head start/early head start update update 4.8.14 final.pdf2014 information memorandums number / date...

Head Start/Early Head Start Update 1

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Head Start/Early Head Start Update

Trainer: Denes L. Tobie, CPA, Partner

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Agenda

• 2013-2014 Information Memorandums

• 2013-2014 Policy Clarifications – None

• 2014 Program Instructions

• FY 2014 Monitoring Protocol

• 2014 Poverty Guidelines

• Report to Congress on HS Monitoring - 2010

• Reform Continues

• Head Start Regulation 1307 – Policies and Procedures for Designation Renewal of HS and EHS Grantees

• NPRM 45 CFR 1305 Eligibility, Recruitment, Selection, Enrollment and Attendance

• OMB Changes – “Super Circular”

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2013 Information Memorandums

Number / Date / TitleACF-IM-HS-13-02 / 07/01/2013 / Five-Year Head Start Project PeriodsINFORMATIONThe Office of Head Start (OHS) is moving from indefinite project periods to five year project periods for all Head Start grantees. This requires changes in OHS funding practices and oversight of Head Start programs. Changes in oversight will include improved communication between federal staff and grantees, as well as ongoing analysis of data to determine the type of support needed by grantees. The main purpose of improved oversight is to demonstrate the quality of program services, the effectiveness of management systems, and the achievement of outcomes for children, families, and communities.

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Number / Date / TitleACF-IM-HS-13-02 / 07/01/2013 / Five-Year Head Start Project Periods (cont.)Funding GuidanceGrantees who are eligible for a non-competitive five year grant will receive a detailed funding guidance letter issued by their Regional Office six months prior to their refunding date. Grant applications will be due to the Regional Office three months prior to the start of the new project period. Grantees will be required to describe the program approach, define anticipated outcomes, and include measures of program progress throughout the five year period. Application criteria in years two through five of the project period will focus on grantee progress toward the goals and outcomes defined in either the year one or the competitive application. Grantees will be expected to use program data to analyze and report on their progress. Grantee requests to change or update their program approach must be supported by program data. Throughout the five year project period and at the end of a five year project period, grantees will be expected to provide evidence of the program's cumulative impact on the children, families, and communities served.

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Number / Date / TitleACF-IM-HS-13-02 / 07/01/2013 / Five-Year Head Start Project Periods (cont.)Additional Post-Award RequirementsThe following requirements will be conditions for all five year grants on the Notice of Award (NoA). Each grantee will complete the activities outlined below and, where required, submit the results to their Regional Office within the identified timeframes. Regional Office staff will discuss and validate these conditions/certifications during annual site visits.

Governance Grantee governing body must complete a governance and leadership capacity screening within 90 days of the start of the project period.

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Number / Date / TitleACF-IM-HS-13-02 / 07/01/2013 / Five-Year Head Start Project Periods (cont.)Grantee must complete a health and safety assessment of each center and/or family child care home where services are provided within 45 calendar days of the start of the program/school year, or within 45 calendar days of the start of the five year project period when the five year project period begins during the program/school year.The grantee governing body must submit to OHS the signed certification of compliance with all applicable health and safety requirements within 15 calendar days of completion of the health and safety assessment.School Readiness Grantee must participate in individual school readiness progress meetings with the OHS Regional Office.Audit Webinar Grantee must participate in an OHS-sponsored single audit webinar within one year of the start of the project period.

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New – First Year Conditions for All Five Year Awards

New tools available or soon to be availableGovernance

• Governance, Leadership, and Oversight Capacity Screener

• Governance Readiness Tool

• Governance System Builder (not issued yet)

• Governance Certification (not issued yet)

Health and Safety• Health and Safety Screener

**You don’t have to use their tools, you just have to be able to prove you complied.

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New – First Year Conditions for All Five Year Awards

• These criteria apply to the first year of your five year grant, not every year

• Tri-annual reviews will now take place in year 3 of your 5 year grant.

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Number / Date / TitleACF-IM-HS-14-01 / 01/09/2014 / 2013 Head Start Audit Supplement

Office of Management and Budget (OMB) Circular A-133 requires annual audits of states, local governments, and nonprofit organizations that expend $500,000 or more from federal awards in a fiscal year. Head Start and Early Head Start grantees and delegate agencies are audited using the OMB A-133 Compliance Supplement, which includes both general compliance requirements and requirements specific to Head Start. The current Compliance Supplement was issued in March 2013, and is applicable to fiscal years beginning after June 30, 2013.

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Number / Date / TitleACF-IM-HS-14-01 / 01/09/2014 / 2013 Head Start Audit Supplement (cont.)

The Head Start Audit Supplement includes three major areas of audit inquiry: I. Program Objectives; II. Program Procedures; and III. Compliance Requirements.

The Program Objectives and Program Procedures sections provide a detailed overview of Head Start and Early Head Start program goals, objectives, administration, services, and program options. The Compliance Requirements section addresses the following required areas of compliance:

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Number / Date / TitleACF-IM-HS-14-01 / 01/09/2014 / 2013 Head Start Audit Supplement (cont.)

