Source: https://www.federalregister.gov/documents/2010/09/22/2010-23583/head-start-program
Timestamp: 2017-02-27 20:23:46
Document Index: 594754328

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:: Head Start Program
A Proposed Rule by the Children and Families Administration on 09/22/2010
57704-57719
2010-23583
https://www.federalregister.gov/d/2010-23583
On February 28, 2005, the United States Government Accountability Office (GAO) issued a report entitled, “Head Start: Comprehensive Approach to Identifying and Addressing Risks Could Help Prevent Grantee Financial Management Weaknesses” (GAO-05-176). The report is available on the GAO Web site at: http://www.gao.gov/​new.items/​d05176.pdf. In that report, GAO found that the Administration for Children and Families (ACF) did not recompete the grants of poorly performing grantees. Instead, ACF gave continuous funding priority to current grantees and as a result, in a number of instances, ACF funded poorly performing grantees until the grantee either relinquished the grant or ACF terminated the grant. GAO stated that, “When grants are allowed to remain with poorly performing grantees, children being served may not be getting the `head start' they deserve because the grantees continuously fail to meet program and financial management standards.”
In their Recommendations for Executive Action, GAO recommended that ACF “take steps to obtain competition for the grant if it has determined that the current recipient of those grant funds fails to meet program, financial management, or other requirements.” In its comments on the draft GAO report, ACF expressed Start Printed Page 57705uncertainty about the scope of its authority to implement the GAO recommendation to recompete Head Start grants. In response to the ACF concerns, GAO asked Congress to consider providing ACF with the authority to recompete grants when ACF determines that a current grantee is not meeting Head Start's program or financial management requirements.
Section 641(c) of the Act required the Secretary of HHS to convene an expert panel (e.g., “the Committee”) to inform the development of a DRS and “make recommendations to the Secretary on the development of a transparent, reliable, and valid system for designation renewal.” The seven members of the Committee were appointed by the Secretary per the requirements in section 641(c)(3) of the Act. The Committee convened three two-day meetings in March, June, and October 2008 and issued a report in December 2008. The report, “A System of Designation Renewal of Head Start Grantees,” is available at the following Web site: http://eclkc.ohs.acf.hhs.gov/​hslc/​Program%20Design%20and%20Management/​Head%20Start%20Requirements/​Renewal%20of%20Head%20Start%20Grantees.
The Administration is deeply committed to the mission of Head Start—to helping our nation's most vulnerable children get a head start on success in school and in life—and as Start Printed Page 57706such is deeply committed to improving quality across all Head Start programs. Participation in high-quality early childhood care and education programs can affect crucial child outcomes dramatically, but participation in low-quality programs has little or no impact. Recent research suggests that quality in Head Start programs varies considerably, and suggests that there is significant room for improvement in Head Start programs. For example, “FACES Findings: New Research on Head Start Outcomes and Program Quality” reports that while average Head Start classroom quality is good, there was substantial variation.
Going concern is proposed to be defined as an organization that operates Start Printed Page 57707without the threat of liquidation for the foreseeable future, a period of at least 12 months. One Head Start agency, for example, had a “going concern” audit finding because it suffered recurring losses from operations resulting in a net deficit in working capital, which raised substantial doubt about its ability to continue as a viable operation.
The second approach we are considering would introduce the use of evidence-based rating instruments into the Head Start monitoring review system. Such rating instruments include: the Early Childhood Environment Rating Scale, the Infant Toddler Environment Rating Scale, and the Family Child Care Environment Rating Scale. Low scores determined using any of these instruments would result in recompetition. Use of these Start Printed Page 57708instruments could provide an increased ability to distinguish the level of quality of services being provided in Head Start and Early Head Start classrooms and family child care homes with evidence-based measures. We are seeking public comments about this structure in general, as well as the three particular rating instruments mentioned above and any alternative tools that interested parties wish to identify in their comments. We also invite public comment on the appropriate scoring level for each instrument that would indicate poorer than acceptable performance as well as the most efficient mechanism for incorporating these rating instruments into the Head Start review process.
