‘‘(1) is receiving assistance under this sub-
chapter; 
‘‘(2) meets or exceeds program and financial 
management requirements, standards described in 
section 641A(a)(1), and other requirements estab-
lished by the Secretary; 
‘‘(3) has no unresolved programmatic defi-
ciencies or areas of noncompliance, and has not had 
findings of deficiencies during the then most recent 
triennial review conducted under section 641A(c); 
and 
‘‘(4) has taken the actions required by the Sec-
retary under section 647(c) to correct deficiencies.’’. 
SEC. 4. QUALITY STANDARDS; MONITORING OF HEAD 
START AGENCIES AND PROGRAMS. 
(a) QUALITY STANDARDS.—Section 641A(a) of the 
Head Start Act (42 U.S.C. 9836a(a)) is amended—
(1) in paragraph (1) by amending subpara-
graph (C) to read as follows: 
‘‘(C) administrative and financial manage-
ment standards, including internal controls nec-
essary to safeguard Federal funds;’’, and 
(2) by adding at the end the following: 
‘‘(4) EVALUATIONS AND CORRECTIVE ACTIONS 
FOR DELEGATE AGENCIES.—
‘‘(A) PROCEDURES.—Each Head Start 
agency shall establish procedures relating to its 
delegate agencies, including—
‘‘(i) procedures for evaluating delegate 
agencies; 
‘‘(ii) procedures for terminating finan-
cial assistance otherwise provided to dele-
gate agencies; and 
‘‘(iii) procedures for appealing a fi-
nancial assistance termination decision re-
lating to a delegate agency. 
‘‘(B) EVALUATIONS.—Each Head Start 
agency—
‘‘(i) shall evaluate its delegate agen-
cies using the procedures established pur-
suant to this section; and 
‘‘(ii) shall inform such delegate agen-
cies of the deficiencies identified through 
the evaluation that are required to be cor-
rected. 
‘‘(C) REMEDIES TO ENSURE CORRECTIVE 
ACTIONS.—If a Head Start agency identifies a 
deficiency for a delegate agency through the 
evaluation, such Head Start agency may—
‘‘(i) initiate procedures to terminate 
the designation of such delegate agency 
unless such delegate agency corrects the 
deficiency; 
‘‘(ii) conduct monitoring visits, as 
needed and without notice, to such dele-
gate agency until either such deficiency is 
corrected or such Head Start agency ter-
minates the financial assistance otherwise 
provided to such delegate agency; and 
‘‘(iii) release funds to such delegate 
agency only as reimbursements until either 
such deficiency is corrected by such dele-
gate agency or such Head Start agency 
terminates financial assistance otherwise 
provided such delegate agency. 
‘‘(D) RULE OF CONSTRUCTION.—Nothing 
in this paragraph shall be construed to modify 
or supersede the responsibilities of the Sec-
retary with respect to Head Start agencies or 
delegate agencies that receive financial assist-
ance under this subchapter.’’. 
(b) CORRECTIVE ACTION; TERMINATION.—Section 
641A(d) of the Head Start Act (42 U.S.C. 9836a(d)) is 
amended—
(1) in paragraph (1)(B)(ii)—
(A) by striking ‘‘90’’ and inserting ‘‘60’’, 
and 
(B) by striking ‘‘90-day’’ and inserting 
‘‘60-day’’, and 
(2) in paragraph (2)—
(A) in subparagraph (A) by striking ‘‘90-
day’’ and inserting ‘‘60-day’’, and 
(B) by amending subparagraph (B) to read 
as follows: 
‘‘(B) SECRETARIAL RESPONSIBILITY.—The 
Secretary shall—
‘‘(i) not later than 30 days after re-
ceiving from a Head Start agency a pro-
posed quality improvement plan for correc-
tive action pursuant to subparagraph (A), 
either approve such plan or specify the rea-
sons why such plan cannot be approved; 
and 
‘‘(ii) not later than 60 days after ap-
proving a quality improvement plan under 
this subparagraph, conduct an on-site re-
view to certify that all deficiencies of such 
Head Start agency, and of all Head Start 
programs operated by such Head Start
agency, have been corrected in accordance 
with the standards established under this 
subchapter and with the results-based per-
formance measures developed by the Sec-
retary under subsection (b).’’. 
SEC. 5. APPEALS, NOTICE, AND HEARING. 
(a) PROCEDURES.—Paragraphs (2) and (3) of sec-
tion 646(a) of the Head Start Act (42 U.S.C. 9841(a)) 
are amended to read as follows: 
‘‘(2) except in emergency situations, a recipient of fi-
nancial assistance under this subchapter shall receive writ-
ten notice not less than 30 days before such assistance 
is suspended, terminated, or reduced; 
‘‘(3) such recipient shall be provided an opportunity 
for full and fair hearing, including an opportunity to show 
cause why the action described in such notice should not 
be taken; and’’. 
(b) LIMITATION ON USE OF FUNDS.—Section 646 of 
the Head Start Act (42 U.S.C. 9841) is amended by add-
ing at the end the following: 
‘‘(f) A recipient of financial assistance under this sub-
chapter may not use such assistance for the purpose of 
appealing any decision made by the Secretary under this 
subchapter.’’.
SEC. 6. AUDITS. 
Section 647 of the Head Start Act (42 U.S.C. 9842) 
is amended by adding at the end the following: 
‘‘(c)(1) Not later that 60 days after the end of each 
fiscal year, each Head Start agency shall submit to the 
Secretary an independent financial audit of the Head 
Start program carried out with financial assistance pro-
vided under this subchapter. Such audit shall be carried 
out by a certified public accountant selected through a 
competitive process from among qualified certified ac-
countants by the local oversight board established in ac-
cordance with section 641(a) by such agency, except that 
no accountant may perform audits of such program for 
a period exceeding 2 consecutive fiscal years. 
‘‘(2) Not later than 60 days after receiving such 
audit, the Secretary shall provide to such agency, and to 
the chief executive officer of the State in which such pro-
gram is operated, a notice identifying the actions such 
agency is required to take to correct all deficiencies identi-
fied in such audit. 
‘‘(d) Each recipient of financial assistance under this 
subchapter shall—
‘‘(1) maintain, and annually submit to the Sec-
retary, a complete accounting of its administrative 
expenses (including a detailed statement identifying 
the amount of financial assistance provided under
this subchapter used to pay expenses for salaries 
and compensation and the amount (if any) of other 
funds used to pay such expenses); and 
‘‘(2) provide such additional documentation as 
the Secretary may require.’’. 
SEC. 7. EFFECTIVE DATE. 
This Act and the amendments made by this Act shall 
take effect on the 1st day of the 1st fiscal year beginning 
after the date of the enactment of this Act.
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