• Activities Allowed or Unallowed• Allowable Costs/Cost Principles• Cash Management• Davis-Bacon Act• Eligibility• Equipment and Real Property Management• Matching, Level of Effort, Earmarking• Period of Availability of Federal Funds• Program Income• Reporting• Sub-recipient Monitoring

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Number / Date / TitleACF-IM-HS-14-01 / 01/09/2014 / 2013 Head Start Audit Supplement (cont.)The Head Start Act designates the governing body as the responsible entity for selection of the financial auditor and requires that all critical accounting policies be reported to the governing body. The governing body must be allowed to review and approve the annual financial audit. Additional governing body audit responsibilities include monitoring the agency's actions to correct any audit findings and any other actions necessary to comply with applicable laws (including regulations) governing financial statement and accounting practices.

The Head Start Act requires that grantees provide accurate and regular information to the governing body about the financial audit and appropriate training and technical assistance to ensure that the members of the governing body understand the information they receive and can effectively oversee and participate in the programs of the Head Start agency.

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Number / Date / TitleACF-IM-HS-14-01 / 01/09/2014 / 2013 Head Start Audit Supplement (cont.)Grantees must effectively educate their governing bodies and fully involve them in the audit selection and the audit process as required by the Head Start Act. A number of resources exist to support grantees in meeting this requirement. Please see IM 12-01: Choosing an External Auditor, the A-133 Audit Training Webcast recently posted on Early Childhood Learning and Knowledge Center (ECLKC), and the webinar entitled "Auditing the Head Start Program as Part of Your Single Audit" and related parties available on the American Institute of CPAs (AICPA) website: AICPA -Auditing the Head Start Program as Part of Your Single Audit.

The Office of Head Start (OHS) encourages grantees to understand Head Start audit requirements and engage in an audit process by fully involving the governing body to obtain high quality audit reports that support effective fiscal operations.

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Number / Date / TitleACF-IM-HS-14-02 / 03/19/2014 / Federal Oversight of Five Year Head Start GrantsThe purpose of this IM is to provide more detailed information on the system of federal oversight to assess performance, compliance, continuous improvement, and progress of grantees during the five year project period.

Federal oversight involves the review and analysis of data, program services, and management systems to ensure grantees establish and implement:

• Program goals, including goals for school readiness;• Effective management systems, including data management and

analysis, ongoing monitoring, and fiscal oversight; and• Methods to assess progress on anticipated outcomes for children,

families, and the community throughout the five year project period.

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Number / Date / TitleACF-IM-HS-14-02 / 03/19/2014 / Federal Oversight of Five Year Head Start Grants(cont.)The implementation of this system of oversight includes ongoing communication and joint analysis of the grantee's plans and progress, and effective provision of targeted training and technical assistance (T/TA) and other supports. Key elements include:

• Five year grant applications• Effective governance and leadership• Program goals, activities, progress, and impacts, including school

readiness and family engagement• Program data and continuous quality improvement• Program communication• Training and technical assistance

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ACF-IM-HS-14-02 / 03/19/2014 / Federal Oversight of Five Year Head Start Grants(cont.)Five Year Grant ApplicationThe baseline, initial grant application establishes the foundation for the Head Start and Early Head Start programs in providing high-quality, comprehensive services to children and families. The intent of the baseline grant application is to provide a comprehensive description of the program design and plan each grantee intends to implement within its community. The baseline application also specifies the measurable impacts on children, families, and the community the grantee expects to achieve throughout the five year project period.

All grantees entering into a five year project period are expected to establish goals for school readiness and fiscal operations; describe governance, organizational, and management structures and systems, including those for ongoing oversight; project anticipated impacts and outcomes for children, families, and the community as a whole; and define measures of program, child, and family progress throughout the five year project period.

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Number / Date / TitleACF-IM-HS-14-02 / 03/19/2014 / Federal Oversight of Five Year Head Start Grants(cont.)Five Year Grant ApplicationGrantees are expected to measure and report progress on achieving the long-range goals, objectives, and impacts in each continuation application, including changes when applicable. The application criteria will be available in the Head Start Enterprise System (HSES).

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Number / Date / TitleACF-IM-HS-14-02 / 03/19/2014 / Federal Oversight of Five Year Head Start Grants(cont.)Effective Governance and LeadershipEffective governance and leadership are key elements of program quality and risk mitigation. These elements are evidenced in governing bodies that are engaged in and knowledgeable of the program's services and operations, make well-informed decisions for the program, and exercise their legal and fiscal responsibilities.

Federal staff priority will be to engage each grantee's governing body through site visits to programs, including meeting with members of the agency's governing body and Policy Council, and to understand oversight procedures, assess management systems, and discuss fiscal procedures and internal controls.

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ACF-IM-HS-14-02 / 03/19/2014 / Federal Oversight of Five Year Head Start Grants(cont.)Program Goals, Activities, Progress, and Impacts, Including School Readiness and Family EngagementGrantees are required to develop long-range program goals and short-term program and financial objectives that provide the foundation and resources to support the grantee's establishment and implementation of their school readiness goals. Attainment of all of these goals will ensure high-quality, comprehensive services for children and families. Grantee's tracking and ongoing assessment of progress made towards meeting goals are integral to their annual planning process over the five year period in order to measure and report their impact on children, families, and the community.