A grantee that has been determined by ACF to have one or more deficiencies in a single review has demonstrated poor performance that should require the grantee to recompete for renewal. ACF believes that Head Start programs determined to have a failure of this kind are considered appropriately to be failing to provide children with a high-quality and comprehensive Head Start program. Failure to correct a deficiency within the allotted time, which ACF generally establishes as 30 to 45 days for health and safety and financial integrity issues, and 90 to 180 days for most other deficiencies, is grounds to terminate an agency from the Head Start or Early Head Start program under section 641A(e)(1)(C) of the Act. We note that the reviews conducted under section 641A of the Act can result in deficiencies in each of the areas of Start Printed Page 57709education, health, family engagement and management and fiscal systems. Violations of program requirements demonstrating a systemic or substantial lack of program integrity, such as the absence of effective internal financial controls or a failure to properly apply eligibility criteria, will result in deficiency findings. The deficiencies may include findings in the specific “Key Quality Indicators” noted in the Committee's recommendations. Therefore, ACF believes that the proposed deficiency condition indirectly addresses the specific program performance indicators recommended by the Committee.
Proposed paragraph (b)(2) is consistent with the Committee's recommendation regarding the importance of Head Start agencies assessing their own performance in relation to achieving agency-determined school-readiness goals. An agency would be required to recompete if it has been determined by the designated ACF official through a review conducted under section 641A(c)(1)(A), (C), or (D) of the Act during the period covered by the ACF review under section 1307.7 not to have assessed its own performance regarding school-readiness goals. Of note, we propose that the criteria that will be considered when determining if an agency has assessed successfully its own performance regarding school-readiness goals will differ for the time period prior to the effective date of this Part compared to the time period after the effective date of this Part, as described further in § 1307.7. Specifically, beginning on June 12, 2009, ACF proposes that the criteria to be considered in the recompetition review is whether agencies have established and taken steps to achieve their goals for improving the school readiness of children participating in their program in accordance with the requirements of section 641A(g)(2) of the Act. Beginning with the effective date of this Part, ACF proposes that the criteria to be considered in the recompetition review also will include whether agencies have: analyzed individual child-level assessment data in order to determine each child's status and progress with regard to each of the domains of the Head Start Child Outcomes Framework for Head Start programs and the Child Competencies listed in the Early Head Start Program Performance Measures Framework for Early Head Start programs and to plan how to individualize experiences and instructional approaches to best support each child's progress; and analyzed aggregated child assessment data at least three times per year, except for programs operating less than 90 days, which will be required to do so at least two times within their program period, and program data to support continuous program improvement and to inform professional development, staffing, and other program decisions. We are proposing this two-phase process in order to provide grantees with sufficient time to develop the necessary polices and procedures and train staff on implementation of analysis of child-level data and subsequent action steps to best support each child's progress.
The Administration believes that it is a major step forward to bring the quality of teacher-child interactions to bear on redesignation. The use of CLASS: Pre-K in particular is warranted by the strong research base validating its correlation with student outcomes. Use of CLASS: Pre-K in redesignation should begin as promptly as possible, recognizing also that CLASS: Pre-K has not been used in this way before. ACF will implement the use of CLASS: Pre-K results during the third year of the three-year transition period rather than waiting until the close of the transition period. For this third year of the transition period, we are proposing an alternative standard of performance related to CLASS: Pre-K data that would trigger Start Printed Page 57710recompetition. For only the cohort of agencies reviewed under section 1307.7 during the third year of the three-year transition period, agencies that received a score of one, on one or more domains of CLASS: Pre-K, on the two most recent CLASS: Pre-K observations would be required to compete for designation renewal.
Section 1307.3(b)(4) considers whether an agency has had its license to operate a center or program revoked by a State or local licensing agency, and the revocation of the license has not been overturned or withdrawn. This is Start Printed Page 57711consistent with the Committee's recommendations to consider revocation of a license to operate a child care program as an automatic indicator requiring competition under the DRS. A license to operate is required in section 641A(a)(1)(D)(i) of the Act, which states that center-based and combination program option facilities “shall meet or exceed State and local requirements concerning licensing for such facilities.”
Section 1307.3(b)(7) proposes the final of the seven conditions in paragraph (b), which incorporates two criteria that are consistent with the Committee's recommendations concerning the area of financial management. The Committee proposed that audit findings that determine an agency is unable to ensure it can continue as a going concern and/or that an agency has received a designation of high risk should be used as indicators of program performance determination criteria for recompetition. ACF believes that an agency that is determined to have one or more material weaknesses or to be unable to ensure that it can continue as a going concern is a high-risk agency that has demonstrated poor financial performance that should result in the grantee being required to recompete for renewal. We propose to use the definitions described in section 1307.2 for “material weakness” and “going concern.” Section 1307.3(b)(7) provides that the basis for the two criteria in this condition will be findings and opinions of either an audit conducted in accordance with section 647 of the Act; an audit, review or Start Printed Page 57712investigation by a State agency; a review by the National External Audit Review (NEAR) Center; or an audit, investigation or inspection by the Department of Health and Human Services Office of Inspector General as mandated under Public Law 95-452. We considered including as another criterion in the area of financial management whether the grantee had a disallowance of any of its Head Start or Early Head Start funds. As defined in the HHS Uniform Administrative Requirements implemented at 45 CFR 74.2, “disallowed costs” means “those charges to an award that the HHS awarding agency determines to be unallowable, in accordance with the applicable Federal cost principles or other terms and conditions contained in the award.” However, we recognize that an instance of disallowed costs would lead to a deficiency finding by ACF in most cases and therefore did not include this as one of the criteria for recompetition.
