Hearing of the House Committee on Education and the Workforce: Financial Accountability in the Head Start Early Childhood Program

HEARING OF THE HOUSE COMMITTEE ON EDUCATION AND THE WORKFORCE: FINANCIAL ACCOUNTABILITY IN THE HEAD START EARLY CHILDHOOD PROGRAM

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Chairman Boehner. A quorum being present, the Committee on Education and the Workforce will come to order. We are holding this hearing today to hear testimony on the financial accountability in the Head Start Early Childhood program. I am
going to limit opening statements to the Chairman and Ranking Member. Therefore, if other Members have opening statements,
they can be included in the hearing record.

And with that, I would ask unanimous consent for the hearing record to remain open for 14 days to allow Members' statements and other documents referenced during the hearing to be submitted for the official hearing record. Without objection, so ordered. Let me change my unanimous consent request to also include Mr. Castle and Ms. Woolsey's opening statements. Without objection, so ordered.

STATEMENT OF HON. JOHN A. BOEHNER, CHAIRMAN, COMMITTEE ON EDUCATION AND THE WORKFORCE

High quality early childhood education is essential to closing the achievement gap that exists in our country between disadvantaged children and their more affluent peers. President Bush urged Americans to unite to eliminate this gap when he
took office in 2001. Congress has responded by enacting two major overhauls of education law, the No Child Left Behind Act
and the special education bill signed by the President just last December. Today, our Committee embarks on another phase of
this process, strengthening the Head Start early childhood program. Head Start's mission is to prepare disadvantaged children for kindergarten, and this Committee has strongly supported Head Start in this mission over the years and particularly during the last decade. Federal funding for Head Start has nearly doubled since 1995, increasing from 3.6 billion annually in 1996 to nearly 7 billion this year.

I support Head Start. It is an important program that is entrusted with a vitally important mission and I believe that a vast majority of those involved with the Head Start program are honest individuals who are dedicated to making sure the poorest
of our Nation's children have a chance to succeed in life. I believe we need to listen to these people and support them and
support the children that they serve. And I know Chairman Castle agrees, I believe the President agrees, and I don't think there is a single Member of this Committee who would disagree with that.

I also want to state that neither I nor the President nor Chairman Castle have called for turning Head Start into a so-called block grant to the States or dismantling Head Start as some have claimed. As I said 2 years ago, as a conservative Republican, I know a block grant when I see one. And trust me, what the President has proposed for Head Start is no block
grant program. There are, however, two critical problems in Head Start that I believe Congress has to address. One problem
is the school readiness gap that continues to exist between some Head Start children and their peers when they reach kindergarten. There is no question most Head Start children are better off in the program than they would have been without it.
That is not in dispute.

But there is evidence that some Head Start centers could be doing an even better job of providing preschoolers with an
academic foundation they need in order to succeed in school. A summary of research released in 2003 by the Department of
Health and Human Services showed that while children in Head Start are learning, they are more than 25 percentile points
behind the national average on many key learning indicators. And we need to listen to people who run the best programs in the Head Start system, get their input on what works and use that information to strengthen the weaker program. Last week our Committee launched a Web site to facilitate this project, and I would encourage parents, teachers, taxpayers and anyone else who has an interest in Head Start to check out this Web site and use it to share your own experiences.

The second problem is that an unacceptable share of Federal Head Start funding never reaches the disadvantaged children the money is meant to serve. Instead, it is being lost to financial abuse and mismanagement, impropriety or outright theft within
the Head Start system. And these abuses are happening at the expense of children served by the many law abiding grantees
within the Head Start system, grantees that too often are put in a position of being forced to defend the actions of a few bad apples in the program.

Between January of 2003 and the first months of 2005, media accounts in numerous U.S. cities alleged serious financial abuses and irregularities by those entrusted with the responsibility of managing Head Start funds meant to serve poor children. These incidents identified in these reports collectively involve the use of tens of millions of Federal Head Start funds that were intended to serve more than 10,000 disadvantaged U.S. children. Such reports surfaced in Baltimore, Maryland; Baton Rouge, Louisiana; Charleston, South Carolina; Charleston, West Virginia; Cleveland, Ohio; Columbus, Ohio; Honolulu, Hawaii; Jamestown, North Dakota; Kansas City, Missouri; Las Vegas, Nevada, Little Rock, Arkansas; Lubbock, Texas; Madison, Wisconsin; Norwalk, Connecticut; Rapid City, South Dakota; San Antonio, Texas; and Stockton, California.

And some reports involving financial mismanagement suggest that many Head Start grantees have good intentions yet lack
strong financial controls and the skills needed to effectively manage complex multi million dollar not-for-profit organizations.

As much as we all support Head Start, Congress cannot simply turn a blind eye to this problem. Financial abuse in the
Head Start system cheats not only children and taxpayers, but also the many law abiding local Head Start grantees nationwide
who find themselves in the position of being asked to defend indefensible practices by other grantees.