Throughout the five year project period, federal staff will maintain ongoing oversight of the grantee's establishment and implementation of school readiness goals, including the collection, aggregation, and analysis of child assessment and related data; progress toward achieving these goals; and ensuring that the implementation of responsive program improvements occur.

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ACF-IM-HS-14-02 / 03/19/2014 / Federal Oversight of Five Year Head Start Grants(cont.)Program Goals, Activities, Progress, and Impacts, Including School Readiness and Family EngagementIn addition, grantees are required to track progress on established parent, family, and community engagement goals.

Federal staff will use information from ongoing communications with grantees and other data sources, such as grant applications and reports, to stay abreast of the grantee's progress in achieving its goals.

Program Data and Continuous Quality ImprovementProgram-level data provides a platform for determining national, regional, state, and grantee performance; informing policy; establishing priorities; and coordinating efforts to support grantees. Ongoing analysis of available data sources by federal staff provides critical information on grantee progress, success, and risk. Federal staff, T/TA partners, and grantees are responsible for utilizing available data to ensure continuous delivery of high-quality services and progress towards program goals.

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ACF-IM-HS-14-02 / 03/19/2014 / Federal Oversight of Five Year Head Start Grants(cont.)Program CommunicationThe purpose of ongoing program communication is to build and strengthen relationships among and across agency leaders, staff, and parents, and to gain greater insights into how the program operates. Ongoing communication between federal staff and grantees is also critical. Intentional planning between grantees and federal staff will ensure that accurate and relevant information is shared. Federal staff, to the extent possible, will conduct annual visits to hear firsthand from leadership, staff, and families about the program, and federal staff will also maintain, at a minimum, monthly contacts with each grantee.

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ACF-IM-HS-14-02 / 03/19/2014 / Federal Oversight of Five Year Head Start Grants(cont.)Training and Technical AssistanceGrantees are expected to provide high-quality, comprehensive services to children and families that result in children's readiness for school. Grantees are encouraged to make effective use of the three components of the T/TA system. Each Head Start grantee receives funds for direct T/TA. These funds are complemented by the state-based T/TA system of early childhood education specialists, grantee specialists, and the National T/TA Centers. Refer to http://eclkc.ohs.acf.hhs.gov/hslc/tta-system for a more detailed understanding of available T/TA resources.

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2014 Program Instructions

ACF-PI-HS-14-01 / 02/10/2014 / FY 2014 Head Start Funding IncreasePresident Obama signed the Consolidated Appropriations Act of 2014 on January 17, 2014 which includes $8,598,095,000 for programs under the Head Start Act, representing an increase of approximately $1.025 billion over the fiscal year (FY) 2013 funding level.

The approximately $1.025 billion increase restores the 5.27 percent reduction from sequestration and provides all grantees with a 1.3 percent cost-of-living adjustment (COLA). The FY 2014 funding level also includes $500 million for expansion through the Early Head Start-Child Care (EHS-CC) Partnership to support communities in expanding high-quality early learning and development opportunities for infants and toddlers.

ACF is developing a separate announcement about the EHS-CC Partnership funds and will be providing more information in the coming weeks about how to apply for these funds.

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ACF-PI-HS-14-01 / 02/10/2014 / FY 2014 Head Start Funding Increase(cont.)Grantees that already received partial funding for FY 2014 are eligible to receive a supplemental award to reflect the increased appropriation. Grantees that successfully competed for funds and received reduced awards due to sequestration are also eligible to receive these increases. All grantees are required to request these funds through a grant application.

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ACF-PI-HS-14-01 / 02/10/2014 / FY 2014 Head Start Funding Increase(cont.)

Restoring SequestrationThe FY 2014 appropriation restores the 5.27 percent reduction grantees received in FY 2013 due to sequestration. The expectation is that grantees will use these funds to restore the number of funded enrollment slots, the number of days or weeks in the program year, or the other cuts programs made to absorb the reduction.

FY 2014 Cost-of-Living Adjustment (COLA)Each grantee may apply for a COLA increase of 1.3 percent of the FY 2012 base funding level. Base funding excludes training and technical assistance funds and any one-time funding grantees may have received in FY 2012. COLA funds are to be used to increase staff salaries and fringe benefits and to pay for higher operating costs.

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FY 2014 Cost-of-Living Adjustment (COLA)Programs that use COLA funds to increase staff salaries should increase the hourly rate of pay and permanently increase the Head Start pay scale rather than only increase the salaries of current employees. Section 653 of the Act restricts compensation to a Head Start employee that is higher than the average rate of compensation paid for substantially comparable services in the area where the program is operating. Section 640(j) of the Act requires that the compensation of Head Start employees must be improved regardless of whether the agency has the ability to improve the compensation of staff employed by the agency that do not provide Head Start services.

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Application RequirementsGrantees must submit a grant application or application amendment in the Head Start Enterprise System (HSES) that includes the Grant Application Budget Instrument (GABI), SF-424 Application for Federal Assistance, board and Policy Council approvals, program narrative, and budget narrative. Information on the increased amount of funds available to your agency for the restoration of operational funds reduced by sequestration and for the COLA will be available in HSES.