Section 641(d) of the Act requires that “if no entity in a community is determined to be successfully delivering a high-quality and comprehensive Head Start program * * * the Secretary shall, after conducting an open competition, designate for a five-year period a Head Start agency from among qualified applicants in such community.” If a grantee is found to meet any of the conditions/criteria in section 1307.3, its service area will be subject to an open competition to determine if it or another provider is best able to serve children and families in that community. Section 641(h) of the Act explains that “for purposes of this subchapter, a community may be a city, county, or multicity or multicounty unit within a State, an Indian reservation (including Indians in any off-reservation area designated by an appropriate tribal government in consultation with the Secretary), or a neighborhood or other area (irrespective of boundaries or Start Printed Page 57713political subdivisions) that provides a suitable organizational base and possesses the commonality of interest needed to operate a Head Start program.”
ACF's designation review will examine relevant records about the grantee's performance since June 12, 2009, and no data prior to June 12, 2009 will be considered in order to comply with section 641(c)(9)(B) of the Act, which describes the following limitation for the transition to the DRS: “A Head Start agency shall not be subject to the requirements of the system for designation renewal prior to 18 months after the date of enactment of the Improving Head Start for School Readiness Act of 2007.” As discussed previously, there is one exception to this time period. ACF proposes an alternative relevant time period to be considered for the third condition described in section 1307.3(b)(3), which considers the results of the classroom interaction rating system known as “CLASS: Pre-K.” ACF proposes to delay implementing the consideration of results from CLASS: Pre-K until after Start Printed Page 57714the effective date of the regulation and beginning in the third year of the three-year transition period because the use of CLASS still is relatively new to many Head Start agencies. Therefore, results from CLASS: Pre-K will not be considered starting on June 12, 2009 and instead will be considered starting after the effective date of this Part and beginning in the third year of the three-year transition period.
This rule establishes new information collection requirements in section 1307.4. As required by the Paperwork Reduction Act of 1995, codified at 44 U.S.C. 3507, ACF will submit a copy of these sections to the Office of Management and Budget (OMB) for review and they will not be effective until they have been approved and assigned a clearance number.Start Printed Page 57715
RequirementRespondentsAnnualAverage burden per respondent (hours)Total burden hoursPer section 1307.4, Head Start and Early Head Start agencies must report to ACF within ten working days of occurrence of any of the following:12-22 grantees1 hour or less1 hour or less12-22 hours.(1) The agency has had a license to operate a center revoked by a State or local licensing entity.(2) The agency has filed for bankruptcy or agreed to a reorganization plan as part of a bankruptcy settlement.(3) The agency has been debarred from receiving Federal or State funds from any Federal or State agency or has been disqualified from the Child and Adult Care Food Program (CACFP).(4) The agency has received an audit, audit review, investigation or inspection report from the agency's auditor, a State agency, or the cognizant Federal audit agency containing a determination that the agency: Has one or more material weaknesses; or is at risk of failing to function as a going concern.Per section 1307.7(a), each Head Start or Early Head Start agency wishing to be renewed for five years without competition shall request that status from ACF immediately after its review under section 641A(c)(1)(A)1,600 grantees1 hour or less1 hour or less1,600 hours.
These rules primarily are intended to ensure accountability for Federal funds consistent with the purposes of the Head Start Act and are not duplicative of other requirements. In developing this notice of proposed rulemaking, we sought to implement the new and expanded requirements of the Head Start Act in a manner that does not impinge on a small entity's ability to design and manage effective and responsive Head Start programs. At the same time, we sought to focus renewed attention on strengthening accountability for Head Start programs and increasing quality outcomes for low-income families. We believe this rule implements the aims of the Head Start Act, as amended, to improve the effectiveness of Head Start programs while preserving Head Start grantees' abilities to continue using creativity and innovation to promote the school readiness of low-income children. We request public comments on whether we have adequately considered all costs for small entities and achieved the balance described above.Start Printed Page 57716
§ 1307.1 Purpose and scope.
§ 1307.2 Definitions.
