pleased that the doctor is here with

us today to discuss the past and current financial management of

a Kansas City Head Start grantee and his thoughts on what steps

could have been taken to avoid the financial problems which are

becoming more egregious and a big press item out in our part of

the world and I think through all the Head Start world and pose

a great challenge to us.

The doctor is a respected leader in the greater Kansas City area

for his work and his dedication to early childhood issues. He has

an extensive background in early childhood, ranging from his work

as an Assistant Superintendent for Special Programs for the Independence, Missouri School District to his work as the Director of

the Metropolitan Council on Early Learning. The council is a highly respected organization which specializes in metropolitan planning for early learning for the bi-state Kansas City region. The vision of the council is that all children will enter school prepared for

success. They work with an extensive network of community partners from the public and private sector to develop and implement

an early learning system that supports families and prepares children for success in school.

It is also important to note the good doctor’s past work as Executive Director for the Partnership with Children. That partnership

is a Kansas City-based organization whose mission is to work on

43

a collaborative basis to protect and improve the quality of life for

children and youth through research, through education, through

mobilization and capacity building. The partnership is now known

for its annual report cards, which actually measure the status of

children in a variety of areas in the five-county metropolitan area.

The doctor also spearheaded the Number One Question campaign, an effort the organization launched back in 1997. The Number One Question campaign encourages everyone in their communities to ask the question, is it good for the children? So before

making any decision, ask the question that should be asked. Now,

this is a cause which I proudly championed here in the Senate a

few years ago with the National Association of Child Care Resource

and Referral Agencies.

As you can gather from his credentials, it is no secret that the

doctor is a dedicated and passionate leader in early childhood

issues. I am confident his testimony will provide great insight into

the Head Start financial situation, which is very egregious in Kansas City, and also provide positive steps we need to take to ensure

a similar situation does not occur in the future.

Doctor, I thank you for taking the time out of your busy schedule

to be here today. I look forward to your testimony, and I thank my

colleagues for their patience, and thank you, Mr. Chairman.

Senator ALEXANDER. Thank you, Senator Roberts.

Senator Dodd, would you like to introduce Dr. Golden, and then

we will go down the line.

Senator DODD. I would be honored to introduce Dr. Golden.

Truth in advertising, I am a fan of Dr. Golden’s. This is a remarkable individual, Mr. Chairman, who has made, really dedicated a

substantial part of her professional life to these very, very issues

and today is the Senior Fellow at the Urban Institute.

Many of my colleagues may recall actually working with Dr.

Golden in the past. She has served recently, prior to the Urban Institute, as the Director of Child and Family Services Agencies here

in the District of Columbia, leading that agency out of receivership,

I might add, into a solvent condition, and I congratulate you on

that.

And then Dr. Golden, previous to that, served in two Presidentially-appointed positions within the U.S. Department of Health

and Human Services, first as the Commissioner for Children,

Youth, and Families, and then as the Assistant Secretary for Children and Families. In those roles, she was responsible for over 60

Federal programs, including Head Start; Early Head Start, which

was created during her tenure to extend benefits to Head Start to

babies and toddlers age 0 to 3 Federal child care programs, which

I was deeply involved in with Senator Hatch in drafting initial legislation in that area; child abuse and neglect programs, including

the implementation of the Adoption and Safe Families Act of 1997.

She was also Director of Programs and Policy for the Children’s

Defense Fund, a lecturer at the Kennedy School at Harvard, and

Budget Director for the Executive Office of Human Services in the

Commonwealth of Massachusetts. She is an author on poor children and welfare reform, just an extensive background, very, very

knowledgeable and tremendously helpful to have as a part of any

discussion about Head Start.

44

I didn’t get a chance at the opening of my comments just to State

what I said. Head Start is—obviously, every program deserves to

be looked at and we need to address issues that can emerge from

it, but I am a strong believer that Head Start has made such a tremendous positive difference in people’s lives, and we take some parochial pride in that the author of Head Start, of course, is a Connecticut resident and a long-time friend of mine who advocated the

program of Head Start back, I guess about 40 years ago now. So

we take particular interest in the program and how we can sustain

it and strengthen it in the coming years.

So again, I thank the chairman for having this hearing, and Dr.

Golden, it is truly an honor to see you once again and have you

before us.

Senator ALEXANDER. Now that we have introduced the members

of the panel, we welcome Senator Clinton, as well.

Why don’t we go on to the 5 minutes of summarized testimony

and then we Senators will plunge in with some questions. Why

don’t we start with Jim Caccamo and go right down the line with

the Mayor, then Yvonne Gates, then Olivia Golden.

STATEMENTS OF JIM CACCAMO, DIRECTOR, METROPOLITAN

COUNCIL ON EARLY LEARNING, KANSAS CITY, MO; A.C.

WHARTON, MAYOR, SHELBY COUNTY, MEMPHIS, TN; YVONNE

GATES, DIRECTOR FOR MARKETING AND COMMUNITY RELATIONS, CENTER FOR ACADEMIC ENRICHMENT AND OUTREACH, CLARK COUNTY, NV; AND OLIVIA A. GOLDEN, SENIOR FELLOW, URBAN INSTITUTE

Mr. CACCAMO. Thank you, Mr. Chairman and members of the

committee, for allowing me to be here today to testify.

One of the early adopters of the Number One Question campaign

in Kansas City was KCMC Head Start. Using the Number One

Question, each and every program was reviewed and, where necessary, changes were made so that they could say, yes, Head Start

is good for the children. For over 3 decades, Head Start has delivered high-quality comprehensive services to children and families.

The KCMC executive director devoted his 27-year career to developing innovative approaches to educating young children and supporting their families. Through his leadership, KCMC reaches over

2,700 children and their families annually.

His strong sense of importance for early childhood helped engage

the private philanthropic community to make sizeable contributions toward continued program improvement in both Head Start,

but in the broader early childhood area within our community. It

is ironic that such a solid agency programmatically experienced

such financial and governance mismanagement.

The financial and governance mismanagement problems began to

surface 4 years ago. The controller and chief financial officer was

engaged in a kickback scheme and in February 2002 plead guilty

to bribery and money laundering. He is currently serving a 51-

month sentence in prison and was ordered to pay $800,000 in restitution.

In March of 2002, Kansas City, Missouri School District began

trying to collect payments of approximately $1.5 million for Head

Start services they provided. These serious problems should have

45

caused intensive scrutiny and supervision of all financial and governance practices at KCMC, but clearly, whatever interventions occurred were not sufficient.

In October 2003, some 18 months after learning of the controller’s abuse, the Kansas City Star reported on the KCMC board’s

paying the executive director an excessive salary. Revelations

about fiscal mismanagement continued to unfold, and in February

2004, the executive director resigned. And in December of 2004, the

agency gave up the Head Start grant. It is estimated that KCMC

is as much as $3 million in debt.

The financial mismanagement, excessive salary, employee kickback problems could have been avoided with tighter oversight on

the part of the board and the executive director. Since last winter,

the Community Development Institute in Denver, Colorado has run

the Head Start program. The programs for children and families

served by the agency remain strong, without noticeable interruption in service, throughout this period.

There is strong community interest in seeing that Head Start

continues to be a flagship program. Our best community organizations have come together to talk about responding to the RFP when

it is published. Our community will respond with a strong application that reflects our commitment to quality, comprehensive services to children and families and to ensuring strong fiscal management. Fiscal and governance problems that occurred at KCMC

have been identified, and local experts are responding to the RFP,

are trying to put together careful attention to ensuring these issues

do not happen again.

All of us who care deeply about supporting low-income children

and their families during these early years must ensure that the

Head Start monitoring process helps programs provide the best

possible support to children and families.

I have participated in Head Start reviews over my career and

found them to be rigorous and thorough. In fact, it seems to me

that Head Start reviews are more complex and rigorous than many

of the other program reviews with which I have taken part. Clearly, these reviews are necessary and the GAO’s recommendations

seem appropriate.

In KCMC’s case, rules and regulations were in place, but we

must be committed to having all financial aspects closely attended

to by the board and the director. I believe that there are some additional steps that could be taken, and let me outline them for you.

First, board membership should include community members

from the delegate agency and school board members from one or

more of the contracting school districts.

Two, increased involvement in board program and fiscal accountability with closer review in monitoring the budget, ensuring that

payments are made in a timely manner, and that each budget year

is closed out using only current fiscal year money.

Three, insistence that delegates and subcontractors notify the executive director and treasurer of the board in writing when payment for services is more than 60 days in arrears, and notification

of the executive director, treasurer of the board, and regional ACF

office if those payments are 90 days in arrears.

46

Internal controls on financial transactions, such as procurement,

accounts payable, payroll, expense reimbursement, must be

strengthened and fiscal review must attest that the agency is following all of ACF’s financial regulations.

And last, staff development for senior management and the

board of directors should be required, including a review of ACF’s

budget practices, budget planning, and ethical leadership.

Ensuring that financial and governance problems don’t occur is

a matter of ethics, integrity, accountability, and active engagement

of the board of directors.

In conclusion, I want to thank the committee for their focus on

helping to improve one of our national treasures. For almost 40

years, Head Start has served our Nation’s low-income children and

their families to help ensure their physical and emotional health

and to prepare these children to be successful in school. Head Start

has made a difference to millions of our children. Strict rules and

regulations are necessary, but communities must also assure that

their local Head Start programs are doing the best possible job fiscally and in governance. In Kansas City, we believe that Head

Start is good for the children. Thank you.

[The prepared statement of Mr. Caccamo follows:]

PREPARED STATEMENT OF JAMES M. CACCAMO, PH.D.

Mr. Chairman and members of the committee, thank you for allowing me the opportunity to testify this morning.

Introduction

For the past 34 years I have been actively working to improve the status of children in Metropolitan Kansas City. My name is Jim Caccamo and I am the director

of the Mid America Regional Council’s Metropolitan Council on Early Learning.

For our young children and their families, the words of Rogers and Hammerstein’s

song from the musical Oklahoma, couldn’t be truer, ‘‘everything’s up to date in Kansas City.’’ Over the past dozen years, our community has worked hard to improve

early learning with the vision that every child will begin school ready to learn.

Civic, business, and philanthropic leaders have formed partnerships with many

agencies and organizations to promote the well-being of our children.

Eight years ago, Kansas City began a campaign to help focus our community’s attention to the well being of our children. We asked every citizen to use what we

called Kansas City’s #1 Question—Is it good for the children?—as a guide for making decisions at home, in schools, in the workplace, in places of worship, and in their

neighborhoods.

One of the early adopters of the #1 Question Campaign was KCMC—Head Start.

Using the #1 Question as a guide, each and every program was reviewed and, where

necessary, changes were made so that they could answer ‘‘yes’’—it is good for the

children.

For over 3 decades Head Start has delivered high quality comprehensive services.

KCMC’s Executive Director devoted his 27-year career to the enhancement and development of innovative approaches to educating our young children and supporting

their families. Through his leadership KCMC reaches over 2,700 children and their

families annually. His strong sense of the importance of early childhood helped engage our private philanthropic community to make sizable contributions toward continued program improvement in both Head Start and the broader early childhood

community. Understanding the value of Head Start’s comprehensive approach to

children and families, there has been and continues to be extremely strong community support for Head Start in Kansas City.

KCMC delivered outstanding care to young children. The agency stressed quality

in every programmatic aspect of its Head Start program and was a leader in ensuring that its sites moved toward accreditation by the National Association for the

Education of Young Children.

It is so ironic that such a solid agency programmatically, still experienced financial and governance mismanagement.

47

What Happened in Kansas City?

The financial and governance problems at KCMC began to surface 4 years ago,

in April 2001. The Controller/Chief Financial Officer was engaged in a kickback

scheme and in February of 2002, pled guilty to bribery and money laundering. He

was sentenced to 51 months in prison and ordered to pay over $800,000.

In March of 2002, the Kansas City Missouri School District began trying to collect

the delinquent payments of approximately 11⁄2 milliom dollars from KCMC for operating Head Start programs.

These serious problems should have caused significant and intensive scrutiny and

supervision of all financial and governance practices at KCMC.

But clearly, whatever interventions occurred were not sufficient. In October 2003,

some 18 months after learning of the comptroller’s abuses, the Kansas City Star re- ported that the KCMC Board was paying the Executive Director an excessive salary.

Revelations about fiscal mismanagement continued to unfold. In February of 2004,

KCMC’s Executive Director resigned. In December of 2004, the agency gave up the

Head Start grant. It is estimated that KCMC is as much as 3 million dollars in

debt.

The fiscal mismanagement, excessive salaries, and the employee kickback problems could have been avoided with tighter oversight on the part of the Executive

Director and Board.

Since last winter, the Community Development Institute in Denver Colorado has

been running the Head Start program. During all of this, the programs and services

for children and families served by the agency continued to be strong without a noticeable interruption in services.

There is a strong community interest in seeing that Head Start continues to be

one of our ‘‘flagship’’ programs. The very best of our community organizations have

come together to talk about responding to the RFP that will soon be published. Our

community will respond to the RFP with a strong application that reflects our commitment to quality comprehensive services for children and their families and to ensuring strong fiscal management.

The financial and governance problems that occurred at KCMC have been identified and local experts who are working on responding to the RFP are bringing particular attention to ensuring that these issues do not reoccur.

Kansas City has been driven by a strong vision that all children will start kindergarten ready to learn. We are committed to continue to provide the strong early education experiences that our children need.

What Steps Could Have Been Taken That Could Have Avoided the Situation in the First Place?

All of us who care so deeply about supporting low-income children and their families during these early years must come together to ensure that the Head Start

monitoring process helps programs to provide the best possible support for children

and families.

The Government Accountability Office’s recommendations to improve program

oversight and financial management seem appropriate.

I have participated in Head Start reviews over my career and found them to be

rigorous and thorough. In fact, it seems to me that the Head Start reviews are more

complex and rigorous than any other program reviews with which I am familiar.

Clearly, these reviews are necessary and as I said the GAO’s recommendations seem

appropriate.

In KCMC’s case, rules and regulations were in place. But, we must be committed

to having all financial aspects closely attended to by the Board and the Executive

Director.

I believe that there are additional steps that can be taken at the community level.

These include but are not limited to:

1. Increased Board membership to include community members such as a member

from a delegate agency and a school board member from one of the contracting

school districts.

2. Increased involvement of the Board in program and fiscal accountability with

closer review and monitoring of the budget, ensuring that payments are made in

a timely manner, and ensuring that each budget year is closed out so that the current fiscal year’s bills are not paid with next fiscal year’s dollars.