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Monitoring Protocol Focus

• Instrument to gather data during on-site monitoring reviews

• Measures 7 areas of performance

• Contains Key Indicators used to assess the grantee

• Data is used by the OHS to evaluate multiple levels of performance: – Strengths

– Compliance

– Concerns

– Non-compliances and deficiencies

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Focus

• Key Indicators: – A series of Compliance Measures which are specific

statements that collectively assess the level of program performance

– Focus on one or more Federal regulation critical to the delivery of quality services and the development of strong management systems

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Focus

• Targeted Questions for each compliance measure are designed to:– Provide guidance to on-site reviewer

– Ensure a standardize method for evidence collection

• Targeted Questions indicate:– People to interview and questions to ask;

– Information to gather from documents

– Observations to conduct; and

– Management systems to analyze.

• Reviewers are required to answer all Targeted Questions for each Compliance Measure

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General

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General

Program Governance (GOV) 9 pages

Management Systems (SYS) 16 pages

Fiscal Integrity (FIS) 29 pages

Eligibility, Recruitment, Selection, Enrollment and Attendance (ERSEA) 10 pages

Child Health and Safety (CHS) 23 pages

Family and Community Engagement (FCE) 14 pages

Childhood Development and Education (CDE) 14 pages

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Overall decrease of 12 pages.


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General

Using the Using the Monitoring Protocol

• Analyze and improve program systems

• Training tool for GB, PC, and staff

• Prepare for unannounced on-site review

• Reference during on-site review

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Note – Since FY 2012, the Protocols have not addressed all performance standards.

FY 2011 Protocol is more comprehensive.

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General

Organization of Each Section:• Introduction

• Key Indicators of Program Performance

• Compliance measures and corresponding regulations

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General

Organization of Each Section: (cont.)• Targeted Questions – lead to the right people,

documents and observations– Interviews – in FY 2014, the emphasis is on

interviews with key staff, Board and Policy Council members

– Document reviews are guided by interview questions

– Review Team Meetings – consult with reviewers of other areas for information that impacts the area under study

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© Wipfli LLPFrom FY 2014 Grantee Webcast, Office of Head Start

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2014 Protocol vs. 2013 Protocol

• Shorter review week – Monday – Thursday

• Streamlined protocol – Bigger print again this year!

• Targeted Questions are rewritten to:– Be more direct:

• FY 2014, “Ask…”• FY 2013, “Determine…”

– Understand what exactly the reviewer is looking for

– Understand what the objective is of the question

• Document reviews are integrated with interviews

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New Monitoring Report

• Areas of strength

• Areas of compliance

• Areas of concern – to help grantees improve before noncompliance or deficiencies develop

• Areas of noncompliance and deficiencies with timeframes for correction

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From FY 2014 Grantee Webcast, Office of Head Start

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From FY 2014 Grantee Webcast, Office of Head Start


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Poverty Guidelines Comparison Chart

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2014 Poverty Guidelines for the 48 Contiguous States and the District of Columbia

Size of Family Unit

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

1 $8,980 $9,310 $9,570 $9,800 $10,210 $10,400 $10,830 $10,830 $10,890 $11,170 $11,490 $11,670

2 12,120 12,490 12,830 13,200 13,690 14,000 14,570 14,570 14,710 15,130 15,510 15,730

3 15,260 15,670 16,090 16,600 17,170 17,600 18,310 18,310 18,530 19,090 19,530 19,790

4 18,400 18,850 19,350 20,000 20,650 21,200 22,050 22,050 22,350 23,050 23,550 23,850

5 21,540 22,030 22,610 23,400 24,130 24,800 25,790 25,790 26,170 27,010 27,570 27,910

6 24,680 25,210 25,870 26,800 27,610 28,400 29,530 29,530 29,990 30,970 31,590 31,970

7 27,820 28,390 29,130 30,200 31,090 32,000 33,270 33,270 33,810 34,930 35,610 36,030

8 30,960 31,570 32,390 33,600 34,570 35,600 37,010 37,010 37,630 38,890 39,630 40,090

For each additional Person, add

3,140 3,180 3,260 3,400 $3,480 3,600 3,740 3,740 3,820 3,960 4,020 4,060

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Poverty Guidelines

Persons in Family Unit Poverty Guideline

1 $11,670

2 15,730

3 19,790

4 23,850

5 27,910

6 31,970

7 36,030

8 40,090

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For each additional person add $4,060

2014 Poverty Guidelines for the 48 Contiguous States and the District of Columbia


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Miscellaneous

• Effective for 2014 the new IRS mileage rate is 56 cents per mile

• Executive Level II compensation limit was increased to 181,500 for 2014.

• Per diem rates did not change for 2014, however some of the hotel allowance have changed.

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Report to Congress on HS Monitoring – 2010

• The Head Start Act of 2007 Section 641A(f) requires a summary report be published at the end of each Federal fiscal year on the finding of monitoring reviews and outcomes of Quality Improvement Plans.

• There are three filed as reported on the OHS/ACF/ECKLC website, for the Federal Fiscal Years Ended 9/30/2008, 9/30/2009, and 9/30/2010.