Early Head Start Agency means a public or private non-profit or for-profit entity designated by ACF to operate an Early Head Start program to serve pregnant women and children from birth to age three, pursuant to section 645A(e) of the Head Start Act.Start Printed Page 57717
Transition period means the three-year time period after the effective date of the final rule on the Designation Renewal System during which ACF will convert all of the current continuous Head Start and Early Head Start grants into five-year grants after reviewing each grantee to determine if it meets any of the conditions or criteria under § 1307.3 that would require recompetition or if the grantee will receive its first five-year grant non-competitively.
§ 1307.3 Basis for determining whether a Head Start agency will be subject to an open competition.
(b) A Head Start or Early Head Start agency shall be required to compete for its next five years of funding whenever the designated ACF official determines that one or more of the following seven conditions existed during the relevant time periods described under § 1307.7:
(1) An agency has been determined by ACF to have one or more deficiencies on a single review conducted under section 641A(c)(1)(A), (C), or (D) of the Act in the period covered by an ACF review under § 1307.7.
(2) An agency has been determined by the designated ACF official based on a review conducted under section 641A(c)(1)(A), (C), or (D) of the Act during the period covered by the ACF review under § 1307.7:
(3) An agency has been determined by the designated ACF official during the period covered by an ACF review under § 1307.7:
(4) An agency has had its license to operate a Head Start or Early Head Start center or program revoked by a State or local licensing agency in the period covered by an ACF review under § 1307.7, and the revocation has not been overturned or withdrawn during that period. A pending challenge to the license revocation or restoration of the license after correction of the violation shall not affect application of this requirement.
(5) An agency has been suspended from the Head Start or Early Head Start program by ACF during the period covered by the designated ACF official review under § 1307.7 and the suspension has not been overturned or withdrawn before a competition for funding for the next five-year period is announced. A pending challenge to suspension or restoration of the grantee to the Head Start program after correction of the violation shall not affect application of this requirement.
(6) An agency has been debarred from receiving Federal or State funds from any Federal or State department or agency or has been disqualified from The Child and Adult Care Food Program (CACFP) any time during the period covered by the designated ACF official's review under § 1307.7 but has not yet been terminated or denied refunding by ACF. (A debarred agency will only be eligible to compete for Head Start funding if it receives a waiver described in 2 CFR 180.135.)
(7) An agency has been determined by ACF within the twelve months preceding the designated ACF official's review under § 1307.7 to have either one or more material weaknesses or to be at risk for failing to continue functioning as a going concern. The final determination is made by the designated ACF official based on a review of the findings and opinions of an audit conducted in accordance with section 647 of the Act; an audit, review or investigation by a State agency; a review by the National External Audit Review (NEAR) Center, or an audit, investigation or inspection by the Department of Health and Human Services Office of Inspector General.
§ 1307.4 Grantee reporting requirements concerning certain conditions.
(4) The agency has received an audit, audit review, investigation or inspection report from the agency's auditor, a State agency, or the cognizant Federal audit Start Printed Page 57718agency containing a determination that the agency has one or more material weaknesses or is at risk for ceasing to be a going concern.
§ 1307.5 Requirements to be considered for designation for a five-year period when no entity in a community is determined to be delivering a high-quality and comprehensive Head Start program.
§ 1307.6 Tribal government consultation under the Designation Renewal System for when an Indian Head Start grant is being considered for competition.
§ 1307.7 Designation request and review process.
(b)(1) ACF shall review each Head Start and Early Head Start agency which has made a request under paragraph (a) of this section to determine if any of the conditions listed in § 1307.3(b)(1), (b)(2), or (b)(4) through (7) or the criteria under § 1307.3(c) were met by the agency's program since June 12, 2009 or if the condition listed in § 1307.3(b)(3) existed in the agency's program since the effective date of this part and beginning in the third year of the three-year transition period.
(2) Except as provided in § 1307.6, at least twelve months before the expiration date of a Head Start or Early Head Start agency's then current grant, ACF shall give written notice by certified mail return receipt requested or other system that establishes the date of receipt of the notice by the addressee, stating:
(i) The Head Start or Early Head Start agency will be required to compete for funding for an additional five-year period because ACF finds that one or more conditions listed in § 1307.3(b)(1), (b)(2), or (b)(4) through (7) or the criteria under § 1307.3(c) were met by the agency's program after June 12, 2009 or if the condition listed in § 1307.3(b)(3) existed in the agency's program since the effective date of this part and beginning in the third year of the three-year transition period; or
(ii) That such agency has been determined on a preliminary basis to be eligible for renewed funding for five years without competition because ACF did not find that any conditions listed in § 1307.3(b)(1), (b)(2), or (b)(4) through (7) or the criteria under § 1307.3(c) were met by the agency's program after June 12, 2009 or the condition listed in § 1307.3(b)(3) existed in the agency's program since the effective date of this part and beginning in the third year of the three-year transition period.