A new report by the independent Government Accountability Office warns, the financial control system in the Federal Head Start Early Childhood program is flawed and failing to prevent these abuses. GAO has independently determined that unresolved financial management weaknesses among Head Start grantees are having a negative effect on some eligible children. It has also determined that the procedures of the Federal Government uses to collect data on grantee financial management performance have significant flaws as well. The GAO report recommends that the Federal Government take steps to allow the recompetition of grants awarded to Head Start grantees.

And I am particularly interested in hearing from our witnesses today on this important issue. It is my view that by failing to promote competition for Head Start grants, the Federal Government has essentially granted monopoly power to some Head Start operators and, as often happens with monopolies, the power has been abused. Removing obstacles for competition of Head Start grants must be a top priority for Congress in reauthorizing Head Start, and if we fail to accomplish this goal, we will fail on our most basic responsibility to children and taxpayers.

Also, some States are operating their own early childhood programs, programs that sometimes rival Head Start in quality. And I do think we need to help such States better integrate and coordinate these programs with Head Start to better serve the needs of our most disadvantaged children. When Head Start was first established 40 years ago, it was the only program of its
kind, Federal or State. Now, there are many different programs across the country preparing children for kindergarten, and we
need to make sure all of those children are getting the same quality education.

In the last Congress, this Committee passed a bill that sought to address this need. But we know many things today that we didn't know then, particularly with respect to the financial control problems that exist in the program. And with this in mind, I think we have a responsibility to start from square one and build this year's legislation from the ground up. There were many elements of the 2003 bill that had bipartisan support. Those things may provide a good foundation. And in those areas where there was disagreement, I am more than willing to look at alternative routes that can be taken to reach the same goal if we can show that they may be effective. That includes the issue of coordination with State programs which generated the most disagreement 2 years ago.

I am committed to passing the bill that promotes competition, strengthens academics, and restores fairness for children taxpayers and honest grantees. And I think we can produce a bill that does these things and does it in a bipartisan fashion. As the Head Start reauthorization process moves forward, this will be my goal.

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Chairman Boehner. Let me thank all the witnesses for coming today, and your excellent testimony. The Members of this Committee understand pretty clearly the importance of early childhood development especially for low income children. And
without this help, their chances of success in school is very, very limited.

Congress has made a big investment in Head Start over the years. And as we said earlier, a lot of grantees are doing a lot of very good work. But Dr. Horn and Dr. Golden, you have both been around this process for a long time. There are some operators out there who have done a pathetic job for a very long time. You probably know who they are better than I do. I hear about it from members. They come up to me. They have been fighting the problem at home for a long time, and nothing ever happens. Why is it it is so difficult to change grantees when it is obvious to virtually everyone that there is a significant problem? Dr. Horn, you are in the hot seat right now because this is your job. So I will let you begin.

Mr. Horn. Well, first of all, let me say from the outset that I believe that most Head Start programs are operating well, that most people who work in Head Start get up every day, go to work and try to do the best they can to further development of children who come from an economically disadvantaged background. So I also believe that Head Start is the embodiment of a very important ideal. That ideal is that now children should be disadvantaged by the circumstances of their birth in their overall education.

So I don't believe that trying to improve the oversight of the Head Start program ought to be equated as some have tried to equate it with an antipathy toward the program in general. I think it is a good program and a program that deserves our support. But there are problems. Some of those problems are internal within my agency. And some of them statutory. And to answer your question about replacing grantees, there is a problem statutorily and I know the GAO and we have a different opinion upon this and it may be useful for the Congress to settle this, because frankly we would like the opinion of the GAO to prevail. Would that we had more authority than we believe the statute provides. And here is the problem. There are two sections in the statute. The first is section 641(b)(2).

And this section says, in part, that the secretary shall give priority to the designation of Head Start agencies to any local public or private non profit or for profit agency which is receiving funds under any Head Start program. Unless the secretary determines that it is, you know--and then it has some exceptions. The problem is, you have to cross reference that with section 646(a)(3) in the statute, which says in part that financial assistance under the subchapter shall not be terminated or reduced or an application for refunding shall not be denied to a grantee unless the recipient has been afforded reasonable notice and opportunity for a full and fair hearing.

Now, if you look at the requirements for notice and so forth, and you add them up, the minimum amount of time to actually defund a grantee who does not voluntary relinquish is 240 days and that is assuming the hearing before the departmental appeals board occurs in 1 day.

Chairman Boehner. But the fact, is Mr. Wade, or Mr. Horn, that if you look at the period from May 1998 to 2001, the--to terminate a grantee, here is an example. It took 1,236 days. I have got another one here, another example occurred between
February 1, 2001 and May, 03, 800 days from the start of the review to the date of the termination. Now why would it take the agency 24 long to make this determination?

Mr. Horn. Well, part of it has to do--we have no control over how long the hearing is before the appeals board. And that hearing can drag on for months. There are cases where it has dragged on for over a year. Just the hearing. And we can't order the DAB to come up with a decision in a shorter period of time. But it seems to us--I am agreeing with you. We ought to be able to move quicker toward termination of a grantee.