3. Insistence that delegates and subcontractors notify the executive director and

treasurer of the Board, in writing, when payment for services is more than 60 days

in arrears. They should also be instructed to notify the executive director, treasurer

of the Board, the regional office of ACF if payments are over 90 days in arrears.

These red flags, if they occur, should be enough for ACF fiscal oversight to become

very engaged.

48

4. Internal controls on financial transactions such as procurement, accounts payable, payroll, and expense reimbursement, must be strengthened and fiscal review

must attest to the agency’s following all of the financial regulations of ACF.

5. Staff development for the senior management and the Board of Directors

should be required. This development should include a review of ACF’s budget practices, budget planning, and ethical leadership.

Ensuring that financial and governance problems don’t occur is a matter of ethics,

integrity, accountability, and active engagement of the Board of directors.

Conclusion

In conclusion, I want to thank the committee for their focus on helping to improve

one of our national treasures. For almost 40 years, Head Start has served our Nation’s low-income children and their families to help ensure their physical and emotional health and to prepare the children to be successful in school. Head Start has

made a difference for millions of children.

Please keep in mind that strict rules and regulations are necessary but communities must also be committed to ensuring that their local Head Start programs are

doing the best possible job for children and families.

In Kansas City, we believe that Head Start is good for the children. Thank you.

Senator ALEXANDER. Thank you, Dr. Caccamo, and Mayor Wharton, welcome.

Mayor WHARTON. Thank you and good morning, Mr. Chairman.

I can only echo what Dr. Caccamo said with respect to the Kansas

City program. I noted in my written testimony that while the

GAO’s report is well, as far as it goes, as indicated by the previous

testimony, I think it would be presented in a vacuum if we did not

go all the way down to the delegate agency level. The problem is

not so much how we detect wrongdoing but what we are able to do

about it once we detect it.

I agree fully with the premise of Senator Dodd’s question to the

effect that, or observation to the effect that most employees do not

get up in the morning thinking of what kind of wrongdoing they

can engage in. Out of the 800 or so employees we have down in

the Shelby County Head Start program, I know that that is correct.

However, there were a few members on the board who did, in my

opinion, wake up each morning and see what kind of excesses they

could become involved in. And even when we detected those wrongful activities, the hoops we had to go through were unbelievable.

Now, I have a legal services background. I have worked with

boards. I am a former public defender. I have no problem with the

shared governance concept.

I do believe, however, that there are certain areas in which we

need a bit more direct control at the grantee level, specifically the

business side—buying gasoline, buying trucks, signing contracts. I,

quite frankly, don’t believe most of the parents I come in contact

with wish to serve on a policy council to deal with where you buy

your gasoline or where you buy your insurance. They want to make

sure that during the day, when their little children are there, that

there is a caring, educated, trained caregiver, teacher, whatever,

aide, whatever, who is going to make sure that that child is progressing as he or she should and that any deficiencies that child

might exhibit at an early age are corrected in the most effective

manner.

If you will look at the areas in which most of the excesses took

place, they were not in how well the children were actually cared

for. They were in these other areas of business. One thing I would

suggest is that we remove from that area of shared governance

those strictly financial and business decisions. Yes, parents ought

49

to have a direct say-so in what their child is taught, what challenges they face to encourage them to be ready to learn when they

reach our schools. If we could simply pull back a part from the parental involvement aspect of it, those are the business decisions.

That is where they get into trouble.

But even again, after we identified the deficiencies there, it is

virtually impossible to do anything. The delegate agencies have a

right to continue operating, and guess what, they have a right to

continue spending the money to fight you as you try to straighten

it out. I believe in due process. But in these instances where we

have programs being literally imploded in front of us, we lose so

much respect for the public that it is impossible for us to regain

the credit that the community has to give us if Head Start is going

to continue to be an effective program.

Mr. Chairman, I heard you mention the higher education model

in which Congress does not get involved in the day-to-day affairs

of a given college or university. That is correct. But you do, from

the standpoint of whether a student is making satisfactory educational progress. If they are not, then that college or university

has clear and direct authority to say, you will not come back next

September, or if you come back, you will not get financial assistance, and it is precise. It is exact. We need to be certain with respect to Head Start.

I, again, emphasize the fact that this is not to assail shared governance. But keep in mind, in many instances, you have your policy committee, you have your policy council, and in my case, I had

a county commission. So while I was able to tangibly see what was

going wrong, it took me almost a year to correct it. And even then,

I had to take a page out of your book, Mr. Chairman, when you

were sworn in as Governor down there when your predecessor was

selling the pardons down there and you had to go in early. I didn’t

know whether I had the authority to do it or not. I basically pulled

the financial operation physically and literally into my Finance Office. I had the books there. That is the only way we straightened

it out now. Had I had to go through the policy council, that never

would have happened.

One final observation, if I might. In many of our communities

where the Head Start programs operate, a Head Start program is

political gold. You build a lot of influence. If you take a powerful

Head Start policy council, they can go head-to-head with an elected

official any day. Again, please do not confuse any of this with the

idea or the suggestion that parents should not be involved. But in

certain areas that are ripe for political interference, that are ripe

for graft and the other things that we are seeing, I think we need

to pull those out of the shared governance model and hold us all

strictly accountable for those financial and business matters.

I will be more than glad to respond to any questions later on.

[The prepared statement of Mayor Wharton follows:]

PREPARED STATEMENT OF THE HONORABLE A.C. WHARTON, JR.

During my campaign for the office of Mayor of Shelby County, Tennessee, I

stressed that my first three priorities would be education, education, and education.

By that statement I was attempting to project that a sound education was the bedrock of any progress Shelby County might make. By ‘‘education’’ I include preschool

exposures that will ensure all children are ready to learn upon entering kinderVerDate 11-MAY-2000 15:57 Sep 26, 2005 Jkt 000000 PO 00000 Frm 00053 Fmt 6633 Sfmt 6621 S:\DOCS\20526.TXT SLABOR3 PsN: SLABOR3
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garten, and that their families receive the appropriate assistance in developing support tools to help their children thrive.

Based upon that philosophy, upon taking office in September 2002, I first set my

intentions to make an inquiry about Shelby County’s troubled Head Start operation.

News reports often chronicled the difficulties within Shelby County’s largest delegate agency, an entity known as Head Start, Inc.

Shelby County Government was and is the official grantee for all Head Start

funds. As Mayor of Shelby County, I believed I had full authority over the program,

and I knew I had a moral obligation to ensure that it was adequately serving the

children and families in my community.

Drawing on my background as a trial lawyer, I poured through, literally, many

feet of files, investigative reports, and assessments. Additionally, many concerned

citizens beat a path to my door to tell me of the troubles of Head Start. After thoroughly researching the issues and listening to the concerns of citizens, I had a clear

vision of the immediate and long-term changes required for us to have a successful,

stable and well managed Head Start program in Shelby County.

What I could not anticipate was how the political realities, created largely by the

obstructive albeit well-intentioned governance structure for Head Start, would prevent swift and decisive action.

I was elected with 62 percent of the vote, due in large part to the fact that I had

bipartisan endorsement. My support base crossed all racial, demographic, and political lines. Given this broad support, I assumed that when I set out to correct what

I believed to be obvious deficiencies in this most critical program, I would be able

to accomplish the task. Unfortunately, I found that my motivations were questioned

and that it was not going to be the efficient task it should be.

As a defense lawyer, I am well respectful of the due process rights our Constitution accords our citizens. I feel, however, that the hurdles I had to face in ridding

Shelby County of an ineffective, and perhaps illegally operated program, went far

beyond our founding fathers’ notion of due process.

With this in mind, it is my belief that all Head Start grantees, such as Shelby

County Government, should upon receipt of their grant or as a condition of receipt

of their grant, be allowed to develop a local governance and operations program that

determines how best to select delegate agencies and how to terminate those contracts efficiently when needed. Once this due process program is approved, it should

rest solely with the grantee to determine when a contract is to be terminated. The

role of the Federal Government should be simply to ensure that the grantee has

complied with its due process plan it submitted to HHS and which has been approved by HHS. The best interest of the intended recipients of Head Start programs

should be the focus of any due process review.

While I understand and support the provisions of the policies that set forth the

parameters for the policy councils’ authority, my experience is that the resulting

practice serves to delay and overcomplicate the termination process. The broad and

expansive role given to the policy committees adds other areas in which delay occurs. Additionally, in the case of Shelby County, a vote of the Shelby County Commission was required. With each member of this body being elected by the public,

there obviously is room for much political interference.

It is my opinion that our present Head Start scheme is one in which process has

trumped product. Head Start was designed as a compensatory education project for

culturally deprived children. The purpose was to ensure that these children receive

services and attention that would prepare them to be ready to learn once they enter

school.

Because of the complicated procedural regulations, more time is given to ‘‘the

process’’ of running the Head Start programs, and all of the attendant politics, than

is given to the intended product, namely well cared for, and well taught children,

ready to learn when they enter school.

Nothing herein should be construed to mean that governments or any other grantee should be allowed to ride roughshod over the dignity that should be accorded all

participants and Head Start programs whether they are grantees, policy councils,

policy committees, or certainly children and parents. What I do feel emphatically

is that the pendulum has swung too far in an effort to correct the excesses that accompanied the origin of our many War on Poverty programs in which those from

the outside came in and professed to know what was best for the service recipients,

giving them no voice, but only imposing on them their designs for a greater society.

We need to pull the pendulum back to a middle ground which gives the appropriate

respect to the desired end of participant involvement while at the same time not

bogging down the programs with procedural hoops that detract from the overall

goals of the Head Start program.

51

Again, I wish to emphasize that in my legal services experience, I worked closely

with citizen boards. I have also worked closely with citizen boards in many other

civic programs. I emphasize that because I want to make it clear that this is not

a call for eliminating policy committees and policy councils. I do feel, however, that

the role of the policy councils in such areas as the selection or termination of delegate agencies should be reviewed carefully. As it now stands, regardless of the severity of mismanagement within a delegate agency, the grantee, in this case Shelby

County Government, faces unnecessary barriers in bringing about an immediate termination of the delegate agency contract, creating a feeling of hopelessness that ultimately weakens the entire program.

In order to understand the seriousness of this dilemma, one must understand the

down to earth politics which often accompany Head Start programs. Many of the

parents who are on the policy council may feel somehow indebted to those who operate the program. In many instances, their children are attending various Head Start

programs, and they have been accorded a level of dignity and respect which they

have never received before. The operators of delegate agencies are often politically

well fixed because they provide a substantial number of jobs in the community.

What we’re faced with is not merely a benign situation in which an errant agency

through no bad intent runs afoul of the guidelines. In many instances the

wrongdoings and shortfalls are calculated to bring about the political empowerment

or financial enrichment of those who profit from the wrongdoing.

The GAO report focuses on financial management. Based upon my personal observations and experience, this report and its recommendations will stand in a vacuum

if the governance problems are not also considered. Head Start grantees cannot correct financial mismanagement at the delegate level if they face obstruction by the

politics of an unnecessarily complicated governance structure. Without the authority

to quickly access records or take appropriate action on personnel issues when mismanagement has been identified, Head Start grantees cannot safeguard the financial security of this country’s most effective and proven program to support at risk

children and families.

In an article entitled ‘‘Life Way After Head Start,’’ the New York Times Magazine

chronicled the research findings of the High Scope Perry Preschool—the precursor

to Head Start—over the course of more than 4 decades. Looking at the school participants and non-participants side by side, the results are nothing less than staggering. Considering a variety of factors from social service requirements to wealth

creation, the analysis suggests a return on investment of 17:1 for the Perry Preschool. The need to ensure Head Start’s success goes beyond a moral obligation and

has implications for our country’s future prosperity. We should not allow any policy

or practice to stand in the way of ensuring this program’s success.

RESPONSE TO QUESTION OF SENATOR ALEXANDER BY MAYOR A.C. WHARTON

Question. You made reference to the GAO recommendations and the effects you

believe they will have on ensuring program accountability. You have also made specific additional recommendations that would focus on the local level, either the

grantee or local governments. How do you see Congress supporting the efforts of

communities and organizations like yours to implement the recommendations made

by the GAO?

Answer. While the statutory preference accorded existing grantees should remain,

there should be exceptions carved out in those instances where there is clear evidence of financial impropriety. Similarly, local governments serving as grantees

should also have the authority to move much more expeditiously in terminating contractual arrangements with delegate agencies in whose operations there is clear evidence of financial impropriety or irregularity.

Specifically, the shared governance provisions which call for policy council approval of the termination of delegate agency contracts or employees of delegate

agencies should be modified to allow the immediate suspension or termination of

such agencies or employees with any due process provisions to take place promptly

following the adverse action.

I would also suggest that the extent of due process to be accorded any employee

or agency should be tailored by the grantee, and once approved by the Administration for Children and Families (ACF) as a part of the grant agreement, it should

be final and binding.

Clarification is also needed in defining exactly who or what body is the ‘‘grantee.’’

In Shelby County, Tennessee, for example, the Office of Shelby County Mayor and

the Shelby County Commission are listed as grantees. Accordingly, the executive

branch may find itself in disagreement with the local legislative body or a signifiVerDate 11-MAY-2000 15:57 Sep 26, 2005 Jkt 000000 PO 00000 Frm 00055 Fmt 6633 Sfmt 6621 S:\DOCS\20526.TXT SLABOR3 PsN: SLABOR3
52

cant number of members thereof, thereby creating the possibility of gridlock when

it comes to terminating failing employees or agencies.

Senator ALEXANDER. Thank you, Mayor Wharton, and thank you

for coming here today.

Senator Ensign, would you like to introduce Yvonne Gates?

Senator ENSIGN. Thank you, Mr. Chairman, I would. I welcome

one of our esteemed County Commissioners to the panel and before

this committee. She is a terrific public servant in Southern Nevada,

former Chairman of the Clark County Commission and a person

who represents most of the areas that take advantage of the Head

Start program. She has been very active on these programs including, the oversight and pointing out a lot of the problems that we

have had with our Head Start grantee. We have worked with Commissioner Gates on many occasions and are jointly working together to try to come up with some solutions that will make a big

difference and actually serve kids instead of, as the Mayor was just

talking about, serve the particular interest of individuals feathering their own nests.

So I welcome Commissioner Gates here and look forward to her

testimony, I look forward to working with you, Mr. Chairman in

the future on trying to fix the problems that we have going on in

Southern Nevada.

Senator ALEXANDER. Thank you, Senator Ensign.

Commissioner Gates?

Ms. GATES. Thank you, Mr. Chairman and members of the committee. Good morning. I am Yvonne Atkinson Gates and I am a

County Commissioner representing 8,000 square miles. It is almost

as large as the State of New Jersey. I wish to thank Senator Ensign for inviting me here to appear before you today.