• Findings corrected on site not included in prior years reports but are in 2009.

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Statics from the 2010 Report• Began doing unannounced visits – to ensure agencies

were operating at “review ready” Approximately ten percent of all Triennial and First-Year reviews will be unannounced beginning in FY 2011.

• 80 grantees were selected to recompete as a result of monitoring (rest could be other reasons i.e. self reporting)

• 946 monitoring visits

– 476 Triennial– 9 First Year– 29 Other– 432 Follow up

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Statics from the 2010 ReportOutcomes of FY 2010 Monitoring Reviews

• Monitoring reviews have three possible outcomes: compliant, having one or more noncompliances, or having one or more deficiencies. Grantees with one or more deficiencies also may have noncompliant findings.

• Of the 485 grantees that underwent either a Triennial or a First‐Year review in FY 2010, 19% were found to compliant, 69.7% were found to have one or more noncompliances and an additional 11.3% were found to have one or more deficiencies.

• Nearly 95% of all grantees found to have one more noncompliancesor one or more deficiencies in FY 2010 corrected all of their findings by the time of their first Follow-up review.

• grantees receiving First-Year reviews have more findings than grantees receiving Triennial reviews,

• larger grantees had more findings than smaller grantees, and • grantees that provide only Head Start services had more findings

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Statics from the 2010 ReportOutcomes of FY 2010 Monitoring Reviews

• Head Start program CLASS scores compared favorably to scores calculated from preschool programs over 11 states by NCEDL (National Center for Early Development and Learning) studies.

• Head Start programs scored higher overall in all domains—Emotional Support, Classroom Organization, and Instructional Support.

• However, Head Start CLASS scores and NCEDL scores may not be fully comparable due to differences in populations, sample size, and geographic diversity.

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Statics from the 2010 ReportNumber and Types of Findings Identified in FY 2010

• 1,967 findings were identified on 485 First Year and Triennial monitoring reviews in FY 2010, similar to FY 2009.

• 393 (81%) had one or more findings • 93.5% (1840) were areas of noncompliance; • 6.5% were deficiencies (127). • Of the 393,

– 338 grantees had one or more noncompliances identified, excluding deficiencies. – 55 grantees had one or more deficiencies identified. – 34.1% had one to two findings and 36.1% had three to five findings. 10.4% had 11 or more

findings.

• Grantees with one or more areas of noncompliance, excluding deficiencies, averaged 4.0 findings per grantee; this is lower than the average in FY 2009 of 4.7 findings per grantee.

• Grantees with one or more deficiency averaged 10.9 findings (noncompliances and deficiencies), 6.9 more than grantees with one or more noncompliances.

• This is higher than FY 2009, when grantees with one or more deficiency averaged 9.5 total findings per review.

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Statics from the 2010 ReportMost Common Findings Identified in FY 2010

Highest• Program Design and Management (67.9%) • Fiscal Management (50.6%) • Safe Environments (44.0%)• Lowest• Disabilities Services (6.1% of grantees) • Mental Health Services (5.3% of grantees)• Family and Community Services (5.1% of grantees) • (36.4%) of the 55 grantees found to have one or more deficiencies

were cited for at least one deficiency in health and safety. • (29.1%) of these grantees were cited for at least one “failure to

perform substantially” deficiency, a higher percentage than in FY 2009 (22.7%)

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Statics from the 2010 ReportMost Common Findings Identified in FY 2010 The most frequently cited issue in FY 2010 was failure to ensure “Physical Arrangements Consistent with the Health, Safety and Developmental Needs of Children”. Over one-quarter (109 of 393 grantees, 27.7%) of all grantees having noncompliant or deficient findings were cited for this issue. Other issues frequently cited for grantees on included

• Annual Report to the Public• Maintenance, Repair, Safety, and Security of all Facilities,

Materials, and Equipment• Reporting to the Governing Body and Policy Council• Ongoing Monitoring of Grantee Operations and Delegates

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Reform Continues

• On December of 2012, the second list of agencies required to compete was published. The competition for these grants was posted to www.grants.gov on July 23 and 24th and closed on October 22, 2013. There are 123 grants available. They have not been awarded yet.

• On April 3, 2013, OHS posted the list of agencies that they were beginning negotiations with, from the initial grants that were open for competition. 160 grantees were announced as potential winners of the grants.

• Of the 125 agencies, 80 received their award back, 25 were replaced, 14 will be split between new and existing agencies. The remaining 6 had no qualified applications and HS services will continue while a new competition begins in the spring to find a new provider.

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Reform Continues

• Majority of grants were won either by the current grantee or delegate agencies, there were not very many new providers.

• Agencies that had health and safety issues are subject to annual unannounced monitoring visits to ensure they are living up to the standards they laid out in their applications. Failure to do so or not complying with other standards could result in termination of their grant.

• Final grantees were announced in July after the negotiations, some of the initial agencies ultimately did not get the final award.

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Reform Continues

• On February 5, 2014 the third list of agencies required to compete for funding was release; 103 grantees were notified.

