HR 2123 PCS 
shall be made available to all parents with children receiv-
ing assistance under this subchapter in an understandable 
and uniform format, and to the extent practicable, pro-
vided in a language that the parents can understand, and 
in addition, make the information widely available through 
public means such as distribution through public agencies, 
and at a minimum posting such information on the Inter-
net immediately upon publication.’’; and 
(5) by adding at the end the following: 
‘‘(f) REDUCTION OF GRANTS AND REDISTRIBUTION 
OF FUNDS IN CASES OF UNDER-ENROLLMENT.— 
‘‘(1) DEFINITIONS.—In this subsection: 
‘‘(A) ACTUAL
ENROLLMENT.—The term 
‘actual enrollment’ means, with respect to a 
Head Start program, the actual number of chil-
dren enrolled in such program in a given 
month. 
‘‘(B) BASE GRANT.—The term ‘base grant’ 
means, with respect to a Head Start agency for 
a fiscal year, that portion of the grant de-
rived— 
‘‘(i) from amounts reserved for use in 
accordance with section 640(a)(2)(A), for a 
Head Start agency administering an In-
HR 2123 PCS 
dian Head Start program or migrant and 
seasonal Head Start program; 
‘‘(ii) from amounts reserved for pay-
ments under section 640(a)(2)(B); or 
‘‘(iii) from amounts available under 
section 640(a)(2)(D) or allotted among 
States under section 640(a)(4). 
‘‘(C) FUNDED
ENROLLMENT.—The term 
‘funded enrollment’ means, with respect to the 
program of a Head Start agency in a fiscal 
year, the number of children that the agency is 
funded to serve through a grant for the pro-
gram during such fiscal year, as indicated in 
the grant agreement. 
‘‘(2) ENROLLMENT REPORTING REQUIREMENT 
FOR CURRENT FISCAL YEAR.—Each entity carrying 
out a Head Start program shall report on a monthly 
basis to the Secretary and the relevant Head Start 
agency— 
‘‘(A) the actual enrollment in such pro-
gram; and 
‘‘(B) if such actual enrollment is less than 
the funded enrollment, any apparent reason for 
such enrollment shortfall.
HR 2123 PCS 
‘‘(3) SECRETARIAL
REVIEW
AND
PLAN.—The 
Secretary shall— 
‘‘(A) on a semiannual basis, determine 
which Head Start agencies are operating with 
an actual enrollment that is less than the fund-
ed enrollment based on not less than the aver-
age of 4 consecutive months of data; 
‘‘(B) for each such Head Start agency op-
erating a program with an actual enrollment 
that is less than 95 percent of its funded enroll-
ment, as determined under subparagraph (A), 
develop, in collaboration with such agency, a 
plan and timetable for reducing or eliminating 
under-enrollment taking into consideration— 
‘‘(i) the quality and extent of the out-
reach, recruitment, and community needs 
assessment conducted by such agency; 
‘‘(ii) changing demographics, mobility 
of populations, and the identification of 
new underserved low-income populations; 
‘‘(iii) facilities-related issues that may 
impact enrollment; 
‘‘(iv) the ability to provide full-day 
programs, where needed, through Head 
Start funds or through collaboration with
HR 2123 PCS 
entities carrying out other preschool or 
child care programs, or programs with 
other funding sources (where available); 
‘‘(v) the availability and use by fami-
lies of other preschool and child care op-
tions (including parental care) in the local 
catchment area; and 
‘‘(vi) agency management procedures 
that may impact enrollment; and 
‘‘(C) provide timely and ongoing technical 
assistance to each agency described in subpara-
graph (B) for the purpose of implementing the 
plan described in such subparagraph. 
‘‘(4) IMPLEMENTATION.—Upon receipt of the 
technical assistance described in paragraph (3)(C), a 
Head Start agency shall immediately implement the 
plan described in paragraph (3)(B). 