Clark County’s population is now over 1.5 million and we have

118,782 children under the age of 5. Unfortunately, 22,468 of that

total includes children living in poverty. As a growing community,

Las Vegas attracts many immigrants who are interested in developing a better way for their families and for their lives. Like many

cities in the southern part, many of those newcomers, however, are

poor and have language barriers where English is not their native

tongue.

Presently, our school system has a majority of the students of a

minority background. As such, it faces a dual challenge of assimilating many of these students into the American culture while at

the same time addressing many of their limited English language

skills. No Child Left Behind is more than an educational mantra,

but rather a larger goal of our society. We believe that Head Start

programs, with this focus on the youth and their families, is a key

tool in providing the necessary foundation for their lives. Children

coming from these poor families need additional compensatory education. We believe that the sooner we begin this process, the greater likelihood is that the children will experience future successes.

Children are society’s greatest resources, as they represent our

future and our collective hope for a better world. The promise of

the Head Start program is to erase inequities among our citizens

and to give all of our children an opportunity and a level playing

field in achieving their academic achievements.

53

In my community, a Head Start provider is a Community Action

Agency and has been funded to enroll approximately 1,723 children

providing Head Start at 15 sites. As a local elected official, I have

worked with my colleagues on the County Commission, the Clark

County School District, the City of Las Vegas, Henderson nonprofit

agencies, and faith-based groups to build state-of-the-art Head

Start programs and early childhood development centers in our

community.

I have provided you with a review and a short package showing

several of these centers, which were funded by community partners

using Federal Community Block Grant funds, city and county general funds, private loans, and land contribution and long-term

leases. Included in this packet are also several personal testimonies

about the importance of Head Start programs and its participants

as well as their families.

With the growth of the Federal budget deficit, we must identify

new ways to enhance program accountability to serve our community service development system. Our goal should be to reward and

enhance performers toward specific goals rather than the continuance of funding Head Start providers who are unable to document

their successes.

I wish to commend the GAO Accounting Office for their recent

review of the Head Start program. Their insight relating to the

weaknesses of the Federal oversight process can help us together

build a stronger Federal and local review system so that these Federal programs can achieve its promise of preparing our children for

their future. This GAO study seems to indicate that much of the

weakness of this program occurs at the Federal level, where inadequate Federal monitoring and oversight, combined with the lack

of clear and sufficient sanctions allows the continuation of funding

for Head Start providers who continue to come up short.

To improve in oversight, the Administration for Children and

Families, ACF, needs to be given the support and the necessary

staff resources to take a more proactive role. ACF needs to engage

in more direct intervention to assist substandard performers

achieve targeted benchmarks, levels, and in cases such as a lack

of performance, to take the necessary hard step in closing and providing opportunities for others to utilize these resources rather

than to keep funding a poor current performer.

We need to recognize that should Head Start programs be defunct by ACF, it will create a critical and immediate community

challenge as ACF and others will need to seek new providers to

continue the operation of these programs so that the children and

their families are not negatively impacted by the program service

interruption, recognizing that these provider relationships may

have been forged over decades. Identifying and selecting new providers will take time and must be acknowledged that breaking up

is hard to do.

To diversify program delivery, Congress may wish to consider restricting and prohibiting the ACF from allocating all of its Head

Start funding to one organization in a single large metropolitan

area. Utilizing multiple agencies can provide an immediate backup should a current grantee no longer be able to effectively deliver

the service.

54

Our goal should be to expand local oversight of the chosen grantee. I know as a County Commissioner that my office frequently has

received and fielded calls from disgruntled parents who think that

we have a direct resolve in their issue with the Federal Head Start

grantee as they do not recognize that the Federal local grant does

not flow through the county. We believe that local government

needs to be more actively engaged in the local review and evaluation process for the use of these Federal programs. Local government is closer to the people and we have an opportunity to provide

technical and mentoring assistance to our local nonprofit partners,

and additionally to help provide other resources to expand the

scope of service for the operation of these programs.

As shown in my handout, Mr. Chairman and members of the

committee, a number of the Head Start and early childhood development centers were a direct result of local funding commitment to

this Federal program reflecting a keen awareness of the importance that preschool education can make a difference for our children.

Additionally, the Federal Government may wish to require Head

Start grantees to work with local governments and potentially require local government oversight review in an annual review process. As the grant manger for other Federal funds, State agencies

are also uniquely qualified to serve in this facilitory role as they

currently supervise and administer many other Federal grants, including the Department of Health and Human Services.

In assisting this reform initiative as part of the reauthorization

of Head Start programs, we must be careful not to overreact to this

GAO study and to use it as an exercise to terminate or reduce Federal funding for this critical human development program because

of its current weakness shared by both the Federal and local level.

Our children are too important to this Nation’s future to be caught

up in Federal deficit reduction efforts.

As fundamentally as their future successes are critical to our Nation’s competitiveness on the world stage, where other countries

have discriminated toward its citizens due to gender, Americans

continue to be a shining light in the heel of all of our citizens have

an opportunity to succeed based on their ability and hard work.

This is the meritocracy envisioned by Thomas Jefferson, where people’s ability would be only limited to their ultimate life successes

rather than preconditioned race, sex, or economic status.

Senator ALEXANDER. Ms. Gates, if we could wrap up in about

one——

Ms. GATES. I am. I am just finishing, Mr. Chairman.

Senator ALEXANDER [CONTINUING]. Thank you.

Ms. GATES. Let us work together to build a Head Start program,

achieve its original promise as a compensatory educational program to help our most vulnerable and youngest Americans and

their families achieve the Jeffersonian meritocracy.

Thank you, Mr. Chairman and members of the committee.

[The prepared statement of Ms. Gates follows:]

PREPARED STATEMENT OF YVONNE ATKINSON GATES

Mr. Chairman, and members of the committee, good morning, my name is Yvonne

Atkinson Gates, and I am a Clark County Commissioner representing an 8,000

square mile area as large as the State of New Jersey, located in southernmost part

55

of the State of Nevada. Clark County is also the home of the City of Las Vegas,

a world renown tourist destination and Nellis Air Force Base, one of the key fighter

pilot training facilities for the defenders of the free world.

I wish to thank Senator John Ensign for inviting me and giving me the opportunity of appearing before you today to talk about the importance of the Head Start

Program to our community.

Clark County’s population is now over 1.5 million and we have 118,782 children

under the age of 5 years of age. Unfortunately, 22,468 of that total include children

who come from poverty households. As a booming growth community, Las Vegas attracts many immigrants who are interested in developing a better life for their families. Like many cities in the southwest, many of those newcomers are, however, poor

and have a language barrier where English is not their native tongue. Presently,

our school district has a majority of students from minority backgrounds. As such,

it faces the dual challenge of assimilating many of these students into American cultural life while at the same time addressing, for many, their limited English language skills.

‘‘No Child Left Behind’’ is more than an educational mantra, but rather the larger

goal of our society. We believe that the Head Start program with its focus on the

youth and their families is a key tool in providing the necessary foundation for their

life success. Children coming from these poor families need additional compensatory

education. We believe that the sooner we begin this process, the greater likelihood

that these children will more quickly assimilate into American society.

Children are every society’s greatest resource, as they represent our future and

our collective hope for a better world. The promise of the Head Start Program is

to erase inequities among our citizens and to give our children, all our children, a

level playing field for their future academic success.

In my community, our current Head Start provider is a community action program agency and it has a funded enrollment of 1,723 children, providing Head Start

services at 15 sites. This Head Start program is a key lifeline for these children as

804 children have no health insurance and 511 children are receiving dental care

and 1,532 have received preventative dental care.

As a County Commissioner, I have worked with my colleagues on the County

Commission, the Clark County School District, and the Cities of Las Vegas and

Henderson, nonprofit agencies, and the faith based nonprofits to help build stateof-the-art Head Start/Early Childhood Development Centers in our community. I

have provided for your review a short package showing several of these centers

which were funded by our community partners using Federal Community Development Block Grant funds, County and City General Funds, private loans, and land

contributions and long term leases. Included in this package are also several personal testimonies about the importance of the Head Start programs to program participants and their families.

With the growth in the Federal budget deficit, we must identify new ways to enhance program accountability of our service delivery systems to ensure that our children, and their families, receive top value for the investment of our tax dollars in

their pre-development education. Our goal should be to reward and enhance performance toward specified goals, rather than continuance of funding to Head Start

providers unable to document their successes.

I wish to commend the United States Government Accountability Office for their

recent review of the Head Start Program. Their insights relating to the weaknesses

of the Federal oversight process can help us together to build a stronger Federal

and local review system so that this Federal program can achieve its promise of preparing our children for their future lives of promise and achievement in what is an

ever diverse and competitive world environment.

This GAO study seems to indicate that much of the weakness of this program occurs at the Federal level, where inadequate Federal monitoring oversight combined

with the lack of clear and sufficient sanctions allows the continuation of funding to

Head Start providers who continue to come up short. This GAO study provides a

unique opportunity for the Federal Government to get its own house in order. While

clear weaknesses have been identified relating to the 1,700 Head Start grantees nationwide, this Federal report gives us a unique opportunity to step back and develop

new systems to measure accountability and to better control the administration of

Federal funds at both the Federal and local levels.

To improve this Federal oversight, the Administration for Children and Families

(ACF) needs to be given the support and the necessary staff resources to take a

more proactive role. Rather than letting program problems continue to fester, ACF

needs to engage in more direct intervention efforts to assist substandard performers

achieve the targeted benchmark levels, and in cases of continued lack of performance, to take the hard steps of closing and providing opportunities for others to utiVerDate 11-MAY-2000 15:57 Sep 26, 2005 Jkt 000000 PO 00000 Frm 00059 Fmt 6633 Sfmt 6621 S:\DOCS\20526.TXT SLABOR3 PsN: SLABOR3
56

lize these funds rather than continue, by inertia, to keep funding the current poor

performers.

As part of this reform effort, the Federal Government may wish to re-think how

Federal funds should be disbursed to run this important program. As an alternative

to the current Federal grantor/local nonprofit agency grant recipient relationship,

we would propose that this funding relationship be modified whereby State and

local governments potentially be selected to serve as local administrators, and that

the review and evaluation process be expanded to include more local stakeholders.

We need to recognize that should a Head Start program be defunded by ACF, that

this will create a critical and immediate community challenge as ACF and others

will need to seek new providers to continue the operation of these programs so that

the children and their families are not negatively impacted by program service

interruptions. Recognizing that these provider relationships may have been forged

over decades, identifying and selecting new providers will take time and we must

acknowledge that ‘‘breaking up is hard to do.’’ To diversify program delivery and to

reduce the government tendency to utilize fewer grantees for their own ease in monitoring and program administration, Congress may wish to consider restrictions prohibiting the ACF from allocating all its Head Start funding to a single organization

within a single large metropolitan area. Utilizing multiple providers can provide an

immediate backup should a current provider no longer be able to effectively deliver

the service.

Our goal should be to expand local oversight of the chosen grantees. I know as

a County Commissioner that my office frequently has had to field calls from disgruntled parents who think that we can directly resolve their issues with a Federal

Head Start grantee as they do not recognize that this is a Federal/local grant that

does not flow through the County.

We believe that local government needs to be more actively engaged in the local

review and evaluative process for the use of these Federal programs. Local government is closer to the people, and we have the opportunity of providing technical and

mentoring assistance to our local nonprofit agency partners, and additionally may

be able to provide other resources to expand the scope of services for the operations

of these programs. As shown by my handout, a number of these new Head Start/

Early Childhood Development Centers were the direct result of that local funding

commitment to this Federal program reflecting our keen awareness of the importance that preschool education can make for our children.

Additionally, the Federal Government might wish to transfer these Head Start

funds to local governments as a block grant, which would provide for local oversight

of these monies. Local governments currently administer a number of block grant

programs, and provided that sufficient administrative monies are available to cover

staff and monitoring costs, the Head Start program might be transferred to this

local level whereby local government, rather than a more distant Federal Agency,

has day to day oversight monitoring responsibilities for the Head Start program,

and serves as the immediate contracting grantee for the program.

As the grant managers for other Federal funds, State Agencies are also uniquely

qualified to serve in this facilitator role as they currently supervise the administration of many other Federal grants, including those from the Department of Health

and Human Services. Secondly, being geographically closer to the grant recipients,

they may have increased opportunities to provide critical oversight, technical assistance, and mentoring assistance to enable those nonprofit grant recipients to achieve

full compliance with all the applicable Federal regulations as the Head Start program is but one of many grants that States make available to these nonprofit grant

recipients, for which the States are already responsible.

In assessing this reform initiative as part of the reauthorization of the Head Start

program, we must be careful not to overreact to this GAO study and use it as an

excuse to terminate or reduce Federal funding for this critical human development

program because of current weaknesses shared at both the Federal and local levels.

Our children are too important to this Nation’s future to be caught up in Federal

deficit reduction efforts, as fundamentally their future successes are critical to our

Nation’s competitiveness on the world stage.

Where other countries have discriminated toward others due to gender discrimination, America continues to be a shining light on the hill as all our citizens have

an opportunity to succeed based on their abilities and hard work. This is the

‘‘meritocracy’’ envisioned by Thomas Jefferson, where a person’s abilities would be

the only limit to their ultimate life success, rather than pre-conditions of race, sex,

and economic status.

Let us work together to help the Head Start Program achieve its original promise

as a compensatory educational program to help our most vulnerable youngest Americans and their families achieve this Jeffersonian ‘‘meritocracy.’’

57

Senator ALEXANDER. Thank you very much, Commissioner Gates.

Dr. Golden?

Ms. GOLDEN. Thank you. Mr. Chairman, Senator Dodd, and

members of the subcommittee, my name is Olivia Golden and I am

a Senior Fellow at the Urban Institute. I am honored to appear before you today.

My perspective on Head Start and on tough and effective management has been shaped by a range of experiences as a researcher

and a practitioner at the Federal, State, and local levels, as you

heard from Senator Dodd. I spent 8 years at HHS, including 3 as

Assistant Secretary for Children and Families, and in 1993 was a

member of the bipartisan Advisory Committee on Head Start Quality and Expansion, which included staff from both parties of this

committee. The Advisory Committee’s unanimous final report provided a rigorous blueprint for quality, including strengthening Federal oversight capacity.

As a result of reforms put in place by HHS and the Congress,

beginning with the 1993 Advisory Committee, the 1994 Head Start

reauthorization, and the 1996 publication of tough research-based

performance standards, Head Start has the most rigorous standards and the most intensive monitoring of any human services program that I am aware of, a point that Dr. Caccamo also made. This

emphasis on accountability paid off in clear results in the late

1990s. As GAO’s report indicates, a historically unprecedented 144

grantees were terminated or relinquished their grants between

1993 and 2001.