(3) Except as provided in § 1307.6, at least six months before the expiration date of a Head Start or Early Head Start agency's then-current grant, ACF shall give written notice by certified mail return receipt requested or other system that establishes the date of receipt of the notice by the addressee, stating either:
(i) The Head Start or Early Head Start agency will be required to compete for funding for an additional five-year period because ACF finds that one or more conditions or criteria listed in § 1307.3 were met by the agency's program during the relevant time periods described in § 1307.7(b), identifying the conditions or criteria ACF found, and summarizing the basis for the finding; or
(ii) That such agency has been determined on a final basis to be eligible for renewed funding for five years without competition because ACF did not find that any conditions or criteria listed in § 1307.3 were met by the agency's program during the relevant time periods described in § 1307.7(b). The letter will include instructions on the information it must provide to the designated ACF official in order to receive funding.
(c)(1) Beginning with the five-year grant period after the transition period under paragraph (b) of this section, at the beginning of the fourth year of a Head Start or Early Head Start agency's then current grant, an agency wishing to be renewed without competition shall request that status. ACF shall review the applicant Head Start and Early Head Start agency to determine if any of the conditions or criteria listed in § 1307.3 were met by the agency's program:
(ii) After the effective date of this part, in the case of the condition described under § 1307.3(b)(3).
(2) Except as provided in § 1307.6, at least twelve months before the expiration date of a Head Start or Early Head Start agency's grant, ACF shall give written notice by certified mail return receipt requested, or other system that establishes the date of receipt of the notice by the addressee, stating either:
(i) The Head Start or Early Head Start agency will be required to compete for funding for an additional five-year period because ACF finds that one or more conditions or criteria listed in § 1307.3 were met by the agency's program during the period established in paragraphs (c)(1)(i) or (ii) of this section, identifying the conditions or criteria ACF found, and summarizing the basis for the finding; or
(ii) That such agency has been determined on a preliminary basis to be eligible for renewed funding for five years without competition because ACF Start Printed Page 57719did not find that any conditions or criteria listed in § 1307.3 were met by the agency's program in the period established in paragraphs (c)(1)(i) or (ii) of this section.
(3) Except as provided in § 1307.6, at least six months before the expiration date of a Head Start or Early Head Start agency's then current grant, ACF shall give written notice by certified mail return receipt requested, or other system that establishes the date of receipt of the notice by the addressee, either stating:
(i) The Head Start or Early Head Start agency will be required to compete for funding for an additional five-year period because ACF finds that one or more conditions or criteria listed in § 1307.3 were met by the agency's program during the period established under paragraphs (c)(1)(i) or (ii) of this section identifying the conditions or criteria ACF found, and summarizing the basis for the finding; or
(ii) That such agency has been determined on a final basis to be eligible for renewed funding for five years without competition because ACF did not find that any conditions or criteria listed in § 1307.3 existed in the agency's program during the period established under paragraphs (c)(1)(i) or (ii) of this section. The letter will include instructions on the information it must provide to the designated ACF official in order to receive funding.
§ 1307.8 Use of CLASS: Pre-K Instrument in the Designation Review System.
Except when all children are served in a single classroom, ACF will conduct multiple class observations and rate the conduct of the classes observed using the CLASS: Pre-K instrument. When the grantee serves the children in its program in a single class, that class will be observed and rated using the CLASS: Pre-K instrument. The domain scores for that class will be the domain scores for the grantee for that observation. After the observation is completed, ACF will report to the grantee the scores of the classes observed during the CLASS: Pre-K observation in each of the domains covered by the CLASS: Pre-K instrument. ACF will average the scores on each domain for all classrooms assessed during a CLASS: Pre-K observation to determine the grantee's score in each domain. As provided in § 1307.3(b)(3), an agency that has been determined by ACF to have a score of one, on one or more domains, during the transition period or a score below three, on one or more domains, for the period after the close of the transition period on each of the two most recent CLASS: Pre-K observations in the time period covered by an ACF decision under § 1307.7 will be required to compete for designation renewal. As provided under § 1307.3(b)(3), the CLASS: Pre-K condition will apply to CLASS: Pre-K observations in DRS reviews under § 1307.7(c) that take place after the effective date of this part and during the third-year of the transition period.