– OHS designated the grantees for competition because they had fiscal or management issues preventing them from properly managing federal funds, or had deficiencies discovered in their on-site federal monitoring review. Any grantee that scored in the lowest 10 percent out of all Head Start programs that received a CLASS review last year must also compete.

38 States were effected, including Puerto Rico

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1307 – Policies and Procedures for Designation Renewal of HS and EHS Grantees

Responses To Comments

1. Concerns over Competition– 2007 Reauthorization of the HS Act required the establishment of 5

year grants and a Designation Renewal System where grantees would compete for renewed funding if not providing high quality services.

– Important to note (per them) competing is not the same as taking a grant away or defunding a grantee, but agencies must compete to demonstrate that it is the most capable entity to provide services.

2. Retroactive Data– The Act stated that designation renewal could not apply for 18

months, the Act was issued 12-12-07, therefore the date of 6-12-09 for the retroactive date.

– This date applies to 5 of 7 of the triggers (CLASS and School Readiness are not retroactive).

– The Licensing trigger applies to 1306.30(c) and the CACFP applies to 1304.23(b)(i).

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2. Retroactive Data (cont.)– Audit relates to 1301.12

– The one deficiency relates to 641A(e) and 1304.60 and deficiency was defined in 637 and revised in 641A, therefore agencies should have seen its significance.

– Suspension and debarment relate to 637(2) and 1303.10(a) and A-110 “Federal agencies shall not award assistance to applicants that are debarred or suspended…”

– Felt that the Act gave warning about the 6-12-09 date and the importance.

3. Designation Renewal Final Decision– Congress did not require in the Act that agencies be given the

opportunity to appeal.

– As long as not terminated in the last 5 years encouraged to compete.

– Provides a mechanism for grantees to demonstrate its capacity to provide a high quality program.

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4. Large Grantees and Delegate Agencies– 1304.51(i)(2) requires grantees to establish and

implement procedures for the on-going monitoring of their programs regardless of size or structure.

– A deficiency is defined to be “systemic or substantial material failure”, therefore, differences in the size of grantees should come into consideration when determining deficiencies.

5. Migrant and Seasonal HS Programs– No exclusions for Migrant or Seasonal programs.

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6. Alternatives to the Proposed DRS• Alternatives suggested didn’t seem fair, consistent and reliable.

• The 25% was removed (however, they now anticipate 1/3 of all agencies will have to recompete).

• The CLASS Pre-K condition replaced it.

• There is an annual report of all deficiencies

– www.eclkc.ohs.acf.hhs.gov/hslc/

• Considers information for triennial reviews, follow up reviews and other reviews but NOT first year reviews (think new EHS ARRA grantees).

• School Readiness goals are effective with the implementation date of the rule (12-9-11).

• Class rule is implemented in the second year of the transition period using data from observations conducted after the effective date of the rule.

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• CLASS is not used for EHS or home-based programs

• It is the revocation of a license, not suspension

• Anything less than an Unqualified Audit Opinion on the Head Start Program will be considered a “red flag” and will trigger additional fiscal oversight i.e. ongoing monitoring and additional targeted review including unannounced on-site, make a determination as to whether the issue identified raises to the level a deficiency as defined in the Act .

• If a fiscal issue identified does lead to a deficiency in HS monitoring that “deficiency finding” would lead to recompetition.

• Going concern still an automatic

• Non compliance findings that have been corrected in the stated time period will not be considered as they would not be considered a deficiency, however uncorrected noncompliance that become deficiency would trigger DRS.

• An agency that has had a denial of refunding is excluded from competing for the next 5 years.

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• A determination that a grantee will not be awarded funding noncompetitively is not a denial of refunding and does not limit applying for funding.

• DRS reviews under Part 1307 consist of an ACF review of data to determine if one or more of the conditions under 1307.3 have been met by the agency.

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• 1307.1 Purpose and Scope – terminated either voluntarily or involuntarily not subject to 1307 but is subject to 1302.

• 1307.2 Definitions– Transition Period – means the three year time period

after December 9, 2011, 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 under section 1307.3 that require recompetition or if the grantee will receive its first five-year grant noncompetitively

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• 1307.3 Basis for determining whether a HS agency will be subject to an open competition.

a) One or more deficiencies in a review, either triennial, unannounced, or follow up.

b) Agency determined not to have1. After 12-9-2011 established program goals for improving school

readiness of children in its program in accordance with the Act

2. After 12-9-2011, taken steps to achieve the school readiness goals described

c) An agency has been determined during its review 1. After 12-9-2011 to have an average score across all classrooms

observed below the following minimum thresholds on any of the three CLASS Pre-K domains from the most recent CLASS: Pre-K observation

i. Emotional Support the minimum is 4ii. Classroom Organization the minimum is 3iii. Instruction Support the minimum is 2

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• 1307.3 Basis for determining whether a HS agency will be subject to an open competition.c) An agency has been determined during its review (cont.)

2. After 12-9-2011 to have an average score across all classrooms observed that is in the lowest 10 percent on any of the three CLASS: Pre-K domains from the most recent CLASS: Pre-K observation among those currently be reviewed unless the average score across all classrooms observed for that CLASS: Pre-K domain is equal to or above the standard of excellence that demonstrates that the classroom interactions are above an exception level of quality. For all three domains the “standard of excellence” is 6.

d) License revoked by federal or state agency and the revocation has not been overturned or withdrawn before a competition for funding for the next 5 year period is announced.

e) An agency has been suspended from the HS or EHS program and the suspension has not been overturned or withdrawn. Grants suspended by DHHS.