GAO’s report provides useful next steps for Federal oversight

that build on these earlier reforms. Before turning to the suggestions I would like to make for implementing GAO’s recommendations, though, I would like to highlight two themes from the research that are explained in much more detail in my written testimony.

First, and I think this came through in several questions earlier,

Head Start serves extremely vulnerable children and families who

experience multiple and complex problems. And second, Head Start

programs make a positive difference for these very disadvantaged

children and their families. Research demonstrates both Head

Start’s positive results for children and the generally high quality

of local programs—and I just want to note in reference to Chairman Alexander’s earlier question that, interestingly, the research

suggests a very high level of consistent quality, much more than

in those other education systems you described. So there is a lot

of consistency in the good quality of Head Start programs when researchers go out and look.

To me, these themes underline the importance of accountability

in Head Start. Federal oversight has got to live up to the crucial

importance of Head Start’s mission.

Let me turn now to five suggestions for strong Federal oversight

detailed in my written testimony. These suggestions draw on my

experience raising the bar on accountability during the 1990s. They

are lessons both about what works and about what is perennially

difficult. The central theme is that holding Head Start programs to

high standards, including closing those that can’t meet the standards, can be done with focused and hands-on Federal oversight.

58

So lesson one, the foundation for strong Federal oversight and for

results for children is the tough, rigorous, and research-based requirements in the performance standards. As a result of the Advisory Committee recommendations and the 1994 reauthorization, we

thoroughly revamped and strengthened the performance standards

in 1996, bringing them in line with the latest research. These rigorous standards are especially important because emerging research

indicates a link between strong and effective implementation of the

standards, on the one hand, and results for children on the other.

Lesson two, terminating grantees and aggressively negotiating

relinquishments are important and realistic steps for HHS to take

when a grantee cannot successfully resolve its problems. Hands-on

leadership is key. Stronger authority for HHS to terminate grantees who can’t meet standards was included in the 1994 reauthorization and the 1996 regulations. As GAO indicated in its 1998 report, HHS moved quickly and aggressively to use that authority.

My own experience was that personal and hands-on involvement

was very important. In one example, I flew out to Denver to speak

with parents and board members at a grantee about the gravity of

our monitoring findings so they could make a more informed decision about relinquishment.

Lesson three, and this is a point that came up, I know, in Senator Dodd’s questions, continuity for successful grantees is just as

important as turnover for unsuccessful grantees. For a Head Start

program to do a truly excellent job at linking children to services

in a community takes time, it takes consistency, it takes relationships among partners developed over many years. So that means

that strong technical assistance to get to programs at the beginning, keep successful programs on track, is a critical partner to

strong monitoring in the Federal oversight strategy. That also

means that recompetition should be limited to unsuccessful programs.

Two more quick lessons. Lesson four, the Federal oversight strategy needs to integrate fiscal accountability with program results at

every stage.

And finally, the oversight strategy must include a focus on Federal staff, both in the central office and in the regions, including

training, professional development, and their ability to make consistent decisions.

In conclusion, for 40 years, the Head Start program has played

a critical role, as you have heard, from the Nation’s most impoverished and vulnerable children, continuing to evolve and innovate in

response to family needs. For Head Start to continue this success

requires an equally strong, innovative, and vigorous Federal oversight role.

I want to say thank you to the members of this committee for

your consistent and historic support for the program and I look forward to any questions that you may have.

Senator ALEXANDER. Thank you, Dr. Golden. It is very helpful to

have your perspective, given your involvement for such a long period of time.

[The prepared statement of Ms. Golden follows:]

59

1The views expressed in this testimony are those of the author and should not be attributed

to the Urban Institute, its trustees, its employees, or its funders.

PREPARED STATEMENT OF OLIVIA A. GOLDEN

Mr. Chairman, Senator Dodd, and members of the subcommittee, my name is

Olivia Golden, and I am currently Senior Fellow and Director of the Assessing the

New Federalism project (a multi-year, nationwide study of low-income children and

families) at the Urban Institute, a nonprofit, nonpartisan research institute in

Washington, D.C.1 I am honored by the opportunity to appear before you today to

discuss the Head Start program, effective strategies for Federal monitoring, and the

content and recommendations of the GAO’s recent report regarding a Comprehensive Approach to Identifying and Addressing Risks.

My perspective on Head Start, on programs that serve low-income children and

families, and on tough and effective management to support accountability has been

shaped by my experiences as a researcher and a practitioner at the Federal, State

and local levels. Immediately before coming to the Urban Institute, I directed the

District of Columbia’s Child and Family Services Agency. Before that, I spent 8

years at the U.S. Department of Health and Human Services, as Commissioner for

the Administration on Children, Youth, and Families and then as Assistant Secretary for Children and Families. During those 8 years, I was a member or chair

of three expert committees charting the future of Head Start. In 1993, I was a member of the bipartisan Advisory Committee on Head Start Quality and Expansion,

which included both majority and minority staff to this committee as well as staff

from both parties to three other House and Senate committees. The Advisory Committee’s unanimous Final Report provided extensive recommendations, including a

rigorous blueprint for monitoring program and fiscal quality and strengthening Federal oversight capacity. In 1994, I chaired the Advisory Committee on Services for

Families with Infants and Toddlers, which created the overall design for Early Head

Start. And in 1999, I chaired the Advisory Committee on Head Start Research and

Evaluation, which provided an overall framework for the design of the Head Start

impact study. We are all eagerly awaiting the first report from that study.

In my testimony today, I will focus primarily on effective strategies for building

the strongest possible Federal oversight role to support high-quality, fiscally accountable, programmatically successful, and well-managed Head Start programs

across the country. As a result of reforms put in place by HHS and the Congress—

beginning with the bipartisan 1993 Head Start Advisory Committee, the 1994 Head

Start reauthorization, and the 1996 publication of tough, research-based performance standards and continuing across two administrations—Head Start has the

most rigorous standards and the most intensive monitoring of any human

services program that I am aware of. This emphasis on accountability by HHS

and the Congress paid off in clear quality control results during the late 1990’s: for

example, as the GAO report indicates, 144 grantees were terminated or relinquished

their grants between 1993 and 2001, a historically unprecedented number.

GAO’s report provides useful next steps for the Federal oversight role that build

on these earlier reforms. The report does not, however, provide a clear picture of

the number or proportion of Head Start programs with serious fiscal problems, because it shows the percentage of programs with even one monitoring finding, rather

than grouping programs by frequency or severity of findings. Based on the Head

Start Bureau’s annual monitoring reports, about 15 percent of grantees have serious

problems, including both programmatic and fiscal problems. Whatever the current

numbers, any serious failures in fiscal accountability need to be forcefully addressed.

The GAO report contributes to this effort by identifying gaps in Federal oversight—in particular, how the Federal implementation of monitoring doesn’t live up

to the rigorous design—and by providing practical recommendations for improvement. The implementation challenges highlighted in the report—such as effective

use of early warning information, consistent decisionmaking across central office

and the regions, and closing ineffective programs on a prompt timetable yet with

appropriate due process—are not limited to any one Administration or even to one

program. In my own experiences both with Head Start monitoring and with designing and implementing monitoring systems for other programs and at other levels

of government, these same challenges have arisen. For that reason, I believe that

the GAO’s practical recommendations for next steps are particularly useful and that

thoughtful implementation of these recommendations, with some additional suggestions and modifications that I suggest below, should help Head Start programs live

up to the very highest levels of accountability.

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2 Administration for Children and Families, Office of Planning, Research, and Evaluation.

April 2003. Executive Summary for Head Start FACES 2000: A Whole-Child Perspective on Program Performance, p. 8. 3 Administration for Children and Families. June 2002. Making a Difference in the Lives of

Infants and Toddlers and Their Families: The Impacts of Early Head Start. Executive Summary,

pp. 3–4. 4Donna Bryant, Dick Clifford, Diane Early, and Loyd Little. 2005. ‘‘Who Are the Pre-K Teachers? What Are Pre-K Classrooms Like’’ Early Developments 9(1): 15-19. Published by the FPG

Child Development Institute at the University of North Carolina at Chapel Hill.

Why Accountability Matters: The Research Context and the Role of Head

Start

Before turning to these specific suggestions about monitoring, I would like to

highlight briefly two broader themes from the research. To me, these themes—(1)

that Head Start serves extraordinarily vulnerable children and families and (2) that

it makes a positive difference for them—underline the whole reason accountability

is so important. In a program with such a critical mission, and such a history of

success for the most vulnerable children in good times and bad, we must ensure

that Federal oversight lives up to the importance of the mission, both demanding

and supporting strong programs.

First, Head Start serves extremely vulnerable children and families, who

experience considerable disadvantage and often multiple and complex

problems. Children enrolled in Head Start may suffer from various health conditions and disabilities, live in families that have difficulty finding and keeping stable

housing, and experience violence in their families and neighborhoods. For these children, improved learning and cognitive development require extremely high-quality

services that follow the comprehensive model laid out in the Head Start performance standards.

For example, a survey of a nationally representative sample of Head Start families in 2000 found that 25 percent of parents were moderately or severely depressed,

more than 20 percent of parents had witnessed violent crime, and parents reported

that almost 10 percent of their children had witnessed domestic violence in the last

year. According to the researchers, ‘‘preliminary findings suggest that Head Start

may play a role in protecting children from the negative outcomes associated with

family risk factors, including maternal depression, exposure to violence, alcohol use,

and involvement in the criminal justice system.’’ 2

Second, Head Start programs overall make a positive difference for these

very disadvantaged young children and their families. Both past and recent

research, such as the rigorous, random assignment evaluation of Early Head Start,

demonstrate Head Start’s positive results for children and the generally high quality of its programs when observed and compared with other early childhood programs. For example,

• A rigorous, randomized assignment evaluation of Early Head Start found that

compared to a control group, 3-year-olds who had attended Early Head Start had

higher average scores and a smaller percentage at-risk in language development,

higher average scores and a smaller percentage at-risk on tests of cognitive development, and better home environments and parenting practices (for example, more

reading to young children).3

• Studies of Head Start using a variety of methods (for example, comparing siblings who have been in Head Start with those who have not) also show positive results for children. Soon, the results of the random assignment study of Head Start—

designed by the committee I chaired in 1999—will be released. This study should

provide more up-to-date information about the effects of Head Start for today’s children, compared with being in other programs or at home.

• When researchers score Head Start classrooms across the country using standard indicators, they generally find them good and quite consistent in quality. A recent study that observed classrooms in six State pre-k programs found that the

overall quality of these classrooms was lower than in similar observational studies

of Head Start.4

• Low-income children are less likely than higher-income children to get the benefits of high quality pre-school or child care settings. This disparity would be far

greater without Head Start, especially for the poorest children. Research conducted

through the Assessing the New Federalism project at the Urban Institute has found

that low-income 3- and 4-year-olds are less likely to be in center-based care (including preschool) than higher-income children. Because of the research evidence suggesting that quality center-based care can help children prepare for school, the reVerDate 11-MAY-2000 15:57 Sep 26, 2005 Jkt 000000 PO 00000 Frm 00064 Fmt 6633 Sfmt 6621 S:\DOCS\20526.TXT SLABOR3 PsN: SLABOR3
61

5 Jeff Capizzano and Gina Adams, 2003. ‘‘Children in Low-Income Families Are Less Likely

to Be in Center-Based Child Care.’’ Snapshots of America’s Families III, No. 16. Washington,

DC: The Urban Institute, p. 2. 6 Administration for Children and Families (June 2002), p.6.

searchers conclude that this ‘‘disparity . . . may represent a missed opportunity to

assist low-income children in becoming school-ready.’’ 5

The Accountability Agenda: Lessons from Experience

The reforms in Head Start quality and accountability that were driven by the bipartisan Advisory Committee of 1993 and the Head Start reauthorizations of 1994

and 1998 provide a very rich source of lessons about strong Federal oversight—both

what works and what issues are perennially difficult and need to be revisited often.

The central theme is that holding Head Start programs to high standards, including

closing those that can’t meet the standards, can be done. It takes strong, focused,

and hands-on Federal oversight that includes both monitoring and technical assistance. The reforms grew out of the widespread concern that after several years of expanding the number of children served in Head Start without corresponding investment in program quality or in the training and development of Federal staff, the

quality of local Head Start programs, while generally good, had become uneven. The

charge of the 1993 Advisory Committee—whose members in addition to Congressional staff from both parties and both houses included experts with experience in

academia, the Federal Government, State and local early childhood programs, and

the broader health and education worlds—was to provide recommendations for both

improvement and expansion that would reaffirm Head Start’s vision of excellence

for every child. The extensive and specific recommendations in the unanimous report covered every area of quality improvement, from local programs to Federal

staff. Many of the recommendations were incorporated into the 1994 Congressional

reauthorization of Head Start, and others were implemented by HHS without requiring legislative authority.

Five specific lessons from this experience seem to me particularly important as

Congress and the Administration consider implementing the GAO’s recommendations:

1. The foundation for strong Federal oversight—and of results for children—is the tough, rigorous, and research-based requirements of the Head

Start performance standards.

The Advisory Committee recommended and the 1994 Head Start Reauthorization

required a major overhaul of the Head Start regulations that define what is expected of local programs (regulations that are known as the Head Start Performance

Standards) to raise the bar for the quality of both service delivery and management.

The final regulations, published in 1996, thoroughly revamped and strengthened the

performance standards across many dimensions. For example, they:

• raised standards for program management, including fiscal accountability and

governance;

• brought standards for service delivery into line with the latest research;

• created new standards which had not existed before for the quality of services

to infants and toddlers.

Thus, many of the rigorous fiscal, board governance, and reporting standards discussed in the GAO report are in place now because of this important revision of the

performance standards. For example, as part of their fiscal and governance standards Head Start programs are expected to ensure that their governing board and

the parent policy council approve funding applications and review the annual audit.

Rigorous standards are important not only because they hold programs accountable and form the basis of a coherent monitoring strategy but also because emerging

research suggests a link between strong implementation of the standards and positive results for children. As part of the Early Head Start evaluation mentioned

above, researchers assessed program implementation of key elements of the performance standards during indepth site visits. They found evidence that ‘‘full implementation [of the performance standards] contributes to a stronger pattern of impacts.’’ 6

2. Terminating grantees and aggressively negotiating relinquishments

are appropriate, important, and realistic steps for HHS to take when a

grantee cannot successfully resolve its problems and meet fiscal and program standards. Hands-on leadership is key to using this authority effectively.

