Letter to Head Start Grantee

May 17, 2010

Dear Head Start Grantee:

I am writing to address fraud and mismanagement in Head Start and to notify you of the steps the Department of Health and Human Services will be taking to strengthen program integrity in the Head Start Program. Recently, I was informed of an investigation initiated by the Government Accountability Office (GAO) into potentially fraudulent eligibility determination procedures and other types of misconduct. According to GAO, individuals employed by approximately eight Head Start grantees determined that certain children were eligible for Head Start services despite being given evidence that their families’ incomes were above the eligibility limit. Our Office of Inspector General is now following up on these allegations. If proven, these actions not only violate Head Start’s rules and regulations, but would represent serious breaches of the public trust.

As you know, Head Start is designed to put our nation’s low-income children on a road to opportunity. Allowing ineligible children to enroll in the program is a blatant violation of Head Start’s rules and it steals opportunity from children who need it most. This Department will not stand for it.

On May 10, the Office of Head Start issued a Program Instruction entitled, "Income Eligibility for Enrollment" (ACF-PI-HS-10-02), which reminds grantees of their obligations to verify income eligibility and determine eligibility in accordance with the Head Start statute and regulations. This was just the first step in our efforts to strengthen program integrity in the Head Start program.

The following are additional concrete steps that we are undertaking to ensure that every Head Start slot is reserved for a child eligible for the program.

Refer fraud allegations to the HHS Inspector General. When HHS discovers potential fraud, those cases are referred to the Department's Inspector General who can pursue a criminal investigation. Knowingly falsifying documents and determining a child eligible for Head Start when the child does not meet the eligibility criteria can lead to criminal charges.
Move to suspend and terminate grantees where pervasive fraud or misuse of funds is found. The Head Start statute provides us with ample authority to suspend and then terminate grants in such instances.
Require grantees that have inadequate controls to prevent errors in eligibility or other critical lapses in program management to take swift, decisive corrective action. This could include firing employees that are found to be knowingly violating Head Start rules, as well as tightening eligibility determination procedures.
Conduct unannounced monitoring visits to Head Start grantees. In the past, we have typically provided grantees with notice before coming to conduct monitoring or other onsite visits. We will increase our use of unannounced visits to ensure that we are able to review how your programs operate on a daily basis.
Create and publicize a web-based "hotline" that will allow those with information of impropriety of any kind to report it directly to me. When this hotline is up and running, we will issue guidance to you about how to access the site. I expect that every grantee will ensure that all Head Start employees are informed about this hotline. We know that fraud is often detected and reported by scrupulous employees who stand up and do the right thing.
Increase oversight and reviews of programs with identified risk factors. Each year, the Administration for Children and Families (ACF) conducts a risk assessment with every grantee to identify risks for program violations or management problems. ACF, in partnership with the grantee, develops and implements an action plan to mitigate the risk factors. Program specialists will be scrutinizing programs more carefully in the risk management process and the action plan phase.
Develop new regulations that promote program integrity. We are developing new regulations that will address verification requirements and staff training on eligibility criteria and procedures.
Recompete grants when questions arise about whether grantees are offering high-quality services or have management lapses. We will soon issue proposed regulations that articulate which grantees will be required to compete for continued Head Start funding – implementing an important reform enacted by Congress in the Head Start for School Readiness Act of 2007. The goal of the regulations is to promote program integrity and strengthen the quality of services that Head Start provides.

As these initiatives gear up, you will be kept fully apprised of new requirements and changes in our operating procedures. Now that you know of our increased focus on program integrity, I hope you will immediately review your own oversight and quality assurance mechanisms and begin to develop ways to strengthen your own programs. If we work together, we can build an even stronger Head Start program.

I know our Head Start grantees can be a source of good ideas for how to promote sound management and ensure that this program meets the highest possible program integrity standards. If you have an idea, please send it to strengthenheadstart@headstartinfo.org. You are our partners in this important program, and we want to hear your thoughts and ideas.

Program integrity is one of my key priorities and goes well beyond Head Start. I recently established the Council on Program Integrity, which will look at all areas within the Department - from Medicare and Medicaid, to Head Start and LIHEAP, to medical research and the public health grants - to conduct risk assessments of programs or operations most vulnerable to waste, fraud, or abuse; enhance existing program integrity initiatives or create new ones; share best program integrity practices throughout HHS; and measure the results of our efforts. I look forward to partnering with you as part of this Department-wide initiative.

I know the great majority of people who work at Head Start centers are dedicated professionals who make tremendous efforts to provide quality care and early education to more than 900,000 children and carry out their work each day with great integrity. We - grantees and federal officials alike - cannot allow a few unscrupulous individuals or grantees to get in the way of the services that Head Start provides to our nation’s low-income children.

Sincerely,

/s/

Kathleen Sebelius