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• 1307.3 Basis for determining whether a HS agency will be subject to an open competition. (cont.)f) An agency has been debarred from receiving federal or state funds from a

Federal or State department or the agency has been disqualified from the CACFP program.

g) An agency has been determined within the 12 months preceding the review to be at risk of failing to continue functioning as a going concern.

• 1307.4 Grantee reporting requirementsa. Agencies must report in writing to the responsible HHS official within 30

working days of 12-9-2011 if the agency has had a revocation of a license during the period between 6-12-2009 and 12-9-2011. (There is not a database of information on this so agencies must self-report).

b. Agencies must report in writing to the responsible HHS official within 10 working days of occurrence of any of the following events following 12-9-20111. Revocation of a license 2. Agency has filed for bankruptcy or agreed to reorganization as a part of a bankruptcy

plan3. Agency has been debarred from receiving funds by a Federal or State Agency or

disqualified from the CACFP Program4. Agency has received an audit, audit review, investigation or inspection report

determining that the agency is at risk for ceasing to be a going concern.

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• 1307.5 Requirements to be considered for designation for a 5 year period when the existing grantee in a community is determined not be delivering a high quality and comprehensive Head Start program and is not automatically renewed.– Agency must submit an application that demonstrates that it is the

most qualified entity to deliver a high-quality program.

– Application must address the criteria for selection as listed in 641(d)(2)

– An agency that has had its grant terminated for cause in the preceding 5 years is excluded from competing for the next 5 years.

– An agency that has had a denial of refunding in the preceding 5 years is also excluded from competing• Denial of Refunding means the refusal of a funding agency to fund an

application for a continuation of a Head Start program for a subsequent program year when the decision is based on a determination that the grantee has improperly conducted its program, or is incapable of doing so properly in the future, or otherwise is in violation of applicable law, regulations, or other policies. 71

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• 1307.6 Tribal government consultation under the DRS for when an Indian HS grant is considered for competition.a. In the case of an Indian HS or EHS agency determined not to

be delivering a high quality program the responsible HHS official and Tribal government will establish a plan to improve the quality1. The plan will be established and implemented within 6 months after the

determination.2. Not more than 6 months after implementation the responsible HHS official

will reevaluate the performance.3. If the agency is still not delivering a high quality program the responsible

HHS official will conduct an open competition to select a grantee.

b. A non-Indian HS or EHS agency will not be eligible for grant unless there is no Indian HS or EHS agency available for designation.

c. A non-Indian HS or EHS agency may receive a grant to carry out an Indian HS program only until an Indian HS agency becomes available and is designated. 72


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• 1307.7 Designation request, review and notification process.a. Grantees must apply to be considered for Designation Renewal

1. For the transition period, each HS and EHS wishing to have their designation renewed without competition shall request that status from ACF within 6 months of 12-9-11.

2. After the transition period, agencies wishing to be considered to have their designation renewed for another 5 year period without competition shall request that status from ACF at least 12 months before the end of their 5 year grant period or by such time required by the Secretary.

b. ACF will review the data to determine if any conditions under 1307.3 were met by the agency’s program:1. During the 1st year of the transition period ACF considers a,d,e,f and g

since 6-12-09.2. During the remainder of the transition period, ACF reviews data from

agencies still under grants with indefinite project periods for conditions a,d,e,f, and g since 6-12-09 and b and c since 12-9-2011.

3. Following the transition period ACF will review data on agencies in the 4th year of the grant to determine if any of the 1307.3 conditions are present.

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• 1307.7 Designation request, review and notification process. (cont.)c. ACF will give notice to grantees on DRS status

1. During the 1st year by certified mail, stating that the agency will be required to compete for funding for an additional 5 year; will identify the conditions, and summarize the basis for the finding.

All grantees that do not meet any of the conditions will remain under the indefinite project periods until the time as described in 1307.7(b)(2).

2. During the remainder of the transition period, ACF will give written notice to all grantees still under indefinite periods and with one of the conditions stating:i. The Agency will be required to recompete because of a condition

met.ii. That the agency has been determined on a preliminary basis to be

eligible for renewed funding for 5 years without competition because no conditions were found during the relevant time period. If prior to the award ACF determines one of the conditions were found, this determination will change and the grantee will receive notification that it will be required to recompete.

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• 1307.7 Designation request, review and notification process.c. ACF will give notice to grantees on DRS status

(cont.)

3. Following the transition period, ACF shall give written notice to all grantees at least 12 months before the expiration date of the agencies grant stating:

i. That the agency will need to recompete because one or more of the conditions have been found.

ii. That the agency has been preliminarily eligible to receive renewed funding, again if prior to the award one of the conditions are met the agency will have to recompete.

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• 1307.8 Use of CLASS: Pre-K Instrument in DRS– Except when all children are served in a single

classroom, ACF will conduct observations on multiple classrooms based on a random sample of all classes and rate the conduct of the classes observed using the CLASS Pre-K instrument.