Stronger authority for HHS to terminate grantees who cannot meet standards

was recommended by the 1993 Advisory Board and included in the 1994 Head Start

62

Reauthorization. As a result, the 1996 revision of the performance standards provided a framework and a tight time limit—no more than 1 year—for grantees with

serious problems (called ‘‘deficiencies’’) to solve those problems or face termination.

As GAO indicated in its 1998 report assessing HHS oversight soon after the regulations, the agency moved quickly and aggressively to use this new authority, with

90 grantees terminated or voluntarily relinquishing their grants by the time of the

1998 report. The GAO report also noted the experience of HHS officials that the termination authority helps them negotiate voluntary relinquishments, which can be

the quickest and smoothest path to a transition.

While I was at HHS, I found that hands-on involvement from agency leadership

was very helpful in reinforcing the new expectations. In one example, I flew to Denver to speak with parents and Board members about the gravity of our monitoring

findings, so they could make a more informed choice about whether the grantee

should relinquish the grant in order to achieve better services for children. In that

example, the grantee relinquished the grant, and a transitional grantee ensured

that services to children continued uninterrupted while the grant was recompeted.

GAO recommends in its report an additional approach, besides termination and

relinquishment, to ensure the replacement of grantees who cannot successfully serve

children. The comments provided by the Administration on Children and Families

express serious legal concerns about this approach, which involves changes in the

recompetition of Head Start grants. I am not qualified to comment on the legal

issues, but I would note that the existing approaches, termination and voluntary relinquishment, exercised with strong leadership and under a tight timetable, have in

my view proved effective at raising the bar on program quality and compliance.

3. The goal of the Federal oversight strategy is good results for children.

To achieve this goal, continuity for successful grantees is just as important

as turnover for unsuccessful grantees. This means that strong technical assistance—high-quality, well-tailored to grantee needs, and available

promptly on request—is a critical partner to strong monitoring in the Federal oversight strategy. It also means that recompetition of Head Start

grants should be limited to unsuccessful programs.

A very important lesson from the deliberations of the Advisory Committee, reinforced for me by my own research and practice experience, is the value to children

and families of continuity over time in a quality Head Start program. The Advisory

Committee found that an effective Head Start program needs to be a central community institution for poor families: it has to link services that vulnerable children

need in order to learn, such as health care, mental health services (for example,

when young children have experienced family or neighborhood violence), and help

for parents who may be young, overwhelmed, and struggling to support their children. For a Head Start program to do a truly excellent job at linking children to

needed services takes time, patience, and a consistent set of players in a community,

sometimes over many years. As a result, just as constant staff turnover can jeopardize quality services for children, turnover in a program can set back quality for

many years, as new players get to know each other and readjust their priorities.

In my own research, not specifically focused on Head Start but on communities

around the country that created successful partnerships to serve both parent and

child in poor families, I found that longstanding relationships among people involved in the work over many years were an important ingredient of success.

Continuity also matters because the lives of poor children, families, and communities are unstable in so many ways that the Head Start program may be the one

critical source of stability. From my experience in child welfare, where I directed

an agency that serves abused and neglected children, I became convinced that a

high quality Head Start or Early Head Start program can be a source of consistent

stable relationships for babies, toddlers, and preschoolers who are moving around

from home to foster care and back as a result of abuse or neglect. Given what the

research tells us about the importance of consistent relationships to cognitive development in early childhood, this role is crucial.

Therefore, it is just as important to a successful Federal oversight strategy to

make sure strong programs continue to succeed as it is to make sure failing programs are replaced. As the Advisory Committee made clear in its very first recommendation regarding Federal oversight, this means placing a priority on responsive, up-to-the-minute, technical assistance capacity easily available to local programs and closely linked to program and management priorities. When programs

have strong capacity and a strong track record in serving children, the Federal oversight responsibility must include making sure that a small problem doesn’t grow

until it threatens a program’s continued success. And as new issues emerge across

the country, the technical assistance system must be able to respond flexibly and

effectively.

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7 U.S. General Accounting Office. 1998. Head Start: Challenges in Monitoring Program Quality

and Demonstrating Results, p. 3.

At HHS, when we revamped and invested in technical assistance in response to

the Advisory Committee report, we learned to consider technical assistance early in

every one of our initiatives. For example, in implementing the current GAO report,

HHS might consider whether the early risk assessment strategy would have its

greatest impact paired with rapid-response technical assistance, so a program could

get help as soon as the risk assessment set off alarms. While I was at HHS, we

used a variation on this strategy in the field of child welfare, seeking to make sure

that when we implemented more rigorous child welfare reviews, technical assistance

to address newly identified problems would be rapidly available.

4. The Federal oversight strategy needs to integrate fiscal accountability

with program accountability at every level and stage—in staff training, in

the design of monitoring, and in additional elements of the strategy such

as the comprehensive risk assessment or the analysis of improper payments proposed by GAO. Focusing on fiscal accountability without also emphasizing program accountability and results for children can lead, in the

words of GAO’s 1998 report on Head Start monitoring to ‘‘hold [ing] local

Head Start programs accountable only for complying with regulations—not

for demonstrating progress in achieving program purposes.’’ 7 Looking at

the two kinds of accountability together, on the other hand, can lead to

successful solutions that help programs serve children better and more efficiently.

Local programs providing Head Start services, like all publicly funded human

services programs serving children with complex needs, often face questions about

how to meet child and family needs and yet stay within fiscal reporting and accounting requirements. For example, when Head Start programs collaborate with

other local programs—such as a mental health clinic that can help children who

have experienced violence in the home—they often face questions about what services they should pay for from the Head Start grant and what services should come

out of the other agency’s funding stream.

For these and many other questions that come up regarding fiscal accountability,

it is important to find solutions that support program creativity and innovation as well as fiscal accountability. The worst outcome is to have different program and

fiscal experts or monitoring reviewers provide conflicting advice. Conflicting responses create the kind of unfairness that GAO cites, where different programs get

different treatment, and they also chill innovation, because many programs won’t

want to risk innovation without knowing how reviewers will judge it. The best outcome is for fiscal and program experts to work together to develop solutions to the

real problems programs face.

Integrated training for fiscal and program reviewers is also likely to reduce the

inconsistencies reported by GAO in assessing program findings and deficiencies.

Among the many reasons that people interpret regulations differently, one is the different focus of ‘‘compliance-oriented’’ fiscal reviewers and ‘‘results-oriented’’ program

reviewers. For this reason, it is especially helpful to address potential conflicts explicitly in advance.

5. Finally, a key step in implementing the GAO recommendations will be

a focus on Federal staff in both central office and the regions: their training and professional development, staffing levels, and administrative support (such as travel resources), as well as strategies to make Federal decisionmaking more consistent. These are difficult issues that have not been

solved yet, either in Head Start or in most other monitoring programs, but

there are promising examples to draw on.

While I was at HHS, we tried a number of approaches to these dilemmas—investing in Federal staff despite very tight administrative budgets and promoting consistent decisionmaking—but there is much left to be done. One promising approach that

we implemented might offer lessons for today’s strategies, because it aimed both to

use Federal dollars more efficiently and to achieve program goals, including Head

Start accountability. Specifically, we chose to divide the ten regions into five pairs,

each with one larger ‘‘hub’’ region and one smaller region, and to design some of

the Head Start monitoring strategies across the two paired regions. We used this

approach to allocate resources more efficiently and to ensure that if we thought it

appropriate, the monitoring team leader for a particular review could be from the

region that did not directly oversee the grantee. This allowed the selection of a team

leader who was familiar with the geographic area but not involved with the individual grantee.

In summary, a well-designed system of Federal oversight for Head Start must

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1The views expressed in this response are those of the author and should not be attributed

to the Urban Institute, its trustees, its employees, or its funders.

• set the bar high, through rigorous and research-based standards; • ensure through aggressive and hands-on management that unsuccessful programs are promptly replaced; • ensure prompt and high-quality technical assistance, to promote continuity and

steady improvement for successful programs; • integrate an emphasis on management with an emphasis on results for children, in order to support creativity, innovation, and fiscal responsibility; • use multiple approaches to strengthen Federal staff capacity.

For more than 40 years, the Head Start program has played a critical role for the

Nation’s most impoverished and vulnerable children, continuing to evolve and innovate to respond to increasingly complex family needs. For Head Start to continue

this success into the future requires an equally strong, innovative, and vigorous

Federal oversight role. I appreciate the subcommittee’s commitment to ensuring the

continued strength of this Federal role, so that Head Start can build on its record

of making a difference to America’s poorest young children and their families.

Thank you for the opportunity to offer suggestions for further improvements, and

I look forward to any questions you may have.

RESPONSE TO QUESTIONS OF SENATOR ENZI BY OLIVIA GOLDEN

Thank you for the opportunity to testify before the subcommittee and for the opportunity to answer these additional questions.1

Question 1. You made reference to the GAO recommendations and the effects you

believe they will have on ensuring program accountability. You have also made specific additional recommendations that would focus on the local level, either the

grantee or local governments. How do you see Congress supporting the efforts of

communities and organizations like yours to implement the recommendations made

by the GAO?

Answer 1. Both GAO’s report and my testimony focused on Federal accountability:

how the Federal Government can best ensure that local Head Start programs live

up to the high standards that are key to the success of Head Start. In my testimony,

I provided five broad themes that I recommended Congress and HHS keep in mind

as they implement GAO’s recommendations. I appreciate the opportunity to address

the implications of these themes for local as well as Federal quality and accountability.

First, I emphasized the critical role that Head Start’s tough, research-based performance standards have played in the program’s success. I stressed that Congress

should ensure a continued commitment to those standards. In addition, to support

local grantees in meeting these standards, Congress could examine whether they

consistently have the tools to do so, including both the knowledge and resources.

Key provisions in the statute for achieving these aims are the quality set-aside and

the technical assistance set-aside, discussed more fully below. Clearly, the effectiveness of these set-asides, particularly the quality set-aside, which is a percentage of

expansion dollars, depends not only on the authorizing statute but also on the level

of appropriations. Congress may want to review the evidence from the last several

years to determine whether the absence of resources dedicated to quality has made

it more difficult for programs to meet the performance standards.

Second, I emphasized in my testimony that when local Head Start programs do

not succeed in meeting the standards, a hands-on Federal role is key to terminating

them. At the hearing, local witnesses argued, in at least two of the three examples,

that Federal involvement was ‘‘too little, too late.’’ Whether this is an issue of Federal resources, training and skills of Federal staff, or priorities is hard for an outside

observer to know. But the Congress may want to focus on enhancing training, skills,

and possibly staffing levels for the Federal functions that directly support Head

Start grantees, including but not limited to monitoring.

Third, I emphasized the critical role of Federal technical assistance in ensuring

continuity for good Head Start programs. In addition to the broad availability of

technical assistance to all programs, I suggested targeting high-quality and immediately available technical assistance to programs identified as at risk through

GAO’s proposed early-warning system. At the hearing, the testimony of the local

witnesses seemed to me to support this idea of immediate, high-quality technical assistance as soon as problems are identified. (For example, in the case of Shelby

County, Tennessee, the Mayor was the grantee yet apparently perceived that he was

not able to get timely and helpful Federal assistance in enforcing accountability on

his delegate agencies.) These observations about the role of high-quality, responsive,

65

and timely technical assistance in accountability and performance suggest the continuing importance of the technical assistance set-aside in the Head Start statute.

Question 2. A common theme in this hearing is that the Head Start program is

a direct Federal to local program. That’s been the model for the program since its

inception, roughly 40 years ago. Have we come to a point where a State or local

role would be appropriate, such as allowing States to compete for Head Start grant

funds?

Answer 2. The goal of Head Start is to help children get ready for school, through

a strong classroom program, active parental involvement, and comprehensive services that help children learn. To achieve that goal, as noted in the question, the

community-level focus of Head Start has been a central feature of the program’s design since its inception. A Head Start program that is strongly grounded in the local

community will be able to recruit extremely disadvantaged families who may be suspicious of other institutions, engage parents in their children’s education and wellbeing, and develop linkages with other local programs and institutions that ensure

Head Start children and families get the services they need, such as family support,

health, and mental health services. For all these reasons, I believe that Head Start’s

community-based, Federal to local, design is a key programmatic strength.

Given this community-based design, strongly underlined in the performance

standards, I do not think that State Agencies would be appropriate applicants for

Head Start grants. In addition, as I suggested earlier in these responses and in my

testimony, other key elements of quality supported by the research are the strong

and consistent Federal performance standards and the strong Federal monitoring

and technical assistance infrastructure. Thus, the current Federal to local design

builds in the elements that research suggests are most important for quality: close

connection to the family and community on the one hand, along with high, researchbased standards implemented through technical assistance and monitoring on the

other.

However, I think that many kinds of partnerships between State Agencies and

local Head Start programs are key to enhancing child and family well-being. Many

of these partnerships already exist and others can be encouraged through the mechanism of the State collaboration grants, as described below. For example, in those

States that fund early childhood activities for infants, toddlers or preschoolers, including pre-kindergarten programs, a range of partnerships are possible: Head Start

programs may compete for these State grants, or may share materials and training

opportunities with other local providers, or may develop strategies for funding programs together that can reach more children or reach children for a longer school

day or year than any of the programs could do alone. In addition, State Medicaid

programs and other health care services for low-income children and families are

key partners for Head Start as well as for other early childhood programs.

Question 3. As you all know, each State operates a collaboration office. What role

do you see those offices playing in helping to improve the accountability process and

more successfully integrating programs with a common interest across State and

local boundaries?

Answer 3. Through the bipartisan commitment of the Congress in the 1994 reauthorization, I am very proud that while I was at HHS, we were able to follow the

recommendation of the Advisory Committee on Head Start Quality and Expansion

and expand the State collaboration grants from just over 20 States to all States. The

State collaboration offices have an important role to play in improving results for

children, particularly at a time when States have shown considerable interest in investing in programs for young children and when there are promising examples of

collaborations that link Head Start, child care, and other early childhood education

programs for the benefit of children. Drawing on the lessons from these examples

as well as promising experiences in related fields, I would suggest several particularly useful areas for the State collaboration offices to focus on:

a. In terms of accountability, one promising role for the collaboration offices is to

work with States that fund early childhood programs toward strong, rigorous, research-based quality standards across multiple programs—for example, incorporating the Head Start performance standards into State approaches to funding model

infant-toddler or pre-K programs.

b. A related role is to expand joint training opportunities, where staff in multiple

early childhood programs, including Head Start and state-funded programs, receive

high-quality training in the development and education of young children, parent

involvement and family support, or management topics that are shared across the

different settings.