‘‘(5) SECRETARIAL
ACTION
FOR
CONVERSION 
TO
SERVE
YOUNGER
CHILDREN.—If, after imple-
menting the plan described in paragraph (3)(B), the 
grantee continues to operate a program at less than 
full enrollment, the grantee may, upon approval by 
the Secretary, be permitted to use a portion of the 
base grant equal to the percentage difference be-
tween funded enrollment and actual enrollment for
HR 2123 PCS 
the most then recent year, to serve persons described 
in section 645A(c) if such agency currently operates 
a grant described in section 645A and submits an 
application containing— 
‘‘(A) evidence of community need for such 
services; 
‘‘(B) a description of how the needs of 
pregnant women, infants, and toddlers will be 
addressed in accordance with section 645A(b) 
and with regulations prescribed by the Sec-
retary pursuant to section 641A in areas in-
cluding— 
‘‘(i) the approach to childhood devel-
opment and health services; and 
‘‘(ii) the approach to family and com-
munity partnerships; and approach to pro-
gram design and management; 
‘‘(C) assurances that the agency will par-
ticipate in technical assistance activities for 
newly funded and existing grantees under sec-
tion 654A; and 
‘‘(D) evidence that the agency meets the 
eligibility criteria as grantees under section 
645A.
HR 2123 PCS 
Any grantee permitted to serve children under this 
paragraph shall be subject to the rules, regulations, 
and conditions under section 645A. 
‘‘(6) SECRETARIAL
ACTION
FOR
CONTINUED 
UNDER-ENROLLMENT.—If, 1 year after the date of 
implementation of the plan described in paragraph 
(3)(B), the Head Start agency continues to operate 
a program at less than full enrollment, the Secretary 
shall, where determined appropriate, continue to 
provide technical assistance to such agency. 
‘‘(7) SECRETARIAL REVIEW AND ADJUSTMENT 
FOR CHRONIC UNDER-ENROLLMENT.— 
‘‘(A) IN
GENERAL.—If, after receiving 
technical assistance and developing and imple-
menting a plan to the extent described in para-
graphs (3), (4), (5), and (6) for 6 months, a 
Head Start agency is still operating a program 
with an actual enrollment that is less than 95 
percent of its funded enrollment, the Secretary 
may— 
‘‘(i) designate such agency as chron-
ically under-enrolled; and 
‘‘(ii) recapture, withhold, or reduce 
the base grant for the program by a per-
centage equal to the percentage difference
HR 2123 PCS 
between funded enrollment and actual en-
rollment for the program for the most re-
cent year in which the agency is deter-
mined to be under-enrolled under para-
graph (2)(B). 
‘‘(B) WAIVER OR LIMITATION OF REDUC-
TIONS.—If the Secretary, after the implementa-
tion of the plan described in paragraph (3)(B), 
finds that— 
‘‘(i) the shortfall can reasonably be 
expected to be temporary; or 
‘‘(ii) the number of slots allotted to 
the agency is small enough that under-en-
rollment does not constitute a significant 
shortfall, 
the Secretary may, as appropriate, waive or re-
duce the percentage recapturing, withholding, 
or reduction otherwise required by subpara-
graph (A). 
‘‘(C) PROCEDURAL
REQUIREMENTS; EF-
FECTIVE DATE.—The actions taken by the Sec-
retary under this paragraph with respect to a 
Head Start agency shall take effect 1 day after 
the date on which—
HR 2123 PCS 
‘‘(i) the time allowed for appeal under 
section 646(a) expires without an appeal 
by the agency; or 
‘‘(ii) the action is upheld in an admin-
istrative hearing under section 646. 
‘‘(8) REDISTRIBUTION OF FUNDS.— 
‘‘(A) IN
GENERAL.—Funds held by the 
Secretary as a result of recapturing, with-
holding, or reducing a base grant in accordance 
with paragraph (7) in a fiscal year shall be re-
distributed in such fiscal year as follows: 
‘‘(i) If such funds are attributable to 
the portion of a base grant derived from 
amounts specified in paragraph (1)(B)(i) 
payable, but for the operation of this para-
graph, to carry out an Indian Head Start 
program, then such funds shall be redis-
tributed to increase enrollment in such fis-
cal year in 1 or more Indian Head Start 
programs. 
‘‘(ii) If such funds are attributable to 
the portion of a base grant derived from 
amounts specified in paragraph (1)(B)(i) 
payable, but for the operation of this para-
graph, to carry out a migrant and seasonal
HR 2123 PCS 
Head Start program, then such funds shall 
be redistributed to increase enrollment in 
such fiscal year in 1 or more migrant and 
seasonal Head Start programs. 