– Where all children are served in one class, that class will be observed and rated using the instrument.

– ACF will report to the grantee the domain scores for the classes observed.

– ACF will average the scores in each domain for the classes observed to determine the agency’s score in each domain.

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Eligibility NPRM

NPRM 45 CFR 1305 Eligibility, Recruitment, Selection, Enrollment and Attendance

• (e) Income verification– child's parent, guardian or other person(s) seeking services for

the child must submit information concerning the family's income

– examination of documents – income compared to the poverty guidelines– program staff must document low-income family– if no documentation regarding the income eligibility (or when it

is either more efficient or reliable) may seek information from third parties who have first-hand knowledge and document the names, titles, and relationship to the applicant

– may seek third party information in cases where documents are not submitted to prove a claim that a pregnant woman or family has no income

– third party verification77

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Eligibility NPRMNPRM 45 CFR 1305 Eligibility, Recruitment, Selection, Enrollment and Attendance (cont.)

• (f) Verification of categorical eligibility. (1) child's parent, guardian, or other person(s) seeking services for the

child must submit information concerning family's categorical eligibility• (i) copy of official documents demonstrating eligibility, or in the

absence of child care, would potentially be eligible for public assistance

• (ii) copy of court order or legal or government-issued document or statement of a government child welfare official demonstrating child is in foster care or

• (iii) copy of any other source document that establishes categorical eligibility

(2) substitute a written statement of a program staff member certifying that the staff member has made reasonable efforts to confirm a child is homeless

(3) third party verification when no documentation regarding categorical eligibility (or when it is more efficient or reliable) may seek information from third parties who have first-hand knowledge

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Eligibility NPRM

NPRM 45 CFR 1305 Eligibility, Recruitment, Selection, Enrollment and Attendance (cont.)

• (g) Records and Certification-must keep an eligibility determination record for each participant, to include:

(1) copies of all documents submitted and any staff member's notes recording any other information received from any source

(2) copy of the statements and documents required under income and categorical eligibility verification

(3) signed and dated statement by the person seeking services certifying that the documents and information provided are accurate to the best of the person's knowledge

(4) documentation establishing that a staff member has sought to verify the accuracy of the information provided to the agency

(5) a record of the eligibility criterion under which the pregnant woman or child was determined eligible 79

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Eligibility NPRM

NPRM 45 CFR 1305 Eligibility, Recruitment, Selection, Enrollment and Attendance

• (g) Records and Certification-must keep an eligibility determination record for each participant, to include: (cont.)

(6) signed and dated statement by the program staff person who made the eligibility determination certifying that the information is accurate to the best of the person's knowledge, and based on that information, the person has determined the pregnant woman or child to be eligible for services.

(7) retention and access practices for the eligibility determination record consistent with section 647 of the Head Start Act and 45 CFR 74.53 or 45 CFR 92.42.

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Eligibility NPRM

NPRM 45 CFR 1305 Eligibility, Recruitment, Selection, Enrollment and Attendance (cont.)

• (h) Establishment of agency policies regarding violation of eligibility determination regulations, policies and procedures – must establish policies and procedures describing the actions to be taken against staff who commit intentional violations of agency eligibility determination regulations, policies and procedures, including enrolling pregnant women and children who staff have not been documented as eligible to participate in the program.

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Eligibility NPRMNPRM 45 CFR 1305 Eligibility, Recruitment, Selection, Enrollment and Attendance (cont.)

• (i) Training:– must train all governing body, policy council, management and

those staff members who have the responsibility to make participant eligibility determinations within 30 days following the effective date of this rule, and within 30 days of hiring or beginning of tenure of new governing body, policy council, management and those staff members who have the responsibility to make eligibility determinations

– must develop policies regarding how often training will be provided after the initial training

– shall maintain ongoing records of training– training must include:

• explanation of the legal consequences for individuals and agencies that commit fraud

• information on methods and strategies for complete and accurate eligibility determinations

• methods and strategies must address treating families with dignity and respect and give due regard for possible issues of domestic violence, stigma, and privacy 82


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OMB Proposed Changes – “Super Circular”

• Convergence of 8 different OMB circulars

• Clarification of and addition to many definitions

• Significant changes to single audit requirements:– Increased single audit threshold from $500,000 to $750,000– Change in Type A major program threshold from $300,000 to

$750,000 for Total Federal awards up to $25 million; 3% of total awards from $25 million to $100 million

– All others are Type B programs but only have to preform risk assessments on B’s that exceed 25% of a Type A program.

– Questioned costs were increased from $10,000 to $25,000– Decrease in required % of federal expenditures to be tested

from 25% (low-risk auditee) and 50% (not low risk auditee) to 20% (low risk auditee) and 40% (low risk auditee)

– Many other proposed changes in the Administration Regulations and Cost Principles.

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Materials/Disclaimer

• Head Start/Early Head Start Update• Technical Information

* Please note that these materials are incomplete without the accompanying oral comments by Denes L. Tobie of Wipfli LLP. These materials are informational and educational in nature and represent the

speakers’ own views.

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