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c. The collaboration offices should be exploring a whole range of strategies for

helping all programs reach for and achieve high standards of quality. For example,

they may be able to identify ways to more fully involve the State’s higher education

system in preparing the early childhood workforce, working with Head Start and

state-funded programs to place students in internships, and providing quality assessments that help programs figure out where they are strong and where they

could improve.

d. In terms of integrating systems, one way for the collaboration offices to improve

the quality of care for all children is to work toward statewide memoranda of understanding that can connect both Head Start programs and state-funded child care

and early childhood programs to other services that all need, such as health and

mental health services funded by Medicaid or other State programs.

I very much appreciate the opportunity to testify as well as the opportunity to

answer these additional questions. Please feel free to e-mail me (at

ogolden@ui.urban.org) or call (202–261–5699) if I can provide any additional information.

Senator ALEXANDER. We will now go to questions from the Senators and we will try to limit those to 5 minutes to have the maximum amount of time for that.

Mayor Wharton, let me go back to you because, let us assume for

a moment that, as Dr. Golden says, a lot of work has been done

to try to create what Mr. Caccamo said was a thorough sort of Federal review. But what you are really telling us is a little different.

You are saying that between Washington and Memphis there may

be a pretty good review, but when it gets down to Memphis and

somebody has to do something about it, it is hard to get it done.

Now, let me make sure I understand this. The grant in the case

of Shelby County, it is a lot of money. It is about $12 million,

is——

Mayor WHARTON. Twenty-two million.

Senator ALEXANDER [CONTINUING]. Twenty-two million. How

many children are affected?

Mayor WHARTON. About 3,100.

Senator ALEXANDER. Thirty-one-hundred children.

Mayor WHARTON. It should be 10,000 if we could ever get

straightened out down there.

Senator ALEXANDER. The grantee was not the county government

but was a separate entity, is that right?

Mayor WHARTON. If I do not—thank you, Mr. Chairman. If I do

not make anything else clear here, I hope I will be able to make

this distinction, because as I read reports throughout the Nation,

there is a blurring of identity there. Shelby County Government

was the grantee, not to be confused with your various delegate

agencies who signed contracts with the grantee.

Senator ALEXANDER. OK. So when you came into office 3 years

ago——

Mayor WHARTON. Three years ago.

Senator ALEXANDER [CONTINUING]. You found that your government to which you were elected had a responsibility with the Federal Government to manage this program for low-income children

and you found a lot of problems. What I think is important for us

to understand is precisely why it was so hard for you to fix the

problems and what we can change in the law to make it easier for

local officials like you to fix the problems.

Mayor WHARTON. Sure. Out of the roughly 3,000 enrollees, children, 2,095 were in the hands of an agency known as Head Start,

Incorporated.

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Senator ALEXANDER. That is a delegate agency.

Mayor WHARTON. That is correct. It was a delegate agency

which, in turn, had other, I guess I could call them sub-delegates

or whatever you wish, but a very complicated structure and a very

powerful structure politically. Again, any time you are spending

$20 million in some impoverished communities, you develop power,

and the individuals used it to the hilt.

When I had the goods on a particular director, it wasn’t enough

for me to say, you have violated this, you have violated that. I had

to go through the policy council.

Senator ALEXANDER. Now, for example, what were the goods? I

mean, what was done wrong?

Mayor WHARTON. Well, simply not accounting for the funds.

Where are they? Some of these matters are still in court and various investigative processes, so I don’t want to prejudice anything

that might come out of that, but, for example, one entity, I am still

trying to find $90,000 worth of playground equipment. The program had some, I have forgotten how many millions issued in bond

funds to build three Head Start centers. They built one. I don’t

know where that money is and I take it I will never find out where

it is.

Senator ALEXANDER. I interrupted you. You were about to say

that when you saw you needed to do something and you were willing to take on the political challenge, you then had to do what to

get something done?

Mayor WHARTON. I had to go to the policy council, which is called

for in the regulations here. And again, I have no problem with

shared governance. But to go to the council, many of whom had

very close relationships, very cozy, with the prior administration of

this delegate agency. I was an outsider. The folks who were running that program had much more influence than I did and the difficulty was getting the votes to get them out.

Senator ALEXANDER. Were there other hoops that you had to

jump through? You described hoops in your testimony.

Mayor WHARTON. Once you get through that, I had to come back

to the actual county commission. I had terminated them one, but

Atlanta told me that, no, you have now got to go back to another

political body and get seven of the 13 votes before you can take

over that program. Had I not gone ahead and just exercised selfhelp and pulled the financial operation then—I basically said, stay

out there, but I am taking the books away from you and brought

them in-house—we would have had much more waste than we

have uncovered already. So it was to go through the policy council

and then through an elected county commission before I could get

to the process of getting them out of there.

Senator ALEXANDER. You have got other things to do as the

mayor of the largest county in the State. How much of your time

did this take in relationship to other projects or problems you were

working on?

Mayor WHARTON. Without quantifying it in any numerical sense,

I would say an inordinate amount of time, and let me say this.

Shelby County Government, as you well know, counties in the

State of Tennessee are responsible for funding all public education,

half of my budget. It is one of my preeminent responsibilities to enVerDate 11-MAY-2000 15:57 Sep 26, 2005 Jkt 000000 PO 00000 Frm 00071 Fmt 6633 Sfmt 6601 S:\DOCS\20526.TXT SLABOR3 PsN: SLABOR3
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sure that what goes into our public schools are children who are

ready to learn. I don’t mind focusing on that, but I should not have

to spend all the time on where did you buy the gas, where is the

credit card, where did you buy the car tires, where did you get the

bus, where is this, and that is what I was spending my time on,

not the processes that were going on in these little classrooms. Too

much time, Senator, to answer your question.

Senator ALEXANDER. Thank you, Mayor Wharton.

My time is up, but I would like to conclude with this observation.

I used a little earlier the higher education model, which is a model

that we are familiar with whereby we give thousands of institutions a great deal of autonomy and then expect them to produce a

result rather than, for example, turn it over to the States or some

intervening management agency.

I have—let me just say this to my colleagues. I have skepticism

about how well in the end a Federal Washington-based agency can

manage 20,000 classrooms, 1,700 agencies, and many more delegate agencies, and I think it is critical that we find a way to, if we

are going to have autonomy for so many different agencies to spend

so many Federal dollars, that once that autonomy is centered

somewhere, that that person, such as the mayor or the county commissioner or whomever it is, have the authority to be accountable

and to do what we expect to be done. Thank you.

Senator Dodd?

Senator DODD. Thank you, Mr. Chairman. Does the chairman of

the committee want to go? Are you all right?

Thank you very much. Let me thank all of you for being here

today and sharing your thoughts with us. It is very, very helpful.

Let me, if I can—by the way, I mentioned earlier—I forgot to

mention Ed Ziegler’s name. I was talking about the person in Connecticut who was responsible as the author of Head Start 40 years

ago, and Ed is still very much involved in these issues and writes

extensively on them. We couldn’t have a hearing about Head Start

and not mention the significant contribution of Dr. Ziegler along

the way.

Let me, is it Dr. Caccamo?

Mr. CACCAMO. Yes.

Senator DODD. Doctor, let me, if I can, ask you to maybe address

a little bit more the issue of the boards. I happen to agree with you

as to your recommendations about the board involvement. It is not

a question of increasing the size of the membership but rather the

type of individuals that serve on the board and the training and

the skills that they ought to have in order to be an effective board,

it seems to me. I wonder if you might share with us anything about

the training of the KCMC board itself, what your experience has

been there, and also what might be an effective on-the-ground

management training for senior management within the Head

Start agencies themselves.

It seems to me, again, going back to the questions that I raised

with the previous panel, if you had to pick out one area to really

work on, assuming for a second the broader question of block

granting Head Start and so forth, but how can you make this more

effective in dealing with the front end of the issue, and that is getting the right people in place?

69

And by the way, Mayor, I think your suggestion about the family

council and the board, separating out the roles, make some sense

to me for the very reasons you identified. The family council members are more inclined to be interested in whether or not children

are getting the kind of learning they need. I am not as aware about

all this. I was sort of surprised to hear that they would also be

asked to be involved in the minutiae of financial management. But

if that is the case, I think your suggestion makes some sense.

But if you might comment on what your experience is regarding

board training.

Mr. CACCAMO. Yes, Senator. I think it is critical. Board members

have to understand that when they say ‘‘yes’’ to being on a board

that they take on a great deal of responsibility, fiduciary and programmatic responsibility. It is critical that they do that.

And, you know, if you look at local public schools, one of the

things that happens in local public schools is there is some limit

to the length of time people can spend on boards. Those particular

school districts, at least in our area, do a great deal of board training. They have board retreats where they talk about fiduciary responsibility, where they talk about how to read a budget, where

they talk about ethics and ethical leadership around performance

of that school board.

I think those same kinds of things should be done at the local

Head Start. They have not been, or weren’t, and I think part of the

problem, and I think Mayor Wharton said it very well about the

political influence that you begin to build as you spend years engaged in organizations like that.

The executive director, very, very excellent in programmatic

work. I don’t think you will find a Head Start in this Nation that

would take Kansas City and place it in second. We do fabulous

work with our children. All of that work is done with a great deal

of community partners. All of the fiscal stuff is done sort of without

many partners, behind closed doors, which adds to, I think, the responsibility of the board having to be well trained.

So I think it has to be done. I think there are great models in

every community about board training and I think it has to be a

requirement that boards undergo some training around their programmatic and fiduciary responsibilities.

Senator DODD. Sort of a Sarbanes-Oxley approach to corporate

governance is what we are sort of looking at here, I suppose, what

I hear you saying.

Mr. CACCAMO. Yes.

Senator DODD. Let me jump to you, Dr. Golden, if I can. I am

going to get to the recompetition issue because I think it is an important question.

First of all, let me ask you three questions regarding it and have

you address those. What would be an appropriate time frame for

citing of a deficiency before a grant is recompeted? I would be interested in your views on that.

What do you think the criteria ought to be for the recompetition

of the Head Start grants?

And what types of training and technical assistance can really

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cies with regard to the systems management, sort of going back to

the same question I asked Dr. Caccamo.

Ms. GOLDEN. OK. Well, on the first two points about deficiencies,

I think what is key is to know what is in the law and the rules

now and then to think about whether what you need is more aggressiveness by HHS and more effectiveness, or whether you need

additional statutory change.

The framework that is in the law right now from the 1994 reauthorization and the regulations we did after that says no more than

a year, and at the most, if an agency has got a deficiency, you can

give them a year. If it is a threat to children’s health and safety

or the fiscal problems are there, threatened Federal dollars, then

you give them less.

And the definition in the law—I mean, again, Senator, the dilemma Senator Alexander has highlighted, the definition in the

regulations is pretty clear, but it doesn’t go into so much detail

that it would apply just like a cookie cutter. It says that if an agency can’t substantially accomplish the purposes, you can’t do early

childhood successfully, you can’t do health care, or if you are not

using—if you are misusing the dollars.

What it takes to implement that effectively, I think, is, first of

all, really good fact finding. You need Federal reviewers that have

the skill and the capacity and the travel money to get out there

and look.

Second, it needs good training and analytic skills for the reviewers because they have to look at these list of things and try to figure out what is going on. So Assistant Secretary Horn’s suggestions

there, I think, are appropriate in terms of improving his capacity

to do that.

But then it circles back to your technical assistance question in

the end, it seems to me, because once you have looked, you have

seen a problem, the question is not just how many days have you

let go by, but have you done something? Have you gotten in there

the intensive help to try to make a difference?

And so I agree completely with your earlier points that I think

were also made by others, that training and technical assistance

are key both in prevention and in getting into some of those problematic grantees and turning them around, and I would list as key

areas, I share the perspective on the board governance that has

been highlighted by everybody here.

I would also say what affects the core of Head Start’s ability to

provide services is the quality of its teachers and its classrooms

and their training. So you can’t put programs or the Federal TA

system in the position of stealing the money away for governance

from the dollars required for training and TA in the classroom.

And then the third piece I would put in is the ability of a community program to link to all the rest of the services that children

need, mental health or health care. I think some of the excellent

programs we have heard about do that well. To do that, they have

to have training both to understand the programmatic and to understand the fiscal implications, because it can be complicated in

accounting terms to do all that together.

Senator DODD. Very good, and my time is up. I know Dr. Horn

talked about a 240-day process in his testimony, and I will leave

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it to a later time to get into that with you on why particularly that

length of time. I am curious if you know any——

Ms. GOLDEN. Well, I assume that that must be cases that they

play out in the legal system. As the example I gave in my testimony, I think that if you lay out the evidence, particularly given,

as you have heard, people often are very invested in the way they

are doing things now, you very often—a grantee will choose to relinquish because they understand that what you have said to them

is, we are going to terminate it. Here is the evidence we have got.

You, the parents on the board whose children are in here, didn’t

get up in the morning wanting to be running a program that we

are going to be taking you through the court. So I assume that he

may have been giving an example of one that played out all the

way without that kind of negotiation.

Senator DODD. Thank you all very, very much. Again, Mr. Chairman, thank you for holding the hearing.

Senator ALEXANDER. Thank you, Senator Dodd.

Senator Enzi?

The CHAIRMAN. Thank you, Mr. Chairman, and I am glad that

Senator Dodd mentioned Sarbanes-Oxley because he and I are both

on the Banking Committee, as well, and about 3 years ago, we had

the opportunity to take a look at what was happening with corporations in the United States, board governance. Corporations, of

course, were doing some things with private money, manipulation,

and we were absolutely appalled and we took drastic action.

Now we are talking about some things where Federal money is

being used with nonprofit organizations and we are rising to the

defense of bad governance. That surprises me a little bit. We are

not talking about eliminating a program, we are talking about

making a program work, making a program better, making sure

that the money that goes into the program is being used for what

we intended for it to be.

I think we ought to be equally appalled with some of the things

that we are finding out about what is happening with Head Start

money and try and figure out some ways to make sure that we put

some rules in place that do that.

Senator DODD. I agree with that.

The CHAIRMAN. As a former mayor, I really sympathize with

what Mayor Wharton is saying. I would ask if you could speak specifically to some suggestions that Congress might provide for support to local government to take more decisive action if a Head

Start program is in trouble. What things could we put into place

that would have helped you?

Mayor WHARTON. Certainly, Senator. One thing I was able to do,

and I would make this as a recommendation, when I took office,

we only had one internal auditor in the entire country government.

I hired six and sent two of those to a couple of the Head Start delegate agencies. Once those auditors visited both of those troubled

agencies, they immediately said, listen, we simply cannot comply.

Take us over.