‘‘(iii) If such funds are attributable to 
the portion of a base grant derived from 
amounts specified in clause (ii) or (iii) of 
paragraph (1)(B) payable, but for the op-
eration of this paragraph, to carry out a 
Head Start program (excluding Indian 
Head Start programs, and migrant and 
seasonal Head Start programs) in a State, 
then such funds shall be redistributed to 
increase enrollment in such fiscal year in 1 
or more— 
‘‘(I) other Head Start programs 
(excluding Indian Head Start pro-
grams and migrant and seasonal 
Head Start programs) that are car-
ried out in such State; or 
‘‘(II) if the Secretary determines 
that children eligible under section 
641 are being adequately served with-
in such State, 1 or more Early Head 
Start programs (excluding Indian
HR 2123 PCS 
Head Start programs and migrant 
and seasonal Head Start programs) or 
1 or more Head Start programs for 
the purpose of becoming a grantee 
pursuant to section 645A. 
‘‘(B) ADJUSTMENT TO FUNDED ENROLL-
MENT.—The Secretary shall adjust as necessary 
the requirements relating to funded enrollment 
indicated in the grant agreement of a Head 
Start agency receiving funds redistributed 
under this paragraph.’’. 
SEC. 9. POWERS AND FUNCTIONS OF HEAD START AGEN-
CIES. 
(a) QUALIFICATIONS
FOR DESIGNATION.—Section 
642(b) of the Head Start Act (42 U.S.C. 9837(b)) is 
amended to read as follows: 
‘‘(b) In order to be so designated, a Head Start agen-
cy shall do all of the following: 
‘‘(1) Establish a program with standards set 
forth in section 641A(a)(1), with particular atten-
tion to the standards set forth in subparagraphs (A) 
and (B) of such section. 
‘‘(2) Demonstrate capacity to serve eligible chil-
dren with scientifically-based curricula and other
HR 2123 PCS 
interventions that help promote the school readiness 
of children participating in the program. 
‘‘(3) Establish effective procedures by which 
parents and area residents concerned will be enabled 
to directly participate in decisions that influence the 
character of programs affecting their interests. 
‘‘(4) Establish an independent board of direc-
tors selected from among eligible individuals who 
shall serve on the board (or may designate an exist-
ing entity whose members are eligible individuals, 
that shall be such board) for a period not to exceed 
5 years, except that board members who oversee a 
public entity and who are selected by election (or 
members of a board of a local educational agency or 
a local council, appointed by an elected official or an 
official of a general purpose local government), may 
serve for such period as may be determined by the 
electing or appointing authority, as the case may be. 
An individual who has a conflict of interest is ineli-
gible to serve as a member of the board. Members 
of the board of all nonpublic entities shall include 
representatives of the local community (including at 
least 1 member with significant financial manage-
ment or accounting experience and the chair of (or 
the designee of the chair, approved by) the council
HR 2123 PCS 
described in section 642(b)(4)(B)(ii)). Additional 
members shall be selected for their expertise in edu-
cation, business administration, community affairs, 
government, legal affairs, and such other areas of 
expertise as may contribute to effective governance 
of the Head Start agency. All members of the board 
shall receive training in the management responsibil-
ities and obligations, ethics, and financial literacy 
and management, and shall adopt practices that as-
sure active, independent and informed governance of 
the Head Start agency, including independent over-
sight of the financial and management practices of 
such agency. The board shall provide direction to the 
executive director of the Head Start agency and 
shall operate as an entity independent of staff em-
ployed by the Head start agency, entity, or applicant 
and have the following duties and responsibilities: 
‘‘(A) To provide independent oversight to 
ensure that the Head Start agency under the 
direction of the executive director is delivering 
high quality services to children and families in 
compliance with all applicable standards in ef-
fect under this subchapter and with the applica-
ble performance measures established by the 
Secretary under section 644.
HR 2123 PCS 
‘‘(B) To establish 2 or more standing com-
mittees to facilitate governance of the Head 
Start agency which shall include both of the fol-
lowing: 
‘‘(i) An audit and finance committee 
whose primary responsibility shall be— 
‘‘(I) to approve annually the op-
erating budget of the Head Start 
agency; 
‘‘(II) to review and recommend 
to the board the selection of inde-
pendent auditors who shall report all 
critical accounting policies and prac-
tices to the finance and audit com-
mittee except when the auditor is as-
signed by the State under State law; 
‘‘(III) to review and recommend 
to the board the termination or exten-
sion of the existing audit firm at least 
once every 5 years; 
‘‘(IV) to review and advise the 
board of the audit management letter 
provided pursuant to the chapter 75 
of title 31 of the United States Code, 
and of any audit findings; and
HR 2123 PCS 
‘‘(V) to monitor agency actions to 
correct any such audit findings or 
other actions necessary to comply with 
applicable laws (including regulations) 
governing financial statements and ac-
counting practices. 