Chairman Boehner. All right. Dr. Golden.

Dr. Golden. I guess what I would highlight is that when I started people said to me just this, that it is too hard. And it turned out that in most cases it wasn't too hard. That is how we were able to accomplish that termination and relinquishment of so many grantees. And it is what we learned I think about what makes it possible is that you have to have--you have to have high quality fact gathering. You have to have hands-on involvement. I think that this helps to have not only the high standards of Head Start, those are key, but the clear vision about how those standards relate to the result, because what I found when I went and talked to parents is that parent boards of a grantee might initially have wanted to fight your conclusion that it was deficient, but once you talk to them about how what was going on was say the kind of fiscal problem that we heard from Ms. Henry and that the teachers in the classroom who they had such affection for really were terrific and were going to be able to stay, once you did that you could often get a relinquishment.

And I don't know the legal specifics of the issue that Assistant Secretary Horn is raising enough to know if there are additional things Congress could do. But the message that I want to leave you with is that there is a great deal you can do with the existing authority when you are focused on being able to prevent a lot of problems with technical assistance and then address the rest.

And I think the one big picture context piece I would put on it is that we know something about the quality of Head Start programs compared to the quality of other programs nationally, because researchers go out and look. And we know in Head Start not only is quality good, but it is unusually consistent compared to, say, State pre-K or child care, so that the overall, this elaborate and high standards monitoring process is delivering at the same time that the Committee is clearly absolutely right and the GAO is right, you can't have--you have to address the individual cases that aren't being met.

Chairman Boehner. Well, I appreciate your comments and your testimony about all the changes that were made in the 1990's. But here is a June 1998 study from the GAO. Challenges in monitoring program quality and demonstrating results. And this isn't new. And the two of you know that this isn't new. That is the part that is agitating me because--

Dr. Golden. The 1998. I think that is right. The 1998 study was very helpful to us. It highlighted how aggressively we have
moved on terminations, but it expressed the concern--and relinquishments--it expressed the concern that the research base wasn't as strong and so that is the next step which I think is really key to work on.

Chairman Boehner. Let me ask one more question. And excuse me for going a little bit over. But as Mr. Miller pointed out
in his opening statement, there are 1,796 little boxes that every Head Start grantee has to check off. And I have watched
some of this occur as I have gone to Head Start centers. And sometimes, between what we are asking the Head Start centers to do in terms of--they are diligent about wanting to check those boxes off and the different offices that are reviewing various
parts of the program, is there ever an opportunity, one, to look at the overall program itself that the grantee in terms of fiscal management, quality, results? That is one question.

And second, are we creating an environment with 1,796 boxes to check off that we are distracting the local grantee from
actually accomplishing results for low income children who need the help?

I will let you start, Dr. Golden.

Dr. Golden. OK. I think that is a great question because I think the key issue for the Committee and for anyone managing the program is that on the one hand, we know from the research, we have studied how programs that do a good job at the standards do for results for kids compared to programs that do a less good job, and so we know that high standards really matter and that carrying out the high standards really matters.

At the same time, I think you are absolutely right that you want to be looking at those standards in a way that is focused on results not a way that is picky about details. And so one of the things that I think is important about the way the regulations now talk about deficiencies is that those are meant to be not just about counting up the boxes, but if you are going to go into this really serious program improvement process you have to step back and you have to say this is serious. This is something that is getting in the way of the program's success. So my own view would be that high standards really matter, and we know that from the research; that in enforcing those high standards you have to keep your eye on the big picture, do a lot of training and technical assistance, and that as the Committee moves forward, that is one of the reasons that I recommended thinking about fiscal and program issues together in carrying out GAO's recommendations because you are absolutely right. You don't want to be pulling people in multiple directions. You want them kept focused on the big picture.

Chairman Boehner. Dr. Horn.

Mr. Horn. I think one of the strengths of the Head Start program is its focus on local control and the ability of local programs to design a program that meets local community needs; and there is a tension between preserving that local control and that local flexibility and the degree of Federal oversight that we want.

I think that there are two things that the Federal Government ought to do when it comes to oversight of the local programs while preserving the ability of the local programs to be flexible to meet local community needs:

First, we ought to make sure, at a minimum, that money that you here in Congress appropriate for Head Start is used for Head Start purposes, No. 1, and is being used to the maximum extent possible to deliver quality services to kids, not to provide outrageous salaries to some executives.

The second thing we ought to do, and I agree with Dr. Golden, is to focus on results. If all of our monitoring is focused on process and we lose sight of results, then the monitoring isn't really very useful. We need to find a way to ensure that as we are monitoring these programs, that at the end of the day what we really care about is not whether certain processes and procedures were followed to the T, but the kids are actually developing well as a consequence of those programs.

Chairman Boehner. The gentleman recognizes the gentleman from California, the Ranking Democrat, Mr. Miller.

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