If somehow Congress could as we as grantees submit our applications, and I suggested this in my testimony, once a grantee or an

applicant specifies precisely how it intends to govern financially

and that is signed off on, then we ought to be given full reign to

72

let it rip, to let it go, and that is what we did. So we were able

to take two agencies out without any appeals or whatever because

we audited them and they saw that they weren’t living up and that

ended it.

Second, I would suggest that the purchasing and all of those

troubled areas, that it be required that they be held back from the

delegate agencies on a centralized basis so that if the folks from

Atlanta came in, they do not have to audit 12 fuel accounts, 12 fuel

accounts. They come to me. I would be responsible for it, for doing

the purchasing on the food or whatever and getting it out. That

way, you have got one account that has to be audited.

So the premise, underlying premise of all my remarks is to separate a lot of these, quote, ‘‘business,’’ close quote, business activities

from the basic purpose of Head Start, which is nurturing, family

support, instruction, all of those things. Our agencies are getting

in trouble more, they are causing shame to the program more on

the financial and business side than they are on the original purpose of Head Start from an instructional and child care standpoint.

So two things—three things, actually, when it comes to shared

governance.

Now, someone asked the question or made an observation that

they were not aware that board members actually get into financial

decisions. That may be true technically, but it is the director of a

given agency who is making those financial decisions and bad decisions and doing wrong in instances. But you then have to go to the

policy council when you get ready to get rid of that delegate agency, or actually to terminate that individual.

Now, that is the most troublesome difficulty there. You still have

to ask—I was elected with 62 percent of the people, but when I

catch somebody doing wrong, I have to go out and go through two

or three levels and ask, is it okay if I get this guy out of here? He

is stealing from us. And if he has got more sway than I do, he gets

to stay.

So keep shared governance. But I think we need to pull it back.

Parents want to know, again, are you challenging my child? Are

you enhancing her cognitive abilities? Are you teaching her to be

a brave little child and to try new things? They don’t want to come

to a board meeting and hear—we have arguments that go into the

night of whether you should have bought the computers over there,

whether the gasoline ought to come from here. These are the kinds

of things we are asking parents who come to find out what you are

doing for their child, and yet they come to a meeting and listen for

3 hours on where you bought the gasoline. That is the kind of thing

that we need to pull out of this shared governance model and that

would give us—let me get in my defense role, if you might. When

you focus on grantees.

The CHAIRMAN. My time has run out.

Mayor WHARTON. When you focus on grantees, don’t chop us off

until you have given us the authority to chop those off who got us

in trouble. That is all I would ask.

The CHAIRMAN. Thank you, and I wish I had time to ask Commissioner Gates a couple of questions similar to that, and I will in

writing, so I appreciate it. Thank you.

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Senator ALEXANDER. Thank you. Senator Clinton has waited patiently. Senator Clinton?

Senator CLINTON. Thank you very much, Mr. Chairman, both

Chairmen, for having this hearing today. I would ask unanimous

consent that I could submit an opening statement to the record.

Senator ALEXANDER. Without objection.

[The prepared statement of Senator Clinton follows:]

OPENING STATEMENT OF HILLARY RODHAM CLINTON

Thank you to all the witnesses for being here today. I appreciate

your time and energy in coming here today.

The topic we are discussing today—accountability for Head Start

programs—is a critically important one. But before I speak to that,

I want to make sure we do not lose the forest for the trees. We are

talking today about a program that for 40 years has provided the

only Federal comprehensive early childhood intervention for needy

families. And while we can split hairs on the exact implications of

each and every impact analysis conducted, the bottom line is that

all of the research points in the same direction—Head Start works.

It is a cost-effective, long-term investment for our society and it improves outcomes for poor children and their families.

Most recently, Steven Barnett and Jason Hustedt conducted an

overarching analysis of Head Start’s benefits—both long and short

term. Their conclusion on short term research is, and I quote,

‘‘studies have generally shown that programs for children at risk,

including Head Start, result in increases of 0.5 standard deviations

in IQ and achievement.’’ This study also cites a rigorously designed, random assignment analysis by Abbott-Shim, Lambert, and

McCarty, which found that Head Start participants benefited substantially compared to non-participants in the areas of vocabulary,

phonemic awareness and health-related outcomes. This study also

found that parents of Head Start children reported more positive

health and safety outcomes than parents of children not in Head

Start.

A 2001 article in the highly respected Journal of Economic Perspectives, which analyzed everything we know about early childhood intervention programs, starts off by saying ‘‘This review of the

evidence concludes that these programs have significant short and

medium-term benefits, and that the effects are often greater for

more disadvantaged children. Some of the model programs have

produced exciting results in terms of improving educational attainment and earnings and reducing welfare dependency and crime.’’ It

goes on to say ‘‘a simple cost-benefit analysis suggests that Head

Start would pay for itself in terms of cost savings to the government if it produced even a quarter of the long-term gains of model

early childhood programs.’’

The most recent, highly respected analysis of the longer-term effects of Head Start, which was published in the American Economic Review, found unambiguous evidence of the success of this

program.

In short, this paper found that ‘‘whites who attended Head Start

are, relative to their siblings who did not, significantly more likely

to complete high school, attend college, and possibly have higher

earnings in their early twenties. African-Americans who particiVerDate 11-MAY-2000 15:57 Sep 26, 2005 Jkt 000000 PO 00000 Frm 00077 Fmt 6633 Sfmt 6601 S:\DOCS\20526.TXT SLABOR3 PsN: SLABOR3
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pated in Head Start are less likely to have been booked or charged

with a crime.’’

Now, I am never one to suggest that we rest on our laurels. If

there are steps we can take to improve Head Start—to make it

more efficient and more responsive to the families it serves—then

we should talk about that through a bi-partisan, thoughtful, reauthorization process.

But I have been and remain very deeply concerned about the Administration’s position on Head Start. In the 2006 budget—once

again—we saw an attempt to turn this successful program into a

block grant. In fact, the President’s entire budget increase for Head

Start—$45 million—is dedicated to supporting block grants in nine

States. And while all of this talk today is about strengthening performance, the Administration has proposed cutting training and

technical assistance resources in half. Frankly, those decisions

make it hard to trust this Administration when it talks about Head

Start. It signals that the Administration’s true intention is at odds

with the will of this committee, which in October of 2003 unanimously passed a bill that rejected the Administration’s block grant

approach.

I also think it is at odds with the facts to suggest that there is

limited accountability for Head Start programs. In fact, quite the

opposite is true. There are—quite literally—1,800 program requirements, which evaluate the program on virtually every factor imaginable. For example, there are 553 requirements for early childhood

development and health services; 206 on family and community

partnerships; and 1,038 program design and management requirements. Head Start managers have a number of tools to keep them

in compliance, including an annual self-assessment, monthly financial reports to the board, an annual financial audit, and an annual

program information report. They have to participate in a triennial

Program Review Instrument for Systems Monitoring.

If all of these measures fail, HHS is support to provide technical

assistance and compliance expectation. And finally, HHS may

defund agencies that are performing poorly.

In short, during the Clinton Administration we set up a gold

standard for Head Start. We have an extensive monitoring system.

And when you demand that programs meet 1,800 requirements,

you should not be surprised when a small proportion of them fail

to achieve perfection. And as you can clearly see from the GAO report [see chart], relinquishments and terminations of poorly performing agencies were much higher during the Clinton Administration. Between 1993 and 1999, there were 101 relinquishments and

24 terminations. Between 2000 and 2003, there have been a total

of 18 relinquishments, and 3 terminations. So, I would hope that

the first step would be to rigorously utilize the oversight systems

that are in place.

Senator CLINTON. I want to thank the witnesses. This is one of

the best hearings that I think I can say I have attended. I think

the thoughtfulness and the extraordinary interest in this program

and the recognition of the success of the program really stands in

very good stead, because what we are looking for are solutions to

some problems as opposed to some of the conversations about Head

Start which really seem to overlook the years and years of research

75

about the success of this program. So I want to thank each of the

witnesses.

As I listened, I think that we are all saying the same thing. We

are trying to figure out how to get to the point where the role of

parents, which was one of the very critical ingredients in early design of Head Start, is maintained but without the kind of lack of

training and the problems with governance that have been so well

outlined here by the witnesses.

I think that the Mayor’s very strong argument that what we

really want to do is build on the strength of Head Start, make it

even stronger, help people, you know, focus on what is important

and not get into trouble over what—the bottom line is really not

that important. I mean, you know, somebody else should be really

overseeing this.

I wanted to ask Dr. Golden, as you listen to this, because I know

you have had so many years of experience in evaluating programs,

terminating programs—I love your very gentle way of saying you

go make the presentation and they relinquish the program, and

there was a lot of that during the Clinton administration where we,

I think, ended up terminating 27 and creating the circumstances

for relinquishment of 117.

Really two questions. One, as you listened to the other witnesses,

how would you address their very legitimate concerns? I mean,

Commissioner Gates, who has one of the fastest-growing places in

the world, I think, with Clark County, the Mayor’s very specific examples, and Dr. Caccamo’s comments, as well.

We tried to do this in the reauthorization and the regulations.

Clearly, there is more than can be fine-tuned and done. So my first

question is, what more can we and should we do?

But second, in the testimony from Secretary Horn, I think that

we heard that there have been cutbacks in the funding for technical assistance and there has been a movement to try to block

grant Head Start, which I think would be a real mistake for a lot

of the reasons why Head Start has worked. But I understand the

frustrations of local leaders who themselves feel on the line. So

how do we get the Federal Government to do a better job working

with responsible leaders like the three witnesses who are here?

Ms. GOLDEN. Well, it is interesting, because, of course, I have

been listening to these three and Dr. Caccamo and I, I think, both

share the fact that KCMC was so exciting and such an example

that it just feels tragic that it fell apart in this way, and in hearing

the Mayor’s and the Commissioner’s examples.

I guess I would say a couple of things. The first is that I think

we all share the view that not only the underlying purpose, but the

core standards of Head Start are critical, that the research supports them and that the experience we have all had about what it

takes to reach these impoverished children and make a difference

in their lives. So that, I think, is shared.

Second, listening to the descriptions of what might be important,

it makes me want to study these three examples. Perhaps the Congress might do some fact finding across a broader array to figure

out—I am curious whether any of the three programs had a visit

by a senior HHS official, had extensive technical assistance to go

through the tangle. I don’t know whether in the Mayor’s example

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whether anything does need to change in the regulations or whether you just didn’t get the help you needed to operate in a strong

way.

And so I think the question of what it needs to change in a regulatory way versus how much of this is about technical assistance,

I think is an important question. So a commitment to the standards, a commitment to strong onsite involvement and technical assistance seems to me key.

And then, I guess, the other piece for me is that in all of these

examples, I do share your view, Senator Clinton, that parent involvement substantively is part of what we know makes Head

Start work and I think that was shared also by all of the panelists.

So figuring out if there is a way to strengthen that through the

training and the board involvement and make sure that that is

happening in a way that supports the programs rather than undercutting them.

I guess I did share the concern you expressed about the idea of

cutting the training and technical assistance overall as a Head

Start strategy, and I think the one thing I would say, you mentioned the block grant question. I think what we are learning more

and more from the research is that what makes early childhood

programs work for children is high-quality standards. As the

Mayor said, it is the standards about what happens in the classroom, that Head Start has rigorous standards that are tied to the

research, and that it is much more consistent in enforcing them

than the State pre-K or child care programs.

So that what we have from Head Start that works for kids is

very high quality standards and a generally high quality and rigorous monitoring, although as we have been seeing, one that needs

to be consistently supported. So I would go for the focus on the

high standards and the rigorous enforcement coupled with the

training, technical assistance, and support that enables local leaders to do what they need to do to meet those standards.

Senator CLINTON. Mr. Chairman, I thank the witnesses, and if

I could maybe suggest that—I am so impressed by the extraordinary thoughtfulness of each of them that perhaps if they would

have the time, the questions that Dr. Golden asked to really get

into the meat of it. I mean, did you get the help you needed? Could

there have been faster response from the Federal Government?

How do we streamline that? I see you nodding, Commissioner

Gates. Would you want to say something real quickly?

Ms. GATES. I couldn’t agree with you more. That was exactly the

problem that happened in Clark County. The Federal Government

came in too late. By that time, the problem had escalated and escalated and it was unresolvable. If local government, being the county, if they had taken our suggestion and let us come in and help

them, they probably would not have been as tragic as it was or as

it has been. So early intervention is really key and important, and

local involvement is probably the most central point that I am

hearing from the Mayor, as well. You have to have that local control because what happens to this program really hurts the whole

community.

Senator CLINTON. Thank you, Mr. Chairman.

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Senator ALEXANDER. I think a good way to end the hearing will

be to ask each of you if you have 60 seconds that you would like

to offer as a valedictory, as a last word, and then invite you each,

as you go back to your homes, within the next week—we will keep

the record open to write us with any specific followups to the discussion that you have heard today, following up Senator Clinton’s

suggestions.

Senator Ensign?

Senator ENSIGN. Thank you, Mr. Chairman.

Senator ALEXANDER. Did I look over Senator Roberts? I guess I

did. I am sorry.

Senator ROBERTS. Normally, that is pretty tough to do, but—

[Laughter.]

Senator ALEXANDER. I apologize. Senator Roberts?

Senator ROBERTS. I would be happy to yield to Senator Ensign.

I have a tirade. You probably have a speech.

[Laughter.]

Senator ROBERTS. It all depends, Mr. Chairman. Do you want the

tirade first and the speech second?

Senator ALEXANDER. Let us go to Senator Ensign.

[Laughter.]

Then we will let the tirade lift us up as we go out.

Senator ENSIGN. I appreciate that, Mr. Chairman. I, too, have

enjoyed the hearing today. I think it is very valuable and I think

all of us agree that the bottom line is how do we get the dollars

to help the kids and to help their families.

As Commissioner Gates has briefly mentioned, we have had

some serious problems in Southern Nevada. Northern Nevada is in

the opposite situation. We have an agency up there that is functioning well and that is where I wanted to start with you, Commissioner Gates. What suggestions specifically do you have for us after

going through the bad experience that we have had in Southern

Nevada, and comparing that to what we do have Northern Nevada

as a little different example? There are things that we do better in

Southern Nevada than they do in Northern Nevada, but this happens to be one case that is just the opposite.

What lessons can we learn from Nevada, as policy makers put

in place changes to try to prevent these problems and help local

governments like you, the Mayor and others prevent what was

going on in Southern Nevada at an earlier stage? What specific

suggestions can you give to us?

Ms. GATES. Mr. Chairman and members of the committee and

Senator Ensign, I think three things that are probably the most

critical that I would say.

No. 1, you can’t have one agency be in charge of the whole caboodle. That is designed for disaster, because if there is a problem,

then there is no one else to come in and take over and to help.