‘‘(ii) A policy council, a majority of 
whose representatives shall be parents of 
children participating in a Head Start pro-
gram or in an Early Head Start program, 
or of children who participated in a Head 
Start program or in an Early Head Start 
program in the then most recent 5-year pe-
riod preceding the selection of the par-
ticular representative involved, and whose 
primary responsibility shall be to serve as 
a link between parents and the board of di-
rectors and to make and submit rec-
ommendations on the following activities to 
the Board: 
‘‘(I) The strategic direction of 
the program, including long and 
short-term planning goals and objec-
tives.
HR 2123 PCS 
‘‘(II) Program operation policies, 
including standards of conduct for 
program staff and volunteers. 
‘‘(III) Activities to support the 
active involvement of parents in sup-
porting program operations. 
‘‘(IV) Classroom activities and 
staffing. 
‘‘(V) Program responsiveness to 
community and parent needs. 
‘‘(VI) Other areas the committee 
identifies as necessary to improve pro-
gram operations. 
‘‘(C) To approve the selection and dis-
missal of the Head Start director, and to review 
annually the human resources available to en-
sure the effective operation of the Head Start 
agency. 
‘‘(D) To consult, on a regular basis, with 
the policy council and to take actions on rec-
ommendations submitted by such council. 
‘‘(E) To review and approve the major 
operational policies of the Head Start agency, 
including policies addressing accounting, finan-
cial management, procurement, record confiden-
HR 2123 PCS 
tiality, and personnel (including specific stand-
ards governing salaries, salary adjustments, 
travel and per diem allowances, and other em-
ployee benefits). 
‘‘(F) To ensure that the Head Start agen-
cy is operated in compliance with applicable 
Federal, State, and local laws (including regula-
tions), and to monitor agency implementation of 
any corrective action necessary to comply with 
applicable laws (including regulations); 
‘‘(G) To oversee the program planning of 
the Head Start agency, including adoption of 
the Head Start agency philosophy and mission 
statement, adoption of policies for determining 
community needs, setting long- and short-range 
goals and objectives, establishment of criteria 
for selecting families in Head Start programs 
or Early Head Start programs, and to oversee 
and approve the agency’s applications to receive 
funds made available under this subchapter; 
and 
‘‘(H) To establish, to adopt, and to peri-
odically update written standards of conduct 
that establish standards and formal procedures 
for disclosing, addressing, and resolving—
HR 2123 PCS 
‘‘(i) any conflict of interest, and any 
appearance of a conflict of interest, by 
board members, officers, employees, con-
sultants, and agents who provide services 
or furnish goods to the Head Start agency; 
and 
‘‘(ii) complaints, including investiga-
tions, when appropriate. 
‘‘(5) To seek the involvement of parents, area 
residents, and local business in the design and im-
plementation of the program. 
‘‘(6) To provide technical and other support 
needed to enable parents and area residents to se-
cure on their own behalf available assistance from 
public and private sources. 
‘‘(7) To establish effective procedures to facili-
tate the involvement of parents of participating chil-
dren in activities designed to help such parents be-
come full partners in the education of their children, 
and to afford such parents the opportunity to par-
ticipate in the development and overall conduct of 
the program at the local level, including a process 
through which parents of children currently partici-
pating in a Head Start program or an Early Head
HR 2123 PCS 
Start program select the parent representatives to 
serve on the council under section 642(b)(4)(B)(ii). 
‘‘(8) To conduct outreach to schools in which 
children participating in Head Start programs en-
roll, local educational agencies, the local business 
community, community-based organizations, faith- 
based organizations, museums, and libraries to gen-
erate support and leverage the resources of the en-
tire local community in order to improve school 
readiness. 
‘‘(9) To offer (directly or through referral to 
local entities, such as entities carrying out Even 
Start programs under subpart 3 of part B of title 
I of the Elementary and Secondary Education Act 
of 1965 (20 U.S.C. 2741 et seq.)), to parents of 
participating children, family literacy services and 
parenting skills training. 
‘‘(10) To offer to parents of participating chil-
dren substance abuse counseling (either directly or 
through referral to local entities), including informa-
tion on drug-exposed infants and fetal alcohol syn-
drome. 
‘‘(11) At the option of such agency, to offer (di-
rectly or through referral to local entities), to such 
parents—