No. 2, I think local government being involved, and I know that

the Mayor is involved, but we are not involved in Clark County.

The granting agency is a nonprofit agency, and if we had an opportunity, because we consider ourselves partners because we provided

so many facilities and built so many facilities that it was important

for us to be involved, but when we went to seek and try to assist,

then that assistance was turned down. I think it is important that

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local government be involved in terms of providing assistance, providing fiscal assistance. That is very critical.

And the last thing that I would say is that if local government

could, of course, have an opportunity, as the Mayor has suggested,

to be in charge of the Federal portion of the moneys, overseeing the

moneys or at least having some kind of leadership role in making

sure that those dollars are spent properly, that would also be critical.

So those are the three things that I would suggest as a government agency who really is concerned about the health and education of all of these children here in Clark County.

Senator ENSIGN. Mr. Chairman, when we are talking about the

reauthorization of this program, I think that everybody is concerned that we measure the results. Measure what is working, the

metrics of the program. I have talked at length about the importance of metrics in personal conversations with Chairman Enzi and

also with the subcommittee chairman—that, first of all, I think we

need to measure what percentage of the dollars are actually going

to oversight? What percent of the dollars are administrative expenses? And what percentage of the dollars are getting to the children and getting to their actual education in the classroom, because that is the most critical piece to measure.

We need to ask, are the reforms that we want to put in place

going to make things worse? Are we going to spend more money

trying to chase the bad money, because frankly, we have had some

bad actors in this program. We had some bad actors in Southern

Nevada. It sounds like they had some bad actors in Memphis, Tennessee. As they have said, you cannot legislate morality. You cannot legislate moral people being involved in these agencies. Are we

putting into place based on programs that are not working, something else that later on, 3 years from now, we are going to have

another hearing and discover that the changes we made to solve

the problem aren’t working, either.

In other words, I think we have to be careful as we are going forward to make sure that the oversight is improved and we have as

much light shining on it as possible. That is the problem that we

saw with the EOB, is that they seemed unaccountable to anybody.

It sounds like with the Mayor that you didn’t know where the

money was. You don’t even know how to get to the money. But at

the same time, we have to make sure that we aren’t spending so

much money going after bad actors and that we are spending so

much money in the bureaucracy that the dollars aren’t getting to

the classroom. If anybody would like to comment on that.

Mayor WHARTON. May I? With respect to your observation on not

spending a lot more money that could more probably be directed

to outcomes for the children, I don’t think that is necessary, quite

frankly. As indicated by the example I gave just a few minutes ago

with respect to the two delegate agencies that I was able—that

they relinquished or whatever the phrase is here, that was strictly

local and I simply sent an auditor down there and there it was.

The key is not more Federal money, but more local authority. I

am not asking—oh, certainly, programmatically, when it comes to

teaching these children and assessing these families and teaching

literacy for the families, yes, we need more money. But on this side

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of catching folks doing wrong, I am not asking for more money for

that. All I am asking for is to give me some finality, some authority

that when I get you, you are gone. It weakens us as a government

when I see what is happening and I can’t do anything about it.

So no, this is not a call for, give us more money, particularly at

the local level. Just give us more power to straighten things out.

Ms. GATES. And I would echo those comments, as well.

Ms. GOLDEN. And I think I would just take them one step further

to say that I think it is very useful for the committee to reflect on

that balance, on the fact that—and I think Chairman Alexander

highlighted it at the beginning, that it is both about making sure

there is integrity, fiscal integrity, and about the results for children, that they are learning.

Perhaps in my 60 seconds at the end, I will highlight the fact

that there is a lot of really useful research going on now that the

committee may want to look at it in its reauthorization that highlights what we know about the impact that we are having on school

readiness and what kinds of standards and how it works. So there

is a lot of knowledge about that now to add to the committee’s reflections.

Senator ENSIGN. Thank you, Mr. Chairman. I wish I had time to

stay around for Senator Roberts’ tirade. I was kind of looking forward to it.

[Laughter.]

Senator ALEXANDER. Well, I hope he will forgive me for jumping

over him. Senator Roberts?

Senator ROBERTS. Thank you, Mr. Chairman.

Jim, again, thank you for taking the time out of your busy schedule to be with us. This comes with good timing for bad news again.

Yesterday, the Kansas City Star printed an article—it has been

an ongoing series of articles for several years about the financial

abuses of the Kansas City Head Start program, which, I might add,

as Ms. Golden indicated, all of these should be synonymous with

integrity. That is an oxymoron in this particular case.

I want to point out that this center is not in Kansas, it is in Missouri, and it is in Clay County, Platte County, and Jackson County,

but we have a very fine Head Start program in Wyandotte County

just across the river and this example basically infected and contaminated all of our efforts.

The article is alarming. It details the corporate credit card

abuses of the former executive director of the program. To quote

the story, the former executive director’s charges range from items

as small as a car wash, and let me point out that those car washes

cost $12,000, to flights overseas, and I could go down the list. It

would make your head swim. I am talking about Godiva chocolates,

wedding and anniversary gifts, trips to the Caribbean, cowboy

boots. In all, the executive director of the Head Start program used

his corporate credit card more than 1,000 times—1,000 times—on

purchases that totaled more than $165,000. If there was a case of

avarice and greed and incompetence and remarkable arrogance, I

don’t know where there is any better case. He got paid $814,000

over a 3-year period.

Now, what was the reaction? Federal auditors never looked at

the credit card charges at KCMC in reviews done every 3 years.

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Even after KCMC’s controller pleaded guilty—he is in jail—in 2002

to bribery and money laundering, Federal officials acknowledged

that auditors failed to scrutinize Crompton’s credit card or travel

expenses in review just 2 months later. Instead, auditors applauded the KCMC for exemplary service. They found the board

and management well informed, including about agency finances.

But the board members said last year, 2 years later, that they

had been unaware of Crompton’s spending and the agency’s financial woes beyond the fraud in December. The agency, millions of

dollars in debt, gave up its Head Start grant. A Denver firm

stepped in to operate the program, which serves 2,700 preschoolers

in Jackson, Clay, and Platte County until the Federal Government

finds a new agency. Jim is probably up on that in terms of where

we are in that regard.

Now the Governor of Missouri is launching another investigation.

It ain’t over. It ain’t over until it is over. This ain’t North Carolina

and Illinois. It ain’t over. And so in Wyandotte County, we have to

live with that right across the river, and I can’t tell you how upset

I am.

I have visited a center in Wyandotte County. When I visited, this

is just about the time this story was breaking and people had come

up to me and said, ‘‘Do you think this is going to endanger the program?’’ And I said, ‘‘Well, it sure as heck isn’t going to help.’’ So,

consequently, I went in and I learned how to brush my teeth better

and I read the book Curious George to the kids, and then the director and I danced to, ‘‘You Are My Sunshine.’’

[Laughter.]

I was not Fred Astaire. She was Ginger Rogers and the kids really got a good kick out of that.

But at the same time this scandal was actually brewing, and it

is still not over, why, Mike Castle over on the House side, with

very good intentions, says, why don’t we delegate this? We can do

it better in Delaware. We can handle it. And so we are into devolution and a pilot program, so on and so forth, which I oppose.

So I am upset about this and I am very glad that Jim came up

to give his testimony. I guess my questions really center on the testimony, especially by Ms. Gates.

Ms. Gates, you said—I am just going to skip to the last—‘‘Congress may wish to consider restrictions on prohibiting ACF from allocating all of its Head Start funding to a single organization within a single large metropolitan area.’’ With your experience, in the

Kansas City situation, do you think such an approach would have

helped?

And Jim, what in the heck are we doing in Kansas City to get

this thing back on track so that we don’t have these kinds of problems in the future?

Ms. GATES. Mr. Chairman and Senator Roberts, I couldn’t agree

more. That has been the biggest problem in Clark County. We had

one grantee. And if we had an opportunity to have more than one

grantee, we probably wouldn’t be in the situation that we are in

today. Obviously, in your situation, you have experienced the same

thing, but it was a little bit too late for the Federal Government

to come in.

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And second, the fact that there is no proper training, and just for

your information, Mr. Chairman and members of the committee, I

was once on that board as a County Commissioner and I got off of

that board because of the internal problems that the Mayor talked

about in terms of the funding and fights and so forth. It was better

for me to be on the outside, although I still helped them.

But having one agency in charge of over $20 million is problematic.

Senator ROBERTS. Jim?

Mr. CACCAMO. Yes, Senator. I go back and forth on this relative

to Kansas City, about whether it should be broken up or be one

agency. Please remember that what goes on for boys and girls,

what goes on for parents and comprehensive services is very

strong. We don’t have programmatic problems. What we have is finance and government, and I am sorry that Senator Enzi left because I want to tell him that we are appalled by it. We are appalled. The juxtaposition of an executive director who could run

such comprehensive programs for children and families against the

use of the credit card and other governance and finance problems

has appalled our community.

Now, to break it up might help, but keep in mind that programmatically, it is solid. I think there are other solutions in our community that I spoke to already that would help resolve the issue

of financing government. If in Clark County there is another solution, I think the law ought to allow—ACF ought to allow for multiple. But I don’t think there is a cookie cutter. The reason I think

Head Start works for so many boys and girls and families is that

there is community reflection in all of these programs, most of the

time for the good.

Senator ROBERTS. Well, thank you, Jim, for your effort, and

thank all of you for your testimony.

After my visit in this one center, a young lady came up to me,

and I said we were singing ‘‘You Are My Sunshine.’’ The sunshine

in that center came from her eyes. She was a graduate of that program 20-some years previously and her daughter is in that program now and it is a success story. And you are right. We are all

appalled. This is a case that has been most damaging. This particular example is a lot like asking for a neck massage from the Boston

Strangler in regards to the program.

[Laughter.]

I am very upset about it and it has taken 3 years to get this doggone thing on track and it is not over because now the Missouri

Governor is going to launch an investigation. I have the privilege

of representing Kansas, but again, because of the border situation,

it reflects on the entire program.

So I really appreciate your efforts for the clean-up, and Mr.

Mayor, I certainly sympathize with your situation, and Mr. Chairman, thank you for your leadership.

Senator ALEXANDER. Thank you, Senator Roberts.

This has been an exceptionally good hearing, both from the Senators’ participation and especially from the witnesses. We would

like to thank each of you for coming, some of you from long distances, to be here today. We know you have busy schedules.

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As I mentioned earlier, we are going to keep the record open for

a week. You have heard the discussion. Maybe it raised some

thoughts in your mind. We are looking at whether we should reauthorize Head Start in the next few months. We need to do that. We

need to do that working together, and we want to improve accountability. We want to make it easier for the money we appropriate

to help children and we need specific suggestions from you. You

have already given us some ideas about how to do that.

Now, let us end the hearing. We will go right down the row. Why

don’t we start with you, Mr. Caccamo, and Mayor Wharton, Commissioner Gates, Dr. Golden. Sixty seconds, what would you like to

leave us with?

Mr. CACCAMO. I think I can do it in less than that, although the

people at home would be surprised.

[Laughter.]

Keep in mind that Head Start works. We have high performance

standards, comprehensive services, parent engagement, and community involvement. Those are strengths and it works in most of

our communities.

There are bad things, too, and the bad things in our case was the

governance problem, financial problems, which I think came about

because of lack of board attention. We will address that, Senator.

Senator ALEXANDER. Thank you, sir.

Mayor Wharton?

Mayor WHARTON. Thank you, Mr. Chairman, and thanks to you

and the committee members for convening this hearing. I will go

back to my basic points. More local control in dealing with errant

agencies. Give us some finality there.

I would have a word of caution with respect to having more than

one grantee, particularly in those instances where, in my case, I

am responsible for funding public schools. I think what we should

require is some cooperation or collaboration between the Head

Start programs and our systems of public education. The Governor

is getting ready to start a pre-K program, but nobody has called

me to say, how can you fit that $22 million you already get into

that? I think if we start breaking it up, we may work against the

purpose of integrating what is taught in Head Start with what goes

on from pre-K on up. So I would caution against breaking it up.

Programs should be required to have some CIP program built in,

not how they are going to correct what they have done wrong but

how they are going to get better. That ought to be built into the

program, a continuous improvement process or whatever.

And I think there should just, again, over and over, more local

control in dealing with agencies that for whatever reason have not

complied. Thank you.

Senator ALEXANDER. Thank you, Mayor Wharton.

Commissioner Gates?

Ms. GATES. Mr. Chairman, thank you. Again, I want to just reiterate that Head Start does work and it certainly works in Clark

County. But I would add three things.

Early Federal intervention with proper training of staff is important.

Expand fiscal review and control by local government, making

sure that local government is involved.

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And then last, have the flexibility to have more than one grantee

in a large metropolitan area, such as Clark County.

Senator ALEXANDER. Thank you, Commissioner Gates.

Dr. Golden?

Ms. GOLDEN. I think I would also make three points. I would

start with the Head Start works point and just note that the more

that school readiness and early learning are on our minds in this

country, and we know from the research both that Head Start

makes a difference and we know some things about how it makes

a difference.

So the second point would be that how it makes a difference is

through high and rigorous standards and strong enforcement and

strong involvement of partners around those standards, so that is

key.

And the third theme, which I have just heard throughout the

conversation today, is really, I think, a theme about balancing,

about making sure you have strong programs and strong fiscal integrity, that you have strong Federal oversight that doesn’t squash

but invites local partnerships, and I think that theme of how to

balance those things in the service of the goals that we know we

all have was really what came through to me most strongly.

Senator ALEXANDER. Thank you. That is very helpful. And for my

60 seconds, I think you took about the first 30 seconds of it because

that balance that you speak of, I think, is critically important. It

is too frequently the case when there is a problem and the Federal

Government gets involved that we become overly prescriptive about

how to fix things from here. There is no more wisdom here than

there is in Memphis or Kansas City or anywhere else, often less.

So we need our standards and we need to watch the money from

here.

But at the same time, we are likely to get a better result if we

have, as several of you have emphasized, clear accountability at the

local grantee level, in other words, somebody in charge and somebody who can fix it if it goes wrong. And if you can help us keep

that balance, we will be able to continue to have autonomous units

around the country, which was the original idea, local control, parent involvement, good programming, hopefully better outcomes.

The more we have learned about preschool education, the more we

want, as several of you have suggested. More cognitive learning; we

want to know whether that is happening. We want to know whether there are results as a result of the health screenings, those sorts

of outcomes.

We want the money to go where it goes, but we don’t want to

squash the ability of local officials to take charge and produce good

results.

Thank you very much. The hearing is adjourned.

[Whereupon, at 12:01 p.m., the subcommittee was adjourned.]

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